Sonos, Inc. (NASDAQ:SONO) Q4 2022 Earnings Call Transcript

And I think if the pandemic has taught us anything, it’s that we need to be nimble as we go through this period, and we will. So, we will be watching it very closely. You know we watch it daily because we got registrations and new household data. We are watching that very closely. And if we need to adjust along the way we will, but we feel like this is a good plan based on what we have been seeing and then as well, of course, the new products that we have planned and coming in the year.

Eddie Lazarus: Certainly have some humility around it. There is no question about that. But we also do see the data, and we did put some additional data into the investor deck this year, and I think I mentioned, which is we did show monthly registration trends for the fourth quarter. And we were very heartened by the fact that in July, we were up low-single digits. In August, we were up low-single digits. And actually, in September, we were up low-double digits. So, we just have to go on the information we have got. We didn’t take a particular amount of joy in those numbers, but they did give us a little bit of confidence going into this year that that things were as we have been saying over and over again, really stabilized in the business.

Patrick Spence: And the one other thing, Brent, the one other factor that as we think through this period, and we have seen this from the market share data over the last four months is we believe that given our brand position, given the products that we have right now in our portfolio and what we have planned in the product roadmap, we can be taking share over this period as well. And so we have seen that. We are going to plan to be able to do more of that. It’s why we have been focused on building the brand we have, the portfolio we have, and certainly that’s something I think that we expect to continue to do.

Brent Thill: And just a quick follow-up on the direct-to-consumer channel, I know you mentioned it was down. You have been making some really good progress and understand some of the factors. But it feels like you have got a lot more runway to take that higher as a Sonos customer. Thank you for the Sub is installed. It just seems like there is an incredible opportunity to take that buyer. Can you talk through the initiatives and what you are pushing there on the direct-to-consumer side?

Patrick Spence: Yes. It’s, we are investing in really the systems and tools to understand our customers better and make sure that we can target on a more individualized basis as well and give each customer the right kind of offer based on the products that they have today and then we know what will make their experience better. And so I would say that with that, we have been investing to have those systems, have the team in place and be able to make these offers. And I think that will help us drive more growth in that channel for sure. And as you know, I mean I expect that we should be able to €“ over time, obviously, we have got the macroeconomic uncertainty right now. But over time, we should be able to drive growth in all of these channels as we go through it. But I do think that the investments we have been making in our systems and tools and our team in DTC set us up for more success in that channel.

Eddie Lazarus: Yes. Pretty tough comps, right. 2 years ago, we were up 80%-something. I think last year, we were up 47%. It did dip a little bit, but that’s really because retail is so much opened up, so much more around the world. But as Patrick said, we have very high hopes for being able to continue to grow in DTC.

Brent Thill: Thank you, gentlemen.

Patrick Spence: Thanks Brent.