Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonos second quarter fiscal 2024 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to James Baglanis, Head of Investor Relations. James, you have the floor. Good afternoon, and welcome to Sonos' second quarter fiscal 2024 earnings conference call. I'm James Baglanis, and with me today are Sonos' CEO Patrick Spence, CFO Saori Casey, and Chief Legal and Strategy Officer Eddie Lazarus. For those who joined the call early, today's hold music is a sampling from our Sweets and Spices station, which is curated in collaboration with AAPI at Sonos in recognition of Asian Pacific American Heritage Month. Before I hand it over to Patrick, 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 the expectations reflected in the forward-looking statements. A discussion of these risk factors is fully detailed under the caption Risk Factors in our filings with the SEC. During this call, we'll 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 second quarter fiscal 2024 results posted to the investor relations portion of our website. As a reminder, the press release, supplemental earnings presentation, and conference call transcript will be available on our investor relations website, investors.sonos.com. I would also like to note that for convenience, we have separately posted an investor presentation to our investor relations website, which contains certain portions of our supplemental earnings presentation. I'll now turn the call over to Patrick. Thank you, James, and hello, everyone. I'm pleased to report that we did what we set out to do in the first half of our fiscal year. This performance sets us up nicely to deliver on our previously outlined fiscal 2024 guidance. As you've heard from us and others previously, our categories remain under pressure, so our ability to deliver these results is a testament to the strengths of our team, our product portfolio, and our brand. We are holding our own and continue to gain market share in U.S. home theater and streaming audio versus last year. As you all know, we've been making healthy investments in innovation. Our investments remain focused on two things. The first is attracting new customers to Sonos, and the second is getting our existing customers to add more Sonos products to their life. There are four things I wanna highlight that stem directly from the investments we're making and how we're laser-focused on attracting new customers and getting existing customers to add more products. The first is the all-new Sonos app. This is our most extensive app redesign and rearchitecture yet. Our original app was designed and architected over a decade ago when Sonos and our customers' needs were very different. We started from the ground up so we can build an app that would deliver our customers a great experience every day, allow us to more easily add new products and categories to it, and move faster with new innovations and features going forward. Our new app brings services, content, and system controls to one customizable home screen, creating an unprecedented streaming experience. Best of all, our redesigned app is easier, faster, and better. It once again raises the bar for the home music listening experience and sets up our ability to expand into new categories and experiences. Our app is a proof point of what we have always said: We are the story of software eating audio. Our software truly differentiates our products from everything else on the market and is key to unlocking the opportunity ahead for us. Speaking of which, the second is that we are just weeks away from unveiling our newest product. This launch will give us a foothold into a new multi-billion-dollar category, expanding the number of categories we play in from five to six and further diversifying our business. This has been a multi-year investment, and we expect it to pay off in spades in Q3 and beyond. This will also mark the beginning of new efforts on the marketing front to evolve the Sonos brand and reach new audiences. The third is expanding our distribution footprint. In March, we officially went live as a first-party seller on Amazon in the United States. The partnership is off to a great start and is a major milestone in our journey to ensure that we attract new customers to Sonos, particularly as we enter new categories. We continue to evaluate our distribution footprint with an eye towards reaching new customers and look forward to providing further updates in the quarters to come. And fourth, this quarter, we experimented with stimulating additional product sales in our install base by delivering limited time upgrade offers to some of our most loyal, longest-tenured customers. We are always exploring how we can better use our unique data and insights to deliver more personalized experiences for our customers. The results of the targeted promotion came in well ahead of our expectations, validating our ongoing investments in systems to better harness and utilize our data. Selling both new and existing products into our install base represents a tremendous revenue opportunity. It's what gives us confidence in the success of the product we're about to launch in a new category, and it's what gives us confidence in our ability to scale this business in the years to come. For example, we've previously sized the opportunity of converting all single-product households to the average multi-product household to be over $6 billion in revenue. Switching gears, I wanted to briefly touch on our litigation with Google. Just last month, in early April, the Federal Circuit affirmed that Google had infringed five foundational Sonos patents. With this ruling in hand, we look forward to pursuing damages for Google's misappropriation of Sonos's innovations. I want to reiterate that we continue to be laser-focused on what we can control. We are at the onset of a multi-year product cycle as we harvest the benefits of our research and development investments to attract new customers and sell more to our existing customers. It's the flywheel that has powered Sonos for the past 20 years, and we're excited to add some more fuel to the flywheel this year. We are positioning the company to accelerate our growth while keeping expenses in check to deliver margin expansion in the years to come. The eventual recovery of our categories will only further fuel this re-acceleration. The opportunity ahead remains large, as we have just 2% of the $100 billion global audio market and 9% share of the total households in our core market. Each year, our business is driven by both the acquisition of new households that enter our install base and by our loyal customers who continue to make subsequent purchases over time. Our ability to capture a disproportionate share of the opportunity ahead of us will only improve from here. Great things are happening here at Sonos, and the best is yet to come. I'll now turn it over to Saori to take you through our financials. Thank you, Patrick. Hi, everyone. Since joining Sonos as CFO a quarter ago, I've immersed myself in the details of the business and the exciting product roadmap. I see tremendous opportunity ahead for Sonos to drive sustainable, profitable growth over the long term, and I'm thrilled to be part of the team. Now on to our results. Q2 revenues came in slightly ahead of our expectations at $252.7 million. Our better-than-expected Q2 revenue was driven by a strong customer response to some promotions that we ran in the quarter. In particular, we saw great adoption to the targeted promotion to drive upgrade sales that Patrick referenced earlier. Revenue per product sold was $338, up 11% year-over-year. This increase resulted from favorable product mix, partially offset by increased promotional activity. This brings our first half revenue to $866 million, down 11% year-over-year. Digging in, performance varied significantly on a regional basis. Revenue in the Americas declined 5% year-over-year, whereas EMEA and APAC declined by 21% and 23% respectively. Sales in our categories in both EMEA and APAC continued to be significantly impacted by the difficult macroeconomic environment. Overall, our first half performance puts us in a good position to deliver on our full year guidance. GAAP gross margin was 44.3%, up 100 basis points year-over-year, and roughly in line with the guidance we gave last quarter. The year-over-year increase was due to lower component costs and favorable product mix, partially offset by additional promotional activity. Gross margin declined sequentially from our holiday quarter due to the seasonal deleverage from lower revenue in Q2. Our Q2 performance brings our first half gross margin to 45.6%, up from 42.7% in the first half of last year. This performance demonstrates the resilience of our underlying gross margins and underpins our confidence that we will meet our fiscal 2024 target of 45%-46%. Adjusted EBITDA was -$34 million, ahead of our guidance due to higher-than-expected revenue and lower product and marketing spend. This brings our first half adjusted EBITDA to $81.6 million, representing a margin of 9.4%. Non-GAAP adjusted operating expenses were $157 million in the quarter, down $22 million sequentially, primarily due to a seasonal decrease in sales and marketing spend. We ended the quarter with $292 million of net cash, which includes $46 million of marketable securities, as we deployed some excess cash into short-duration Treasury bills. Free cash flow in Q2 was -$121 million due to typical seasonality, bringing our first half free cash flow to $148 million, compared to $46 million in the first half of last year. This increase was primarily driven by working capital improvements, resulting from a focus on better managing our inventory through adjustments to our sourcing plans, as well as implementation of newly adopted payment terms with our suppliers. Our period-end inventory balance was $180 million, down 45% year-over-year and up 4% from last quarter. This consists of $114 million of finished goods and $65 million of components. We're working hard to keep inventory balances in check. And finally, we returned $53 million to our shareholders through stock repurchases in the quarter. We repurchased 2.5% of common shares outstanding as of Q1 at an average price of $17.32 per share. This brings our total year-to-date share repurchases to $76 million, leaving us with approximately $124 million remaining under our current $200 million share repurchases authorization. We continue to be balanced in our capital allocation strategy and expect to be active in the market repurchasing our stock. Turning to our outlook, we remain confident in our previous guidance for FY 2024, which I will quickly recap. We expect our revenue in the range of $1.6-$1.7 billion, roughly flat year-over-year at the midpoint. As previously noted, our guidance assumes that our products in the new multibillion dollar category will generate a large portion of the over $100 million revenue we expect from new products this year. We expect GAAP gross margin in the range of 45%-46%, with non-GAAP gross margins in the range of 45.4%-46.4%, due to approximately $7 million of stock-based compensation and amortization of intangibles included in the GAAP cost of revenue. Adjusted EBITDA is expected to be in the range of $150-$180 million, representing a margin of 9.4%-10.6%. As previously discussed, we're not providing formal guidance for free cash flow in fiscal 2024, though we continue to expect to significantly improve our free cash flow conversion versus last year. Turning to Q3, we expect revenue to grow year-over-year in the range of $375 million-$405 million, which includes a sizable contribution from our launch of our highly anticipated new product. We expect GAAP gross margin to increase sequentially to 45%-46%, primarily due to a fixed cost leverage from higher revenue in Q3. Non-GAAP operating expenses are expected to be in the range of $147 million-$159 million, resulting in adjusted EBITDA in the range of $35 million-$40 million. With a solid first half in the books, we're in a good position to deliver on our fiscal 2024 guidance. We're laser focused on our execution and accelerating revenue growth in the second half of the year, while tightly managing our expenses to drive margin expansion. With that, I'd like to turn the call over for questions. All right, thank you. And at this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Once again, star and the number one. And we will pause just a moment to compile the Q&A roster. All right, looks like our first question comes from the line of Steve Frankel with Rosenblatt. Steve, please go ahead. Good afternoon. I'd like to start with a couple of the new initiatives that happened during the quarter. Maybe give us some feedback on early learnings from the direct presence on Amazon, and any more details you could give us on the install base promotion and what you might do going forward around that. Yeah, thanks, Steve. It's Patrick here. On Amazon, we're very pleased with our start there. As I mentioned, you know, very focused on how we find new customers, and that is something that we've been able to deliver on. Just getting started, but something we think is going to be even more important going forward, given some of the new categories that we're going into. So, I think that's been helpful in terms of our overall plan and, you know, positioning ourselves for growth. And then on the install base, this is one that, as you know well, is a large opportunity for us over time if we can get more of the single-player homes to the multi-product average. That's a $6 billion opportunity, and we continue to invest in the systems and the tools to allow us to go after this opportunity even more. So we're very excited about the opportunities there. I feel like we're getting well-positioned, particularly through our direct-to-consumer channel, to really tap into that, as well, which I think, you know, really helps, particularly as we think about, as well, some of the new products that are coming into play, 'cause they're gonna help as we tap into our existing base too. So, excited about both. I think we have lots of opportunity in both, and we're gonna continue working on those. And there's other ones we're working on, to... Again, with that real focus of trying to find other partners that can help us get into new homes. Because, as everyone knows, we're only in about 9% of the total homes we think we can address, and so finding new homes is the name of the game. Great. And then one last question, some characterization of channel inventories, and if you'd give us some insight geographically, how they may differ as well? Yeah. On the channel inventory, we ended with a very comfortable level. We don't usually break it down into the geographic or channel details further on the call, but we're comfortable with where we ended. Okay, great. Thank you. I'll jump back in the queue. Thanks, Steve. And thank you, Steve. And our next question comes from the line of Erik Woodring with Morgan Stanley. Eric, please go ahead. Super. Thank you very much for taking the questions, guys. So, Patrick, maybe you first. You know, clearly still banking on a pretty significant product launch in fiscal 3Q. Can you maybe help us understand what you've learned about consumer demand over the last 3 months? And I say that because, you know, we see most consumer companies flagging real caution in kind of the spending environment. You know, your outlook for this new product has been unwavering. So can you maybe just help us connect the dots? What's driving the confidence as we see maybe some of the macro outlook, especially as it relates to consumer spending, you know, remain kind of unchanged, negative, maybe deteriorate? Not sure how to characterize it, but maybe you could share some color with us, and that'd be helpful. Thank you. You bet, Eric. I'd say for our categories, last three months have been more of the same. And I do wonder if it's, you know, our categories have been challenged for a while, and maybe, you know, I think we had characterized last year kind of being in a pretty weak, you know, weak categories overall. And so we're not seeing anything that makes us believe it's getting any weaker or any stronger as we go through it. And I think the, you know, so we continue to really focus on what we can control, and I think it's a huge testament to the team, really the state of our brand and our product portfolio, that we've been able to execute across the first half successfully. And so, obviously, we take learnings from that, understanding from that. I think the other thing is, we've done a lot of work to make sure we understand the new category we're going into. You know, it's a large one, so that gives us confidence. We believe we bring a unique perspective, as well. As you might imagine, we've had lots of conversations with channel partners, and we also know it's a growing category. So from our perspective, it's a little different than the other categories we're in right now because it is growing year over year. And so all those things combined, plus our ability to execute across the first half, is really what gives us, you know, the confidence to keep our, you know, guidance for fiscal 2024, intact. Great. And then, you know, I'm not sure if this is for you, Patrick, or for you, Saori, but obviously a lot going on investment-wise this year, which is great to see. How much of this is kind of run rate operating expenses or investments as we think about the forward look beyond just this year, versus how much is a bit of what I would call heavy lifting that you need to do, and maybe a bit of pull forward in spend, that you know, some of it potentially doesn't repeat as we look again beyond this year? Can you just help us understand some of that? That'd be really helpful. Thank you so much. Thanks, Eric. You know, certainly what our investment approach is embedded in our guidance range, the FY 2024 guidance that we've confirmed. You know, we, we are continuing to invest, to optimize for profit, profit growth, over the long term, at the same time, making sure that, we're optimizing for the future growth as well. So it, it is embedded in our guidance, and, we will share more, as we, you know, go through the, the new product launches and as we continue to monitor the market. The market continues to be challenging, and we realize, that we need to stay pulse on, on the market. But at the same time, we will continue to control what we can control. Great. Thank you. Thanks so much for the call, guys. Good luck. Thanks, Eric. Thank you, Eric. All right, our next question comes from the line of Jake Norrison with Raymond James. Jake, please go ahead. Perfect. Good afternoon. I just wanted to start and double-click on the promotional focus on getting new homes. Could you just speak to the levers here that you'd be able to pull? Obviously, this is high level, it's early days, but, you know, maybe just compare and contrast it to previous partnerships, like the IKEA one, that, you know, weren't as successful in gaining new customers. Thanks. Yeah, so it's not promo related. This is more structural and long-term oriented. So if we're going to add a, you know, any, channel partner, it really is about assessing who they're reaching and who they're talking to, and how does that fit with, today's product portfolio and the one we're building for the future? And so this is much more strategic in nature in terms of identifying how else do we tap into the, you know, 91% of homes that we believe we can address but aren't in yet. And so that's what's guiding, that's what's guiding really our push for the expanded distribution, that you've seen and will continue to see. Okay, great. I appreciate the color there. And then last one for me. I'm hoping you could just dive a little deeper on international trends. Of course, we've seen the weakness, but can you just maybe speak to, you know, your market share versus the broader audio segment, in those regions? Thanks. You bet. Yeah, so this is one we watch very closely because, you know, we wanna know how we're doing relative to the other players that are out there. You know, as I mentioned, you know, we continue to, in fact, gain or hold share in the U.S. home theater and the streaming audio, even though those are down year-over-year, which is what we're looking at. Similarly, we're seeing, you know, significantly down year-over-year, anniversarying negative year-over-year last year as well, across EMEA, and then as well into Australia, which is our biggest APAC market at this point. And so those are ones where we are holding our own, we feel like. From everything we can see at this point, we continue to hold up well relative to what's happening in the industry more broadly. I think when you look at our results in terms of the geographies, I think they're very representative of what you're seeing across the industry as opposed to anything Sonos unique. Awesome. Thanks, Patrick. Appreciate it. Thank you. All right. Thank you, Jake. Just as a reminder, ladies and gentlemen, again, if you'd like to ask a question, it is star one on your telephone keypad. Once again, star and the number one. And our next question comes from the line of Alex Fuhrman with Craig- Hallum. Alex, please go ahead. Hey, guys. Thanks for taking my question. Just from a high level, wondering if you can explain to us a little bit. Seems like your business today is roughly the same size as it was about three years ago when there was a lot more housing activity, and you know, now it's been kind of a multi-year slump in housing velocity. Can you talk to us a little bit about what that's done to your customer profile, who you have coming into the brand, how many products they're buying, maybe what their first products they might be buying are, and what steps are you taking to be ready for demand to come back, if presumably, you know, we do see some type of an uptick in the housing market at some point in the future? ... Yeah, thanks, Alex. I think, you know, we've actually been working, again, in kind of the theme of focusing on what we can control. You'll recall in Q1, one of the big areas we focused on was bundles, and we had our highest, you know, proportion of new homes starting with multiple products in that quarter as well. And so I think if anything, we've shown an ability to try and make sure that we can drive, you know, customers. Because there are so many we haven't tapped into, right, as we think about being only in 9% of those homes, is that if we can put the right kind of packages together for our customers, make it easy for them to buy, as we showed through the holiday season, then I think we can... You know, we to some degree are bucking the trends. Now, overall, obviously, our categories remain under pressure. I think to your point, you know, housing is something that we think would naturally is a tailwind for us, ultimately, that's there. And so I think you, you know, I think you prepare for the good times by focusing and getting better in the challenging times on how you execute, you know, how you invest, where you invest, and trying to be as creative as possible. So coming up with bundles, looking at how we do promotions to our install base. All of the things that we're doing today, the innovation we're doing across our product team, the new marketing and brand kind of aspects that we're doing for our new product, all of these things, you know, I think will benefit us greatly if we get some tailwinds from the categories as well, and, or housing, if you will. And so all of the activities we're doing in this, you know, challenging period will pay off when we see the tailwinds come back and the categories pick up. So I think we're doing all the right things we can, and obviously, we'll watch carefully, but we're gonna also, you know, manage our business appropriately to make sure we navigate these challenging times successfully, and do so profitably, as we've outlined many times. Great. That's, that's really helpful. Thank you very much, Patrick. Thanks, Alex. Thank you. Our next question comes from the line of Brent Thill with Jefferies. Brent, please go ahead. Hey, Patrick. Thanks. Hey, Patrick, you get the magic wand, and you can kind of wave it. What, what are the things that you think could really help get the environment back to where you'd want to be? What, what are the two or three things you'd wave that wand over? Oh, that's amazing, Brent. That's a great, that's a great question. I mean, you know, I, I think tailwinds in our category. So, so people shifting their, you know, their investments from wherever they happen to be investing today into, audio products would be a great thing for us. That, that would be, the biggest thing. I, I think, to Alex's point, like, housing is one that certainly we expect to be benefiting from, so, so that would be something that would be, underlying it. But again, you know, we're, we're not st- you know, we're not gonna... Because there are no magic wands, we're not going to, not gonna focus on that too much, and instead, we're just focused on how do we, you know, tap further into that install base, right, and tap into that $6 billion opportunity, and how do we, you know, make sure that we're finding new channels, new countries, where we can tap into those homes that we're not in yet. And so things like expanding distribution, our product innovation pipeline, and then as well, how we deal with our existing install base and, you know, find ways for them to enjoy more Sonos products and tell their friends and families, kind of where we're putting all of our efforts. And sorry if I missed this, just on some of the promotional pricing that you put in, I know some of that seemed like it was working, but to what extent are you using that going forward, and do you need to lean on that harder, or is that something that, given your premium product, you don't want to pull that thread? Or how should we think about that? Yeah, we continue to look at promotion very thoughtfully. Clearly, our goal is to drive for more profitable profit dollars, not just revenue. So, certainly the, you know, certain markets are very, has become very promotional and highly competitive, and we're continuing to keep our pulse on the dynamic of the business to make sure we can grow profit, profit to the bottom line. Great, thanks. Thanks, Brent. All right. Thank you, Brent. And again, ladies and gentlemen, last call. If you would like to ask a question, please press star and the number one on your telephone keypad. Once again, star one, and we'll just pause for a few moments if you have any last-minute questions. All right, it appears there are no further questions, so I will now hand it back to CEO Patrick Spence for closing remarks. Patrick- All right ... the floor is yours. Thank you. I just want to hit two quick things in closing. First, we did what we set out to do in the first half of the fiscal year, and this puts us in a great position to deliver on our fiscal 2024 guidance. Second, we are on the cusp of an exciting launch that takes us into a new multi-billion dollar category that is growing. We look forward to sharing this new product with the world soon. And of course, there's a lot more in the pipeline that we're excited about. Thanks for your time today, and we look forward to speaking with you again next quarter.