Sonos Q3 2025 Earnings Report

Sonos EPS Results

• Actual EPS: -$0.03
• Consensus EPS: -$0.02
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: $0.03

Sonos Revenue Results

• Actual Revenue: $344.76 million
• Expected Revenue: $324.66 million
• Beat/Miss: Beat by +$20.11 million
• YoY Revenue Growth: -13.20%

Sonos Announcement Details

• Quarter: Q3 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 4:30PM ET

Sonos (NASDAQ:SONO), together with its subsidiaries, designs, develops, manufactures, and sells audio products and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers wireless, portable, and home theater speakers; components; and accessories. The company offers its products through approximately 10,000 third-party retail stores, including custom installers of home audio systems; and e-commerce retailers, as well as through its website. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was incorporated in 2002 and is headquartered in Santa Barbara, California.

Sonos Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong Q3 financial results with $345 M in revenue above guidance and $36 M adjusted EBITDA, supported by a 15% year-over-year decline in operating expenses.
• Negative Sentiment: New 20% tariffs on Vietnam and 19% tariffs on Malaysia-bound products will force price increases later this year, risking demand headwinds.
• Positive Sentiment: Q4 guidance projects $260 M–$290 M in revenue (up 2%–14% YoY) and adjusted EBITDA of −$10 M to $14 M, indicating margin improvement.
• Positive Sentiment: Operational transformation cut over $100 M in annual expenses, delivered four consecutive quarters of on-target guidance, and generated $33 M in free cash flow in Q3.
• Neutral Sentiment: New CEO Tom Conrad underscores a platform strategy combining hardware, software upgrades and partnerships to capture a small fraction of global market share.

Presentation

[Operator]

Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonos Third Quarter Fiscal twenty twenty five Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise.

[Operator]

After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I would like to turn the conference over to James head of corporate finance.

[James Baglanis, Head - Corporate Finance at Sonos]

Good afternoon, and welcome to Sonos third quarter fiscal twenty twenty five earnings conference call. I am James Voglonis, with me today are Sonos CEO, Tom Conrad CFO, Sayori Casey and Chief Legal and Business Development Officer, Eddie Lazarus. Before I hand it over to Tom, I would like to remind everyone that today's discussion will include forward looking statements regarding future events and our future financial performance. These statements reflect our views as of today only and should not be considered as representing our views of any subsequent date. These statements are also subject to material risks and uncertainties that could cause actual results to differ materially from expectations reflected in the forward looking statements.

[James Baglanis, Head - Corporate Finance at Sonos]

A discussion of these risk factors is fully detailed under the caption Risk Factors in our filings with the SEC. During this call, we will also refer to certain non GAAP financial measures. For information regarding our non GAAP financials and a reconciliation of GAAP to non GAAP measures, please refer to today's press release regarding our third quarter results posted to the Investor Relations portion of our website. As a reminder, the press release, supplemental earnings presentation, including our guidance, and conference call transcript will be available on our Investor Relations website, investors.sonos.com. I will now turn the call over to Tom.

[Tom Conrad, CEO & Director at Sonos]

Thank you, James, and thanks to all of you for joining us. I'm speaking to you today not just as the new CEO of Sonos, but as someone who deeply believes in what this company can be. I've devoted my career to building consumer products that people love, and I took this role because I believe Sonos is one of the few companies with the ingredients to do that at the highest level. There's a reason I have a Sonos Ace tattoo on my forearm. I love this company, its mission, and the possibilities ahead.

[Tom Conrad, CEO & Director at Sonos]

Over the past six months, I've had the chance to work closely with every part of this business, and I've seen just how much our people care about the quality of our products, our customers' experience, the craft of what we build, and the operational rigor we bring to the task every day. Working with this incredible team has only deepened my conviction that Sonos can be among the most consequential hardware platform companies in the world. That's why I'm so honored the Board has asked me to lead Sonos into its next chapter and why I'm so optimistic about what comes next. My appointment is not just a leadership transition. It's a turning point for the company, a return to our founding principles of obsessive craftsmanship, customer first design, and category defining innovation.

[Tom Conrad, CEO & Director at Sonos]

We have a lot of work ahead of us to translate our convictions into a return to growth with better profitability, and we're approaching the challenge with urgency. Now, let me tell you why I'm so excited about the future. First, the Sonos we're building today is not just a product company. We're a platform company. A platform where our expanding portfolio of hardware products compound in value, thanks to powerful software upgrades that deliver unique experiences for the home and beyond.

[Tom Conrad, CEO & Director at Sonos]

This ecosystem connects not just our products, but also our partners, developers, and consumers. Every new product, every software feature, and every integration ensures that, over time, Sonos becomes more powerful, more interconnected, and more irreplaceable in our customers' homes. Second, Sonos has an extraordinary brand. We're the clear leader in wireless home audio, and we have earned that position by delivering consistently great sound, thoughtful industrial design, and a system that works across every room in the home. That's not marketing spend, it's why we're the number one home theater brand in The US and why our installer and channel partnerships remain so strong.

[Tom Conrad, CEO & Director at Sonos]

Third, we're making significant operational progress. Earlier this year, we reorganized to improve our product cadence while reducing our annual operating expenses by more than $100,000,000 This has catalyzed focus on the things that matter: the core experience, profitable growth, and the kinds of innovations only Sonos can deliver. For example, this quarter we delivered new AI powered voice enhancement features on Arc Ultra and state of the art adaptive noise cancellation for Sonos Ace. We're keeping this momentum as we build a strong roadmap that stretches through fiscal twenty twenty six and beyond. Finally, there are many opportunities ahead for growth.

[Tom Conrad, CEO & Director at Sonos]

Despite our market leadership, we've only captured a small fraction of the global market. We have room to add new households and grow our installed base in both our existing and key growth markets. What's more, our installed base is a powerful asset itself and roughly 40 to 45% of annual product registrations come from existing households. And we're leaning into this by delivering experiences that get better as your system expands. Which is just to say, we know we have more to do.

[Tom Conrad, CEO & Director at Sonos]

We'll make Sonos more relevant to people's daily lives by expanding the experiences we deliver and making them even easier to enjoy. We'll be more assertive in the products we bring to market and more expressive in how we tell the Sonos story. We can reconnect more deeply with artists, with culture, and with the spirit of invention that has always been part of this company. This is the Sonos I'm building. It will take some time to bring this reinvention to market, but we will move with conviction and clarity of purpose and the payoff will be clear over the medium to long term.

[Tom Conrad, CEO & Director at Sonos]

Now let me share a few comments about our performance in Q3 and the business environment in which we're operating. We had a solid quarter with revenue and adjusted EBITDA at or above the top of our guidance. Our results reflect a tight focus on execution, which yielded dollar share gains in home theater in The US and on efficiency, which drove continued year over year declines in our operating expenses. With respect to our operations, like many companies, the most significant near term challenge has been the uncertain tariff environment. As a reminder, short of a few accessories and our passive speaker partnership with Sonance, we do all of our U.

[Tom Conrad, CEO & Director at Sonos]

S.-bound manufacturing in Vietnam and Malaysia. We talked last quarter about the contingency planning we underwent to minimize the effects of tariffs on our business, while also doing what we can to limit the downstream impact to our customers. With last week's news, the tariff rates we were subject to going forward appeared to be 20% for Vietnam and 19% for Malaysia. We continue to work closely with our contract manufacturers and our channel partners to share tariff costs, though it has become clear that we'll need to raise prices on certain products later this year. As these pricing changes land, we'll monitor consumer behavior closely, as well as competitive trends across our categories, and we'll make adjustments in collaboration with our channel partners, when and if necessary, to ensure we're exploring every opportunity to optimize our respective top and bottom lines.

[Tom Conrad, CEO & Director at Sonos]

In conclusion, Sonos has the right to lead. We have the brand, the platform, the team, and the permission to define what great means for audio and entertainment in the home, on the go, and into the future. We lost some momentum in 2024. We're starting to get it back, and we're going to accelerate our pace from here. Now, let me turn things over to Sayori.

[Saori Casey, CFO at Sonos]

Thank you, Tom. Hi, everyone. We're pleased to deliver Q3 financial results that exceeded our expectations. Revenue of $345,000,000 was above the high end of our guidance range, driven by better than expected portables and component products. Q3 revenue declined 13% year over year versus our guidance of down 22% to 14%.

[Saori Casey, CFO at Sonos]

Excluding the impact of the launch of ACE last year, when we recognized the revenue of the channel fill, our revenue was down mid single digits in Q3, slightly better than the first half of the year and better than the overall category trends. This was driven by ARC and ARC Ultra, which grew on a year over year basis. Gross margin was 43.4, near the midpoint of our guidance range. Non GAAP gross margin was 44.7%. We incurred $2,100,000 of tariff expenses in Q3, which was a 60 basis point impact to our reported gross margin.

[Saori Casey, CFO at Sonos]

This is consistent with our guidance for under $3,000,000 in Q3. Q3 GAAP operating expenses were $153,000,000 down 15% year over year. Non GAAP operating expenses of $131,000,000 were down 15% year over year and came in about 9,000,000 below the low end of our guidance. On a normalized basis, primarily for variable compensation, non GAAP operating expenses declined by 23%, as we saw a full quarter benefit of savings from the reduction in force announced last quarter, as well as from many other cost optimization efforts we had set out last summer. As for the year over year trends of each non GAAP operating expense category, research and development expense decreased by 17% due to cost optimization efforts from the prior quarter.

[Saori Casey, CFO at Sonos]

G and A expenses decreased by 16%, driven by head count and various cost optimization efforts initiated last year. Sales and marketing expenses decreased by 13%, driven by higher marketing investments last year from the launch of ACE. Adjusted EBITDA was positive $36,000,000 at the high end of our guidance range of 12,000,000 to $37,000,000 due to higher revenue and lower operating expenses. Year to date, revenue declined by 8%, while GAAP gross margin came in at 43.7% and non GAAP at 45.2%. Our GAAP and non GAAP operating expenses declined by eight percent and eleven percent, respectively, on a reported basis and by 16% on a normalized basis.

[Saori Casey, CFO at Sonos]

Adjusted EBITDA declined 4% year over year, better than our revenue performance due to our expense discipline. Our balance sheet remains strong as our net cash balance increased by $30,000,000 sequentially to end the quarter at $254,000,000 which includes $53,000,000 of marketable securities as we hold excess cash in short duration treasury bills. We also have $100,000,000 undrawn revolving facility at our disposal. Q3 free cash flow was $33,000,000 an increase from negative $65,000,000 last quarter. CapEx was $5,000,000 down from $6,000,000 last quarter.

[Saori Casey, CFO at Sonos]

We paid $3,500,000 of cash tariffs in Q3, a bit below the low end of our $5,000,000 to $10,000,000 guidance due to lower than planned inventory purchase pull forward. Our period end inventory balance decreased 17% sequentially to $115,000,000 primarily due to lower finished goods. On a year over year basis, this was a 25% decrease, primarily due to lower component balances. Our inventory consists of $93,000,000 of finished goods and $22,000,000 of components. As we noted last quarter, our near term priority is navigating this dynamic and uncertain environment with ample liquidity to preserve operational flexibility.

[Saori Casey, CFO at Sonos]

As a result, we paused our repurchase activities in Q3. Returning capital to shareholders remains a key pillar of our capital allocation framework, and we have $150,000,000 remaining on our current share repurchase authorization available at our disposal. Turning to our guidance. The Q4 outlook we're providing today reflects the demand trends we have observed quarter to date and does not assume any material change in consumer purchasing behavior as a result of this highly dynamic global trade environment. We expect Q4 revenue to be in the range of $260,000,000 to $290,000,000 up 2% to 14% year over year.

[Saori Casey, CFO at Sonos]

We're not guiding Q1 at this time, but I would note that due to the launch timing of ARC Ultra in sub-four in 2025, we have a difficult year over year comparison. Also, as Tom mentioned earlier, we will be raising prices on certain products later this year. We have carefully formulated our pricing plan in support of our goal to optimize for gross profit dollars. However, it is difficult to accurately predict how our pricing and overall market demand may impact unit sales volume in this dynamic environment. If not for the uncertainty introduced by our contemplated pricing changes, we had been expecting our year over year comparison would improve from Q1 through the balance of fiscal twenty twenty six.

[Saori Casey, CFO at Sonos]

We expect our Q4 GAAP gross margin to be in the range of 42% to 44, with non GAAP gross margin in the range of 43.7% to 45.5%. Our gross margin guidance embeds our expectation that tariff expenses will be approximately $5,000,000 in Q4, which is around 180 basis point headwinds to gross margin, mostly representing the previous 10% tariff as well as inventory on hand. On a cash basis, we expect to pay $8,000,000 to $10,000,000 in Q4 as we build inventory ahead of our holiday quarter. This estimate is lower than our previous 20,000,000 to $30,000,000 estimate based on new tariff rates and the timing of the effective dates. And while we're not guiding Q1 at this time, we expect our GAAP and non GAAP gross margin will be above 40% for the quarter, even with the newly announced tariff rates due to our mitigation actions.

[Saori Casey, CFO at Sonos]

We expect Q4 GAAP operating expenses to be in the range of $150,000,000 to $155,000,000 down 13% to 10% from $172,000,000 in Q4 last year. We expect non GAAP operating expenses to be in the range of $130,000,000 to $135,000,000 down 9% to 6% from $143,000,000 in Q4 last year, and roughly flat sequentially. This decline is less than 15% decline we saw in Q3, primarily due to lower variable compensation expenses in Q4 of last year. On a normalized basis, our guidance implies non GAAP operating expenses will decline by 23% to 20% from Q4 of last year. Bringing it all together, we expect Q4 adjusted EBITDA to be in the range of minus $10,000,000 to positive $14,000,000 representing a margin of approximately minus 4% to plus 5% and an improvement from negative $22,600,000 in Q4 of last year.

[Saori Casey, CFO at Sonos]

Please note that the adjusted EBITDA figures I just quoted include the $5,000,000 tariff impact I outlined while discussing gross margin. Our Q4 guidance implies that our full year adjusted EBITDA will be between $116,000,000 to $140,000,000 an increase of 8% to 30% year over year from $108,000,000 in fiscal twenty twenty four. Growing adjusted EBITDA, while top line declines between 7% to 5%, is a direct result of our transformation efforts. This marks our fourth consecutive quarter of delivering on our top and bottom line guidance while navigating through a volatile and uncertain macro environment, thanks to the dedication and hard work of our employees. We continue to work hard on our transformation efforts to improve operational efficiency to drive profitability and enable investments for our future growth.

[Saori Casey, CFO at Sonos]

We will provide more updates in future quarters. Speaking of future growth, although our growth markets represent a small share of our revenue today, we remain encouraged by their growth performance that will be our key contributor to our growth in the years to come. We also continue to see tremendous opportunities to grow within our developed markets. We have been navigating a cyclical dowsing in our category for some time, and we are confident that we are well positioned when the cycle rebounds as we continue to invest in the core experience and build out the Sonos platform. We're excited to have Tom officially as our CEO, as his appointment marks the beginning of a new chapter to capitalize on our brand and leadership in wireless audio.

[Saori Casey, CFO at Sonos]

With only a small fraction of the global market captured so far, there is a vast opportunity to introduce the compounding value of the Sonos platform to new customers. After the call, we will update our earnings slides to reflect our Q4 guidance and our revised tariff exposure expectations. With that, I'd like to turn the call over for questions.

[Operator]

Star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We'll go first to Steve Frankel at Rosenblatt.

[Steve Frankel, Director of Research & Senior Research Analyst at Rosenblatt Securities]

Hi. Good afternoon, and thank you. Congratulations, Tom. Maybe just start with some high level insights on how you think about new product introductions. The the prior prior to your appointment, you know, the company was pretty set on in introducing a couple of new pieces of hardware per year.

[Steve Frankel, Director of Research & Senior Research Analyst at Rosenblatt Securities]

You seem to be emphasizing software. So should we think about software innovation being as important in terms of new products to drive growth as new new hardware products.

[Tom Conrad, CEO & Director at Sonos]

Sure. Thanks. And it's great to be on the call as the CEO for the first time. You know, I continue to think that a cadence of two new products a year is a is an excellent outcome for Sonos and its customers. And so there's really no change in our ambition in that regard.

[Tom Conrad, CEO & Director at Sonos]

I will say though that we are, as you know, in the process of of navigating tremendous reinvention here at at Sonos. And it takes time to drive change. And the beauty of software is that you have shorter lead times and the benefits of upgrades to the software platform can appear more quickly. Hardware, of course, has much longer cycles. And so while it's true that today, I think we have the strongest product portfolio in our history across every room of the home and beyond, our attention to software reliability and core experience over the last fifteen months has created a a kind of lull in new hard release releases coming over the next couple of quarters.

[Tom Conrad, CEO & Director at Sonos]

So in the short term, you will see us, work hard to drive differentiation and experience improvements, to support the current portfolio through software upgrades. Having said all of that, we all here at Sonos remain incredibly excited about our product road map with great new product introductions that will pick up in the 2026. So expect in terms of near term execution, continuing to deliver excellence in core experience, driving new customer acquisition and repurchase, look to us to sharpen our ability to tell the Sonos story. They already described, expanding and promising new geographies, maturing our relationship with installer channels, and and driving success in the new categories we've entered recently like headphones.

[Steve Frankel, Director of Research & Senior Research Analyst at Rosenblatt Securities]

Right. And and, Sayori, the last couple quarters, there's been a lot of discussion about reducing costs, and you've done a great job. Are are we towards the end of that journey, or do you think, excluding tariffs, there's more costs you can take out of the business to drive margin improvement as volumes return?

[Saori Casey, CFO at Sonos]

Thank you, Steve. We are still on our journey of our, as we've been calling it, transformation, but really driving cost structure and cost efficiency to be able to invest for the future. So our work continues, and we'll we'll hope to be able to share more in the future quarters.

[Steve Frankel, Director of Research & Senior Research Analyst at Rosenblatt Securities]

Great. Thank you. I'll jump back into the queue.

[Operator]

We'll move next to Eric Woodring at Morgan Stanley.

[Erik Woodring, MD - Equity Research at Morgan Stanley]

Great. Thank you guys for taking my questions. And same, Tom, you are clearly deserving of the role, and so congrats on becoming the permanent CEO. Would love to maybe, Tom, I realize that it's early and this is maybe a tough question to answer. But you guys last quarter communicated a strategy of kind of trying to widen your aperture from a pricing and promotion perspective to kind of get new households in the door.

[Erik Woodring, MD - Equity Research at Morgan Stanley]

Obviously, once they come in, there's a very powerful flywheel. Now obviously, are kind of forcing your hand a bit from a pricing perspective. Can you maybe just give us a little bit more detail or direction on exactly how you think about what products should be higher priced because of tariff, what products maybe you don't want to adjust pricing because of some of this pricing strategy? Just love to get a little bit more flavor of how you're thinking about pricing increases versus tariffs. And then I have a a follow-up, please.

[Tom Conrad, CEO & Director at Sonos]

I'm not sure that on this call we're gonna go into more detail about the specifics of the pricing changes that we're making beyond just saying that, of course, we're evaluating each of the products in the line, contemplating our sense of elasticity and effect on demand as we make pricing changes. You know, I think the best way to think about what we're trying to do here strategically is to craft a pricing plan that supports our goal of optimizing gross profit dollars. We certainly will be paying close attention to how our customers respond to these pricing changes as well as the competitive trends across the portfolio and in our categories. And then I'll just say, you know, we really believe that our our portfolio of hardware products deliver truly exceptional value that compounds over times, you know, thanks to the kinds of software updates that deliver new experiences. Just this quarter, we shipped AI speech enhancement for ARC Ultra, multi user swap for Ace in home theater, new room tuning capabilities for Ace.

[Tom Conrad, CEO & Director at Sonos]

So, you know, our our customers benefit from products that improve over time after their purchase, and and we think that that puts us in a good position as we have to modulate pricing relative to our competitors who so often are delivering commodity experiences.

[Erik Woodring, MD - Equity Research at Morgan Stanley]

Okay. Okay. Totally understood. And then I'd love, as a follow-up, maybe just if you could kind of touch on the high level kind of market backdrop as you see it today and maybe where you see it going. Again, realize there's a lot of variables that go into the forward book.

[Erik Woodring, MD - Equity Research at Morgan Stanley]

But do you see, you know, the the environment getting better? Is it is it deteriorating? Anything by geography that you would call out? Would just love to know kind of what's what's going on behind the scenes kind of outside of what you guys can actually control. Thanks so much.

[Tom Conrad, CEO & Director at Sonos]

Sure. You know, it is you know, continues to be the case that the the category remains cyclically challenged, you know, coming off of COVID pull in and weak housing data, as just two headwinds. On the other hand, you know, more people are consuming content at home than ever before. More people are subscribing to digital music and video streaming services than ever before. More people are interacting with technology through voice and conversational AI than ever before.

[Tom Conrad, CEO & Director at Sonos]

And I really think that in time, all of these trends are going to drive a return to growth for the category, and and I think we're uniquely positioned to capture that growth when it returns. So we're working hard in this sort of cyclical downturn to drive share through strong execution and innovation. You see that with Arc Ultra driving year over year gains in home theater in The US this quarter on on on the backs of the the sound motion technology that that we brought to market. And you'll continue to see us work hard in that lane while we wait for what we think is the inevitable return of of category demand.

[Erik Woodring, MD - Equity Research at Morgan Stanley]

Super. Thanks. And maybe just last question, then I'll get back in the queue. For you, Sayori, kind of a similar question to my predecessor, which is last quarter, you guys talked about $580,000,000 to $600,000,000 of non GAAP OpEx as kind of your target annualized run rate. I think you are actually already below that right now if we kind of take fiscal twenty twenty five in totality.

[Erik Woodring, MD - Equity Research at Morgan Stanley]

And so I know you're not going to necessarily guide for fiscal twenty six, but is $5.80 to 600 still the target run rate? Is it below that? I'd love if you could just share a bit more context about kind of what that target is, if it has changed at all. Thanks.

[Saori Casey, CFO at Sonos]

Thanks, Eric. Yeah. We we're still we continue to still work on our efforts to optimize our cost structure. Part of it, we obviously wanna reinvest into the business for the future growth. And so we're we're we're not guiding to a FY '26 OpEx today.

[Saori Casey, CFO at Sonos]

However, I do wanna call out part of what I mentioned on on the prepared remarks that the the resulting impact to even the f I '25 adjusted EBITDA, we expect to grow 8% to 30% year over year on our bottom line for this year. And as you recall, we had our reduction in force both last August as well as even a larger one in February. So we're not seeing a full year impact of those activities that we've taken place to improve our cost structure this year in FY 'twenty five, and we expect that to fully materialize into FY 'twenty six as well. But again, we're balancing with where we want to invest for our future as well as flowing it through to the bottom line, but we expect to continue to improve our profitability. And we believe this business can expand both top and the bottom line. Thank you.

[Erik Woodring, MD - Equity Research at Morgan Stanley]

Awesome. Thank you guys for all the color. Good luck.

[Operator]

We'll go next to Brent Thill at Jefferies.

[Rayyana Matraji, Equity Research Associate at Jefferies]

Hi. This is Brianna Matraji on for Brent Thill. Thanks for the question, and congrats, Tom. Can you speak to how Sonos is leveraging AI to enhance the product or app experience? And do you think this could be a meaningful differentiator or monetization driver over time? Thank you.

[Tom Conrad, CEO & Director at Sonos]

Let me start by talking just a little bit about what I think of as the sort of the fundamental strengths of the the Sonos capability. You know, we have best in class sound quality industrial design. We, you know, invented the multi room architecture that's defined the standard for, you know, for customers everywhere. We have this incredibly broad portfolio of premium form factors for every room and beyond. And the power of this ecosystem is really the software platform that connects all of those products with our partners and developers and our customers in truly unique and differentiated ways.

[Tom Conrad, CEO & Director at Sonos]

And I think what you're touching on is is why I'm so excited about where this platform can go from here. I think our hardware and software is incredibly well positioned to deliver the next generation of conversational AI experiences in the home. So I think the way to think about it in is that Sonos isn't and has never been a company that sells a loose collection of speakers. Today, we're we're building a next generation platform that we think will define how people experience sound and interaction in the home for the next decade and beyond. And of course, as a footnote, I should say, the the the company operationally is being transformed by the use of of AI technology across all of our departments from, you know, engineering certainly through marketing and legal and customer experience.

[Tom Conrad, CEO & Director at Sonos]

So we have a really big vision for AI both in terms of increasing our operation agility as well as delivering incredible one of a kind experiences in our customers' homes.

[Rayyana Matraji, Equity Research Associate at Jefferies]

Great. Thank you.

[Operator]

And that will complete our question and answer session. This concludes today's conference call. We thank you for your participation. You may now disconnect.

Participants

Executives

• James Baglanis, Head - Corporate Finance
• Tom Conrad, CEO & Director
• Saori Casey, CFO

Analysts

• Steve Frankel, Director of Research & Senior Research Analyst at Rosenblatt Securities
• Erik Woodring, MD - Equity Research at Morgan Stanley
• Rayyana Matraji, Equity Research Associate at Jefferies