Hello everyone.

Today’s update has a Sonos focus. We begin with Neil’s thoughts on Sonos FY1Q23 earnings (October to December). The discussion then turns to Sonos management once again hinting at the company entering a new product category. We discuss what that product category likely is and the challenges facing Sonos. The update concludes by examining a Sonos comment regarding Big Tech not doing a whole lot in the speaker space.

Sonos FY1Q23 Earnings

Back on February 8th, Sonos reported FY1Q23 earnings (covering October to December).

Revenue was up 1% (7% excluding currency impact) with speaker unit sales up 4% (to 2.5M). Sonos speaker demand was driven by promotional activity. Management called out sales around sets (more than one speaker) as being especially effective with promotions. Sonos talked about speaker share gains. It would not be surprising to find out those gains are coming against Amazon, Google, and traditional speaker companies (Bose, Samsung/Harman, Sony).

Here is Sonos speaker sales on a TTM basis to remove the seasonality associated with the holidays:

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