Sonos, Inc. (NASDAQ:SONO) Q2 2022 Earnings Conference Call May 11, 2022 5:00 PM ET Company Participants Patrick Spence - Chief Executive Officer Brittany Bagley - Chief Financial Officer Conference Call Participants Erik Woodring - Morgan Stanley Rod Hall - Goldman Sachs John Babcock - BofA Thomas Forte - D.A. Davidson Brent Thill - Jefferies Operator Good afternoon. My name is Emma and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonos Second Quarter Fisca ...

Financial Performance - Total revenue for the three months ended April 2, 2022, was $399.8 million, a 20% increase from $332.9 million for the same period in 2021[99] - Net income for the three months ended April 2, 2022, was $8.6 million, a decrease of 50% compared to $17.2 million for the same period in 2021[98] - Total revenue for the three months ended April 2, 2022, increased by 20.1% to $399.8 million compared to $332.9 million for the same period in 2021[133] - Total revenue increased by 8.8% to $1,064,262,000 for the six months ended April 2, 2022, compared to $978,532,000 for the same period in 2021[138] - In constant currency, total revenue increased by 10.0% for the six months ended April 2, 2022, compared to the same period in 2021[142] Product Sales - Products sold increased to 1,401 units in the three months ended April 2, 2022, compared to 1,039 units in the same period of 2021, representing a 34.5% growth[99] - Total products sold for the six months ended April 2, 2022, increased by 3.0% to 3,799,000 units compared to 3,688,000 units for the same period in 2021[143] - Revenue from Sonos speakers accounted for 79.5% of total revenue, increasing by 18.8% to $317.7 million, driven by the introduction of new products and strong demand[134] - Revenue from Partner products and other sources surged by 56.0% to $20.8 million, primarily due to partnerships with IKEA and Sonance[134] Profitability Metrics - Adjusted EBITDA for the three months ended April 2, 2022, was $46.9 million, with an adjusted EBITDA margin of 11.7%, down from $48.5 million and 14.6% in the same period of 2021[99] - Gross profit for the three months ended April 2, 2022, was $179.0 million, resulting in a gross margin of 44.8%[131] - Operating income for the same period was $10.0 million, representing an operating margin of 2.5%[131] - Gross margin decreased by 500 basis points to 44.8% for the three months ended April 2, 2022, primarily due to increased component and shipping costs[145] Expenses - Research and development expenses for the three months ended April 2, 2022, were $64.9 million, representing 16.2% of total revenue[131] - Total operating expenses increased to $169.0 million, accounting for 42.3% of total revenue[131] - Sales and marketing expenses increased by 4.8% to $59,955,000 for the three months ended April 2, 2022, compared to $57,205,000 for the same period in 2021[151] - General and administrative expenses increased by 10.8% to $44,090,000 for the three months ended April 2, 2022, compared to $39,806,000 for the same period in 2021[154] Supply Chain and Market Conditions - The company has experienced significant supply chain challenges due to COVID-19, leading to increased component costs and delayed product availability[94] - The conflict between Russia and Ukraine has caused increased inflationary pressures and foreign exchange rate fluctuations, but did not materially impact the company's results for the quarter ended April 2, 2022[96] - The company aims to diversify its supply chain into Malaysia to mitigate ongoing supply chain challenges[95] - The company continues to face supply chain challenges, resulting in a backlog despite improved product availability[133] Cash Flow and Financing - The net cash provided by operating activities for the six months ended April 2, 2022, was $82.4 million, a decrease from $175.9 million for the same period in 2021[170] - Cash used in investing activities for the six months ended April 2, 2022, was $42.8 million, primarily for acquisitions and purchases of property and equipment[172] - The company had $606.7 million in cash and cash equivalents as of April 2, 2022, including $111.9 million held by foreign subsidiaries[164] - The company entered into a Revolving Credit Agreement allowing borrowing up to $100.0 million, with a maturity date of October 2026[165] Foreign Currency Impact - For the three months ended April 2, 2022, the company recognized a foreign currency loss of $2.2 million, compared to a loss of $1.6 million for the same period in 2021[182] - For the six months ended April 2, 2022, the company recognized a foreign currency loss of $3.7 million, while it had a gain of $2.6 million for the same period in 2021[182] - The strengthening of the U.S. dollar relative to the euro in the latter part of Q2 2022 may negatively impact revenue and gross margins from foreign currency-denominated sales[182] - A hypothetical adverse change of 10% in foreign currency transactions would have resulted in an adverse impact on income before taxes of approximately $5.1 million for the three months and $15.6 million for the six months ended April 2, 2022[182]

Q2 2022 Financial Summary S ONO S May 11, 2022 Forward Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding our outlook for the fiscal year ending October 1, 2022; our fiscal 2024 targets; our long-term focus, financial, growth, and business strategies and opportunities; growth metrics and targets; our business model; new products, services, and partnerships; profitability and gross margin ...

Financial Data and Key Metrics Changes - Revenue for Q1 2022 reached a record $664.5 million, representing a 3% increase year-over-year or 3.5% on a constant currency basis [27] - Adjusted EBITDA was $163 million with an adjusted EBITDA margin of 24.6%, marking the second highest Q1 EBITDA ever [30] - Gross margin improved by 140 basis points to 47.8%, driven by reduced promotional activity and product mix [30] Business Line Data and Key Metrics Changes - Sonos speaker revenue decreased by 5% year-over-year due to component availability challenges [29] - Revenue from Sonos system products increased by 38%, supported by the installer channel and improved component availability [29] - Partner products and other revenue rose by 37%, primarily from partnerships with Sonance and IKEA [29] Market Data and Key Metrics Changes - The Americas and EMEA regions both grew by 2% during the quarter, with EMEA increasing by 5% when adjusted for currency [28] - APAC region saw an 18% increase, driven by available supply to meet strong demand [28] Company Strategy and Development Direction - The company is focused on long-term growth through product innovation and has committed to launching at least two new products annually [11][17] - Sonos aims to achieve approximately $2.5 billion in revenue by fiscal 2024, with a 13% CAGR [11][39] - The company operates in a large and growing addressable market, currently holding less than 2% of the $89 billion global audio market [20][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another record year, raising the low end of fiscal 2022 revenue guidance to a range of $1.95 billion to $2 billion [10][33] - The company anticipates continued supply constraints but is working to mitigate these issues [34] - Management highlighted macro tailwinds such as increased audio and video content consumption and the evolution of remote work as favorable for growth [22] Other Important Information - The company generated cash flows from operating activities of $180 million and free cash flow of $174 million [32] - Sonos has deployed $30 million in share buybacks and $27 million in two small acquisitions [32] Q&A Session Summary Question: How will Sonos benefit from the reopening theme? - Management noted that products like Roam and Move are well-positioned for consumers as they leave their homes, and the company is becoming a provider of audio experiences throughout life [45][46] Question: Can you provide an update on the supply chain situation? - Management acknowledged ongoing challenges with component shortages but highlighted improved logistics that contributed to better-than-expected performance in Q1 [49][50] Question: What is the current growth trajectory for new households? - Management indicated that while growth has slowed, there is still significant potential to reach more of the 116 million addressable homes [55][57] Question: What are the expectations for channel inventory levels? - Management expects inventory levels to improve by fall but does not anticipate a return to normal levels immediately [59] Question: What factors contributed to the strong gross margin performance? - Management attributed the improved gross margin to the lack of promotions and price increases that offset supply chain cost increases [65] Question: Can you comment on the ITC news regarding legal actions? - Management expressed satisfaction with the ITC's ruling against Google and mentioned ongoing legal actions related to Sonos innovations [67] Question: How are labor costs impacting the company? - Management noted that labor cost trends are similar to the broader market and have been factored into guidance [71] Question: What is the focus of R&D spending? - Management emphasized ongoing investments in product development and customer experience, including software updates and new services [73]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Table of contents Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 1, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38603 SONOS, INC. (Exact name of registrant as specified in its charter) (I.R.S. Employer Identification No. ...

Table of contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________ Form 10-K _________________________________________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended October 2, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-38603 | _____________________ ...

Sonos, Inc. (NASDAQ:SONO) Q4 2021 Earnings Conference Call November 18, 2021 5:00 PM ET Company Participants Patrick Spence – CEO Brittany Bagler – CFO Eddie Lazarus – Chief Legal Officer Cammeron Mclaughlin – Vice President, Investor Relations Conference Call Participants Tom Forte – Davidson Katy Huberty – Morgan Stanley Brent Thill – Jefferies Rk Rajagopal – Goldman Sachs John Babcock – Bank of America Matt Sheerin – Stifle Operator Good afternoon. My name is Emma and I will be your conference Operator ...

Q3 FY21 Financial Results August 11, 2021 SONOS Forward Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding our outlook for the fiscal year ending October 2, 2021, our fiscal 2024 targets, our long-term focus, financial, growth, and business strategies and opportunities, growth metrics and targets, our business model, new products, services and partnerships, profitability and gross margin ...

Sonos, Inc. (NASDAQ:SONO) Q3 2021 Earnings Conference Call August 11, 2021 5:00 PM ET Corporate Participants Cammeron McLaughlin - Vice President, Investor Relations Patrick Spence - Chief Executive Officer Eddie Lazarus - Chief Legal Officer Brittany Bagley - Chief Financial Officer ConferenceCall Participants Katy Huberty - Morgan Stanley Rod Hall - Goldman Sachs John Babcock - Bank of America Matt Sheerin - Stifel David Zervos - Jefferies Alex Sklar - Raymond James Alexia Tsimikas - D.A. Davidson Operato ...

Table of contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 3, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38603 SONOS, INC. (Exact name of registrant as specified in its charter) Delaware 03-0479476 (State or other ju ...