Shares of premium audio company Sonos (SONO 0.74%) jumped Wednesday after reporting results for its fiscal 2024 first quarter. The company outperformed expectations on the top and bottom lines during those three months. As a result, Sonos stock was up 17% as of 9:50 a.m. ET.

Sonos starts its fiscal 2024 on a high note

For the period, which ended on Dec. 30, revenue fell by almost 9% year over year to $613 million, while net income rose  almost 8% to $81 million. Both figures were ahead of Wall Street's expectations. However, management kept its fiscal-year guidance unchanged, saying that some sales had likely been pulled forward into the holiday quarter.

Sonos really shined when it came to its cash flow. In Q1, it had free cash flow of $269 million. That gave it a free-cash-flow margin of 44%, which was nearly a 61% improvement over the prior-year period.

Sonos' cash flow soared because it manufactured fewer products during the quarter and sold inventory that it already had. In Q1, its inventories decreased 50% year over year. This is really good news because the company is preparing to update its product lineup.

What is the "mystery" product?

Sonos currently has audio products in five categories, including portable speakers and home theater. However, management says that it will expand into a sixth category in the third quarter of its fiscal 2024. Management is just teasing this product right now, and hasn't said much other than it's a multibillion-dollar opportunity.

There's good reason to believe Sonos can get traction in a new category quickly. The average Sonos household owns 4.41 products from the company, and that metric has been consistently increasing. Therefore, it appears that its customers are loyal fans willing to spend more money on its equipment over time, which is one reason to continue to like this stock for the long term.