#1Q2 2022 Financial Summary SONOS SONOS May 11, 2022#2Forward 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 margins; our direct-to-consumer efforts; our market share; and other factors affecting variability in our financial results. ecc 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 supply chain; supply chain challenges, including shipping and logistics challenges, significant limits on component supplies and inflationary pressures; the impact of global market and political events, including Russia's invasion of Ukraine; changes in consumer income and overall consumer spending as a result of economic or political uncertainty; 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 January 1, 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 letter, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events, except to the extent required by law. Non-GAAP Measures Additional information relating to certain of our financial measures contained herein, including non-GAAP financial measures, is available in the appendix to this presentation.#3Q2 Highlights Record Q2 revenue of $399.8M, +20% from LY driven by strong product demand and improved availability of supply Q2 gross margin of 44.8%, -300 bps from Q1 driven primarily by increased component costs and higher shipping and logistics costs Q2 adjusted EBITDA of $46.9M, -3% from LY driven by lower GM, partially offset by opex leverage Q2 adjusted EBITDA margin of 11.7% Note: Unaudited. See appendix for reconciliation of GAAP to non-GAAP measures.#4Record Q2 revenue, strong growth, and stable profitability Q2 Revenue $175.1 -17% 2Q20 Q2 Adjusted EBITDA $(28.4) 2Q20 $332.9 +90% 2Q21 $48.5 2Q21 $399.8 +20% 2Q22 $46.9 -3% 2Q22 Revenue +20% to a record Q2 of $399.8M. Driven by: Strong product demand, supported by improved availability of supply The introduction of Roam, along with continued success of One and Arc drove our Speaker category Sonos system products grew 18% Partner products and other revenue supported by Sonance and Ikea O Industry-wide supply chain issues continue, and we still have a backlog O Adjusted EBITDA margin declined slightly (down 290 bps) to 11.7% GM pressure of 500 bps YoY driven by supply chain (see next slide) Partially offset by Opex leverage Note: $ in millions, unaudited. See appendix for reconciliation of GAAP to non-GAAP measures. Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely.#5Increased supply chain costs Gross margin declined -500 bps YoY driven by: The need for spot buys given component shortages, higher shipping and logistics costs, FX and product mix Partially offset by higher selling prices following September 2021 price increase Gross Margin declined 300 bps QoQ given the supply chain challenges FY'22 Guidance of 45.5% -46% still within our long-term gross margin targets ● ● 41.7% 2Q 20 49.8% 2Q 21 44.8% 2Q 22 Note: Unaudited. See appendix for reconciliation of GAAP to non-GAAP measures. Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely.#6Investing in the business & driving opex leverage in Q2 Research and Development (GAAP) Legal and transaction related costs Adjusted Research and Development (Non-GAAP) % of revenue Sales and Marketing (GAAP) Legal and transaction related costs Adjusted Sales and Marketing (Non-GAAP) % of revenue General and Administrative (GAAP) Legal and transaction related costs Adjusted General and Administrative (Non-GAAP) % of revenue Total Operating Expenses (GAAP) Legal and transaction related costs Adjusted Operating Expenses (Non-GAAP) % of revenue Note: $ in millions, unaudited. Percentages and sums have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely. Q2'22 $64.9 0.0 $64.9 16.2% $60.0 0.0 $60.0 15.0% $44.1 6.0 $38.1 9.5% $169.0 6.0 $163.0 40.8% Q2'21 $56.4 0.0 $56.4 16.9% $57.2 0.0 $57.2 17.2% $39.8 11.0 $28.8 8.6% $153.4 11.0 $142.4 42.8% Y/Y Change 15.2% NM 15.2% (70) bps 4.8% NM 4.8% (220) bps 10.8% (45.4)% 32.2% 90 bps 10.2% (45.4%) 14.5% (200) bps Adjusted Opex leverage of 200 bps YoY: O R&D +15.2% primarily due to higher personnel-related expenses, increased product development costs, professional fees, and other expenses S&M +4.8% primarily due to increased brand and marketing investments and personnel-related and other costs G&A ex legal and transaction costs +32.2% due to increased personnel-related expenses related to hiring support, and continued systems and tools investments. These include investments to replace our legacy ERP system, with the new system going live in Q3 2022#7Cash flow & balance sheet highlights Cash flow from operations Capital expenditures % of revenue Free cash flow Free cash flow / Adj EBITDA Ending cash & cash equivalents Total debt YTD22 $82.4 $15.7 1.5% $66.7 32% $606.7 $ YTD21 $176.0 $19.9 2.0% $156.0 73% $639.1 $- Y/Y Change (53.2)% (21.4)% (57.2)% (5.1)% N/A Cash flow from operations of $82.4M, -53% from LY, mainly due to investments in inventory Share repurchases of $74.5M YTD; $75.5M remaining on our $150M authorization We deployed $27M to M&A YTD with an additional $100M deal (Mayht) completed post quarter end Cash and cash equivalents of $606.7M (excluding Mayht transaction), no debt Note: $ in millions, unaudited. See appendix for reconciliation of GAAP to non-GAAP measures. Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely.#8FY22 Outlook ********** CENER WORKS#9FY22 Outlook: Maintain revenue guidance, reduced gross margin, narrowed adjusted EBITDA range. Remain on track to deliver another record fiscal year Revenue % growth Gross Margin Adjusted EBITDA Adjusted EBITDA Margin Other Key Assumptions: Tariffs FY21 Actuals $1.717 billion 29% 47.2% $278.6 million 16.2% $4.6 million net tariff benefit Prior FY22 Outlook $1.95 billion - $2.0 billion 14% -16% 46 - 47% $290 million $325 million 14.9% -16.2% Minimal net tariff benefit New FY22 Outlook $1.95 billion $2.0 billion 14% -16% 45.5 - 46.0% $290 million - $310 million 14.9% - 15.5% - Minimal net tariff expense Note: Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. We do not provide a reconciliation of forward-looking non-GAAP measures to their comparable GAAP financial measures. See "Non-GAAP Measures" for more information. FY22 outlook only as of the date of this presentation. See "Forward-Looking Statements" for more information. ● Re-confirming revenue range Reduced and narrowed Gross Margin range given increased cost of components, shipping and logistics Lowered high end of Adjusted EBITDA range on Gross Margin flow through, partly offset by moderation of Opex investments#10Long Term Opportunity#11FY2024 Financial Targets Revenue ~$2.5B Gross Margin 45-47% Note: Adjusted EBITDA Margin is a non-GAAP measures. We do not provide a reconciliation of forward-looking non-GAAP measures to their comparable GAAP financial measures. See "Non-GAAP Measures" for more information. FY24 outlook only as of the date of this presentation. See "Forward-Looking Statements" for more information. Adjusted EBITDA Margin 15-18%#12Key Drivers of Long Term Growth "The Sonos Flywheel" New household growth + existing household repurchases Expansion of our product offerings Launch at least 2 products per year to delight existing households and attract new ones Large, growing addressable market Just scratching the surface: Currently ~2% share of $96B global audio market¹ and -9% share of 145M affluent households² in our core markets Long term Macro tailwinds Continued growth in audio and video content consumption and formats Evolution of remote work and impact on how and where consumers live 1- Source: Futuresource CY2021. 2- Source: Euromonitor 2021 Core Markets include the United States, Canada, Australia, United Kingdom, Germany, Netherlands, Sweden, Denmark, France, Switzerland, Norway, Belgium, Italy, Austria, Spain, Ireland, Finland and Poland.#13Our Long Term Opportunity: Households PLUS Geographic Expansion 348M Households in Core Markets¹ 145M Affluent ($75k+²) Households ~9% Current Penetration of Total Affluent Households 13M Sonos FY21 Households Source: Euromonitor 2021 1. Core Markets include the United States, Canada, Australia, United Kingdom, Germany, Netherlands, Sweden, Denmark, France, Switzerland, Norway, Belgium, Italy, Austria, Spain, Ireland, Finland and Poland 2. Represents disposable income as defined by the OECD#14Our Long Term Opportunity: Revenue PLUS Audio content, services & business $96B Global Audio $29B Global Home Audio $22B Premium Global Home Audio $1.7B Sonos FY21 Revenue Source: Futuresource CY2021, Premium defined as $100+ wireless speakers, $200+ soundbars, $300+ Hi-Fi systems, $250+ in-wall/in-ceiling speakers, $250+ bookshelf speakers (pairs), and all AV receivers, Floor-standing speakers, home theater speakers and home theater in a box products and Hi-Fi separates ~2% Current Penetration of Global Audio Market#15ACTUE 14 Appendix 1#16Non-GAAP Measures We have provided in this presentation financial information that has not been prepared in accordance with US generally accepted accounting principles ("GAAP"). 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 US GAAP. 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 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 certain 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.#17Reconciliation of Net Income to Adjusted EBITDA Net income Add (deduct): Depreciation and amortization Stock-based compensation expense Interest income Interest expense Other expense (income), net Provision for (benefit from) income taxes Restructuring and related expenses (1) Legal and transaction related costs (2) Adjusted EBITDA Revenue Adjusted EBITDA margin Three Months Ended April 2, 2022 $8,566 9,575 21,225 (123) 90 2,281 (772) 6,012 $46,854 $ 399,781 11.7% April 3, 2021 $ 17,221 8,742 16,363 (44) 182 1,578 (6,542) 11,013 $ 48,513 $ 332,949 14.6 % Six Months Ended April 2, 2022 $132,047 18,792 38,684 (156) 187 3,683 6,874 9,885 $209,996 $1,064,262 19.7% April 3, 2021 $ 149,513 16,725 31,207 (80) 448 (2,680) 2,578 (2,611) 19,679 $ 214,779 $978,532 21.9% (1) Restructuring and related expenses for the three months ended January 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. Note: $ in thousands, unaudited.#18Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow Cash flows provided by operating activities Less: Purchases of property and equipment, intangible and other assets Free cash flow Note: $ in thousands, unaudited. April 2, 2022 $82,374 (15,665) $66,709 Six Months Ended April 3, 2021 $175,953 (19,927) $156,026#19SONOS