Even Sonos Is Feeling the Memory Crunch-Heard on the Street -- WSJ

Dow Jones05-06

By Dan Gallagher

Soaring prices for memory chips don't just affect makers of PCs and smartphones, especially as products such as high-end speakers become computing devices in their own right.

Premium speaker maker Sonos showed that with its fiscal second-quarter report late Monday. Revenue rose more than 8% year-over-year, exceeding Wall Street's estimates for the March-ending quarter that is typically a quieter period following the holiday sales season. And that didn't even include much from the company's Play portable speaker, which launched near the end of the quarter. Sonos chief executive Tom Conrad described the Play as getting a "strong early reception" during the company's earnings call.

However, skyrocketing memory costs are eating into the bottom line. Sonos said it expects "memory cost inflation" to build during the rest of the fiscal year, which ends in September. Analysts expect the company's gross margin to hit around 43% in the fiscal fourth quarter, down three percentage points from the just-ended period. Sonos shares fell around 6% midday Tuesday.

Sonos has deftly managed through a couple of tough years following a disastrous update to its main control app in 2023. But the memory crunch is unavoidable for any company in consumer electronics, as any product with a processor also needs memory chips to function.

Part of the problem is that new memory-chip production facilities take years to build, which means the current shortage won't be ending soon. "Memory cost inflation will be a margin headwind for the foreseeable future," Morgan Stanley analyst Erik Woodring wrote in a report Tuesday. Sonos CEO Conrad said the company is working to "optimize memory requirements" across its products-including future designs. For Sonos, getting the sound right is now just half the battle.

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May 05, 2026 13:00 ET (17:00 GMT)

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Even Sonos Is Feeling the Memory Crunch-Heard on the Street -- WSJ

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