Slide 1: Q1 Fiscal Year 2025 Financial Results
Q1 Fiscal Year 2025 Financial Results February 6, 2025
Slide 2: Forward Looking Statements
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 quarter ending March 29, 2025; our long-term outlook; our long-term focus, financial, growth,
Slide 3: Launch of Arc Ultra
Launch of Arc Ultra Press/Reviewer Accolades “I found myself audibly chuckling as “The best feature of Arc Ultra “Sonos’ latest audio products the Ultra ramped up well-worn "This technology is a is the addition of Sound transformed the way I watch movies at territory in familiar test films like revol
Slide 4: Holiday Media Coverage
Holiday Media Coverage Von Herzen schenken: Die 8 Tech Gifts for Your Favorite 57 Thoughtful Gifts for Men Who Christmas Gift Guide 2024: schönsten Präsente und Outdoor Nerd Love to Travel 10 Gift Ideas For Audiophiles Deko-Tipps für Zuhause (US) (SPG) (AUT) (US) From WIRED with love! 32 45 Luxury G
Slide 5: Fiscal Q1 Financial Summary
Fiscal Q1 Financial Summary NET REVENUE GAAP GROSS MARGIN 1Q25 revenue decline driven 1Q25 gross margin decline by softer demand due to primarily due to an increase market conditions and in inventory-related challenges resulting from our write-downs, unfavorable 2024 app rollout, partially channel m
Slide 6: Fiscal Q1 Operating Expense Trends
Fiscal Q1 Operating Expense Trends Research and Development Sales and Marketing GAAP R&D was $81M, +$2M GAAP S&M was $87M, +$3M y/y, driven by a one-time y/y, driven by app recovery stock-based compensation spend and depreciation costs; expense related to retention of partially offset by lower key pe
Slide 7: Inventory Trends
Inventory Trends ● Inventories decreased by $32M, -19% y/y due to measures taken to more efficiently manage inventory ○ Finished goods inventory increased by $4M y/y, +3% ○ Components balance decreased by $36M y/y, -60% Note: In $ millions (unless noted), unaudited. Percentages have been calculated us
Slide 8: Cash Flow & Balance Sheet Highlights
Cash Flow & Balance Sheet Highlights ● Cash, cash equivalents & marketable securities of $328M ○ Includes $48M cash deployed into short 1Q25 1Q24 duration treasury bills Cash flow from operations $ 156.2 $ 275.4 ● 1Q25 cash flow from operations of $156M, Capital expenditures $ (13.1) $ (6.1) -$119M y/
Slide 9: 2Q25 Outlook
2Q25 Outlook To be provided on 1Q25 earnings call 9
Slide 10: The Sonos Story
The Sonos Story 10
Slide 11: Sonos at a Glance
Sonos at a Glance 2002 Founded $1.52B FY24 Revenue 16M+ Household Install Base 3.08 FY24 products per Household 44% Products Registered to Existing 17 Flagship Products 6 Categories 3,800+ US Patents and Applications Household Install Base 11
Slide 12: Broad Product Portfolio Spanning Variety of Price Points and Use Cases
Broad Product Portfolio Spanning Variety of Price Points and Use Cases Home Theater Ray Beam $279 $499 Arc Arc Ultra Sub Mini Sub $899 $999 $429 $799 Speakers Components and Architectural Era 100 Era 300 Five Amp Port Sonos and Sonance Sonos and Sonance Sonos and Sonance Sonos and Sonance $249 $449
Slide 13: Market Position
Market Position Premium Sonos is differentiated by our unique combination of an open content and control platform with high-quality, premium hardware that spans a variety of form factors, use cases, and price points. No other company has created an interoperable suite of products serving customers in
Slide 14: Sonos Audio Innovation Is Widely Adopted
Sonos Audio Innovation Is Widely Adopted Sonos Sonos releases digital founded June music system in 2002 February 2005 Sonos Apple HomePod demos at D2 June 2004 Google Home Amazon Echo Denon Heos Lenbrook Bluesound Jan Jan Jan Jan Jan Jan Jan Jan Jan 2018 Present 2002 2004 2006 2008 2010 2012 2014 20
Slide 15: … Yet We Remain the Leader
… Yet We Remain the Leader FY24 Top Ranked Models (by $ share) United States EMEA1 $200+ Home Theater2 $150+ Streaming Audio $200+ Home Theater2 $150+ Streaming Audio Brand Rank: #1 Brand Rank: #2 Brand Rank: #1 Brand Rank: #2 Top Products in Category Top Products in Category Top Products in Categor
Slide 16: Why the Sonos Ecosystem Wins
Why the Sonos Ecosystem Wins Hardware + Software + Interoperability Sound Easy to use Design Reliable 100+ third-party apps Quality All works together Voice services Durability Rich patent portfolio = = = Sounds great, System Open platform looks beautiful, and choice and lasts 16
Slide 17: Our Innovation Is Protected by a Robust and Growing Patent Portfolio
Our Innovation Is Protected by a Robust and Growing Patent Portfolio Total Sonos U.S. Patents and Patent Applications (filed over time, cumulative) 17 Source: Internal Data
Slide 18: Open Platform Enables Freedom of Choice
Open Platform Enables Freedom of Choice 100+ Content Partners Home Automation & Voice Assistants Home Control Partners 18
Slide 19: Key Drivers of Long Term Growth: The Sonos Flywheel
Key Drivers of Long Term Growth: The Sonos Flywheel New households enter the Sonos ecosystem, and existing households purchase additional products at a steady rate Improving the core experience is critical to fueling the Sonos flywheel 1 Continue to raise the bar in New Existing existing product cate
Slide 20: Large and Growing Install Base
Large and Growing Install Base Total Households 16.3 Existing Households Net New Households 15.3 1.0 14.0 1.3 AGR 17%C 12.6 1.4 10.9 1.7 9.1 1.8 7.4 1.7 5.9 1.5 4.6 1.3 1.2 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 Source: Internal Data 20 Note: Unaudited.
Slide 21: Framing Our Long Term Opportunity: Households
Framing Our Long Term Opportunity: Households PLUS Geographic Expansion 391M Households in Core Markets1 ~9% Current penetration of total affluent households 172M Affluent ($75k+2) Households 16M Sonos FY24 Households Source: Euromonitor 2023 1. Core Markets include the United States, Canada, Mexico, Au
Slide 22: Our Install Base Continues to Purchase Additional Sonos Products
Our Install Base Continues to Purchase Additional Sonos Products A significant portion of our annual product registrations come from our existing households (HHs), many of which start with just one product. Lifetime value of customers grows as products per HH increases Incremental revenue opportunity
Slide 23: Average Registrations per Customer
A Detailed Look at Customer Behavior and Install Base Monetization Over Time Consistent repurchase behavior across larger cohorts and greater monetization of products sold underscores our conviction to deliver our long term financial targets Cohorts behave similarly over time, regardless of when first
Slide 24: New Product Innovation Drives Household Acquisition & Repurchase Activity
New Product Innovation Drives Household Acquisition & Repurchase Activity We continue to launch new products across our six current categories FY25 FY18 FY19 FY20 FY21 FY22 FY23 FY24 to date -Arc -Beam (Gen 2) -Arc Ultra Home Theater -Beam (Gen 1) -Sub Mini -Sub (Gen 3) -Ray -Sub (Gen 4) -Era 100 Sp
Slide 25: Framing Our Long Term Opportunity: Revenue
NEW: Framing Our Long Term Opportunity: Revenue Launch of our new premium over-the-ear (OTE) headphones unlocks an incremental $5bn core Premium OTE headphones TAM, +23% increase PLUS Audio content, services & business $22bn $5bn Premium Global Premium Global Home Audio TAM over-the-ear (OTE) $100B
Slide 26: Differentiated Channel Distribution
Differentiated Channel Distribution Channel mix remains relatively flat YoY as challenges related to the launch of our new app and category headwinds weigh on our FY24 results 2018 2019 2020 2021 2022 2023 2024 ● Retail & Other (55% of revenue, +0 bps), -8% y/y Retail and Other 830 930 838 1,011 987 9
Slide 27: Summary Financial Overview
Summary Financial Overview 2018 2019 2020 2021 2022 2023 2024 Americas 603 678 756 981 1,044 1,048 1,005 % y/y 12% 11% 30% 6% 0% (4%) EMEA 479 485 471 618 578 518 430 % y/y 1% (3%) 31% (7%) (10%) (17%) APAC 55 98 100 117 130 89 83 % y/y 78% 2% 18% 11% (32%) (7%) Total Revenue 1,137 1,261 1,326 1,717
Slide 28: Appendix
Appendix 28
Slide 29: Reconciliation of Certain GAAP to Non-GAAP Operating Expenses
Reconciliation of Certain GAAP to Non-GAAP Operating Expenses 1Q20 1Q21 1Q22 1Q23 1Q24 1Q25 GAAP R&D $ 52,526 $ 52,346 $ 61,330 $ 76,940 $ 79,235 $ 80,838 Less: Stock-based compensation expense $ 5,116 $ 6,258 $ 6,738 $ 9,151 $ 8,979 $ 13,315 Less: Amortization of intangibles $- $ 487 $ 1,071 $ 495
Slide 30: Reconciliation of Operating Income to Adjusted EBITDA
Reconciliation of Operating Income to Adjusted EBITDA 1Q20 1Q21 1Q22 1Q23 1Q24 1Q25 Operating Income (GAAP) $ 67,462 $ 137,384 $ 132,594 $ 86,304 $ 79,695 $ 48,093 Stock-based compensation 13,204 14,844 17,459 20,195 19,358 25,334 Legal and transaction related costs (1) 3,448 8,666 3,873 6,289 3,743
Slide 31: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA 1Q20 1Q21 1Q22 1Q23 1Q24 1Q25 (In thousands, except percentages) Net income $ 70,775 $ 132,292 $ 123,481 $ 75,188 $ 80,947 $ 50,237 Add (deduct): Depreciation and amortization 9,105 7,982 9,217 11,132 11,878 17,611 Stock-based compensation expense 13,2
Slide 32: Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow
Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow 1Q20 1Q21 1Q22 1Q23 1Q24 1Q25 Cash flows (used in) provided by operating activities $ 118,840 $ 214,513 $ 179,934 $ 182,286 $ 275,401 $ 156,173 Less: Purchases of property and equipment (15,914) (11,333) (6,355) (14,689)
Slide 33: SONOS
SONOS