Forward Looking Statements This presentation contains - PowerPoint PPT Presentation

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 year ending October 2, 2021, our long-term focus, financial, growth and business strategies and opportunities, growth metrics and targets, new products, software, services and partnerships, profitability and gross margins, 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; 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 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 accurately forecast consumer demand for our products and manage our inventory in response to changing demands; and the other risk factors set forth under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 27, 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. 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.

FY20 Record 10.6% fiscal 2020 adjusted EBITDA margin ● Highlights ex-tariffs and on track to deliver 12%-14% next year– ahead of prior targets 15th consecutive year of revenue growth fueled by ● demand for new products, with revenue +3% excluding 53rd week Record FY gross margin +370 bps ex-tariffs driven by ● favorable product and channel mix and cost reductions Continued investment in R&D to fuel future product ● and service roadmap offset by significant S&M and G&A leverage ex restructuring and legal costs Record growth in net new households and a record ● number of additional purchases by existing households Free cash flow / adj EBITDA conversion nearly 120% ● Note: Unaudited. See appendix for reconciliation of GAAP to non-GAAP measures.

New Products Launched FY20 Arc - Launched June 2020 - $799 MSRP. Our premium smart soundbar that delivers our most immersive entertainment experience and sets a new standard for home theater sound. Five - Launched June 2020 - $499 MSRP. Our most powerful speaker, delivering the same studio-quality sound as the beloved Play:5 and bringing increased memory, processing power, and a new wireless radio. Arc Sub - Launched June 2020 - $699 MSRP. Features the same iconic design and bold bass as its predecessor, but with upgrades such as increased memory, processing power, and more. Sub Five

New Services Sonos Radio - Launched April 2020. Free, ad-supported streaming radio service pre-loaded in the Sonos app. We have experienced early customer success, and Sonos Radio is now the fourth most listened to service on Sonos. Sonos Radio HD - Launched November 2020 $7.99/month subscription. Offers the choice of ad-free, high-definition content, all curated and programmed for listening at home with skips and repeats.

New Software Sonos S2 app – Launched June 2020 Delivers upgraded software platform powering the next generation of Sonos products and experiences. Includes support for higher resolution audio technologies, increased security and improved user interface. New design enables easier search functionality and sound control, plus ability to personalize the experience with new features. What changed? S2

New Partnerships Disney+ Partnership - Fall 2020 Innovative, multifaceted strategic marketing campaign with Disney+ leading up to the widely-anticipated premiere of the second season of The Mandalorian on October 30, 2020. Disney+ partnership with Sonos highlights the quality of our brand and the value that our consumers provide to content partners like Disney.

Strong Financial Performance and Outlook Net Revenue Gross Margin 45.6% $1,470 $1,326 $1,261 43.1% 43.0% $1,137 41.8% FY2018 FY2019 FY2020 FY2021 Midpoint FY2018 FY2019 FY2020 FY2021 Midpoint $188 Free Cash Flow* Adjusted EBITDA* $129 $97 $109 $89 $69 $(5) FY2018 FY2019 FY2020 FY2021 Midpoint FY2019 FY2020 FY2018 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.

Q4 Highlights

Record Profitability and Strong Revenue Growth Revenue +16%; excluding 14th week, revenue ● Q4 Revenue +7% due to strong demand, success of recent $339.8 new product intros, and 67% DTC growth offset $294.2 $272.9 by negative effect of COVID-19 on retail store partners and product availability constraints Adjusted EBITDA growth driven by continued ● strong demand, further gross margin expansion, and significant opex leverage 4Q18 4Q19 4Q20 Adjusted EBITDA margin +1460 bps to record ● Q4 Adjusted EBITDA $46.4 13.7%; ex-tariffs adjusted EBITDA margin of 14.4% Gross margin +530 bps to record 47.5%; ● $20.2 ex-tariffs gross margin +560 bps to 48.3% $(2.8) 4Q18 4Q20 4Q19 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.

Record Gross Margin Gross Margin Gross Margin ex Tariffs Gross margin +530 bps Y/Y - key drivers: Mix shifts into higher margin ● products and channels Product and material cost reductions ● ● Cost leverage on higher volume 48.3% No promotions as compared to 4Q19 ● 47.5% 42.6% 42.6% 42.7% 42.2% 4Q20 4Q18 4Q19 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.

Strong Opex Leverage While Continuing to Invest in R&D Y/Y 4Q20 4Q19 Change Research and Development (GAAP) $54.8 $49.6 10.4% Excluding restructuring and legal costs, ● Restructuring and related charges 0.1 - NM drove 960 basis points of opex leverage Adjusted Research and Development $54.7 $49.6 10.1% (Non-GAAP) % of revenue 16.1% 16.9% (80 bps) Leverage in all adjusted opex lines excluding ● restructuring and legal costs Sales and Marketing (GAAP) $58.3 $70.9 (17.7)% Restructuring and related charges - - NM ● R&D +10% ex restructuring primarily driven Adjusted Sales and Marketing (Non-GAAP) $58.3 $70.9 (17.7)% by increased headcount, higher bonus % of revenue 17.2% 24.1% (690 bps) achievement, and new product development costs General and Administrative (GAAP) $33.0 $28.6 15.5% Restructuring and related charges - - NM Legal and transaction related costs $6.2 - NM S&M -18% ex restructuring due to lower ● Adjusted General and Administrative marketing and advertising expenses $26.8 $28.6 (6.1)% (Non-GAAP) % of revenue 7.9% 9.7% (180 bps) ● G&A -6% ex restructuring and legal costs due primarily to facilities cost reductions Total Operating Expenses (GAAP) $146.1 $149.1 (2.0)% Restructuring and related charges 0.1 - NM Legal and transaction related costs 6.2 - NM Adjusted Operating Expenses (Non-GAAP) $139.8 $149.1 (6.2)% % of revenue 41.1% 50.7% (960 bps) 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.

FY20 Highlights

15th Consecutive Year of 20%+ Household Growth FY20 FY19 Y/Y Change ● 15th consecutive year of 20%+ total household growth - ended Total Households (cumulative - in millions) 10.9 9.1 20% fiscal 2020 with 10.9M Net New Online Households (in millions) 1.8 1.7 9% % Registrations to Existing Households 41% 37% ● Existing households accounted for Average Registrations per Total Households 2.9 2.9 41% of new product registrations Total Listening Hours (in billions) 10.2 7.7 33% up from 37% last year ● Added record 1.8M net new households Average number of registered ● products per household at 2.9 ● Listening hours +33% on top of +29% last year Note: Percentages have been calculated using actual, non-rounded figures and, therefore, may not recalculate precisely.