Core Insights - Traeger reported revenue of $125.4 million for the quarter ended September 2025, marking a year-over-year increase of 2.7% and exceeding the Zacks Consensus Estimate by 11.39% [1] - The company experienced an EPS of -$0.17, which is a decline compared to -$0.06 from the previous year, resulting in an EPS surprise of -466.67% against the consensus estimate of -$0.03 [1] Revenue Breakdown - Net sales from Grills reached $76.6 million, surpassing the average estimate of $67.85 million, reflecting a year-over-year increase of 2.3% [4] - Net sales from Consumables amounted to $25.3 million, exceeding the average estimate of $23.88 million, with a year-over-year increase of 12.4% [4] - Net sales from Accessories were reported at $23.5 million, which fell short of the average estimate of $20.8 million, showing a year-over-year decline of 4.5% [4] Stock Performance - Traeger shares have returned -15.3% over the past month, contrasting with a +1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Traeger reported a quarterly loss of $0.17 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.03, marking an earnings surprise of -466.67% [1] - The company achieved revenues of $125.4 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 11.39% and showing a year-over-year increase from $122.05 million [2] - Traeger shares have declined approximately 62.1% year-to-date, contrasting with the S&P 500's gain of 15.1% [3] Financial Performance - Over the last four quarters, Traeger has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $0.03, with projected revenues of $146.68 million, and for the current fiscal year, the estimate remains at $0.03 with revenues of $548.08 million [7] Market Outlook - The estimate revisions trend for Traeger was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] - The Consumer Products - Discretionary industry, to which Traeger belongs, is currently ranked in the bottom 30% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Revenue Performance - Revenue for the three months ended September 30, 2025, was $125.4 million, a 2.7% increase from $122.1 million in the same period of 2024[120][121] - Revenue for the nine months ended September 30, 2025, was $414.2 million, a 4.9% decrease from $435.4 million in the same period of 2024[121] - The company derives substantially all of its revenue from the sale of grills, consumables, and accessories in North America[126] - Seasonal fluctuations in revenue typically result in higher sales of grills in the first and second quarters, while accessory sales peak in the fourth quarter[127][128] - Total revenue decreased by $21.3 million, or 4.9%, to $414.2 million for the nine months ended September 30, 2025, compared to $435.4 million for the same period in 2024[156] Profitability and Loss - The company recorded a net loss of $89.8 million for the three months ended September 30, 2025, compared to a net loss of $19.8 million for the same period in 2024[121] - The company experienced a net loss of $89.8 million for the three months ended September 30, 2025, compared to a net loss of $19.8 million in the same period of 2024, reflecting a 353.9% increase in losses[144] - Gross profit decreased by $3.1 million, or 6.1%, to $48.5 million for the three months ended September 30, 2025, with a gross margin of 38.7%, down from 42.3% in the prior year[149] - Gross profit decreased by $21.6 million, or 11.6%, to $165.0 million, with gross margin declining to 39.8% from 42.8%[161] - A non-cash goodwill impairment charge of $74.7 million was recorded for the three months ended September 30, 2025, due to a sustained decrease in stock price and market capitalization[153] - A non-cash goodwill impairment of $74.7 million was recorded for the nine months ended September 30, 2025, compared to no impairment in the prior year[164] Expenses - Research and development expenses were $3.1 million for the three months ended September 30, 2025, down from $3.3 million in the same period of 2024[133] - Sales and marketing expenses decreased by $6.2 million, or 23.6%, to $20.0 million, representing 15.9% of revenue for the three months ended September 30, 2025[151] - Sales and marketing expenses decreased by $9.1 million, or 11.9%, to $67.0 million, representing 16.2% of revenue[162] - General and administrative expenses decreased by $13.5 million, or 15.6%, to $73.2 million, accounting for 17.7% of revenue[163] - Total operating expenses surged by 123.1% to $131.9 million for the three months ended September 30, 2025, compared to $59.1 million in the prior year[144] Cost Management - The company has implemented cost-saving initiatives, including a reduction in force and centralization of the MEATER business, to improve operational efficiency[125] - The company expects continued cost savings to improve operating results in the long term, despite uncertainties in the macroeconomic environment[125] - The company anticipates fluctuations in sales and marketing expenses as a percentage of revenue based on the timing of sales and marketing function expansions[131] Revenue Breakdown - Revenue from consumables increased by $2.8 million, or 12.3%, to $25.3 million, driven by a mid-double digit increase in wood pellet sales[147] - Revenue from grills increased by $1.6 million, or 2.2%, to $76.6 million, primarily due to a low-double digit increase in average selling price[146] - Revenue from grills decreased by $9.3 million, or 3.8%, to $237.4 million, primarily due to a mid-single digit reduction in average selling price[157] - Revenue from consumables increased by $3.3 million, or 3.7%, to $91.9 million, driven by a mid-single digit increase in wood pellet sales[158] Financial Position - Cash and cash equivalents as of September 30, 2025, were $5.9 million, with no outstanding loan amounts under the Revolving Credit Facility and Receivables Financing Agreement[169] - Net cash provided by operating activities decreased to $5.0 million for the nine months ended September 30, 2025, compared to $16.4 million in the prior year[171] - The First Lien Term Loan Facility has a principal amount outstanding of $403.4 million as of September 30, 2025, down from $403.6 million as of December 31, 2024[178] - The Revolving Credit Facility has been reduced by 10% to $112.5 million, split into two tranches: $30.0 million expiring on June 29, 2026, and $82.5 million expiring on December 29, 2027[180] - The interest rate for the First Lien Term Loan Facility ranges from 3.00% to 3.25% per annum based on the company's Public Debt Rating[178] - The Receivables Financing Agreement allows for a maximum borrowing capacity between $30.0 million and $75.0 million, with a fixed interest rate of 2.5% on outstanding cash advances[184] - The company is required to maintain a minimum liquidity of at least $15.0 million, tested monthly, under the Extended Revolving Facility[182] - As of September 30, 2025, the company had no outstanding loan amounts under the Revolving Credit Facility[180] - The fixed interest rate on outstanding cash advances under the Receivables Financing Agreement was approximately 2.6% after the amendment on August 6, 2024[185] - The First Lien Net Leverage Ratio covenant is set at 6.20 to 1.00, applicable if the utilization of the Revolving Credit Facility exceeds a specified threshold[182] - The company had drawn down $5.0 million under the Receivables Financing Agreement for general corporate and working capital purposes as of September 30, 2025[186]

Financial Data and Key Metrics Changes - The company reported a 3% increase in sales to $125 million, driven by growth in grills and consumables categories [5][20] - Adjusted EBITDA rose by 12% year-over-year to $14 million, reflecting successful expense reduction initiatives [5][25] - Gross profit decreased to $49 million from $52 million, with gross profit margin contracting 360 basis points to 38.7% due to tariff impacts [22][25] Business Line Data and Key Metrics Changes - Grill revenues increased by 2%, primarily due to higher average selling prices from pricing increases implemented earlier [21] - Consumables revenues grew by 12% to $25 million, driven by strong sell-through of wood pellets and expanded distribution [18][21] - Accessories revenues decreased by 4% to $24 million, largely due to lower MEATER sales, although Traeger branded accessories saw over 20% growth [19][21] Market Data and Key Metrics Changes - The overall grill market is slightly down, influenced by higher price points and interest rates affecting consumer discretionary spending [51][52] - The company is maintaining its market share despite a challenging environment, with unaided brand awareness increasing by 100 basis points [54] Company Strategy and Development Direction - The company is focused on Project Gravity, aiming for $50 million in cumulative run rate savings by optimizing channels and enhancing operational efficiency [10][26] - The strategy includes exiting unprofitable channels, such as the Costco roadshow, and shifting to a distributor model in European markets [12][14] - The company plans to redirect its website traffic to retail partners to improve consumer experience and profitability [13][30] Management's Comments on Operating Environment and Future Outlook - Management reiterated guidance for fiscal year 2025, expecting revenues between $540 million and $555 million, down 8%-11% [17][28] - The company anticipates continued pressure on unit volumes due to pricing increases but expects growth in consumables [28] - Management expressed confidence in navigating the current environment while laying groundwork for sustainable growth [29][55] Other Important Information - A non-cash impairment charge of $75 million was recorded due to a sustained decrease in stock price, resulting in a net loss of $90 million for the quarter [24][25] - The company has liquidity of $167 million with no outstanding borrowings, indicating a solid financial position [25] Q&A Session Summary Question: Clarification on exiting DTC and redirecting traffic - Management explained that the decision to exit direct-to-consumer (DTC) was based on cost inefficiencies and a desire to improve consumer experience through retail partners [30][31] Question: Revenue loss from phase two distribution strategy - The company expects to walk away from approximately $60 million in revenue but anticipates recapturing this through other channels [39][40] Question: Margin profile of the distributor model in Europe - While there will be a margin impact from the distributor model, the overall cost structure improvements will offset this loss [42] Question: Elasticity response to pricing changes - Management noted that pricing increases led to a decline in unit volumes, but promotional strategies will continue to be employed to manage inventory and profitability [44] Question: Assessment of the overall grill market - The company views the current year as a category growth year despite slight market declines, with expectations for a robust replacement cycle in the future [51][52]

Financial Performance - Revenue for Q3 2025 reached $125 million, a 2.7% increase compared to $122 million in Q3 2024[9, 22] - Gross margin was 38.7% in Q3 2025, compared to 42.3% in Q3 2024[9, 24] - Adjusted EBITDA was $13.8 million, representing an 11.0% margin, compared to $12 million and 10.1% margin in Q3 2024[9, 24] - Adjusted net loss was $7 million in Q3 2025, compared to $4 million in Q3 2024[24] Revenue Mix & Growth Pillars - Grills accounted for 61% of revenue, consumables 19%, and accessories 20%[10, 11] - Consumables revenue increased by approximately 12% in Q3 2025[13] - Accessories line realized double-digit growth[13] Project Gravity - Project Gravity aims for $50 million in annualized run-rate savings once fully implemented by the end of 2026[6, 15, 16] - Phase 1 includes a reduction in force and MEATER centralization, yielding approximately $30 million in savings[16] - Phase 2 includes channel optimization and other productivity measures, yielding approximately $20 million in savings[6, 16] Tariff Mitigation & Balance Sheet - The company is diversifying production outside of China to mitigate tariff risks, expecting a meaningful production shift by the end of 2026[14] - Liquidity at the end of Q3 2025 was $167 million, compared to $177 million in Q3 2024[18] - Net debt was $398 million, compared to $399 million in Q3 2024[18] Fiscal Year 2025 Guidance - Total revenue is projected to be between $540 million and $555 million[26] - Gross margin is expected to be between 40.5% and 41.5%[26] - Adjusted EBITDA is guided to be between $66 million and $73 million[26]

Company Overview - Traeger, a wood pellet outdoor grill manufacturer, has hit its 47th new 52-week low, indicating a decline in its market performance [1] - The company went public on July 29, 2021, with an IPO price of $18 per share, raising $424 million and valuing the company at $2.12 billion [2] - Currently, Traeger's market capitalization is approximately one-twelfth of its IPO valuation, placing its shares in penny-stock territory and at risk of delisting from the NYSE [3] Financial Performance - Traeger has experienced a significant decline in stock value, down nearly 50% in 2025 and 66% over the past year, raising concerns about its future viability [3] - In fiscal 2020, Traeger reported a 50% increase in sales to $546 million, which was higher than Weber's 18% increase to $1.30 billion [5] - Traeger was valued at a higher sales multiple of 3.9 times compared to Weber's 3.1 times, leading to an all-time high share price of $32.59 shortly after its IPO [5] Competitive Landscape - The outdoor grill market was favorable during the COVID pandemic, which boosted sales for companies like Traeger and Weber [4] - Weber, which went public around the same time as Traeger, had a significantly higher equity valuation of nearly $4 billion at its IPO [4] - Financial analysis indicated that Weber had a better financial health rating (75 out of 100) compared to Traeger's rating of 44, suggesting underlying financial weaknesses for Traeger [6]

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Traeger (COOK) FY Conference Summary Company Overview - Traeger is a Salt Lake City-based company founded in 1986, specializing in premium pellet grills and cooking platforms, including flat top griddles [2][3] - The company has seen significant market share and household penetration growth since the mid-2000s, particularly during the pandemic [2] Financial Performance - The company reported a pullback in revenues due to a timing shift between Q1 and Q2, but sell-through results were satisfactory [4] - Full-year revenue is expected to decline year-over-year, primarily due to pricing adjustments in response to tariffs [5] - The management is focused on profitability, aiming to offset approximately 80% of tariff exposure [5][6] Tariff Impact and Supply Chain - Traeger faces a blended tariff rate in the low 30% range, impacting pricing and overall business operations [8] - The company is implementing a cost management initiative called Project Gravity, targeting $30 million in annual savings [9] - Currently, 80% of grills are sourced from China, with plans to diversify supply chains to Vietnam to mitigate risks [14][15] Market Dynamics - The grill industry is experiencing a downturn, with volumes below 2019 levels due to a pullback in consumer spending post-pandemic [22][27] - The company holds a 3.5% household penetration rate, indicating significant growth potential, especially in regions with lower brand awareness [25][34] Consumer Behavior - Consumer purchasing behavior has shifted towards seeking value and lower price points, impacting sales of higher-priced grills [20][30] - The company believes that the long-term outlook remains positive, as Americans continue to enjoy grilling [28][30] Product Strategy - Traeger aims to maintain a premium brand image while introducing products at more accessible price points to attract a broader consumer base [31][32] - The company is focused on education and awareness to overcome consumer hesitance regarding pellet grills [34][36] Meter Acquisition - The Meter business, acquired in 2021, has faced challenges due to increased competition but is being centralized to improve efficiency and capitalize on synergies with Traeger products [39][41] Deleveraging Strategy - Deleveraging is a priority, with plans to improve EBITDA and utilize excess free cash flow to pay down debt [44][46] Consumer Sentiment - Current consumer sentiment is cautious, particularly regarding big-ticket purchases, influenced by high interest rates and economic uncertainty [50][52] Conclusion - Traeger is positioned for long-term growth despite current challenges, with a focus on profitability, supply chain diversification, and consumer education to enhance market share and household penetration [38][48]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) Details Traeger, Inc.'s Quarterly Report on Form 10-Q filing for the period ended June 30, 2025 [Filing Details](index=1&type=section&id=Filing%20Details) Traeger, Inc. filed its Q2 2025 Form 10-Q, reporting 135.9 million shares outstanding as of August 1, 2025 - Traeger, Inc. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) **Filer Status** | Filer Status | Status | | :------------- | :----- | | Accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of August 1, 2025, **135,886,236 shares of common stock** were outstanding[7](index=7&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights forward-looking statements, subject to risks and uncertainties that could cause actual results to differ materially [Forward-Looking Statements Disclosure](index=4&type=section&id=Forward-Looking%20Statements%20Disclosure) This report contains forward-looking statements about future operations and strategy, subject to known and unknown risks and uncertainties - The report contains forward-looking statements regarding future results, financial position, macroeconomic trends, business strategy, and market growth[11](index=11&type=chunk) - These statements are predictions based on current expectations and projections, subject to known and unknown risks and uncertainties[12](index=12&type=chunk) - Key risks include operating losses, ability to manage growth, market expansion, brand strength, customer retention, product quality, trade policies, and competitive market[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents Traeger, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Presents Traeger, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details Traeger, Inc.'s financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 **Condensed Consolidated Balance Sheet Highlights (in thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total assets | $780,620 | $830,677 | | Total current assets | $220,305 | $243,123 | | Cash and cash equivalents | $10,301 | $14,981 | | Inventories | $115,795 | $107,367 | | Total liabilities | $506,374 | $554,247 | | Total current liabilities | $75,561 | $122,241 | | Total stockholders' equity | $274,246 | $276,430 | - Total assets decreased by **$50.06 million** from December 31, 2024, to June 30, 2025[16](index=16&type=chunk) - Total liabilities decreased by **$47.87 million**, and total stockholders' equity decreased by **$2.18 million** over the same period[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Presents Traeger, Inc.'s financial performance, including revenue, gross profit, and net loss for Q2 and H1 2025 and 2024 **Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $145,483 | $168,471 | $288,766 | $313,385 | | Gross profit | $57,000 | $72,328 | $116,459 | $134,891 | | Income (loss) from operations | $(6,095) | $4,795 | $(2,683) | $4,722 | | Net loss | $(7,384) | $(2,578) | $(8,162) | $(7,261) | | Net loss per share, basic and diluted | $(0.06) | $(0.02) | $(0.06) | $(0.06) | - Revenue decreased by **13.6%** for the three months ended June 30, 2025, and by **7.9%** for the six months ended June 30, 2025, compared to the prior year periods[18](index=18&type=chunk) - The company reported an **increased net loss** for both the three-month and six-month periods ended June 30, 2025, compared to the same periods in 2024[18](index=18&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Details changes in Traeger, Inc.'s stockholders' equity, including accumulated deficit and additional paid-in capital, for the periods presented **Changes in Stockholders' Equity (in thousands):** | Item | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Total Stockholders' Equity (3M) | $274,246 | $297,286 | | Total Stockholders' Equity (6M) | $274,246 | $297,286 | | Accumulated Deficit (3M) | $(697,047) | $(662,138) | | Accumulated Deficit (6M) | $(697,047) | $(662,138) | | Additional Paid-in Capital (3M) | $969,038 | $952,435 | | Additional Paid-in Capital (6M) | $969,038 | $952,435 | | Common Stock Shares Outstanding (3M) | 135,873,828 | 129,110,864 | | Common Stock Shares Outstanding (6M) | 135,873,828 | 129,110,864 | - Total stockholders' equity decreased from **$276.43 million** at December 31, 2024, to **$274.25 million** at June 30, 2025[16](index=16&type=chunk) - The accumulated deficit **increased significantly**, reflecting the net losses incurred during the periods[20](index=20&type=chunk)[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines Traeger, Inc.'s cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 **Condensed Consolidated Statements of Cash Flows (in thousands):** | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(2,545) | $1,269 | | Net cash used in investing activities | $(4,650) | $(7,890) | | Net cash provided by (used in) financing activities | $2,515 | $(5,275) | | Net decrease in cash and cash equivalents | $(4,680) | $(11,896) | | Cash and cash equivalents at end of period | $10,301 | $18,025 | - Operating activities shifted from providing **$1.27 million** in cash in H1 2024 to using **$2.55 million** in H1 2025[24](index=24&type=chunk) - Cash used in investing activities **decreased**, while financing activities **provided cash** in H1 2025 compared to using cash in H1 2024[24](index=24&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering business, accounting policies, and specific accounts [1 – Description of Business and Basis of Presentation](index=11&type=section&id=1%20%E2%80%93%20DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) Traeger, Inc. designs, sells, and supports wood pellet grills and consumables, primarily in the U.S., with financial statements prepared under U.S. GAAP - Traeger, Inc. specializes in wood pellet fueled barbecue grills, consumables, and accessories, with primary sales in the U.S. and expanding distribution in Canada and Europe[29](index=29&type=chunk) - The company is an **'emerging growth company'** and has elected to use the extended transition period for new accounting standards[36](index=36&type=chunk) [2 – Summary of Significant Accounting Policies](index=11&type=section&id=2%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines Traeger's significant accounting policies, including estimates, credit risk, revenue recognition, goodwill impairment, and adoption of new accounting pronouncements - The company's financial statements rely on significant estimates for customer credits, inventory reserves, and intangible asset valuation[37](index=37&type=chunk) **Customer Sales Concentration (Percentage of Net Sales):** | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Customer A | 20 % | 22 % | 27 % | 22 % | | Customer B | 18 % | 18 % | 15 % | 18 % | | Customer C | 10 % | 11 % | 11 % | 10 % | - Despite a sustained decrease in stock price triggering a goodwill impairment test, the fair value of the reporting unit **exceeded its carrying value** as of June 30, 2025, with no impairment recorded[49](index=49&type=chunk)[51](index=51&type=chunk) - The company adopted **ASU 2023-07, Segment Reporting**, effective January 1, 2024, retrospectively[54](index=54&type=chunk) - In Q2 2025, the Company received **$5.1 million** from the IRS for Employee Retention Tax Credits, including **$1.1 million** in interest, recorded as other income[53](index=53&type=chunk) [3 – Revenue](index=14&type=section&id=3%20%E2%80%93%20REVENUE) Traeger's revenue is disaggregated by product category, geography, and sales channel, primarily from North America retail **Revenue by Product Category (in thousands):** | Product Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Grills | $74,184 | $94,971 | $160,868 | $171,790 | | Consumables | $36,357 | $33,831 | $66,645 | $66,090 | | Accessories | $34,943 | $39,669 | $61,253 | $75,505 | | Total revenue | $145,483 | $168,471 | $288,766 | $313,385 | **Revenue by Geography (in thousands):** | Geography | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | North America | $133,570 | $150,939 | $266,879 | $277,205 | | Rest of world | $11,913 | $17,532 | $21,887 | $36,180 | | Total revenue | $145,483 | $168,471 | $288,766 | $313,385 | **Revenue by Sales Channel (in thousands):** | Sales Channel | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Retail | $123,635 | $142,425 | $251,237 | $267,500 | | Direct to consumer | $21,848 | $26,046 | $37,529 | $45,885 | | Total revenue | $145,483 | $168,471 | $288,766 | $313,385 | [4 – Accounts Receivables, Net](index=14&type=section&id=4%20%E2%80%93%20ACCOUNTS%20RECEIVABLES%2C%20NET) Accounts receivable, net, decreased to $76.1 million as of June 30, 2025, due to reduced trade accounts receivable and increased sales reserves **Accounts Receivable, Net (in thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Trade accounts receivable | $101,406 | $104,138 | | Allowance for expected credit losses | $(385) | $(449) | | Sales reserves, discounts and allowances | $(24,880) | $(18,358) | | Total accounts receivable, net | $76,141 | $85,331 | - Accounts receivable, net, decreased by **$9.19 million** from December 31, 2024, to June 30, 2025[58](index=58&type=chunk) [5 – Inventories](index=14&type=section&id=5%20%E2%80%93%20INVENTORIES) Total inventories increased to $115.8 million as of June 30, 2025, driven by finished goods, partially offset by raw materials **Inventories (in thousands):** | Item | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Raw materials | $4,313 | $4,975 | | Work in process | $5,544 | $6,526 | | Finished goods | $105,938 | $95,866 | | Inventories | $115,795 | $107,367 | - Finished goods inventory increased by **$10.07 million**, while raw materials and work in process decreased[59](index=59&type=chunk) [6 – Accrued Expenses](index=14&type=section&id=6%20%E2%80%93%20ACCURUED%20EXPENSES) Accrued expenses decreased to $48.2 million as of June 30, 2025, due to a $15.0 million legal matter payment and reduced inventory in-transit accruals **Accrued Expenses (in thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Accrual for inventories in-transit | $4,357 | $13,013 | | Warranty accrual | $6,396 | $6,239 | | Accrued compensation and bonus | $9,261 | $8,483 | | Accrual for legal matter | $— | $15,000 | | Other | $28,140 | $39,408 | | Accrued expenses | $48,154 | $82,143 | - Accrued expenses decreased by **$33.99 million**, largely due to the settlement of a **$15.0 million** legal matter and a reduction in inventory in-transit accruals[61](index=61&type=chunk)[86](index=86&type=chunk) [7 – Derivatives](index=15&type=section&id=7%20%E2%80%93%20DERIVATIVES) Traeger uses an interest rate swap to hedge variable rate debt and foreign currency contracts to manage exchange rate risk, with $2.3 million remaining in AOCI from the swap - An interest rate swap, with a notional amount of **$379.2 million** and a fixed rate of **2.08%**, was dedesignated as a cash flow hedge in January 2023[62](index=62&type=chunk)[63](index=63&type=chunk) - As of June 30, 2025, **$2.3 million** remained in Accumulated Other Comprehensive Income (AOCI) from the dedesignated cash flow hedge, to be amortized into earnings[63](index=63&type=chunk) **Foreign Currency Contract Positions (in thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Gross Asset Fair Value | $— | $— | | Gross Liability Fair Value | $255 | $2,871 | | Net Fair Value | $255 | $2,871 | **Gains (Losses) from Foreign Currency Contracts (in thousands):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Realized loss | $(567) | $(376) | $(2,120) | $(537) | | Unrealized gain (loss) | $622 | $205 | $2,616 | $(375) | | Total gain (loss) | $55 | $(171) | $496 | $(912) | [8 – Fair Value Measurements](index=16&type=section&id=8%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) The company measures financial instruments at fair value, classifying derivatives as Level 2 and the First Lien Term Loan Facility as Level 3 **Fair Value Measurement of Financial Instruments (in thousands):** | Item | Level | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :---- | :------------ | :---------------- | | Derivative assets—interest rate swap contract | 2 | $5,175 | $9,223 | | Derivative liabilities—foreign currency contracts | 2 | $255 | $2,871 | - The fair value of the First Lien Term Loan Facility was **$357.05 million** as of June 30, 2025, compared to its carrying amount of **$403.45 million**, classified as a Level 3 instrument[73](index=73&type=chunk) [9 – Debt and Financing Arrangements](index=17&type=section&id=9%20%E2%80%93%20DEBT%20AND%20FINANCING%20ARRANGEMENTS) Traeger's debt includes a First Lien Term Loan, an amended Revolving Credit Facility, and a Receivables Financing Agreement, with all covenants met - The First Lien Term Loan Facility had **$403.5 million** outstanding as of June 30, 2025, with a maturity date of June 29, 2028[77](index=77&type=chunk) - An amendment on August 5, 2025, reduced the Revolving Credit Facility to **$112.5 million**, split into two tranches expiring in June 2026 (**$30.0 million**) and December 2027 (**$82.5 million**)[79](index=79&type=chunk) - The Receivables Financing Agreement, with a borrowing capacity of **$30.0-$75.0 million**, was extended to August 6, 2027. **$9.0 million** was drawn as of June 30, 2025[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The company was in **compliance with all covenants** under its Credit Facilities and Receivables Financing Agreement as of June 30, 2025[80](index=80&type=chunk)[83](index=83&type=chunk) [10 – Commitments and Contingencies](index=19&type=section&id=10%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) Traeger is involved in legal proceedings, including a product liability matter settled for $15.0 million through insurance policies - A product liability matter was settled for **$15.0 million** in February 2025 and paid in March 2025 through insurance policies[86](index=86&type=chunk) [11 – Stock-Based Compensation](index=20&type=section&id=11%20%E2%80%93%20STOCK-BASED%20COMPENSATION) The 2021 Incentive Award Plan allows for various equity grants, with stock-based compensation expense decreasing to $9.1 million for H1 2025 - The 2021 Incentive Award Plan allows for grants of stock options, restricted stock units (RSUs), restricted stock awards (RSAs), performance shares, and performance stock units (PSUs)[87](index=87&type=chunk)[88](index=88&type=chunk) **Stock-Based Compensation Expense (in thousands):** | Classification | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $13 | $24 | $25 | $43 | | Sales and marketing | $623 | $896 | $915 | $1,545 | | General and administrative | $3,333 | $6,145 | $8,205 | $15,575 | | Total stock-based compensation | $3,969 | $7,065 | $9,145 | $17,163 | - As of June 30, 2025, unrecognized stock-based compensation expense was **$17.6 million** for RSUs/RSAs (2.00 years weighted-average period) and **$4.6 million** for Performance Shares/PSUs (2.81 years weighted-average period)[91](index=91&type=chunk)[94](index=94&type=chunk) [12 – Income Taxes](index=21&type=section&id=12%20%E2%80%93%20INCOME%20TAXES) Traeger recorded an income tax benefit, maintains a valuation allowance against U.S. deferred tax assets, and is evaluating new tax law changes **Provision (Benefit) for Income Taxes (in thousands):** | Period | 2025 | 2024 | | :------------------------------- | :----- | :----- | | Three Months Ended June 30, | $(391) | $(24) | | Six Months Ended June 30, | $(1,991) | $166 | - The company maintains a **valuation allowance** against substantially all U.S. deferred tax assets due to cumulative losses[96](index=96&type=chunk) - The U.S. government enacted **The One Big Beautiful Bill Act** on July 4, 2025, which includes changes to corporate income tax, and the company is evaluating its future impact[97](index=97&type=chunk) [13 – Related Party Transactions](index=21&type=section&id=13%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) Traeger outsources customer service to an affiliated third party, with related expenses decreasing for Q2 and H1 2025 **Related Party Expenses (in millions):** | Period | 2025 | 2024 | | :------------------------------- | :----- | :----- | | Three Months Ended June 30, | $0.9 | $1.3 | | Six Months Ended June 30, | $2.0 | $2.5 | [14 – Net Loss Per Share](index=22&type=section&id=14%20%E2%80%93%20NET%20LOSS%20PER%20SHARE) Traeger reported a basic and diluted net loss per share of $(0.06) for Q2 and H1 2025, with potential common shares excluded as anti-dilutive **Net Loss Per Share (Basic and Diluted):** | Period | 2025 | 2024 | | :------------------------------- | :----- | :----- | | Three Months Ended June 30, | $(0.06) | $(0.02) | | Six Months Ended June 30, | $(0.06) | $(0.06) | **Weighted-Average Common Shares Outstanding (Basic and Diluted):** | Period | 2025 | 2024 | | :------------------------------- | :----------- | :----------- | | Three Months Ended June 30, | 133,289,523 | 127,138,825 | | Six Months Ended June 30, | 131,311,862 | 126,175,888 | - **15,661,805 potential common shares** were excluded from diluted EPS calculations for the six months ended June 30, 2025, as their effect was anti-dilutive[101](index=101&type=chunk) [15 – Restructuring Plan](index=22&type=section&id=15%20%E2%80%93%20RESTRUCTURING%20PLAN) Traeger's Board approved a restructuring plan on May 15, 2025, to streamline operations and rebalance costs, incurring $3.5 million in related expenses - Traeger approved a restructuring plan on May 15, 2025, to streamline operations, reduce costs, and improve profitability[102](index=102&type=chunk) - The plan includes a reduction in force and operational centralization[102](index=102&type=chunk) - **$3.5 million** in restructuring costs, primarily severance and personnel costs, were recorded for the three and six months ended June 30, 2025[103](index=103&type=chunk) [16 – Segment Information](index=22&type=section&id=16%20%E2%80%93%20SEGMENT%20INFORMATION) Traeger operates as a single operating and reportable segment, with the CEO reviewing consolidated financial information to manage the business - Traeger operates as a **single operating and reportable segment**[104](index=104&type=chunk) - The CEO, as the chief operating decision maker (CODM), reviews consolidated revenue, gross margin, demand creation costs, and net loss to manage the business[105](index=105&type=chunk) **Segment Information (in thousands):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $145,483 | $168,471 | $288,766 | $313,385 | | Gross profit | $57,000 | $72,328 | $116,459 | $134,891 | | Demand creation | $8,804 | $11,237 | $14,565 | $17,679 | | Other operating expenses | $54,291 | $56,296 | $104,577 | $112,490 | | Other segment items | $1,289 | $7,373 | $5,479 | $11,983 | | Net loss | $(7,384) | $(2,578) | $(8,162) | $(7,261) | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides management's perspective on Traeger's financial condition and results, highlighting decreased revenue, increased net loss, and strategic initiatives - Revenue decreased by **13.6%** and **7.9%** for the three and six months ended June 30, 2025, respectively[116](index=116&type=chunk) - Net loss increased to **$7.4 million** (3 months) and **$8.2 million** (6 months) for the periods ended June 30, 2025[118](index=118&type=chunk) - The company is implementing cost savings initiatives and monitoring macroeconomic conditions, including tariffs, which could impact consumer demand and operating results[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Overview](index=24&type=section&id=Overview) Traeger is the category leader in wood pellet grills, offering versatile outdoor cooking systems and consumables, distributed through an omnichannel strategy - Traeger is the creator and **category leader of wood pellet grills**, offering versatile outdoor cooking systems complemented by wood pellets, rubs, sauces, and accessories[111](index=111&type=chunk) - The company employs an **omnichannel distribution strategy**, selling through brick-and-mortar retailers, e-commerce platforms, and direct-to-consumer channels via its website and app[114](index=114&type=chunk) - Grills are manufactured in China and Vietnam, wood pellets in the U.S., and MEATER smart thermometers in Taiwan, with reliance on a limited number of third-party manufacturers[115](index=115&type=chunk) [Key Factors Affecting Our Financial Condition and Results of Operations](index=26&type=section&id=Key%20Factors%20Affecting%20Our%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses macroeconomic conditions, tariffs, and the components of Traeger's financial results, including revenue, gross profit, and operating expenses [Macroeconomic Conditions](index=26&type=section&id=Macroeconomic%20Conditions) Global economic uncertainty, inflation, and tariffs impact consumer spending, prompting Traeger to pursue cost savings and operational efficiencies - Global economic uncertainty, inflation, and higher interest rates are impacting consumer demand for durable goods[120](index=120&type=chunk) - Tariffs implemented by President Trump could disrupt supply chains, increase costs, and decrease consumer demand[121](index=121&type=chunk) - Traeger is executing cost savings initiatives, including direct import programs, long-term transportation contracts, and pellet mill efficiencies, to mitigate macroeconomic impacts[122](index=122&type=chunk) [Components of Results of Operations](index=26&type=section&id=Components%20of%20Results%20of%20Operations) Details the components of Traeger's financial results, including revenue, gross profit, operating expenses, amortization, restructuring costs, and total other expense [Revenue](index=26&type=section&id=Revenue%20(Component)) Revenue is primarily from grills, consumables, and accessories in North America, recognized net of returns, with seasonal fluctuations impacting sales - Revenue is primarily from grills, consumables, and accessories in North America, recognized net of returns upon shipment or delivery[123](index=123&type=chunk) - Sales of grills are typically higher in Q1 and Q2 due to warmer weather and holidays, while accessories see higher demand in Q4 due to holiday season[124](index=124&type=chunk) [Gross Profit](index=26&type=section&id=Gross%20Profit%20(Component)) Gross profit is influenced by product costs, manufacturing, freight, warehousing, warranty, depreciation, product mix, direct import programs, and tariffs - Cost of revenue includes product costs, manufacturing, freight, warehousing, warranty, and depreciation[126](index=126&type=chunk) - Gross margin can be favorably impacted by growth in direct import programs and increased sales of wood pellets, but is subject to tariffs and other external factors[127](index=127&type=chunk) [Sales and Marketing](index=27&type=section&id=Sales%20and%20Marketing%20(Component)) Sales and marketing expenses cover advertising, employee-related costs, sales incentives, and professional services, fluctuating with expansion timing and scope - Sales and marketing expenses cover advertising, marketing, employee-related costs, sales incentives, and professional services[128](index=128&type=chunk) - These expenses are expected to fluctuate as a percentage of revenue based on expansion timing and scope[128](index=128&type=chunk) [General and Administrative](index=27&type=section&id=General%20and%20Administrative%20(Component)) General and administrative expenses include employee costs, facilities, professional services, and R&D expenses, contributing to overall operational overhead - General and administrative expenses include employee costs, facilities, professional services, and R&D expenses[129](index=129&type=chunk)[130](index=130&type=chunk) - R&D expenses were **$3.4 million** (3 months) and **$6.3 million** (6 months) for the periods ended June 30, 2025[130](index=130&type=chunk) [Amortization of Intangible Assets](index=27&type=section&id=Amortization%20of%20Intangible%20Assets%20(Component)) Amortization primarily relates to finite-lived customer relationships and trademark assets from past acquisitions, expected to remain stable - Amortization primarily relates to finite-lived customer relationships, distributor relationships, non-compete arrangements, and trademark assets from past acquisitions[132](index=132&type=chunk) - Amortization expense is expected to remain stable over the coming years[133](index=133&type=chunk) [Restructuring Costs](index=28&type=section&id=Restructuring%20Costs%20(Component)) A comprehensive enterprise initiative approved on May 15, 2025, aims to streamline operations and rebalance costs, incurring $3.5 million in severance and personnel costs - A comprehensive enterprise initiative approved on May 15, 2025, aims to streamline the organizational structure and rebalance the cost base[134](index=134&type=chunk) - **$3.5 million** in severance and personnel costs were recorded as restructuring costs for the three and six months ended June 30, 2025[135](index=135&type=chunk) [Total Other Expense](index=28&type=section&id=Total%20Other%20Expense%20(Component)) Total other expense includes interest expense, interest income from ERTC, amortization of dedesignated interest rate swap amounts, and gains/losses from derivatives - Total other expense includes interest expense from credit facilities, interest income from ERTC, and amortization of dedesignated interest rate swap amounts[136](index=136&type=chunk) - It also includes realized and unrealized gains/losses from interest rate swaps and foreign currency contracts[136](index=136&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Provides a detailed comparison of Traeger's financial performance for Q2 and H1 2025 and 2024, across key income statement items [Comparison of the Three Months Ended June 30, 2025 and 2024](index=30&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) For Q2 2025, Traeger experienced a 13.6% revenue decrease and 21.2% gross profit decline, leading to an increased net loss despite other income benefits **Key Financials (Three Months Ended June 30, in thousands):** | Item | 2025 | 2024 | Change Amount | Change % | | :-------------------------- | :----- | :----- | :------------ | :------- | | Revenue | $145,483 | $168,471 | $(22,988) | (13.6)% | | Gross profit | $57,000 | $72,328 | $(15,328) | (21.2)% | | Sales and marketing | $24,779 | $28,224 | $(3,445) | (12.2)% | | General and administrative | $26,032 | $30,491 | $(4,459) | (14.6)% | | Total other expense | $(1,680) | $(7,397) | $(5,717) | (77.3)% | | Net loss | $(7,384) | $(2,578) | $4,806 | 186.4 % | [Revenue](index=30&type=section&id=Revenue%20(3M)) Total revenue decreased by $23.0 million (13.6%) due to lower grill and accessory sales, partially offset by increased consumables - Total revenue decreased by **$23.0 million (13.6%)** to **$145.5 million**[140](index=140&type=chunk) - Grill revenue decreased by **$20.8 million (21.9%)** due to unit volume reduction, partially offset by high-single digit average selling price increase[141](index=141&type=chunk) - Consumables revenue increased by **$2.5 million (7.5%)** driven by low-double digit increase in wood pellet sales[142](index=142&type=chunk) - Accessories revenue decreased by **$4.7 million (11.9%)** primarily due to lower sales of MEATER smart thermometers[143](index=143&type=chunk) [Gross Profit](index=30&type=section&id=Gross%20Profit%20(3M)) Gross profit decreased by $15.3 million (21.2%), with gross margin declining to 39.2% due to mix shifts, tariffs, and increased promotional activities - Gross profit decreased by **$15.3 million (21.2%)** to **$57.0 million**[144](index=144&type=chunk) - Gross margin decreased to **39.2%** from **42.9%**, driven by mix of direct import shipments, tariff costs, and increased promotional activities[144](index=144&type=chunk) [Sales and Marketing](index=30&type=section&id=Sales%20and%20Marketing%20(3M)) Sales and marketing expense decreased by $3.4 million (12.2%), though as a percentage of revenue, it slightly increased to 17.0% - Sales and marketing expense decreased by **$3.4 million (12.2%)** to **$24.8 million**[146](index=146&type=chunk) - As a percentage of revenue, sales and marketing expense slightly increased to **17.0%** from **16.8%**[146](index=146&type=chunk) [General and Administrative](index=31&type=section&id=General%20and%20Administrative%20(3M)) General and administrative expense decreased by $4.5 million (14.6%), driven by lower stock-based compensation and reduced legal costs - General and administrative expense decreased by **$4.5 million (14.6%)** to **$26.0 million**[147](index=147&type=chunk) - The decrease was driven by lower stock-based compensation (**$2.8 million**) and reduced legal costs, partially offset by higher employee costs[147](index=147&type=chunk) [Total Other Expense](index=31&type=section&id=Total%20Other%20Expense%20(3M)) Total other expense decreased by $5.7 million (77.3%), primarily due to the employee retention tax credit benefit and favorable foreign currency rates - Total other expense decreased by **$5.7 million (77.3%)** to **$1.7 million**[148](index=148&type=chunk) - This decrease was primarily due to the employee retention tax credit benefit and favorable foreign currency rates, partially offset by lower gains on interest rate swaps[148](index=148&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) For H1 2025, Traeger's revenue decreased by 7.9%, and gross profit fell by 13.7%, resulting in an increased net loss despite other income benefits **Key Financials (Six Months Ended June 30, in thousands):** | Item | 2025 | 2024 | Change Amount | Change % | | :-------------------------- | :----- | :----- | :------------ | :------- | | Revenue | $288,766 | $313,385 | $(24,619) | (7.9)% | | Gross profit | $116,459 | $134,891 | $(18,432) | (13.7)% | | Sales and marketing | $46,989 | $49,903 | $(2,914) | (5.8)% | | General and administrative | $51,051 | $62,629 | $(11,578) | (18.5)% | | Total other expense | $(7,470) | $(11,817) | $(4,347) | (36.8)% | | Net loss | $(8,162) | $(7,261) | $901 | 12.4 % | [Revenue](index=31&type=section&id=Revenue%20(6M)) Total revenue decreased by $24.6 million (7.9%) due to lower accessory and grill sales, with a slight increase in consumables - Total revenue decreased by **$24.6 million (7.9%)** to **$288.8 million**[150](index=150&type=chunk) - Grill revenue decreased by **$10.9 million (6.4%)** due to a low double-digit reduction in average selling price, partially offset by a mid-single digit increase in unit volume[151](index=151&type=chunk) - Consumables revenue increased by **$0.6 million (0.8%)** driven by a low double-digit increase in wood pellet sales[152](index=152&type=chunk) - Accessories revenue decreased by **$14.3 million (18.9%)** primarily due to lower sales of MEATER smart thermometers[153](index=153&type=chunk) [Gross Profit](index=32&type=section&id=Gross%20Profit%20(6M)) Gross profit decreased by $18.4 million (13.7%), with gross margin declining to 40.3% due to lower direct import mix and tariff-related costs - Gross profit decreased by **$18.4 million (13.7%)** to **$116.5 million**[154](index=154&type=chunk) - Gross margin decreased to **40.3%** from **43.0%**, driven by lower mix of direct import shipments and tariff-related costs[154](index=154&type=chunk) [Sales and Marketing](index=32&type=section&id=Sales%20and%20Marketing%20(6M)) Sales and marketing expense decreased by $2.9 million (5.8%), though as a percentage of revenue, it increased to 16.3% - Sales and marketing expense decreased by **$2.9 million (5.8%)** to **$47.0 million**[155](index=155&type=chunk) - As a percentage of revenue, sales and marketing expense increased to **16.3%** from **15.9%**[155](index=155&type=chunk) [General and Administrative](index=32&type=section&id=General%20and%20Administrative%20(6M)) General and administrative expense decreased by $11.6 million (18.5%), driven by lower stock-based compensation and reduced legal costs - General and administrative expense decreased by **$11.6 million (18.5%)** to **$51.1 million**[157](index=157&type=chunk) - The decrease was driven by lower stock-based compensation (**$7.4 million**) and reduced legal costs, partially offset by higher employee-related costs[157](index=157&type=chunk) [Total Other Expense](index=33&type=section&id=Total%20Other%20Expense%20(6M)) Total other expense decreased by $4.3 million (36.8%), primarily due to the employee retention tax credit benefit and favorable foreign currency rates - Total other expense decreased by **$4.3 million (36.8%)** to **$7.5 million**[158](index=158&type=chunk) - This decrease was primarily due to the employee retention tax credit benefit, favorable foreign currency rates, and net gains from foreign currency contracts[158](index=158&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Traeger's liquidity is supported by cash on hand, credit facilities, and receivables financing, which management believes are sufficient for the next twelve months - As of June 30, 2025, cash and cash equivalents were **$10.3 million**[160](index=160&type=chunk) - The company had **$125.0 million** borrowing capacity under its Revolving Credit Facility (no outstanding loans) and **$44.6 million** under its Receivables Financing Agreement (**$9.0 million** drawn)[160](index=160&type=chunk) - Management believes existing liquidity and anticipated cash flows will be **sufficient for the next twelve months**[160](index=160&type=chunk) [Cash Flows](index=34&type=section&id=Cash%20Flows) Operating activities used $2.5 million in cash for H1 2025, a shift from providing cash, while financing activities provided cash **Cash Flow Data (Six Months Ended June 30, in thousands):** | Cash Flow Activity | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Net cash provided by (used in) operating activities | $(2,545) | $1,269 | | Net cash used in investing activities | $(4,650) | $(7,890) | | Net cash provided by (used in) financing activities | $2,515 | $(5,275) | | Net decrease in cash and cash equivalents | $(4,680) | $(11,896) | - Operating cash flow shifted from positive to negative, primarily due to increased working capital usage (decreased accounts payable and accrued expenses)[163](index=163&type=chunk) - Financing activities provided cash, driven by increased net borrowing on the Receivables Financing Agreement[165](index=165&type=chunk) [Credit Facilities](index=34&type=section&id=Credit%20Facilities) Traeger's Credit Facilities include a First Lien Term Loan Facility and a Revolving Credit Facility (recently amended), with the company in compliance with all covenants - The First Lien Term Loan Facility had **$403.5 million** outstanding as of June 30, 2025, maturing on June 29, 2028[170](index=170&type=chunk) - The Revolving Credit Facility was reduced to **$112.5 million** via an August 5, 2025 amendment, split into a **$30.0 million** tranche (expiring June 29, 2026) and an **$82.5 million** Extended Revolving Facility (expiring December 29, 2027)[172](index=172&type=chunk) - The Credit Facilities are collateralized by substantially all assets of TGP Holdings III LLC, TGPX Holdings II LLC, TPC Traeger Blocker, LP, Traeger Pellet Grills Holdings LLC and certain subsidiaries, excluding accounts receivable[173](index=173&type=chunk) - The company was in **compliance with all covenants**, including a First Lien Net Leverage Ratio test and a minimum liquidity covenant for the Extended Revolving Facility[174](index=174&type=chunk) [Accounts Receivable Credit Facility](index=36&type=section&id=Accounts%20Receivable%20Credit%20Facility) Traeger utilizes a Receivables Financing Agreement, extended to August 6, 2027, with a maximum borrowing capacity of $30.0 million to $75.0 million - The Receivables Financing Agreement, extended to August 6, 2027, has a maximum borrowing capacity of **$30.0 million to $75.0 million**[176](index=176&type=chunk)[177](index=177&type=chunk) - As of June 30, 2025, **$9.0 million** was drawn under this facility for general corporate and working capital purposes[178](index=178&type=chunk) - The company was in **compliance with the covenants**, including a liquidity threshold of **$42.5 million**, as of June 30, 2025[176](index=176&type=chunk)[178](index=178&type=chunk) [Contractual Obligations](index=37&type=section&id=Contractual%20Obligations) No material changes to Traeger's contractual obligations as of June 30, 2025, from those disclosed in its Annual Report on Form 10-K - No material changes to contractual obligations as of June 30, 2025, compared to the Annual Report on Form 10-K[179](index=179&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No material changes to critical accounting policies and estimates during H1 2025, except for goodwill and acquired intangible assets valuation - No material changes to critical accounting policies and estimates during the six months ended June 30, 2025, except for goodwill and acquired intangible assets valuation[181](index=181&type=chunk) [Valuation of Goodwill and Acquired Intangible Assets](index=37&type=section&id=Valuation%20of%20Goodwill%20and%20Acquired%20Intangible%20Assets) A goodwill impairment test was performed for Q2 2025 due to a stock price decrease, with fair value exceeding carrying value by 5%, thus no impairment - A goodwill impairment test was conducted for the three months ended June 30, 2025, due to a sustained decrease in stock price[182](index=182&type=chunk) - The fair value of the reporting unit **exceeded its carrying value by approximately 5%**, and no impairment was recorded[184](index=184&type=chunk) - Future declines in stock price or adverse events could lead to goodwill impairment[184](index=184&type=chunk) [Recent Accounting Pronouncements](index=37&type=section&id=Recent%20Accounting%20Pronouncements) For information regarding recent accounting pronouncements, refer to Note 2 – Summary of Significant Accounting Policies - Refer to Note 2 for information on recent accounting pronouncements[185](index=185&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=37&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes to Traeger's disclosures regarding its exposure to market risk as described in its Annual Report on Form 10-K - No material changes to market risk disclosures since the Annual Report on Form 10-K[187](index=187&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=38&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management evaluated Traeger's disclosure controls and procedures as effective at a reasonable assurance level, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated as **effective at the reasonable assurance level** as of June 30, 2025[189](index=189&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[190](index=190&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=38&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) Management acknowledges that controls and procedures provide only reasonable assurance due to inherent limitations and resource constraints - Management acknowledges that controls and procedures provide only reasonable assurance due to inherent limitations and resource constraints[188](index=188&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025 - The CEO and CFO concluded that disclosure controls and procedures were **effective at the reasonable assurance level** as of June 30, 2025[189](index=189&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025 - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[190](index=190&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) Covers other information not included in the financial statements, such as legal proceedings, risk factors, and exhibit listings [ITEM 1. LEGAL PROCEEDINGS](index=38&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Traeger is subject to various legal proceedings, but management believes their ultimate resolution will not materially adversely affect the business - The company is involved in various legal proceedings, claims, and investigations in the ordinary course of business[192](index=192&type=chunk) - Management believes the ultimate resolution of these matters will not materially adversely affect the business[192](index=192&type=chunk) [ITEM 1A. RISK FACTORS](index=38&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to the risk factors disclosed in the Annual Report on Form 10-K - No material changes to risk factors disclosed in the Annual Report on Form 10-K[193](index=193&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=38&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[194](index=194&type=chunk)[195](index=195&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=38&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities to report for the period - No defaults upon senior securities to report[196](index=196&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=38&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to Traeger, Inc - Mine safety disclosures are not applicable[197](index=197&type=chunk) [ITEM 5. OTHER INFORMATION](index=39&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Confirms no disclosures in lieu of Form 8-K, no material changes to board nominee procedures, and no Rule 10b5-1 trading arrangements by directors or officers - No disclosures in lieu of reporting on a Current Report on Form 8-K[198](index=198&type=chunk) - No material changes to procedures for recommending board nominees[199](index=199&type=chunk) - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter[200](index=200&type=chunk) [ITEM 6. EXHIBITS](index=40&type=section&id=ITEM%206.%20EXHIBITS) Lists all exhibits filed with the Form 10-Q, including organizational documents, credit agreements, stock award plans, and certifications from the CEO and CFO - The exhibits include organizational documents (Certificate of Incorporation, Bylaws), credit agreements, stock award plans, and certifications from the CEO and CFO[201](index=201&type=chunk) [SIGNATURES](index=41&type=section&id=SIGNATURES) Contains the official signatures for the Quarterly Report on Form 10-Q [Report Signatures](index=41&type=section&id=Report%20Signatures) The Quarterly Report on Form 10-Q was signed on August 6, 2025, by the Chief Executive Officer and Chief Financial Officer - The report was signed on August 6, 2025, by Jeremy Andrus (CEO) and Michael J. Hord (CFO)[204](index=204&type=chunk)

Company Performance - Traeger reported a quarterly loss of $0.01 per share, missing the Zacks Consensus Estimate of $0.06, and compared to earnings of $0.06 per share a year ago, representing an earnings surprise of -116.67% [1] - The company posted revenues of $145.48 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 13.12%, and down from $168.47 million year-over-year [2] - Over the last four quarters, Traeger has surpassed consensus EPS estimates just once, while it has topped consensus revenue estimates three times [2] Stock Performance - Traeger shares have lost about 31% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The current Zacks Rank for Traeger is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is -$0.04 on revenues of $119.64 million, and for the current fiscal year, it is $0.07 on revenues of $593.22 million [7] - The outlook for the Consumer Products - Discretionary industry, where Traeger operates, is currently in the top 28% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]