#1Q2 FY21 Financial Results May 12, 2021 SONOS 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 Quarterly Report on Form 10-Q for the quarter ended January 2, 2021 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 4729 ● Record Q2 results driven by ability to fulfill strong demand Record Q2 adjusted EBITDA margin of 14.6% driven by significant gross margin expansion Record Q2 revenue of $332.9M, +90% from LY driven by strong product demand, annualizing the Y/Y declines in Q2 20, and strong DTC growth Record Q2 gross margin of 49.8%, +810 bps from LY driven primarily by lower promotional discounts ("At Home with Sonos" promo accrual in Q2 20), lower tariff duties, favorable product and channel mix and fixed cost leverage on higher sales volume Significant opex leverage driven by the higher Q2 sales volume vs the prior year quarter Increasing FY21 outlook Note: Unaudited. See appendix for reconciliation of GAAP to non-GAAP measures.#4Record Q2 Profitability and Strong Revenue Growth Q2 Revenue $210.2 2Q19 Q2 Adjusted EBITDA ($2.8) 2Q19 $175.1 2Q20 ($28.4) 2Q20 $332.9 2Q21 $48.5 2Q21 Revenue +90% due to strong demand, continued success of new product intros, annualizing the Y/Y declines in Q2 20 (partner inventory rebalancing / start of COVID-19 pandemic LY), and strong DTC growth Adjusted EBITDA growth driven by continued strong demand, significant gross margin expansion, and opex leverage on the higher sales volume Adjusted EBITDA margin increased to record 14.6%; ex-tariff duties and refunds adjusted EBITDA margin of 15.2% Gross margin +810 bps to record 49.8%; ex-tariff duties and refunds gross margin of 50.4% 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 Q2 Gross Margin Gross margin +810 bps Y/Y - key drivers: Lower promotional discounts ("At Home with Sonos" campaign accrual in Q2 LY) Reduction in tariff duties Mix shifts into higher margin products and channels Fixed cost leverage on higher sales volume $1.7 million tariff refund Offset by increase in component costs as well as ongoing higher industry wide shipping and logistics cost 43.0% 43.0% 41.7% 45.3% Gross Margin 49.8% 2Q21 2Q19 2Q20 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 50.4%#6Strong Opex Leverage on Higher Sales Research and Development (GAAP) % of revenue 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 2Q21 $56.4 16.9% $57.2 17.2% $39.8 11.0 $28.8 8.6% $153.4 11.0 $142.4 42.8% 2Q20 $49.6 28.3% $50.5 28.8% $26.1 1.7 $24.4 13.9% $126.2 1.7 $124.5 71.1% Y/Y Change 13.7% (1,140 bps) 13.3% (1,160 bps) 52.4% 545.9% 17.9% (530 bps) 21.5% 545.9% 14.3% (2,830 bps) Drove significant opex leverage on the higher sales base Year-over-year increases in opex driven by the following factors: O R&D +13.7% primarily due to increased bonus and stock comp S&M +13.3% primarily due to increased bonus and stock comp and marketing investments offset partially by savings from the 2020 restructuring G&A ex legal and transaction costs +17.9% due to increased bonus and stock comp offset partially by savings from the 2020 restructuring 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 Ending total debt YTD21 $176.0 $19.9 2.0% $156.0 73% $639.1 $0 Y/Y YTD20 Change $35.4 397% $25.8 -23% 3.5% $9.6 15% $283.4 $29.9 1531% 125% NM ● Cash flow from operations of $176M, +397% from LY Free cash flow of $156M, +1531% from LY Free cash flow / adjusted EBITDA of 73% Capex of $20M, 2% of revenue, largely driven by decreased expenses related to diversifying our manufacturing into Malaysia in the prior year Cash and cash equivalents of $639M, 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.#8FY21 Outlook SONOS#9FY21 Priorities Delivering innovative new products that both new and existing customers love - ie: Roam Services that enhance and further differentiate the customer experience - ie: Sonos Radio and Radio HD Strengthening our direct-to-consumer efforts Supporting our incredible partnerships Adjusted EBITDA margin expansion Industry-leading gross margins Navigating global supply chain and logistics challenges Double-digit revenue growth#10Raising FY21 Outlook: Strong Demand; Continued Adj. EBITDA Margin Expansion Adjusted EBITDA Adjusted EBITDA Margin Gross Margin Revenue % growth (52 wk vs 52 wk) % growth (as reported) Other Key Assumptions: Tariffs FY20 Actuals $108.5 million 8.2% 43.1% $1.326 billion 3% 5% $32 million Initial FY21 Outlook (provided at 4Q earnings) $170 - $205 million 12.0%-14.0% 45.3% - 45.8% $1.44 $1.5 billion 11% - 15% 9% -13% Minimal tariff expense, no tariff refund assumed Prior FY21 Outlook (provided at 1Q earnings) $195 $225 million 12.8% 14.3% 46.0% - 46.5% $1.525 $1.575 billion 17% -21% 15% - 19% Minimal tariff expense, no tariff refund assumed 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 $225 $250 million - 13.8% 14.9% 46.0% - 46.5% $1.625 $1.675 billion 25% -29% 23% -26% Minimal tariff expense, no tariff refund assumed#11Long-Term Opportunity Well Wolfgang Tillmans SONOS SONOS#12Our Strategic Initiatives Expand Our Brand Expand Our Offerings Drive Operational Excellence#13Trends Fueling Our Growth #1 The Golden Age of Audio Spotify pandora ini deezer amazon music YouTube Music TIDAL Yandex Music *Music audible Pocket Casts Calm Clubhouse #2 Homes Becoming Movie Theaters #3 The Great Reshuffling#14Our Opportunity: Homes PLUS Geographic Expansion 349M Households in Core Markets¹ 116M Affluent ($75k+²) Households ~9% Current Penetration of Target $75K+ Households in Core Markets² 11M Sonos FY20 Households Source: Euromonitor 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#15Our Opportunity: Revenue PLUS Audio content, services & business $89B Global Audio $25B Global Home Audio $18B Premium Global Home Audio $1.3B Sonos FY20 Revenue Source: Futuresource CY2020, 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 ~7% Current Penetration of Premium Home Audio Market#16Our FY 2024 Financial Targets Revenue $2.25B Gross Margin 45-47% Adjusted EBITDA Margin 15-18%#17Appendix 20 456 17#18Non-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.#19Reconciliation of Net Income (Loss) to Adjusted EBITDA Net income (loss) Add (deduct): Depreciation and amortization Stock-based compensation expense Interest income Interest expense Other (income) expense, net Provision for (benefit from) income taxes Restructuring and related expenses (1) Legal and transaction related costs (2) Adjusted EBITDA Revenue Adjusted EBITDA margin April 3, 2021 S17,221 8,742 Note: $ in thousands, unaudited. 16,363 (44) 182 1,578 Three Months Ended (6,542) 11,013 $48,513 $332,949 14.6% March 28, 2020 ($52,320) 9,726 13,394 (874) 374 1,423 (1,810) 1,705 $(28,382) $175,098 (16.2)% Six Months Ended 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% March 28, 2020 $18,454 (1) Restructuring and related expenses for the six months ended April 3, 2021 includes 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. 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 ("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. 18,831 26,598 (1,873) 827 (3,001) (153) $64,836 $737,181 5,153 8.8%#20Gross Profit and Margin Excluding the Impact of Tariffs Revenue Reported gross profit Add/deduct: Tariffs, net of refunds Adjusted gross profit Gross margin Adjusted gross margin Note: $ in thousands, unaudited. April 3, 2021 $332,949 165,776 1,940 167,716 49.8% Three Months Ended 50.4% March 28, 2020 $175,098 73,009 6,269 79,278 41.7% 45.3% April 3, 2021 $978,532 465,201 (1,121) 464,080 47.5% Six Months Ended 47.4% March 28, 2020 $737,181 300,629 25,851 326,480 40.8% 44.3%#21Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow Cash flows provided by operating activities Less: purchases of property and equipment and intangible assets Free cash flow Note: $ in thousands, unaudited. April 3, 2021 $175,953 (19,927) Six Months Ended 156,026 March 28, 2020 $35,368 (25,800) 9,568#22SONOS