Sleep Number : SNBR IR Deck March 2024 Final

Improving the health and wellbeing of society

through higher quality sleep

Sleep Number Corporation (Nasdaq: SNBR)

March 2024

Forward-looking Statements

Statements used in this presentations relating to future plans, events, financial results or performance, such as the statement that the company is well-positioned for growth, other future plans, and the company's 2024 financial outlook, including expected annual net sales, gross margin, adjusted EBITDA, adjusted EBITDA margin, free cash flow, and capital expenditures, are forward-looking statements subject to certain risks and uncertainties including, among others, changes in economic conditions and consumer sentiment and related impacts on discretionary consumer spending; increases in interest rates, which have increased the cost of servicing our indebtedness; availability of attractive and cost-effective consumer credit options; ability to achieve savings and efficiencies from cost savings plans related to business restructuring actions and to avoid unexpected adverse effects; dependence on, and ability to maintain working relationships with key suppliers and third parties; fluctuations in commodity costs or third-party delivery or logistics costs and other inflationary pressures; risks inherent in global-sourcing activities, including tariffs, foreign regulation, geo-political turmoil, war, pandemics, labor challenges, foreign currency fluctuations, inflation, and climate or other disasters, and resulting supply shortages and production and delivery delays and disruptions; operating with minimal levels of inventory, which may leave us vulnerable to supply shortages; the effectiveness of our marketing strategy and promotional efforts; the execution of our Total Retail distribution strategy; ability to achieve and maintain high levels of product quality and to improve and expand the product line; ability to protect our technology, trademarks, and brand and the adequacy of our intellectual property rights; ability to effectively compete; risks of disruption in the operation of our facilities and operations, including manufacturing, assembly, distribution, logistics, field services, home delivery, headquarters, product development, retail or customer service operations; ability to comply with existing and changing government regulations and laws; pending or unforeseen litigation and the potential for associated adverse publicity; the adequacy of the company's and third-party information systems and costs and disruptions related to upgrading or maintaining these systems; our ability to identify and withstand cyber threats that could compromise the security of our systems, result in a data breach or business disruption; risks associated with advancements in or adoption of artificial intelligence technologies; our ability, and the ability of our suppliers and vendors, to attract, retain and motivate qualified and effective personnel; the volatility of Sleep Number stock, our removal from various stock indices, and the potential negative effects of shareholder activism or of changes in coverage by securities analysts; environmental, social and governance risks, including increasing regulation and stakeholder expectations; and our ability to adapt to climate change and readiness for legal or regulatory responses thereto. Additional information concerning these and other risks and uncertainties is contained in the company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K and other periodic reports. We have no obligation to publicly update or revise any of these forward-looking statements.

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Overview of Sleep Number (Nasdaq: SNBR)

A beloved brand and leader of sleep wellness technology through the design, engineering, manufacturing, distribution and marketing of innovative sleep solutions

• We are dedicated to our mission of improving lives by individualizing sleep experiences
• We integrate physical and digital innovations for unparalleled comfort through a highly advanced technology platform that adjusts to the needs of each sleeper
• Our proprietary smart beds revolutionized the sleep industry and have improved the lives of over 15 million people
• Our smart beds collect billions of data points nightly from millions of sleepers, generating comprehensive longitudinal data. Our data and smart bed ecosystem drive best- in-class engagement through personalized digital sleep and health insights
• We have developed an intellectual property portfolio consistent with our strategic imperatives, supported by over 800 patents and patents pending worldwide
• Our vertically integrated, direct-to-consumer business model with exclusive distribution enables us to be closer to our customer
• Across our customer touchpoints, including over 650 stores, online, phone and chat, we deliver a value-added retail experience. Our mission-driven team members seamlessly integrate our digital and physical experiences to meet customer needs

Summary Data1

Enterprise Value ($ in millions)	$904
Net Debt ($ in millions)	$537
Market Cap ($ in millions)	$367
Sleep Number Stores	672
Smart Sleepers	2.8M

1. Source: FactSet and Company filings. valuation data as of February 29, 2024.
2. See Appendix for non-GAAP reconciliation.

Revenue ($B)1							Adjusted EBITDA ($M)1,2
					$2.2	$2.1						$268	$277
				$1.7	$1.9		$1.9
										$190
			$1.4	$1.5							$169
	$1.2	$1.3			$148		$166	$148
$1.2					$133	$146		$127

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

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Our Strategy to Drive Long-Term Growth

Our Purpose

To improve the health and wellbeing of society through higher quality sleep

Our Vision

To become one of the world's most beloved brands by delivering unparalleled sleep experiences

Our Strategic Priorities

Executing on our four-pillar consumer innovation strategy

Multisided sleep wellness

platform

Smart beds deliver customized sleep experiences, addressing barriers to quality sleep with physical and digital products and services

Connected

Smart Sleepers

Highly engaged user base of nearly three million Smart Sleepers who advocate for our beloved brand and drive referrals and repeat purchases

Durable

operating model

Transformed and strengthened operating model to deliver positive cash flow in a range of macroeconomic environments

Culture

of individuality

~4,100 team members connected to our purpose and committed to driving innovation, efficiency and growth

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Why Our Mission Matters

Our proprietary wellness technology platform provides proven benefits to consumers and is the foundation of our long-term value proposition

1. • The benefits of sleep are well known; sleep boosts immunity, increases energy and focus and improves recovery1
   • Not surprisingly, given its physical and mental health benefits, sleep consistently ranks as one of consumers' highest health and wellness priorities2
   • Yet, sleep is also the area in which consumers have the most unmet needs
   • • Many adults don't get enough sleep,3 and many consumers find that their current sleep products and services are not meeting their needs4
   • Our smart beds serve an important purpose: by effortlessly adjusting to sleepers' unique needs, they help millions of consumers achieve more restful sleep every night5
2. "Discover Why Sleep Is Important," Sleep Number. Available at:https://www.sleepnumber.com/pages/health-well-being.
3. "The trends defining the $1.8 trillion global wellness market in 2024," McKinsey & Co., Jan. 16, 2024.
4. "Sleep and Sleep Disorders," Centers for Disease Control and Prevention.
5. "Still feeling good: The US wellness market continues to boom," McKinsey & Co., September 19, 2022.
6. Based on internal analysis of sleep sessions assessing sleepers who use multiple features of Sleep Number® products. Claim based on sleepers achieving over 15 more minutes of restful sleep per sleep session.

7-9

7-9 hours of sleep each night are required for REM sleep1

45%

45% of consumers rank

better sleep as a "very high

priority"2

32%

You are 32% more likely to catch a cold if you sleep less than 7 hours per night1

33%

33% of American adults are not getting enough sleep on a regular basis3

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How We Deliver a Better Sleep Experience

Our smart beds go beyond simple tracking to "sense and do technology", thereby providing higher sleep quality

Our Unique Offerings	Deliver Significant Value to the Consumer
Individualized Experience	Our smart beds respond to movement throughout the night, automatically
adjusting each side to their ideal level of support, firmness and temperature

Embedded research-grade sensors in our smart beds monitor pressure across

Digital Engagementthe mattress and use machine learning to analyze personalized insights about sleep patterns and deliver insights to help improve sleep quality

Data generated by the smart bed platform allows us to analyze sleep and

Longitudinal Datahealth insights from millions of sleepers. Using the data, we develop new science-based innovations for improved sleep health and wellbeing

94% of Sleep Number® smart bed sleepers report getting better sleep quality compared with sleeping on a non-smart bed1

1. Source: Based on self-reported data between 3/23-6/23 from 90 incentivized sleepers new to the brand who slept on a Sleep Number®	6
smart bed for 6 weeks without the ability to use any smart features and then were given the ability to use all features for 6 weeks.

History of Our Evolution

Act 1:	Act 2:	Act 3:	Act 4:
Direct-to-Consumer	Sleep Innovation Leader	Smart Bed Leader	Fit for Growth

Exited all retail			Introduced Sleep
		Number 360® smart
partners in the U.S.			bed and changed	Became "Official Sleep
to become an	Expanded store footprint	Introduced SleepIQ®	corporate name from	+ Wellness Partner" of	Introduced My Sleep
independent,	with standalone locations	technology and	Select Comfort to	the NFL; 80% of	Health technology feature
vertically integrated	and immersive store	surpassed $1B in	Sleep Number	NFL players have Sleep	for daily, personalized
market leader	experience	sales for the first time	(SNBR)	Number smart beds	health insights

Initiated operating model transformation to significantly reduce costs and strengthen financial resilience through economic cycles

2009

2011

2014

2017

2018

2021

2023

2010

Rebranded all stores and consumer facing assets to "Sleep Number"

2012	2013	2015	2020	2022	2024 and beyond
Initiated consumer	Acquired	Acquired BAM Labs,	Initiated R&D	Introduced	Continuing to advance our
innovation strategy and	Comfortaire, a	becoming the world's	collaboration with Mayo	Climate360® smart	innovation pipeline and
partnership with BAM	South Carolina-	leading provider of Smart	Clinic to advance sleep	bed; named	expand our addressable
Labs to develop	based adjustable	Bed TechnologyTM	science with an emphasis	American Cancer	market
biosignal sensors for	mattress	solutions	on cardiovascular health	Society Partner of
sleep monitoring	manufacturer			the Year

Ongoing transformational actions deepen our customer relationships and accelerate our lead in sleep wellness

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Sleep Number Is Highly Differentiated from Competitors

We are advancing the category with wellness-focused,technology-driven innovations and a differentiated business model

Traditional Mattress Companies

Technology (if any) is reliant on licensing and partnerships

Sleep tracking apps and devices have limited functionality

Limited data capability and power due to lack of ownership

Mass brands without known consumer identities or definitions

Restricted to a narrow, cyclical category

Undifferentiated and lower productivity stores

Price-focused consumers with minimal brand loyalty

Robust IP portfolio, proprietary technology, life-changing innovations

Smart bed platform delivers "sense and do" technology and personalized insights at scale

Power to build on and monetize multisided wellness platform

Strong, salient brand with high consumer meaning

Opportunities for growth in large wellness technology market

Highly productive stores with mission-driven team members

Digitally engaged Smart Sleepers with high retention and referrals

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Our Business Model Supports Growth

The strength of our business model positions us to capitalize when industry demand improves from recessionary levels

Industry-Leading		Connected Smart		Vertical Integration		Long-Term Value
Innovation		Sleepers

• Smart beds deliver higher quality sleep by individualizing sleep experiences for each sleeper
• Patent portfolio expansion and R&D investments strengthen competitive moats
• Robust innovation roadmap provides opportunity to expand market relevance beyond traditional mattress category

• High ongoing engagement builds lifelong customer relationships, increasing their lifetime value
• Provides valuable longitudinal data used by leading research institutions to help solve global sleep and health challenges
• Smart Sleeper advocacy provides strong brand support through reviews and testimonials

• Enables us to stay close to our consumer and adjust our strategies in real-time
• Allows us to control and optimize our brand through integrated consumer touch points
• Gives us control of our manufacturing and fulfillment network

• More durable operating model generates free cash flow across range of industry cycles
• Track record of taking market share, even in challenging industry conditions
• Opportunity for margin expansion as mattress demand environment recovers

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Our Business Model Provides Meaningful Competitive Advantages

Our vertically integrated model allows us to navigate a dynamic demand environment and supports our long-term strategy

Attributes	Retailer	Wholesaler
Control over brand experience			
Proximity to customers and ability to adjust strategy in real-time			
Integrated demand planning			
Mission-driven team members and a value-added relationship-			
based store experience
Full ownership of R&D and innovation process			
Full visibility into supply chain and time-to-deliver			
Enhanced control over input cost inflation			
Opportunity for full margin capture			

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