By Jorge Mercado Monday, January 13th, 2025

Consequences of Sonos’ decision to overhaul and release a new version of its app — one that was riddled with bugs and missing key features — came to fruition on Jan. 13 after the company announced it would be looking for a new CEO to start the new year.

Sonos, a maker of speakers, headphones and other products based in Santa Barbara, announced Jan. 13 that its board of directors has accepted Patrick Spence’s resignation as CEO, effective immediately, after eight years on the job.

Long-time board member, Tom Conrad, has been named the interim CEO.

The announcement comes eight months after Sonos released its overhauled app back in May, which faced almost immediate backlash from even its longest customers due to apps missing numerous key features and being an overall glitchy mess.

Those app glitches hurt Sonos’ stock, as shares fell as much as 40% following the company’s May 7 app release date.

Shares have been down about 15% since May 7. 

Shares closed at $14.40 on Jan. 13, down about 1% since the morning’s announcement of Spence stepping down.

The app’s failure also hurt several fiscal numbers as its fourth-quarter revenue fell down $50 million from the previous fourth quarter.

Overall fiscal year revenue also suffered, which was down from $1.65 billion in 2023 to $1.51 billion in 2024.

The updated app was also released nearly alongside the long-awaited release of the company’s first-ever headphones, Ace.

Sales for the Ace headphones have failed to meet expectations, according to The Verge, however, with many citing customers overall outrage at the app playing a key role in that failure.

Spence and the Sonos team attempted to gain back the trust of its customer base in October, as on the first of the month the company announced a list of new standards and pledges before any major release to ensure the failure of the app never happens again.

The included spending $30 million to clean up the app and its bugs, putting together a new advisory board and more.

The move appears to have been too little, too late, however, with Spence ending his eight-run tenure as CEO just three months later.

Sonos did note that the leadership change is “unrelated to the company’s fiscal first-quarter results,” which will be released on Feb. 6.

Board Chair Julius Genachowski praised Spence for leading Sonos’ expansion into premium audio for home theater, portables, and headphones.

“We appreciate his dedication to Sonos,” he said.

According to a filing with the U.S. Securities and Exchanges Commission, Spence will remain with Sonos until June 30 in an advisory role, receiving a base salary of $7,500 per month. 

After he leaves the company on June 30, Spence will be paid a severance of $1.8 million.

Taking over for Spence will be Conrad, who has served on the Sonos board since 2017.

He has previously served as the CEO of Zero Longevity Science, where he has driven growth for its subscription digital health platform since 2021, according to the press release.

He also served as the chief product officer of Quibi, the $2 billion short-form streaming service that failed about six months following its launch.

Genachowski said Conrad’s “mandate” until the board finds its permanent CEO is to ” improve the Sonos core experience for our customers, while optimizing our business to drive innovation and financial performance.”

“I am deeply honored to step into this role at such an important moment for Sonos,” Conrad said in a press release. 

“Nearly two decades ago, when I led the earliest initiative to integrate Pandora and Sonos, I got my first glimpse of the magic that Sonos could bring to millions of lives every day. I am excited to work with our team to restore the reliability and user experience that have defined Sonos, while bringing innovative new products to market. Together, we will focus on delivering extraordinary experiences for our customers and strong results for our shareholders.”

Raymond James analysts Adam Tindle and Mark Cash said in a note to investors on Jan. 13 that the timing of this announcement comes “after the critical holiday season” in which their research suggests a 2% and 8% month-over-month declines for November and December, respectively.

The note said competitors Bose and JBL also saw revenue declines in those months.

“We remain on the sidelines during this “clean up” period, though share repurchase authorization ($71M) used ahead of a successful operational turnaround could magnify value creation for patient shareholders,” the note said.

Sonos announcement also included a statement that no executive would receive a fiscal year 2025 bonus unless Sonos wassuccessful in improving app quality and rebuilding customer trust.

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