Yes, you need WiFi connection so that Sonic can communicate with the cloud (it is actually Signal that acts as a WiFi bridge between the cloud and Sonic). However, you don't need WiFi coverage at the location where Sonic is installed, as long as Signal is on WiFi.
Signal communicates with Sonic using our unique HeroLink technology, for a rock-solid connection up to 8 floors high. If your home WiFi goes down, you won't receive notifications or be able to control Sonic remotely.