#1Q1 FY21 Financial Results February 10, 2021 SCHOE ENA SONOS#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 2, 2021, 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, our tariff expense 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 supply chain; changes in general economic or market conditions that could affect consumer income and overall consumer spending; 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 and accurately forecast product demand and manage any product availability delays; and the other risk factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended October 3, 2020 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.#3Q1 Highlights NEAU Record Q1 results and increasing FY21 outlook across all metrics Record Q1 adjusted EBITDA margin of 25.8%, +920 bps from LY Record Q1 revenue of $645.6M, +15% from LY driven by continued DTC strength and strong product demand Record Q1 gross margin of 46.4%, +590 bps from LY driven by lower tariff duties, favorable product and channel mix and cost reductions Significant opex leverage driven by continued restructuring efficiencies and higher Q1 sales volume Free cash flow increased nearly 100% from LY to $203.2M Free cash flow / adj EBITDA conversion 122% Note: Unaudited. See appendix for reconciliation of GAAP to non-GAAP measures.#4Record Profitability and Strong Revenue Growth Q1 Revenue $496.4 1Q19 Q1 Adjusted EBITDA $87.4 1Q19 $562.1 1Q20 $93.2 1Q20 $645.6 +15% 1Q21 $166.3 +78% 1Q21 Revenue +15% due to strong demand, continued success of recent new product intros, and strong DTC growth Adjusted EBITDA +78% driven by continued strong demand, further gross margin expansion, and significant opex leverage Adjusted EBITDA margin +920 bps to record 25.8%; ex-tariff duties and refunds adjusted EBITDA margin of 25.3% Gross margin +590 bps to record 46.4%; ex-tariff duties and refunds gross margin of 45.9% 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.#5Record Gross Margin Gross margin +590 bps Y/Y - key drivers: Mix shifts into higher margin products and channels Reduction in tariff duties $4.5 million tariff refund Product and material cost reductions Offset by increased shipping costs to meet strong demand, industry-wide pricing dynamics 39.3% 39.3% 40.5% 44.0% Gross Margin 46.4% 1Q21 1Q19 1Q20 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. Gross Margin ex Tariff Duties and Refunds 45.9%#6Strong Opex Leverage Research and Development (GAAP) % of revenue Sales and Marketing (GAAP) Restructuring and related charges 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) Restructuring and related charges Legal and transaction related costs Adjusted Operating Expenses (Non-GAAP) % of revenue 1Q21 $52.3 8.1% $74.5 (2.6) $77.1 11.9% $35.2 8.7 $26.6 4.1% $162.0 (2.6) 8.7 $155.9 24.2% 1Q20 $52.5 9.3% $77.4 $77.4 13.8% $30.2 3.4 $26.8 4.8% $160.2 3.4 $156.7 27.9% Y/Y Change (0.3%) (124 bps) (3.8%) NM (0.4%) (183 bps) 16.7% NM (0.7%) (64 bps) 1.2% NM NM (0.5%) (372 bps) ● Excluding restructuring and legal costs, drove 372 basis points of opex leverage Leverage in all adjusted opex lines excluding restructuring and legal costs: R&D due to leverage on the higher Q1 sales volume O S&M driven by higher Q1 sales volume and marketing efficiencies stemming from restructuring efforts, partially offset by an increase in marketing expenses and revenue-related sales fees from higher sales in our DTC channel O G&A primarily due to leverage on the higher Q1 sales volume Note: $ in millions, unaudited. See appendix for reconciliation of GAAP to non-GAAP measures. Percentages and sums have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely.#7Significant Cash Flow and Strong Balance Sheet Cash flow from operations Capital expenditures % of revenue Free cash flow Free Cash Flow / Adj EBITDA Ending cash & cash equivalents Long-term debt 1Q21 $214.5 $11.3 1.8% $203.2 122% $678.0 $0 1Q20 $118.8 $15.9 2.8% $102.9 110% $408.6 $23.2 Y/Y Change 81% -29% 97% 66% NM ● Cash flow from operations of $214.5M, +81% from LY Free cash flow of $203.2M, +97% from LY Free cash flow / adjusted EBITDA 122% Capex of $11.3M, 1.8% of revenue, largely driven by [decreased expenses related to diversifying our manufacturing into Malaysia in the prior year] Cash and cash equivalents of $678M, no long-term debt, $25M short-term debt repaid in full subsequent to quarter 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.#8FY 21 Outlook#9FY21 Priorities Delivering innovative new products that both new and existing customers love Services that enhance and further differentiate the customer experience Strengthening our direct-to-consumer efforts Supporting our incredible partnerships Adjusted EBITDA margin expansion Industry-leading gross margins Double-digit revenue growth#10Raising FY21 Outlook: Profit Margin Expansion Continues; Strong Demand Adjusted EBITDA Adjusted EBITDA Margin Gross Margin Revenue % growth (52 wk vs 52 wk) % growth (as reported) Other Key Assumptions: Tariffs DTC as % of revenue FY20 Actuals $108.5 million 8.2% 43.1% $1.326 billion 3% 5% $32 million 21% Prior FY21 Outlook $170 million $205 million 12% -14% 45.3% - 45.8% $1.44 billion $1.5 billion 11% -15% 9% -13% Minimal tariff expense; no tariff refund assumed Similar to Fiscal 2020 % 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. FY21 Outlook speaks only as of the date of this presentation. See "Forward-Looking Statements" for more information. New FY21 Outlook $195 million - $225 million 12.8% - 14.3% 46.0% - 46.5% $1.525 billion - $1.575 billion 17% -21% 15% - 19% No update#11Upcoming Investor Event Tuesday, March 9, 2021 - 4:00 pm Eastern Save the Date! Sonos to host virtual investor event where leadership will update everyone on our strategy and outlook. Further details to come - stay tuned...#12of HUGO CABRET wn and in Appendix SS WHO ANGURACL KML#13Non-GAAP Measures We have provided in this presentation financial information that has not been prepared in accordance with 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 U.S. 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 calculate gross margin excluding the impact of tariff duties and refunds as gross profit dollars removing the impact of tariffs imposed on goods imported to the U.S. from China and any tariffs refunds subject to a tariff refund claim approved by U.S. Customs and Border Protection divided by revenue. We define free cash flow as net cash from operations less purchases of property and equipment. We calculate adjusted EBITDA excluding the impact of tariffs as net income excluding the impact of tariffs imposed on goods manufactured in China and any tariffs refunds subject to a tariff refund claim approved by U.S. Customs and Border Protection and 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 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.#14Reconciliation of Net Income to Adjusted EBITDA Net income Add (deduct): Depreciation and amortization Stock-based compensation expense (1) (2) Note: $ in thousands, unaudited. Three Months Ended January 2, 2021 $ 132,292 7,982 14,844 (36) 265 Interest income Interest expense Other income, net Provision for income taxes Restructuring and related expenses (¹) Legal and transaction related costs (2) Adjusted EBITDA Revenue Adjusted EBITDA margin Restructuring and related expenses includes a gain of $2.8 million, related to our negotiation for the early termination of a certain facility lease that was part of the 2020 restructuring. The gain represents the difference between the related operating lease liability and previously accrued restructuring expenses versus the early termination payment. Legal and transaction related costs consist of expenses related to our intellectual property ("IP") 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. December 28, 2019 $ 70,775 (4,257) 9,120 (2,611) 8,666 $ 166,265 $ 645,584 25.8 % 9,105 13,204 (998) 453 (4,424) 1,656 3,448 $ 93,219 $ 562,083 16.6%#15Gross Profit and Margin Excluding the Impact of Tariffs Revenue Reported gross profit Add/deduct: Net tariff impact Adjusted gross profit Gross margin Adjusted gross margin Note: $ in thousands, unaudited. January 2, 2021 $645,584 299,425 (3,061) 296,364 46.4% 45.9 % Three Months Ended December 28, 2019 $562,083 227,620 19,582 247,202 40.5 % 44.0 %#16Reconciliation 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. Three Months Ended December 28, 2019 $118,840 (15,914) 102,926 January 2, 2021 $214,513 (11,333) 203,180#17SONOS