Patrick Spence, a longtime tech executive, knows the market cycle when he sees it.
He sees the tech bubble of 2000 in the form of plunging values for tech stocks, which is similar to the tech bubble of 2000, when he was running point as a marketing whiz at Blackberry.
The future of the company is being questioned by investors.
The company said this week it saw its second quarter sales increase 20.1% on the back of demand for its latest smart speakers. Operating profits were not changed year over year, at $46.9 million.
Sonos lowered its operating profit outlook to between $290 and $310 million, citing inflation and ongoing component shortages. Sonos previously expected profits of between $290 and $325 million.
After the results, the Sonos stock went up 14%.
The CEO stressed the role of software in the company's success.
Spence said that's the core of who we are. I always tell people that software eats audio, referencing a 2011 op-ed by Marc Andreessen titled Why Software is Eating the World. He acknowledged that the recession is roiling the stock market, but he said there was no signs that his customer base is refusing to spend.
Our consumer remains strong when it comes to everything we see, and based on the results you just saw, our consumer remains strong, he said.
Wall Street seems to agree with that assessment.
We are impressed by the beat in Q 2, and more encouraged by the fact that Sonos reiterated FY 22 and FY 24 revenue guidance despite fears of a slowdown in the macro environment, Jefferies Tech Analyst Brent Thill wrote in a note to clients. We remind investors that Sonos is trading near trough discount levels compared to the S&P 500. We believe that the valuation disconnect will allow investors to be rewarded over time if SONO can execute against targets. Follow Sozzi on Twitter, BrianSozzi, and LinkedIn.