Sonos, Inc. · NASDAQ:SONO
Sonos — Q3 FY2025 Earnings Presentation
35 slides from Sonos's earnings presentation, Aug 6, 2025
Slide 1: Q3 Fiscal Year 2025 Financial Results
Q3 Fiscal Year 2025 Financial Results August 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 September 27, 2025; our long-term outlook; our long-term focus, financial, grow
Slide 3: Fiscal Q3 Financial Summary
Fiscal Q3 Financial Summary 3Q25 GAAP GM declined (490 NET REVENUE GROSS MARGIN bps) y/y primarily due to higher 3Q25 revenue decrease of inventory reserves, the impact (13%) y/y driven by of reorganization efforts, and comping launch of Ace in deleverage, partially offset by 3Q24 (June 2024) and lowe
Slide 4: Inventory Trends
Inventory Trends ● Inventories decreased by $39M, (25%) y/y driven primarily by workdown of component inventory ○ Finished goods inventory decreased by $9M, (9%) y/y ○ Components balance decreased by $30M, (58%) y/y Note: In $ millions (unless noted), unaudited. Percentages and comparisons have been
Slide 5: Cash Flow & Balance Sheet Highlights
Cash Flow & Balance Sheet Highlights ● Cash, cash equivalents & marketable securities of $254M ○ Includes $53M cash deployed into short duration treasury bills 3Q25 3Q24 Cash flow from operations $ 37.4 $ 63.5 ● Total liquidity of $352M, includes $97.6M borrowing Capital expenditures $ (4.8) $ (23.2)
Slide 6: Fiscal Q3 Operating Expense Trends
Fiscal Q3 Operating Expense Trends Research and Development Sales and Marketing GAAP R&D was $60M GAAP S&M was $63M 1 Non-GAAP R&D was $53M, down 17% y/y due to cost Non-GAAP S&M1 was $58M, optimization efforts down 13% y/y driven by lower marketing investment General and Administrative Total Operati
Slide 7: 4Q25 Outlook
4Q25 Outlook 7
Slide 8: Fiscal Q4 Outlook
Fiscal Q4 Outlook 4Q24 3Q25 4Q25 Outlook Revenue $255.4M $344.8M $260M to $290M % y/y (16%) (13%) +2% to +14% % q/q (36%) (25%) to (16%) GAAP Gross Margin 40.3% 43.4% 42.0% to 44.0% Adjustments1 0.7% 1.3% 1.5% to 1.7% Non-GAAP Gross Margin1 41.0% 44.7% 43.7% to 45.5% Tariff Headwind to GAAP and Non-G
Slide 9: Overview of Sonos Tariff Exposure
Overview of Sonos Tariff Exposure A few years ago, we undertook a significant effort to diversify our supply Mitigation Efforts - working to minimize tariff impact to Adjusted EBITDA chain, which resulted in manufacturing of nearly all of our U.S.-bound products shifting to Vietnam and Malaysia. Our reli
Slide 10: Year-to-Date Transformation Overview
Year-to-Date Transformation Overview ● We continue to work on rationalizing our operating expenses, as evidenced by our y/y OpEx declines in 3Q25 (13%) to (17%) ● Relative to FY24 Normalized OpEx, our run-rate cost savings targets are: ○ $100-130 million (GAAP), +$40-60M vs prior update ○ $80-100 mi
Slide 11: The Sonos Story
The Sonos Story 11
Slide 12: Sonos at a Glance
Sonos at a Glance $1.52B FY24 Revenue 45% FY24 GAAP Gross Margin 16M+ Household Install Base 3.08 FY24 products per Household 44% 18 6 #4 Patent Power Per IEEE Products Registered to Existing Flagship Products Categories 4,300+ US Patents and Applications Household Install Base 12
Slide 13: 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 $199 $499 Arc Ultra Arc Sub Mini Sub $999 $899 $429 $799 Speakers Components and Architectural Era 100 Era 100 Pro Era 300 Five Amp Port Sonos and Sonance Sonos and Sonance Sonos and Sonance Sonos and Sonanc
Slide 14: 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 15: 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 16: … 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 17: Why the Sonos Platform Wins
Why the Sonos Platform 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 17
Slide 18: 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) 18 Source: Internal Data
Slide 19: Open Platform Enables Freedom of Choice
Open Platform Enables Freedom of Choice 100+ Content Partners Home Automation & Voice Assistants Home Control Partners 19
Slide 20: 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 1 Improve the Sonos core experience 2 Continue raising the bar in existing product categories and enter new product categories 3 Expand
Slide 21: 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 21 Note: Unaudited.
Slide 22: 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 23: 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 24: A Detailed Look at Customer Behavior and Install Base Monetization
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 25: 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 26: Framing Our Long Term Opportunity: Revenue
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 headp
Slide 27: Differentiated Channel Distribution
Differentiated Channel Distribution Channel mix in FY24 remained relatively flat y/y 2018 2019 2020 2021 2022 2023 2024 ● Retail & Other (55% of revenue, +0 bps), -8% y/y Retail and Other 830 930 838 1,011 987 918 842 % yoy 12% (10%) 21% (2%) (7%) (8%) ● DTC (23% of revenue, -100 bps), -12% y/y DTC 13
Slide 28: 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 29: Appendix
Appendix 29
Slide 30: Reconciliation of GAAP to Non-GAAP Gross Margin
Reconciliation of GAAP to Non-GAAP Gross Margin 3Q20 3Q21 3Q22 3Q23 3Q24 3Q25 Reconciliation of GAAP gross profit GAAP gross profit $ 109,791 $ 177,861 $ 175,848 $ 171,762 $ 191,641 $ 149,724 Stock-based compensation expense 306 248 448 450 655 1,633 Amortization of intangibles - 230 213 973 973 3,278
Slide 31: Reconciliation of Certain GAAP to Non-GAAP Operating Expenses
Reconciliation of Certain GAAP to Non-GAAP Operating Expenses 3Q20 3Q21 3Q22 3Q23 3Q24 3Q25 GAAP R&D $ 57,770 $ 55,578 $ 62,522 $ 77,758 $ 74,223 $ 59,750 Less: Stock-based compensation expense $ 6,154 $ 6,125 $ 7,858 $ 8,637 $ 9,735 $ 7,944 Less: Amortization of intangibles $ 475 $ 260 $ 641 $ 496
Slide 32: Reconciliation of Operating (Loss) Income to Adjusted EBITDA
Reconciliation of Operating (Loss) Income to Adjusted EBITDA 3Q20 3Q21 3Q22 3Q23 3Q24 3Q25 Operating (Loss) Income (GAAP) $ (56,914) $ 16,729 $ 6,960 $ (21,261) $ 12,589 $ (2,929) Stock-based compensation 15,041 15,547 18,779 18,329 21,930 19,352 Legal and transaction related costs (1) 4,132 5,351 7
Slide 33: Reconciliation of Net (Loss) Income to Adjusted EBITDA
Reconciliation of Net (Loss) Income to Adjusted EBITDA 3Q20 3Q21 3Q22 3Q23 3Q24 3Q25 (In thousands, except percentages) Net (loss) income $ (56,980) $ 17,826 $ (597) $ (23,571) $ 3,709 $ (3,379) Add (deduct): Depreciation and amortization 8,861 9,065 8,907 12,209 12,032 15,879 Stock-based compensati
Slide 34: Reconciliation of Cash Flows to Free Cash Flow
Reconciliation of Cash Flows Provided by (Used in) Operating Activities to Free Cash Flow 3Q20 3Q21 3Q22 3Q23 3Q24 3Q25 Cash flows provided by (used in) operating activities $ 47,783 $ 70,786 $ (6,717) $ 8,887 $ 63,483 $ 37,441 Less: Purchases of property and equipment (4,105) (14,865) (9,281) (16,68
Slide 35: SONOS
SONOS