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Sonos Reports Fourth Quarter and Fiscal 2022 Results

Nov 16, 2022

Eddie Lazarus Appointed Chief Financial Officer

SANTA BARBARA, Calif.--(BUSINESS WIRE)-- Sonos, Inc. (Nasdaq: SONO) today reported fourth quarter and fiscal 2022 results.

Fiscal 2022 Financial Highlights (unaudited)

  • Revenue increased 2.1% year-over-year to $1,752.3 million; on a constant-currency basis, revenue increased approximately 4.9% year-over-year
  • Gross margin decreased (180) basis points year-over-year to 45.4%
  • GAAP net income of $67.4 million compared to $158.6 million last year
    • GAAP diluted earnings per share (EPS) of $0.49 compared to $1.13 last year
  • Non-GAAP net income1 of $165.9 million compared to $248.3 million last year
    • Non-GAAP diluted EPS1 of $1.20 compared to $1.77 last year
  • Adjusted EBITDA of $226.5 million compared to $278.6 million last year
    • Adjusted EBITDA margin of 12.9% compared to 16.2% last year
  • Free cash flow of $(74.5) million. Cash flows (used) in operating activities of $28.3 million

Fourth Quarter 2022 Financial Highlights (unaudited)

  • Revenue decreased 12.0% year-over-year to $316.3 million; on a constant-currency basis, revenue decreased approximately 6.6% year-over-year
  • Gross margin decreased 720 basis points year-over-year to 39.2%
  • GAAP net (loss) of $(64.1) million compared to $(8.7) million last year
    • GAAP diluted (loss) per share of $(0.50) compared to $(0.07) last year
  • Non-GAAP net (loss)1 of $(40.4) million compared to non-GAAP net income of $11.8 million last year
    • Non-GAAP diluted (loss) per share1 of $(0.32) compared to $0.08 last year
  • Adjusted EBITDA of $(25.6) million compared to $17.1 million last year
    • Adjusted EBITDA margin of (8.1%) compared to 4.8% last year
  • Free cash flow of $(125.2) million. Cash flows (used) in operating activities of $103.9 million

Notes: 1 Non-GAAP net income/EPS and non-GAAP net (loss)/(loss) per share exclude stock-based compensation and legal and transaction related fees. See “Use of Non-GAAP Measures” and reconciliations to GAAP measures below.

“The macroeconomic backdrop became significantly more challenging in Fiscal 2022 and I am proud of our team's tremendous efforts to deliver our 17th consecutive year of revenue growth. We grew the team to build on our leadership in existing categories, and pursue four additional categories, to ultimately capture more of the $96 billion global audio market. We were pleased to see trends stabilize in Q4, and head into the holidays with a good early response to our latest product, Sub Mini, and our healthiest in-stock inventory position in three years,” said Patrick Spence, CEO of Sonos.

Mr. Spence continued, “We will remain disciplined as we invest in the year ahead, and will take all necessary steps to protect the health of the business. My conviction in the long-term potential of Sonos has never been stronger. As these headwinds subside, I am confident that we will return to double-digit revenue growth.”

Sonos today announced that Eddie Lazarus, the Company’s interim Chief Financial Officer and Chief Legal Officer, has been appointed as Chief Financial Officer of the Company. A search will commence for a General Counsel who will assume the day-to-day responsibilities of the legal organization, reporting to Mr. Lazarus.

“Eddie has seamlessly transitioned into his expanded role and made an immediate impact on the organization,” said Mr. Spence. “I am confident that under his leadership we will execute on our strategic priorities, drive greater organizational efficiency and make continued progress toward delivering on our long term financial targets.”

Fiscal 2023 Outlook

  • Revenue in the range of $1.7 billion to $1.8 billion, representing a decline of -3% to growth of 3% from fiscal 2022, or growth of 1% to 7% on a constant currency basis
  • Gross margin in the range of 45.0% to 46.0%
  • Adjusted EBITDA in the range of $145 million to $180 million, representing a decline of 36% to 21% from fiscal 2022
  • Adjusted EBITDA margin of 8.5% to 10.0%

Fiscal 2022 Company Highlights (unaudited)

Key Metrics:

  • Total households increased 11% to 14.0 million in fiscal 2022
  • Existing households accounted for 44% of new product registrations in fiscal 2022
  • Average number of registered products per household of 2.98 in fiscal 2022 vs 2.95 last year
  • Listening hours increased 6% year-over-year to 12.8 billion
  • Direct-to-consumer (DTC) revenue decreased 5% and represented 23% of total revenue
  • New disclosure: Installer Solutions (IS) revenue increased 28% and represented 21% of total revenue

New Stock Repurchase Program

  • As announced in a separate release today, the company’s Board of Directors has authorized a new common stock repurchase program of up to $100 million.
  • Under its most recently completed repurchase program, the company repurchased $150 million in stock, representing 6.6 million shares at an average price of $22.80 per share, enabling the company to return capital to shareholders and offset dilution from compensation plans.

Strategic Initiatives

  • Expansion of our Ecosystem
    • Mayht - Acquisition Announced April 2022: Mayht is a Netherlands-based company that has invented a new, revolutionary approach to audio transducers. Transducers are the foundational element within speakers that create sound, and Mayht has re-engineered them to enable smaller and lighter form factors while producing exceptional sound.
    • Sonos Voice Control - May 2022: The first voice experience created purely for listening on Sonos. Designed with privacy at its core, Sonos Voice Control is the simplest way to control your music, offering complete command of your Sonos system using only your voice.
    • Sonos Ray - June 2022 - $279 MSRP: Our entry-level, smart soundbar for TV, music and more.
    • Sub Mini - September 2022 - $429 MSRP: The wireless subwoofer that sets a new standard in its category for powerful, balanced bass. Building on the award-winning design of Sub, Sub Mini delivers rich, clear low end in a more compact, cylindrical design.
  • Expansion of our Brand
    • LFC delivered TV viewership of over 270M in Season 1/ FY22.
    • ESPN delivered 205M impressions in its first season.
    • Food52, a platform with a large female following, delivered more than 28M impressions by the end of FY22
    • For the launch of Roam Colors, more than 170 advocates in the outdoor, travel and wellness spaces delivered inspiring video content showcasing how they Feel More with Sonos, resulting in more than 70M impressions in FY22
  • Responsibility and Innovation
    • Recognized as one of the best places to work for LGBTQ+ equality by the Human Rights Campaign (HRC) Foundation.
    • Publishing annual Listen Better Report on November 29th, highlighting the work we have done to improve our efforts as a responsible company. In FY22, we advanced our Climate Action Plan by conducting an annual assessment of our greenhouse gas emissions.
    • Won two awards for our product packaging. First-place in 2022 Dieline Awards under the electronics, office, e-commerce, entertainment and self-promo category, and Industrial Designers Society of America IDEA 2022 Jury Chair Award for Sonos Global Packaging System.
    • Won CIO 100 award for “IT in a Box.”

Supplemental Earnings Presentation

The company has posted a supplemental earnings presentation accompanying its fourth quarter and fiscal 2022 results to the Earnings Reports section of its investor relations website at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports.

Conference Call, Webcast and Transcript

The company will host a webcast of its conference call and Q&A related to its fourth quarter and fiscal 2022 results on November 16, 2022, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Participants may access the live webcast in listen-only mode on the Sonos investor relations website at https://investors.sonos.com/news-and-events/default.aspx.

The conference call may also be accessed by dialing (888) 330-2454 with conference ID 8641747. Participants outside the U.S. can access the call by dialing (240) 789-2714 using the same conference ID.

An archived webcast of the conference call and a transcript of the company’s prepared remarks and Q&A session will also be available at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports following the call.

 

Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited, in thousands, except share and per share amounts)

 

 

 

 

 

 

Three Months Ended

Twelve months ended

 

October 1,
2022

October 2,
2021

October 1,
2022

October 2,
2021

Revenue

$

316,290

 

$

359,539

 

$

1,752,336

 

$

1,716,744

 

Cost of revenue

 

192,191

 

 

192,608

 

 

955,969

 

 

906,750

 

Gross profit

 

124,099

 

 

166,931

 

 

796,367

 

 

809,994

 

Operating expenses

 

 

 

 

Research and development

 

67,274

 

 

65,783

 

 

256,073

 

 

230,078

 

Sales and marketing

 

72,649

 

 

73,236

 

 

280,333

 

 

272,124

 

General and administrative

 

44,240

 

 

39,457

 

 

170,429

 

 

152,828

 

Total operating expenses

 

184,163

 

 

178,476

 

 

706,835

 

 

655,030

 

Operating income

 

(60,064

)

 

(11,545

)

 

89,532

 

 

154,964

 

Other income (expense), net

 

 

 

 

Interest income

 

1,070

 

 

33

 

 

1,655

 

 

146

 

Interest expense

 

(168

)

 

(67

)

 

(552

)

 

(592

)

Other income (expense), net

 

(8,364

)

 

(2,271

)

 

(21,905

)

 

2,407

 

Total other income (expense), net

 

(7,462

)

 

(2,305

)

 

(20,802

)

 

1,961

 

Income (loss) before provision for (benefit from) income taxes

 

(67,526

)

 

(13,850

)

 

68,730

 

 

156,925

 

Provision for (benefit from) income taxes

 

(3,459

)

 

(5,106

)

 

1,347

 

 

(1,670

)

Net income (loss)

$

(64,067

)

$

(8,744

)

$

67,383

 

$

158,595

 

 

 

 

 

 

Net income (loss) attributable to common stockholders:

 

 

 

 

Basic and diluted

$

(64,067

)

$

(8,744

)

$

67,383

 

$

158,595

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders:

 

 

 

 

Basic

$

(0.50

)

$

(0.07

)

$

0.53

 

$

1.30

 

Diluted

$

(0.50

)

$

(0.07

)

$

0.49

 

$

1.13

 

 

 

 

 

 

Weighted-average shares used in computing net income (loss) per share attributable to common stockholders:

 

 

 

 

Basic

 

127,104,659

 

 

126,351,433

 

 

127,691,030

 

 

122,245,212

 

Diluted

 

127,104,659

 

 

126,351,433

 

 

137,762,078

 

 

140,309,152

 

 

 

 

 

 

Total comprehensive income (loss)

 

 

 

 

Net income (loss)

$

(64,067

)

$

(8,744

)

$

67,383

 

$

158,595

 

Change in foreign currency translation adjustment

 

(249

)

 

252

 

 

(2,221

)

 

514

 

Comprehensive income (loss)

$

(64,316

)

$

(8,492

)

$

65,162

 

$

159,109

 

 

Consolidated Balance Sheets

(unaudited, dollars in thousands, except par values)

 

As of

 

October 1,
2022

October 2,
2021

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

274,855

 

$

640,101

 

Accounts receivable, net of allowances

 

101,206

 

 

100,779

 

Inventories

 

454,288

 

 

185,130

 

Prepaids and other current assets

 

37,042

 

 

31,504

 

Total current assets

 

867,391

 

 

957,514

 

Property and equipment, net

 

86,168

 

 

71,341

 

Operating lease right-of-use assets

 

28,329

 

 

33,841

 

Goodwill

 

77,300

 

 

15,545

 

Intangible assets, net:

 

 

In-process research and development

 

64,680

 

 

20,100

 

Other intangible assets

 

26,384

 

 

4,350

 

Deferred tax assets

 

1,508

 

 

10,028

 

Other noncurrent assets

 

36,628

 

 

26,085

 

Total assets

$

1,188,388

 

$

1,138,804

 

Liabilities and stockholders’ equity

 

 

Current liabilities:

 

 

Accounts payable

$

335,758

 

$

214,996

 

Accrued expenses

 

109,290

 

 

108,029

 

Accrued compensation

 

23,624

 

 

77,695

 

Deferred revenue, current

 

27,318

 

 

35,866

 

Other current liabilities

 

39,649

 

 

39,544

 

Total current liabilities

 

535,639

 

 

476,130

 

Operating lease liabilities, noncurrent

 

25,596

 

 

33,960

 

Deferred revenue, noncurrent

 

56,152

 

 

53,632

 

Deferred tax liabilities

 

9,642

 

 

2,394

 

Other noncurrent liabilities

 

846

 

 

3,646

 

Total liabilities

 

627,875

 

 

569,762

 

Stockholders’ equity:

 

 

Common stock, $0.001 par value

 

130

 

 

129

 

Treasury stock

 

(50,896

)

 

(50,276

)

Additional paid-in capital

 

617,390

 

 

690,462

 

Accumulated deficit

 

(2,514

)

 

(69,897

)

Accumulated other comprehensive loss

 

(3,597

)

 

(1,376

)

Total stockholders’ equity

 

560,513

 

 

569,042

 

Total liabilities and stockholders’ equity

$

1,188,388

 

$

1,138,804

 

 

Consolidated Statements of Cash Flows

(unaudited, dollars in thousands)

 

Twelve months ended

 

October 1,
2022

October 2,
2021

Cash flows from operating activities

 

 

Net income

$

67,383

 

$

158,595

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

Depreciation and amortization

 

38,504

 

 

33,882

 

Impairment and abandonment

 

62

 

 

3,552

 

Stock-based compensation expense

 

75,640

 

 

62,127

 

Other

 

10,919

 

 

1,951

 

Deferred income taxes

 

(1,508

)

 

(8,330

)

Foreign currency transaction (gain) loss

 

10,775

 

 

(1,108

)

Changes in operating assets and liabilities:

 

 

Accounts receivable, net

 

(5,513

)

 

(45,697

)

Inventories

 

(277,489

)

 

(7,911

)

Other assets

 

(16,604

)

 

(30,009

)

Accounts payable and accrued expenses

 

129,686

 

 

26,231

 

Accrued compensation

 

(52,904

)

 

33,447

 

Deferred revenue

 

(1,667

)

 

27,587

 

Other liabilities

 

(5,544

)

 

(1,091

)

Net cash provided by (used in) operating activities

 

(28,260

)

 

253,226

 

Cash flows from investing activities

 

 

Purchases of property and equipment, intangible and other assets

 

(46,216

)

 

(45,531

)

Cash paid for acquisitions, net of acquired cash

 

(126,416

)

 

 

Net cash used in investing activities

 

(172,632

)

 

(45,531

)

Cash flows from financing activities

 

 

Payments for debt issuance costs

 

(929

)

 

Proceeds from exercise of stock options

 

40,443

 

 

147,818

 

Payments for repurchase of common stock

 

(150,121

)

 

(50,014

)

Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock units

 

(39,653

)

 

(47,837

)

Payments of borrowings

 

 

 

(25,000

)

Net cash provided by (used in) financing activities

 

(150,260

)

 

24,967

 

Effect of exchange rate changes on cash and cash equivalents

 

(14,094

)

 

148

 

Net increase (decrease) in cash and cash equivalents

 

(365,246

)

 

232,810

 

Cash and cash equivalents

 

 

Beginning of period

 

640,101

 

 

407,291

 

End of period

$

274,855

 

$

640,101

 

Supplemental disclosure

 

 

Cash paid for interest

$

344

 

$

502

 

Cash paid for taxes, net of refunds

$

9,306

 

$

4,114

 

Cash paid for amounts included in the measurement of lease liabilities

$

14,636

 

$

18,657

 

Supplemental disclosure of non-cash investing and financing activities

 

 

Purchases of property and equipment in accounts payable and accrued expenses

$

9,112

 

$

5,653

 

Right-of-use assets obtained in exchange for new operating lease liabilities

$

5,054

 

$

2,010

 

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(unaudited, dollars in thousands except percentages)

 

Three Months Ended

Twelve months ended

 

October 1,
2022

October 2,
2021

October 1,
2022

October 2,
2021

Net income (loss)

$

(64,067

)

$

(8,744

)

$

67,383

 

$

158,595

 

Add (deduct):

 

 

 

 

Depreciation and amortization

 

10,805

 

 

8,093

 

 

38,504

 

 

33,882

 

Stock-based compensation expense

 

18,177

 

 

15,372

 

 

75,640

 

 

62,127

 

Interest income

 

(1,070

)

 

(33

)

 

(1,655

)

 

(146

)

Interest expense

 

168

 

 

67

 

 

552

 

 

592

 

Other (income) expense, net

 

8,364

 

 

2,271

 

 

21,905

 

 

(2,407

)

Provision for (benefit from) income taxes

 

(3,459

)

 

(5,106

)

 

1,347

 

 

(1,670

)

Restructuring and related expenses(1)

 

 

 

165

 

 

 

 

(2,446

)

Legal and transaction related costs(2)

 

5,529

 

 

5,028

 

 

22,873

 

 

30,058

 

Adjusted EBITDA

$

(25,553

)

$

17,113

 

$

226,549

 

$

278,585

 

Revenue

$

316,290

 

$

359,539

 

$

1,752,336

 

$

1,716,744

 

Adjusted EBITDA margin

 

(8.1

)%

 

4.8

%

 

12.9

%

 

16.2

%

(1)

Restructuring and related expenses for the twelve months ended October 2, 2021, include a gain of $2.8 million, related to our negotiation for the early termination of a facility lease that was part of the 2020 restructuring plan. The gain represents the difference between the related operating lease liability and previously accrued restructuring expenses versus the early termination payment.

(2)

Legal and transaction related costs consist of expenses related to our intellectual property litigation against Alphabet Inc. and Google LLC as well as legal and transaction costs associated with our acquisition activity, which we do not consider representative of our underlying operating performance.

 
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)

(unaudited, in thousands, except share and per share amounts)

 

Three Months Ended

 

Twelve months ended

 

October 1,
2022

 

October 2,
2021

 

October 1,
2022

 

October 2,
2021

Reconciliation of GAAP net income (loss)

 

 

 

 

GAAP net income (loss)

$

(64,067

)

$

(8,744

)

$

67,383

$

158,595

 

Stock-based compensation expense

 

18,177

 

 

15,372

 

 

75,640

 

 

62,127

 

Restructuring and related expenses

 

 

 

165

 

 

 

 

(2,446

)

Legal and transaction related costs

 

5,529

 

 

5,028

 

 

22,873

 

 

30,058

 

Non-GAAP net income (loss)

$

(40,361

)

$

11,821

 

$

165,896

 

$

248,334

 

 

 

 

 

 

Reconciliation of net income (loss) per share

 

 

 

 

GAAP net income (loss) per share, diluted

$

(0.50

)

$

(0.07

)

$

0.49

 

$

1.13

 

Non-GAAP adjustments to net income (loss) per share

$

0.19

 

$

0.15

 

$

0.72

 

$

0.64

 

Non-GAAP net income (loss) per share, diluted

$

(0.32

)

$

0.08

 

$

1.20

 

$

1.77

 

Weighted-average shares used in GAAP and non-GAAP per share calculation, diluted

 

127,104,659

 

 

126,351,433

 

 

137,762,078

 

 

140,309,152

 

Note: Certain figures may not sum due to rounding

Reconciliation of Cash Flows Provided by (Used in) Operating Activities to Free Cash Flow

(unaudited, dollars in thousands)

 

Three Months Ended

 

Twelve months ended

 

October 1,
2022

 

October 2,
2021

 

October 1,
2022

 

October 2,
2021

Cash flows provided by (used in) operating activities

$

(103,917

)

$

6,486

 

$

(28,260

)

$

253,226

 

Less: Purchases of property and equipment, intangible and other assets

 

(21,269

)

 

(10,739

)

 

(46,216

)

 

(45,531

)

Free cash flow

$

(125,186

)

$

(4,253

)

$

(74,476

)

$

207,695

 

 

Revenue by Product Category

(unaudited, dollars in thousands)

 

Three Months Ended

 

Twelve months ended

 

October 1,
2022

 

October 2,
2021

 

October 1,
2022

 

October 2,
2021

Sonos speakers

$

235,091

$

273,525

$

1,368,916

$

1,378,808

Sonos system products

 

62,782

 

67,738

 

297,110

 

265,180

Partner products and other revenue

 

18,417

 

18,276

 

86,310

 

72,756

Total revenue

$

316,290

$

359,539

$

1,752,336

$

1,716,744

 

Revenue by Geographical Region

(unaudited, dollars in thousands)

 

Three Months Ended

 

Twelve months ended

 

October 1,
2022

 

October 2,
2021

 

October 1,
2022

 

October 2,
2021

Americas

$

199,686

$

196,034

$

1,044,113

$

980,931

Europe, Middle East and Africa

 

91,438

 

 

137,936

 

 

578,034

 

 

618,476

 

Asia Pacific

 

25,166

 

 

25,569

 

 

130,189

 

 

117,337

 

Total revenue

$

316,290

 

$

359,539

 

$

1,752,336

 

$

1,716,744

 

 

Stock-based Compensation

(unaudited, dollars in thousands)

 

Three Months Ended

Twelve months ended

 

October 1,
2022

October 2,
2021

October 1,
2022

October 2,
2021

Cost of revenue

$

467

$

265

$

1,620

$

988

Research and development

 

8,037

 

 

6,008

 

 

30,724

 

 

25,075

 

Sales and marketing

 

3,685

 

 

3,253

 

 

15,335

 

 

13,570

 

General and administrative

 

5,988

 

 

5,846

 

 

27,961

 

 

22,494

 

Total stock-based compensation expense

$

18,177

 

$

15,372

 

$

75,640

 

$

62,127

 

 

Use of Non-GAAP Measures

We have provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles (“U.S. GAAP”), including adjusted EBITDA, adjusted EBITDA margin, free cash flow, net income (loss) excluding stock-based compensation and legal and transaction related fees and diluted earnings (loss) per share excluding stock-based compensation and legal and transaction related fees. These non-GAAP financial measures are not based on any standardized methodology prescribed by U.S. GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We use these non-GAAP financial measures to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in these non-GAAP financial measures. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects and allowing for greater transparency with respect to a key financial metric used by our management in its financial and operational decision-making. Non-GAAP financial measures should not be considered in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of these financial measures to their nearest U.S. GAAP financial equivalents provided in the financial statement tables above. We define adjusted EBITDA as net income adjusted to exclude the impact of depreciation, stock-based compensation expense, interest income, interest expense, other income (expense), income taxes and other items that we do not consider representative of our underlying operating performance. We define adjusted EBITDA margin as adjusted EBITDA divided by revenue. We define free cash flow as net cash from operations less purchases of property and equipment and intangible and other assets. We calculate non-GAAP net income (loss) excluding stock-based compensation and legal and transaction related fees as net income (loss) less stock-based compensation and legal and transaction related fees. We calculate non-GAAP diluted earnings (loss) per share excluding stock-based compensation and legal and transaction related fees as net income (loss) less stock-based compensation and legal and transaction related fees divided by our number of shares at fiscal year end. We calculate constant currency growth percentages by translating our prior period financial results using the current period average currency exchange rates and comparing these amounts to our current period reported results. We do not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because we cannot do so without unreasonable effort due to unavailability of information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, we do so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for items such as stock-based compensation, which is inherently difficult to predict with reasonable accuracy. Stock-based compensation expense is difficult to estimate because it depends on our future hiring and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to constant change. In addition, for purposes of setting annual guidance, it would be difficult to quantify stock-based compensation expense for the year with reasonable accuracy in the current quarter. As a result, we do not believe that a GAAP reconciliation would provide meaningful supplemental information about our outlook.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding our outlook for the fiscal year ending September 30, 2023, our long-term outlook, 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 margins, market growth and our market share, the macroeconomic environment and our ability to weather it, and other factors affecting variability in our financial results. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including, but not limited to the duration and impact of the COVID-19 pandemic and related mitigation efforts on our industry and our supply chain; supply chain challenges, including shipping and logistics challenges, component supply-related challenges and inflationary pressures; our ability to effectively manage inventory levels, particularly during periods of fluctuating component availability; the impact of global economic, market and political events, including the continuing conflict between Russia and Ukraine, foreign currency exchange fluctuations and inflation; changes in consumer income and overall consumer spending as a result of economic or political uncertainty; changes in consumer spending patterns;our ability to successfully introduce new products and services and maintain or expand the success of our existing products; the success of our efforts to expand our direct-to-consumer channel; the success of our financial, growth and business strategies; our ability to meet product demand and manage any product availability delays; and the other risk factors set forth under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended July 2, 2022 and our other filings filed with the Securities and Exchange Commission (the “SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this press release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events. Sonos and Sonos product names are trademarks or registered trademarks of Sonos, Inc. All other product names and services may be trademarks or service marks of their respective owners.

About Sonos

Sonos (Nasdaq: SONO) is one of the world’s leading sound experience brands. As the inventor of multi-room wireless home audio, Sonos’ innovation helps the world listen better by giving people access to the content they love and allowing them to control it however they choose. Known for delivering an unparalleled sound experience, thoughtful home design aesthetic, simplicity of use and an open platform, Sonos makes the breadth of audio content available to anyone. Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

Investor Contact
James Baglanis
IR@sonos.com

Press Contact
Tom Lodge
PR@sonos.com

Source: Sonos

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