Fourth Quarter & Full Year 2025 Earnings Presentation January 27, 2026 The data source for retail sales figures included in this presentation is registration information provided by Polaris dealers in North America and Europe compiled by the Company or Company estimates and other industry data sources. The Company relies on information that its dealers or other third parties supply concerning retail sales, and other retail sales data sources related to Polaris and the powersports industry, and this informat ...

Financial Data and Key Metrics Changes - Adjusted sales for Q4 2025 increased by 9%, with North American retail also up by 9%, excluding youth [9][10] - Adjusted EPS for Q4 was approximately $0.08, slightly ahead of the guidance provided in October [11] - Adjusted EBITDA margin contracted year-over-year due to $37 million in new tariffs and normalization of incentive compensation [16][24] Business Line Data and Key Metrics Changes - Off-road vehicle (ORV) sales rose by 11% in Q4, supported by higher shipments and a richer mix of vehicles [16] - Marine sales increased by 1%, with strong demand for entry-level Bennington models and redesigned flagship Bennington QX lineup [18] - On-road sales were up 4%, driven by positive mix within Aixam and Goupil, despite softness in Indian Motorcycle and Slingshot [18] Market Data and Key Metrics Changes - International sales grew by 9%, with all regions contributing, driven by double-digit growth in parts, garments, and accessories (PG&A) [15] - Dealer inventory was down 9% in ORV, and more than 40% in snow, indicating a healthy inventory position [17] - The overall dealer inventory is at the lowest levels outside of the pandemic, with a healthy mix of current versus non-current inventory [14][17] Company Strategy and Development Direction - The company aims to reduce its exposure to China-based spend from approximately 14% to below 5% by year-end 2027, which will lower tariff expenses and create a more localized supply chain [7][31] - The separation of Indian Motorcycle is on track to close by the end of Q1 2026, expected to be accretive to EBITDA margins and adjusted EPS [9][20] - The company is focused on maintaining leadership in the powersports industry through innovation and strong dealer partnerships [26][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2025, including tariffs and macroeconomic pressures, but highlighted the company's ability to deliver on its commitments [4][24] - The company expects total sales growth of 1%-3% for 2026, with a more challenging year-over-year comparison due to the absence of Indian Motorcycle sales [21] - Management remains cautious about the recreational segment but anticipates utility growth to offset ongoing pressures [30] Other Important Information - The company generated approximately $180 million in operating cash flow for Q4, translating into $120 million of free cash flow [19] - The company has reduced finished goods and improved working capital, with a focus on maintaining investment-grade metrics [19][20] - The company is committed to its dividend policy, having completed its 30th consecutive year of dividend increases [20] Q&A Session Summary Question: Revenue lift in 2026 from wholesale and retail alignment - The revenue lift increased due to a strong Q4, with flow-through expected to be closer to 40% when excluding tariffs [34][36] Question: Cost savings beyond the $30 million absorption - Cost takeout is complicated due to the Indian Motorcycle separation, but there are expectations for slight GP declines driven by TSAs [38][40] Question: 2026 free cash flow expectations - The company anticipates about $160 million in operating cash flow and $120 million in free cash flow for 2026, with a focus on working capital [44][46] Question: Tariff impacts and future expectations - The company expects approximately $215 million in tariffs for the year, with ongoing efforts to mitigate these costs through supply chain localization [71][72] Question: Inventory levels across the industry - The company feels confident about its inventory position, having reduced aged inventory significantly and maintaining a healthy mix [80][81]

Financial Data and Key Metrics Changes - Adjusted sales for Q4 2025 increased by 9%, with North American retail also up by 9%, excluding youth [9][15] - Adjusted EPS for Q4 was approximately $0.08, slightly ahead of the implied guidance [11] - Adjusted EBITDA margin contracted year-over-year due to $37 million in tariff costs and normalization of incentive compensation [16][24] Business Line Data and Key Metrics Changes - Off-road vehicle (ORV) sales rose by 11% in Q4, supported by higher shipments and a richer mix of vehicles [16] - Marine sales increased by 1%, with strong demand for entry-level Bennington models and the redesigned Bennington QX lineup [18] - On-road sales were up 4%, driven by positive mix within Aixam and Goupil, despite softness in Indian Motorcycle and Slingshot [18] Market Data and Key Metrics Changes - International sales grew by 9%, with all regions contributing, driven by double-digit growth in parts, garments, and accessories (PG&A) [15] - Dealer inventory was down 9% in ORV, and more than 40% in snow, indicating a healthy inventory position [17] - The industry faced pressure from higher interest rates and macroeconomic uncertainty, but Polaris maintained a strong market position [18][29] Company Strategy and Development Direction - The company aims to reduce reliance on China-sourced components to less than 5% of material costs by year-end 2027, which is expected to lower tariff expenses and improve supply chain responsiveness [7][31] - The separation of Indian Motorcycle is on track to close by the end of Q1 2026, expected to be accretive to EBITDA margins and adjusted EPS [9][20] - The company is focused on maintaining leadership in the powersports industry through innovation and strong dealer partnerships [26][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2025, particularly due to tariffs, but highlighted the company's ability to deliver on strategic milestones and share gains [4][24] - The outlook for 2026 includes expectations for total company sales growth of 1%-3%, with a focus on aligning shipments and retail [21][25] - Management remains cautious about the recreational segment but expects utility growth to offset ongoing pressures [29][30] Other Important Information - The company generated approximately $180 million in operating cash flow for Q4, translating into $120 million of free cash flow, and $605 million for the year [19] - The company has removed over $240 million in structural costs from its plants over the last two years, enhancing operational efficiency [27] - The company is committed to maintaining its dividend aristocrat status, having completed its 30th consecutive year of dividend increases [20] Q&A Session Questions and Answers Question: Revenue lift in 2026 from wholesale and retail alignment - The revenue lift increased due to a strong Q4, with flow-through expected to be closer to 40% when excluding tariffs [34][36] Question: Cost savings beyond the $30 million absorption - Excluding Indian Motorcycle, gross profit is expected to be down slightly due to accounting for transition service agreements (TSAs) [38][40] Question: 2026 free cash flow expectations - Free cash flow is expected to be around $120 million, with continued focus on working capital improvements [44][46] Question: Inventory levels across the industry - The company feels good about its inventory position, having reduced aged inventory significantly and maintaining a healthy mix [78][80]

Financial Data and Key Metrics Changes - Adjusted sales for Q4 2025 increased by 9%, with North American retail also up by 9%, excluding youth [8][14] - Adjusted EPS for Q4 was approximately $0.08, slightly ahead of the guidance provided in October [10] - Adjusted EBITDA margin contracted year-over-year due to $37 million in new tariffs and normalization of incentive compensation [15][24] Business Line Data and Key Metrics Changes - Off-road vehicle (ORV) sales rose by 11% in Q4, supported by higher shipments and a richer mix of vehicles [15] - Marine sales increased by 1%, with strong demand for entry-level Bennington models and redesigned flagship Bennington QX lineup [17] - On-road sales were up 4%, driven by positive mix within Aixam and Goupil, despite softness in Indian Motorcycle and Slingshot [17] Market Data and Key Metrics Changes - International sales grew by 9%, with all regions contributing, particularly driven by double-digit growth in parts, garments, and accessories (PG&A) [14] - Dealer inventory was down 9% in ORV, and more than 40% in snow, indicating a healthy inventory position [16] - The industry faced pressure from higher interest rates and macroeconomic uncertainty, but Polaris maintained a strong market position [17] Company Strategy and Development Direction - The company aims to reduce its exposure to China-based spending from approximately 14% to below 5% by year-end 2027, which will lower tariff expenses and create a more localized supply chain [6][32] - The separation of Indian Motorcycle is on track to close by the end of Q1 2026, expected to be accretive to EBITDA margins and adjusted EPS [8][19] - The company is focused on maintaining leadership in the powersports industry through innovation and strong dealer partnerships [26][30] Management's Comments on Operating Environment and Future Outlook - Management expressed pride in the team's ability to navigate a challenging year, achieving share gains and operational improvements despite tariff headwinds [4][10] - The company anticipates a flat retail environment in 2026, with utility growth expected to offset ongoing pressure in recreation [31] - Management remains cautious about the remainder of the snowmobile season due to variable weather conditions [12] Other Important Information - The company generated approximately $180 million in operating cash flow in Q4, translating into $120 million of free cash flow [18] - For 2026, the company expects total sales growth of 1%-3%, with adjusted EBITDA margin expansion of 80-120 basis points year-over-year [21][22] - The company is committed to maintaining its dividend aristocrat status, having completed its 30th consecutive year of dividend increases [19] Q&A Session Summary Question: Revenue lift in 2026 from wholesale and retail alignment - The revenue lift increased from $300 million to over $400 million due to a strong Q4, with a flow-through of around 40% expected [34][35] Question: Thoughts on 2026 free cash flow and working capital - The company expects about $160 million in operating cash flow and $120 million in free cash flow for 2026, with continued focus on working capital [44][46] Question: Financial leverage goals for the end of 2026 - The company aims to be under normal covenants in the 3.5 range by the second half of 2026, with long-term goals of achieving a leverage ratio of 1-2 [48][49] Question: Impact of tariffs and commodities on financials - The company anticipates a total of $215 million in tariffs for the year, with ongoing pressure from commodity prices [70] Question: Inventory levels across the industry - The company feels confident about its inventory position, having reduced aged inventory significantly and maintaining a healthy mix [78][80]

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Core Viewpoint - Polaris Inc. reported its fourth quarter and full year 2025 financial results, indicating ongoing performance and engagement with investors through a scheduled conference call [1]. Group 1: Financial Results - The earnings release detailing Polaris Inc.'s financial performance for Q4 and the full year of 2025 is available on the Company's Investor Relations website [1]. - The financial results will be submitted to the Securities and Exchange Commission on a Form 8-K [1]. Group 2: Conference Call and Webcast - A conference call with analysts and investors is scheduled for today at 10:00 a.m. CT, providing an opportunity for direct engagement [2]. - The call and webcast can be accessed via a link on the Company's website or by dialing specific numbers for U.S. and international participants [2]. - Related presentation materials and a replay of the webcast will be available on the Company's website, along with a replay of the call accessible through designated phone numbers [2]. Group 3: Company Overview - Polaris Inc. is recognized as a global leader in powersports, with a history of product innovation and enhancing outdoor experiences since its founding in 1954 [3]. - The Company's product lineup includes a variety of vehicles such as off-road vehicles, snowmobiles, motorcycles, and boats, catering to diverse consumer needs [3]. - Polaris operates globally, serving nearly 100 countries, and is headquartered in Minnesota [3].

Sales Performance - Fourth quarter 2025 sales were $1,922 million, a 9% increase compared to the fourth quarter of 2024, with North America sales of $1,623 million representing 84% of total sales[7] - Full year 2025 sales were $7,152 million, approximately flat compared to the previous year, while adjusted sales were $7,143 million[8] - Sales for Q4 2025 reached $1,921.9 million, a 9.5% increase from $1,755.4 million in Q4 2024[30] - Parts, Garments and Accessories (PG&A) sales increased by 22% in the fourth quarter, contributing positively to overall sales performance[16] - Adjusted sales for the full year 2025 were $7,142.8 million, slightly down from $7,174.7 million in 2024[30] Profitability and Loss - The fourth quarter reported diluted loss per share was $5.34, compared to a net income of $0.19 per diluted share in the fourth quarter of 2024[11] - Gross profit for the twelve months ended December 31, 2025, was $1,368.7 million, down 6.7% from $1,466.8 million in 2024[24] - Gross profit for Q4 2025 was $384.2 million, compared to $357.9 million in Q4 2024, reflecting a 7.4% increase[30] - Net loss attributable to Polaris Inc. for the twelve months ended December 31, 2025, was $465.5 million, compared to a net income of $110.8 million in 2024[24] - Adjusted EPS for Q4 2025 was $0.08, down from $0.92 in Q4 2024[30] Operating Expenses - Operating expenses for the fourth quarter were $724 million, a significant increase of 128% from $318 million in the fourth quarter of 2024[10] - Total operating expenses for Q4 2025 were $724.0 million, significantly higher than $318.2 million in Q4 2024, primarily due to a $288.1 million loss on disposal group held for sale[24] Cash Flow and Assets - Cash and cash equivalents decreased to $138.0 million as of December 31, 2025, from $287.8 million in 2024[26] - Total current assets fell to $2,206.6 million in 2025, down from $2,632.4 million in 2024[26] - Net cash provided by operating activities for the twelve months ended December 31, 2025, was $741.0 million, a significant increase from $268.2 million in 2024[28] - The company reported a net cash used for investing activities of $139.5 million in 2025, compared to $270.9 million in 2024[28] - Adjusted free cash flow for 2025 was $605.4 million, compared to $64.7 million in 2024[33] Future Outlook - The company expects 2026 sales to increase by 1% to 3% compared to 2025, with adjusted diluted EPS projected to be between $1.50 and $1.60[14] - Polaris anticipates that its long-term growth plan will focus on innovation, efficient operations, and a strong dealer network to drive profitable growth[5] - The company anticipates approximately $32 million in restructuring and acquisition-related costs for 2026[40] Impairment and Charges - Fourth quarter results included impairment and other charges of $288 million related to the Indian Motorcycle business, primarily non-cash charges[12] - The company recorded impairment charges of $53.9 million in Q4 2025 and $155.9 million for the full year[38] - Loss on disposal group held for sale amounted to $288.1 million in Q4 2025 and $330.4 million for the full year[39] Market Share - Polaris gained market share in all segments for full-year 2025, with retail sales for powersports up 9% excluding Youth compared to last year[8] Gross Profit Margin - The gross profit margin for the fourth quarter decreased by 40 basis points to 20.0%, primarily due to tariffs and net pricing pressures[9] EBITDA - Adjusted EBITDA for Q4 2025 was $98.1 million, with an adjusted EBITDA margin of 5.1%[31]

Group 1 - Polaris Inc. is recognized as one of the 14 Best Mid Cap Dividend Aristocrat Stocks to buy now [1] - Seaport Research initiated coverage of Polaris with a Buy rating and an $83 price target, citing strong outdoor demand and improving dealer conditions in the powersports market [2] - Polaris is viewed as undervalued, with the market not fully recognizing its earnings potential [2] Group 2 - Polaris announced plans to sell a majority stake in Indian Motorcycle to Carolwood LP, which generated approximately $478 million, or about 7% of Polaris' revenue, over the trailing twelve months ended June 30, 2025 [3] - The transaction is expected to increase annualized adjusted EBITDA by about $50 million and add roughly $1.00 to adjusted EPS, with closing anticipated in Q1 2026 [4] - Polaris intends to retain a small equity stake in Indian Motorcycle post-transaction and is confident in the brand's future under new ownership [4]

Core Viewpoint - Polaris Renewable Energy Inc. is set to hold its Q4 and annual 2025 Earnings Conference Call on February 19, 2026, at 10:00 am EST, indicating a commitment to transparency and communication with investors [1]. Group 1: Earnings Call Information - The earnings call can be accessed via a toll-free number or an international toll-free number, showcasing the company's effort to facilitate investor participation [1]. - A digital recording of the earnings call will be available for replay two hours after the call's completion, allowing stakeholders to review the information at their convenience [1]. Group 2: Company Overview - Polaris Renewable Energy Inc. is a publicly traded Canadian company focused on the acquisition, development, and operation of renewable energy projects in Latin America and the Caribbean, highlighting its role in the energy transition [2]. - The company's portfolio includes a geothermal plant (~82 MW), four run-of-river hydroelectric plants (~39 MW), three solar projects (~35 MW), and an onshore wind park (~26 MW), demonstrating a diverse range of renewable energy sources [3].

Core Insights - Polaris Inc. is reintroducing its Free Snowmobile Rides program for February 2026, aimed at encouraging outdoor winter activities [1][2][3] - The program offers complimentary one-hour rides on the latest Polaris snowmobiles at select locations, enhancing accessibility to winter adventures [3][4] Company Overview - Polaris Inc. has been a leader in the powersports industry since its founding in 1954, providing a wide range of products including snowmobiles, off-road vehicles, and motorcycles [6] - The company operates in over 100 countries and is known for its commitment to innovation and quality in outdoor recreational products [6] Polaris Adventures - Launched in 2017, Polaris Adventures has become a leading powersports vehicle rental service, supporting over 250 outdoor experience Outfitters [7] - The initiative aims to provide customers with opportunities to engage in new activities and experience various models of powersports vehicles at premier riding destinations [7] Program Details - The Free Snowmobile Rides program is designed for all riders, from beginners to enthusiasts, and includes safety overviews and protective gear [9] - Last year's program reached capacity within weeks, indicating strong demand and interest in winter recreational activities [4]