Financial Analysis

"7. Commitments and Contingencies Legal proceedings From time to time, the Company is involved in legal proceedings in the ordinary course of business, including claims relating to employee relations, business practices, and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Companys view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Companys operations or its financial position, liquidity or results of operations. The Companys Lawsuits Against Google: On January 7, 2020, the Company filed a complaint with the U.S. International Trade Commission (""ITC"") against Alphabet Inc. (""Alphabet"") and Google LLC (""Google"") and a counterpart lawsuit in the U.S. District Court for the Central District of California against Google. The complaint and lawsuit each allege infringement by Alphabet and Google of certain Sonos patents related to its smart speakers and related technology. The counterpart lawsuit was stayed pending completion of the ITC investigation and appeal thereof. The ITC concluded its inves …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"6. Debt On October 13, 2021, the Company entered into a Revolving Credit Agreement (the ""Revolving Credit Agreement"") which was amended in October 2025 (Amendment No. 2"") with JPMorgan Chase Bank, N.A., KeyBank National Association and Goldman Sachs Bank USA. Amendment No. 2 provides for (i) a five-year senior secured revolving credit facility in the amount of up to $80.0 million and (ii) an uncommitted incremental facility subject to certain conditions. Proceeds are to be used for working capital and general corporate purposes. The facility may be drawn as an Alternative Base Rate Loan (at 1.00% plus an applicable margin) or Term Benchmark Loan (SOFR plus an applicable margin). The Company must also pay (i) an unused commitment fee ranging from 0.200% to 0.275% per annum of the average daily unused portion of the aggregate revolving credit commitment under the agreement and (ii) a per annum fee equal to the applicable margin over SOFR multiplied by the aggregate face amount of outstanding letters of credit. As of June 27, 2026, the Company did not have any outstanding borrowings and had $2.4 million in undrawn letters of credit that reduce the availability under the Revolving Credit Agreement. The Company's obligations under the Revolving Credit Agreement are secured by substantially all of its assets. The Revolving Credit Agreement contains customary representations and warranties, customary affirmative and negative covenants, a financial covenant that is tested quarter …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"Revenue includes the applicable service revenue for unspecified software upgrades and cloud-based services attributable to each region and is as follows: Three Months Ended Nine Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands) Americas $ 238,373 $ 229,656 $ 747,858 $ 731,041 Europe, Middle East and Africa (""EMEA"") 114,173 97,245 386,775 363,642 Asia Pacific (""APAC"") 22,714 17,863 67,816 60,693 Total revenue $ 375,260 $ 344,764 $ 1,202,449 $ 1,155,376 Revenue includes the applicable service revenue for unspecified software upgrades and cloud-based services attributable to each country and is as follows: Three Months Ended Nine Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands) United States $ 224,497 $ 213,815 $ 700,798 $ 675,546 Other countries 150,763 130,949 501,651 479,830 Total revenue $ 375,260 $ 344,764 $ 1,202,449 $ 1,155,376 Revenue by product category also includes the applicable service revenue for unspecified software upgrades and cloud-based services attributable to each product category and is as follows: Three Months Ended Nine Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands) Sonos speakers $ 285,325 $ 253,669 $ 954,583 $ 915,330 Sonos system products 69,252 73,179 186,721 183,993 Partner products and other revenue 20,683 17,916 61,145 56,053 Total revenue $ 375,260 $ 344,764 $ 1,202,449 $ 1,155,376"

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"9. Stock-based Compensation 2018 Equity Incentive Plan In July 2018, the Board adopted the 2018 Equity Incentive Plan (the ""2018 Plan""). Stock options The summary of the Companys stock option activity is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at September 27, 2025 5,544,885 $ 14.28 1.5 $ 5,850 Exercised (1,640,599) $ 14.09 Forfeited / expired (47,036) $ 14.29 Outstanding at June 27, 2026 3,857,250 $ 14.36 1.0 $ 514 As of June 27, 2026 and September 27, 2025, all outstanding stock options have vested and the Company had no unrecognized stock-based compensation expense related to stock options. Restricted stock units (""RSU"") Pursuant to the 2018 Plan, the Company issues RSUs to employees and directors. The summary of the Companys RSU activity is as follows: Number of Units Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at September 27, 2025 8,777,387 $ 12.96 $ 134,294 Granted 5,951,464 $ 15.31 Released (3,796,383) $ 13.62 Forfeited (768,146) $ 13.54 Outstanding at June 27, 2026 10,164,322 $ 14.05 $ 137,930 As of June 27, 2026 and September 27, 2025, the Company had $100.9 million and $78.1 million of unrecognized stock-based compensation expense related to RSUs, which are expected to be recognized over weighted-average periods of 2.9 years and 2.3 years, respectively. Performance stock units (""PSU"" …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

3. Financial Instruments The carrying values of the Companys accounts receivable and accounts payable approximate their fair values due to the short period of time to maturity or repayment. The Company utilizes the following fair value hierarchy to establish priorities of the inputs used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. The following table summarizes cash, cash equivalents and marketable securities by investment category as of June 27, 2026 and September 27, 2025: June 27, 2026 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cash and Cash Equivalents Marketable Securities Cash $ 101,507 $ $ $ 101,507 $ 101,507 $ Level 1: Money market funds 105,387 105,387 105,387 Subtotal 105,387 105,387 105,387 Level 2: U.S. Treasury securities 54,178 3 (49) 54,132 54,132 Subtotal 54,178 3 (49) 54,132 54,132 Total $ 261,072 $ 3 $ (49) $ 261,026 $ 206,894 $ 54,132 September 27, 2025 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cash and Cash Equivalents Marketable Securities Cash $ 158,556 $ $ $ 158,556 $ 158,556 $ Level 1: Money market funds 16,112 16,112 16,112 Subtotal 16,112 16,112 16,112 Level 2: U.S. Treasury securities 52,834 32 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"10. Income Taxes The Companys income tax provision and the resulting effective tax rate for interim periods is generally determined based upon its estimated annual effective tax rate (""AETR""), adjusted for the effect of discrete items arising in that quarter. The impact of such inclusions could result in a higher or lower effective tax rate during a quarter, based upon the mix and timing of actual earnings or losses versus annual projections. In each quarter, the Company updates its estimate of the AETR, and if the estimated AETR changes, a cumulative adjustment is made in that quarter. The Company recorded income tax provisions of $4.4 million and $2.6 million for the three months ended June 27, 2026 and June 28, 2025, respectively, related to U.S. and non-U.S. income taxes. The Company recorded income tax provisions of $10.5 million and $7.1 million for the nine months ended June 27, 2026 and June 28, 2025, respectively, related to U.S. and non-U.S. income taxes. Income tax provision for the three and nine months ended June 27, 2026 increased compared to the three and nine months ended June 28, 2025. These increases were primarily driven by shifts in the Company's forecasted geographic earnings mix, which required the Company to apply a single consolidated estimated annual effective tax rate (""AETR"") in the current year, whereas the prior year required separate U.S. and non-U.S. AETRs. These increases were partially offset by the favorable impact of the One Big Beautif …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"In December 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (ASU) No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual reporting period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The amendments may be applied retrospectively or prospectively, with early adoption permitted. The Company is currently evaluating the pronouncement to determine the impact it may have on the Company's consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (""ASU 2023-09""). This update includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments will be effective for the Company's fiscal year ending October 3, 2026. The Company expects adoption of ASU 2023-09 to result in expanded incom …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"12. Retirement Plans The Company has a defined contribution 401(k) plan (the ""401(k) Plan"") for the Companys U.S.-based employees, as well as various defined contribution plans for its international employees. Eligible U.S. employees may make tax-deferred contributions under the 401(k) plan but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code of 1986, as amended. The Company matches contributions towards the 401(k) Plan and international defined contribution plans. The Company's matching contributions totaled $2.3 million and $1.6 million for the three months ended June 27, 2026 and June 28, 2025, respectively. The Company's matching contributions totaled $6.4 million and $5.9 million for the nine months ended June 27, 2026 and June 28, 2025, respectively."

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13. Restructuring and Other Charges The Company incurred restructuring and other charges associated with optimizing its organizational structure, workforce, and operational footprint. The following table summarizes the components of restructuring and other charges: Three Months Ended Nine Months Ended (in thousands) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Cash restructuring charges: Employee-related costs $ 4,034 $ 1,874 $ 5,649 $ 17,227 Other restructuring costs 131 (1,327) 732 2,071 Total cash charges $ 4,165 $ 547 $ 6,381 $ 19,298 Non-cash charges: Stock-based awards $ 240 $ 1,434 $ 240 $ 4,577 Asset write-offs 848 1,746 Total non-cash charges $ 240 $ 1,434 $ 1,088 $ 6,323 Total restructuring and other charges $ 4,405 $ 1,981 $ 7,469 $ 25,621 The following table summarizes restructuring and other charges recorded in the Company's condensed consolidated statements of operations and comprehensive income (loss): Three Months Ended Nine Months Ended (in thousands) June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Cost of revenue $ 131 $ (514) $ 795 $ 3,420 Research and development 4,014 (824) 4,871 11,882 Sales and marketing 46 1,038 1,499 3,831 General and administrative 214 2,281 304 6,488 Total restructuring and other charges $ 4,405 $ 1,981 $ 7,469 $ 25,621 The following table summarizes the Company's restructuring and other charges recorded in accrued expenses and accrued compensation within the condensed consolidated balance sheets: (in thousands) E …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

"4. Revenue and Geographic Information Disaggregation of revenue Revenue includes the applicable service revenue for unspecified software upgrades and cloud-based services attributable to each region and is as follows: Three Months Ended Nine Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands) Americas $ 238,373 $ 229,656 $ 747,858 $ 731,041 Europe, Middle East and Africa (""EMEA"") 114,173 97,245 386,775 363,642 Asia Pacific (""APAC"") 22,714 17,863 67,816 60,693 Total revenue $ 375,260 $ 344,764 $ 1,202,449 $ 1,155,376 Revenue includes the applicable service revenue for unspecified software upgrades and cloud-based services attributable to each country and is as follows: Three Months Ended Nine Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands) United States $ 224,497 $ 213,815 $ 700,798 $ 675,546 Other countries 150,763 130,949 501,651 479,830 Total revenue $ 375,260 $ 344,764 $ 1,202,449 $ 1,155,376 Revenue by product category also includes the applicable service revenue for unspecified software upgrades and cloud-based services attributable to each product category and is as follows: Three Months Ended Nine Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In thousands) Sonos speakers $ 285,325 $ 253,669 $ 954,583 $ 915,330 Sonos system products 69,252 73,179 186,721 183,993 Partner products and other revenue 20,683 17,916 61,145 56,053 Total revenue $ 375,260 $ 344,764 $ 1,202,449 $ 1,1 …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"2. Summary of Significant Accounting Policies There have been no changes in the Companys significant accounting policies, recently adopted accounting pronouncements, or recent accounting pronouncements pending adoption from those disclosed in the Annual Report, except as noted below. Recent accounting pronouncements pending adoption In December 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (ASU) No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual reporting period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The amendments may be applied retrospectively or prospectively, with early adoption permitted. The Company is currently evaluating the pronouncement to determine the impact it may have on the Company's consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (""ASU 2023-09""). This update includes amend …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"8. Stockholders' Equity On February 24, 2025, the Board of Directors (the ""Board"") authorized a common stock repurchase program of up to $150.0 million. During the nine months ended June 27, 2026, the Company repurchased 6,008,107 shares for an aggregate purchase price of $94.9 million and at an average price of $15.80 per share under the repurchase program. Aggregate purchase price and average price per share exclude commission and excise tax. As of June 27, 2026, the Company had $34.7 million available for share repurchases under the share repurchase program. The Company's share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act. Any excise tax incurred is recognized as part of the cost basis of the shares acquired in the condensed consolidated statements of equity. Treasury stock during the nine months ended June 27, 2026, included 1,271,405 shares withheld to satisfy employees' tax withholding requirements in connection with vesting of stock awards. Additionally, during the nine months ended June 27, 2026, the Company retired 6,908,008 shares of treasury stock."

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