Sonos wrapped its third quarter of fiscal 2025 with $344.8 million in revenue and a slim net loss of $3.4 million, but the biggest headline wasn’t the numbers themselves—it was the impact of new U.S. tariffs on its supply chain. During its recent earnings call, CEO Tom Conrad confirmed that “it has become clear that we’ll need to raise prices on certain products later this year,” as the company grapples with steeper duties on goods imported from Vietnam and Malaysia.

Conrad—a longtime Sonos executive who shed his “interim” tag in January—has spent much of 2025 steering the company back from last year’s mobile-app debacle, which forced Sonos to pause product launches and rebuild customer confidence. In May, Sonos posted a modest 3 percent revenue uptick to about $260 million and saw gross margins hold at 44 percent despite early tariff-related strains. It’s a far cry from the chaos of mid-2024, when a faulty update left users unable to stream, but the rebound underscores Conrad’s focus on shoring up both engineering and financial discipline.

At issue now is Washington’s latest round of tariffs, announced by President Trump and effective August 1, which slapped a roughly 20 percent duty on Vietnam-made goods and 19 percent on those from Malaysia—two countries Sonos deliberately leaned on to diversify away from China. “Short of a few accessories, and our passive speaker partnership with Sonance, we do all of our U.S.-bound manufacturing in Vietnam and Malaysia,” Conrad reminded investors. He added that Sonos had undertaken “contingency planning” to blunt the blow, but with tariffs rising from previous levels of 10 percent to nearly double that, absorbing the full cost internally was no longer tenable.

To share the pain, Sonos is working “closely with our contract manufacturers and our channel partners,” but ultimately, some of that extra cost will find its way to consumers. Exactly which products will see price bumps—and by how much—remains under wraps. Conrad promised the hikes will be “strategic,” varying by market and product category, and continually calibrated based on how customers respond and what competitors are doing.

It’s a dilemma shared across the consumer-tech world. From adidas to Procter & Gamble, many companies have signaled price increases to shield margins from Trump-era duties, but they tread carefully to avoid outright demand destruction. Reuters recently reported that nearly a third of consumer brands it tracks have already lifted prices in response to U.S. tariffs, while others are holding off as long as possible. Apple, for instance, warned its tariffs would add roughly $1.1 billion in costs this year—but stopped short of announcing specific price changes on iPhones or Macs.

For Sonos, premium positioning is both a blessing and a curse. It’s devoted to base values, quality and seamless multi-room audio, which gives the company some latitude to nudge prices upward without inviting a mass exodus. Yet its outright luxury status means every dollar counts when a $449 soundbar, for example, becomes $499. Even a single percentage-point hit to gross margin can translate into millions in the P&L, especially amid a broader market slowdown in discretionary spending.

To bolster perceived value, Sonos hasn’t paused its software roadmap. Recent updates include multi-user TV audio swapping, TrueCinema mode optimizations for its Ace headphones, and an AI-driven speech-enhancement feature on the high-end Arc Ultra soundbar. Those features, Conrad argued, help justify premium pricing and keep customers locked into the Sonos ecosystem even as competitor devices undercut on cost.

Investors seemed to take the tariff news in stride: Sonos shares ticked up about 1.6 percent in after-hours trading, closing around $11.04, after beating both revenue and EPS estimates by a healthy margin. Non-GAAP EPS of $0.19 handily topped forecasts of a $0.10 loss, driven largely by disciplined expense cuts and a leaner organizational structure that shed roughly 12 percent of its workforce earlier this year.

Looking ahead, Sonos will be watching consumer reaction like a hawk. The company plans to roll out price changes “later this year,” then track sales velocity, regional performance, and competitive pricing in real time—ready to adjust if demand softens. That agile approach, paired with its software-first ethos, may help Sonos navigate the tariff storm with minimal damage to its reputation and its bottom line. But for now, it’s clear that the age of rock-solid, price-stable Sonos hardware is giving way to a world where trade policy sets the rhythm.