Last quarter should’ve been a triumphant one for Sonos with the launch of its first headphones, but the company is facing the realities of its botched app redesign. CEO Patrick Spence explained in the company’s Q3 earnings press release that Sonos has reduced its 2024 fiscal guidance as a result of “problems” both customers and partners encountered with the software update. But, the issues don’t stop with revenue. The company also said on its earnings call it will delay two new product launches planned for Q4 until the app is fixed.
“Thanks to Ace, our long-awaited entry into headphones, we reported year over year revenue growth and delivered results that slightly exceeded our expectations in our third quarter,” Spence said. “This was overshadowed by the problems that our customers and partners experienced as a result of the rollout of our new app, which in turn has required us to reduce our Fiscal 2024 guidance. We have a clear action plan to address the issues caused by our app as quickly as possible.”
Spence said the new products were ready to ship in Q4, but that right now “our number one priority is to make this right and ensure that the next chapter is even better than the previous ones.” Of course, the company hasn’t officially discussed exactly what those two products are just yet. Bloomberg reported late last year that Sonos was working on a set-top TV streaming box and a successor to its premium Arc soundbar. The CEO also admitted during the call that the total cost of fixing the issues with the app will cost the company $20-$30 million. However, Spence is confident Sonos will bounce back, describing this as only one “chapter” in the company’s history.
