Core Points - SharkNinja Operating LLC voluntarily discontinued its comparative performance claim regarding its HydroDuo Wet Dry Hard Floor Cleaner against Dyson's WashG1 due to a Fast-Track SWIFT challenge initiated by Dyson [1][2][3] - The National Advertising Division (NAD) found Dyson's challenge appropriate for SWIFT as it focused on the inappropriateness of Shark's comparison since Dyson's WashG1 lacks a "dry-only" mode [2][3] - SharkNinja stated that the discontinuation of the claim was for business reasons unrelated to Dyson's challenge, and NAD will treat this as a compliance measure [3] Industry Context - The household floor cleaning appliance market is competitive, with Dyson and Shark being key players [2] - The NAD serves as an independent body for advertising truthfulness and accuracy, ensuring fair competition and consumer protection in the U.S. [6] - BBB National Programs, which oversees NAD, has been enhancing consumer trust in business for over 50 years through self-regulation and dispute resolution services [5]

Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology company, today announces findings from a newly published comparative study of single-use Negative Pressure Wound Therapy (sNPWT) devices in Caesarean section (C-section) recovery has identified significant benefits for postpartum use of Smith+Nephew’s leading PICO sNPWT technology. Analyzing real-world data from over 10,000 C-section patients treated at different pressure levels, the study published in WOUNDS (April 2025) reveals that PICO sNPWT ...

Summary of Key Points from the Conference Call Industry and Companies Involved - **Industry**: Lifestyle & Growth Platforms - **Companies Mentioned**: - SharkNinja (SN) - YETI Holdings (YETI) - Acushnet (GOLF) - Revolve (RVLV) Core Insights and Arguments - **Tariff Impact**: - In Q1, tariffs led to a 60 basis points decline in adjusted gross margin (GM) to 50.2% for the companies involved, with potential gross costs amounting to hundreds of millions [7] - Estimated gross cost of $100 million due to a 145% tariff on China-sourced products and a 10% tariff on goods from other countries, resulting in a net 450 basis points decline in GM [7] - Tariffs expected to indirectly reduce top-line growth by 300 basis points due to a softer consumer environment and supply chain disruptions [7] - **Mitigation Strategies**: - Companies are diversifying supply chains, aiming for 90% of US volume to be sourced outside of China by Q2, leveraging suppliers in Southeast Asia and building strategic inventory in the US [7] - Cost reductions through supplier concessions, value engineering opportunities (over 1500 identified), selective pricing, and operational expense optimization [7] - Acushnet plans to offset over 50% of the gross tariff impact this year, with further relief expected in FY26 [7] - Revolve is engaging in cost-sharing discussions with manufacturing partners and diversifying sources outside of China, although this is a long-term strategy [7] Additional Important Insights - **Company Valuations and Price Targets**: - **Acushnet Holdings Corp.**: Price target of $75 based on ~13x 2026E EV/EBITDA; risks include slowing industry growth and adverse weather [8] - **Revolve Group, Inc.**: Price target of $24 based on ~30x FY26 P/E; downside risks include economic weakness and competition [9] - **SharkNinja Inc.**: Price target of $175 based on ~19x FY26E EV/EBITDA; risks include supply chain headwinds and increased competition [10] - **YETI Holdings, Inc.**: Price target of $53 based on ~18x FY26E EPS; risks include competition and economic weakness [11] - **Inventory Exposure**: - Approximately 22% of Revolve's FY24 inventory purchases are directly exposed to tariffs, with management anticipating a GM reduction of 240 basis points due to tariffs and shifts in consumer demand [7] - **Strategic Focus**: - Companies are focusing on managing inventory levels tightly, reducing safety stocks, and pausing non-critical capital expenditures to preserve cash flow and minimize risk [7] This summary encapsulates the key points discussed in the conference call, highlighting the impact of tariffs, mitigation strategies, company valuations, and strategic focuses of the involved companies.

Core Viewpoint - SharkNinja has demonstrated resilience and adaptability in the face of tariff challenges, posting strong financial results and raising its revenue and profit guidance for the year [1][9]. Company Overview - SharkNinja, which went public in mid-2023, aims to disrupt the consumer appliance industry with an aggressive approach [4]. - The company focuses on developing five-star-rated products based on customer pain points, fostering brand loyalty and potential virality [5]. Financial Performance - SharkNinja reported a 14.7% revenue growth in the first quarter and has increased its revenue guidance to 12% for the year, alongside adjusted earnings per share guidance raised to $4.95, reflecting a 13% growth [9]. - The company has achieved an average revenue growth of 21% since 2008 through consistent innovation and entry into new product categories [6]. Tariff Mitigation Strategies - SharkNinja has shifted a significant portion of its U.S. volume from China to other Southeast Asian countries, which currently face only a 10% tariff [10]. - The company has established close partnerships with contract manufacturers to secure cost reductions and discounts on materials [11]. - SharkNinja identified 1,500 cost-saving opportunities through value engineering processes, including adjustments to product configurations and features [12]. - The company has selectively raised prices on certain products without a noticeable drop in demand, indicating strong pricing power and competitive advantage [13]. Growth Potential - SharkNinja is targeting expansion into two new product subcategories annually and expects about one-third of its revenue to come from international markets in Europe and Latin America this year [15]. - The company has a return on equity exceeding 25%, suggesting efficient profit generation and long-term growth potential [16].

Core Insights - SharkNinja, Inc. reported revenue of $1.22 billion for the quarter ended March 2025, reflecting a year-over-year increase of 14.7% and a surprise of +3.99% over the Zacks Consensus Estimate of $1.18 billion [1] - The company's EPS for the quarter was $0.87, down from $1.06 in the same quarter last year, but exceeded the consensus estimate of $0.73 by +19.18% [1] Financial Performance - Net Sales in Cleaning Appliances were $441.42 million, slightly below the average estimate of $451.46 million from two analysts [4] - Net Sales in Beauty and Home Environment Appliances reached $137.89 million, surpassing the average estimate of $131.01 million [4] - Net Sales in Food Preparation Appliances amounted to $297.39 million, significantly exceeding the average estimate of $239.89 million [4] - Net Sales in Cooking and Beverage Appliances were $345.94 million, slightly above the average estimate of $344.48 million [4] Stock Performance - SharkNinja, Inc. shares have returned +3.1% over the past month, compared to the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Net sales increased nearly 15% year over year globally, marking the eighth consecutive quarter of double-digit revenue growth [5][41] - Adjusted gross margin was 50.2%, with adjusted EBITDA at $200 million, reflecting a 13% decrease year over year due to substantial investments [6][40][45] - Adjusted net income for Q1 was $124 million, or $0.87 per diluted share, compared to $149 million, or $1.06 per diluted share in the prior year [47] Business Line Data and Key Metrics Changes - Cleaning category net sales increased 5% year over year to $441 million, driven by cordless and extraction subcategories [43] - Cooking and Beverage category net sales rose 5% year over year to $346 million, with strong performance from the Crispy product line [43] - Food Preparation category saw a significant 45% increase in net sales to $297 million, driven by the success of the slushy frozen drink maker and Swirl by Creamy [44] - Beauty and Home Environment category net sales increased 26% year over year to $138 million, fueled by CryoGlo skincare products and FlexBreeze fans [44] Market Data and Key Metrics Changes - Domestic net sales grew 15% year over year, while international sales increased by 14% [41] - International business, excluding the UK air fryer segment, showed significant growth across all regions, particularly in Central Europe [41][30] Company Strategy and Development Direction - The company is focused on a three-pillar growth strategy: expanding into new categories, growing share in existing categories, and international growth [21][29] - SharkNinja plans to launch at least 25 new products in 2025, emphasizing innovation and consumer insights [35] - The company is diversifying manufacturing capabilities outside of China, with expectations to move 90% of U.S. volume outside of China by the end of Q2 2025 [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff challenges through a comprehensive mitigation strategy involving sourcing, selling, and operational efficiency [20][52] - The company raised its 2025 guidance, expecting net sales to increase between 11% and 13%, and adjusted EBITDA to grow by 15% to 17% year over year [52][53] - Management highlighted strong consumer demand and a robust product pipeline as key drivers for future growth [36][54] Other Important Information - SharkNinja received recognition as one of the most trustworthy companies in America and ranked among the world's 50 most innovative companies [37] - The company is committed to maintaining a healthy balance of investment for growth while managing operating expenses [19][45] Q&A Session Summary Question: Insights on consumer discovery of new products - Management noted that the installed consumer base and pre-launch marketing efforts have significantly accelerated product awareness and sales [60][63] Question: Details on European market expansion and talent acquisition - Management discussed strong relationships with European retailers and the expansion into multiple countries, emphasizing the importance of talent in driving growth [70][73] Question: Clarification on tariff mitigation strategies - Management confirmed that while not all tariff impacts have been fully mitigated, significant efforts across buy side, sell side, and operational expenses have been implemented [78][80]

Financial Data and Key Metrics Changes - Net sales increased nearly 15% year over year globally, marking the eighth consecutive quarter of double-digit revenue growth [5][40] - Adjusted gross margin was 50% with adjusted EBITDA of $200 million in the quarter, although adjusted EBITDA decreased by 13% year over year [6][40] - Adjusted net income for Q1 was $124 million or $0.87 per diluted share, compared to $149 million or $1.06 per diluted share in the prior year [47] Business Line Data and Key Metrics Changes - Cleaning category net sales increased 5% year over year to $441 million [43] - Cooking and Beverage category net sales also rose 5% year over year to $346 million [43] - Food Preparation category saw a significant increase of 45% year over year to $297 million, driven by the success of the slushy frozen drink maker and Swirl by Creamy [44] - Beauty and Home Environment category net sales increased 26% year over year to $138 million, fueled by CryoGlo skincare products and FlexBreeze fans [44] Market Data and Key Metrics Changes - Domestic net sales grew 15% year over year, while international sales increased by 14% [40] - International business, excluding the UK air fryer segment, showed significant growth across all regions, particularly in Central Europe [41] Company Strategy and Development Direction - The company is focused on a three-pillar growth strategy: expanding into new categories, growing share in existing categories, and international growth [22][29] - SharkNinja plans to launch at least 25 new products in 2025, emphasizing innovation and consumer insights [35] - The company is diversifying manufacturing capabilities to mitigate tariff impacts, with expectations to move 90% of U.S. volume outside of China by the end of 2025 [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff challenges and maintaining growth despite macroeconomic uncertainties [10][51] - The company raised its 2025 guidance, expecting net sales to increase between 11% and 13% [51] - Management highlighted strong consumer demand and a robust product pipeline as key drivers for future growth [36][53] Other Important Information - SharkNinja received recognition as one of the most trustworthy companies in America and ranked among the world's 50 most innovative companies [37] - The company is committed to maintaining investment in R&D and product innovation despite cost management efforts [20][46] Q&A Session Summary Question: Insights on consumer discovery of new products - Management noted that the installed consumer base and pre-launch marketing efforts have significantly accelerated product awareness and sales [60][63] Question: Details on European market expansion and talent acquisition - Management discussed strong relationships with European retailers and the expansion into multiple countries, emphasizing the importance of talent in driving growth [67][72] Question: Clarification on tariff mitigation strategies - Management explained that while they have not fully offset the tariff impacts, they have implemented effective strategies across buy side, sell side, and operating expenses [77][80]

Core Viewpoint - SharkNinja, Inc. reported quarterly earnings of $0.87 per share, exceeding the Zacks Consensus Estimate of $0.73 per share, but down from $1.06 per share a year ago, indicating a 19.18% earnings surprise [1][2] Financial Performance - The company achieved revenues of $1.22 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.99%, compared to $1.07 billion in the same quarter last year [2] - Over the last four quarters, SharkNinja has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - SharkNinja shares have declined approximately 16.6% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The current Zacks Rank for SharkNinja is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1 on revenues of $1.47 billion, and for the current fiscal year, it is $4.69 on revenues of $6.21 billion [7] - The outlook for the industry, specifically the Retail - Miscellaneous sector, is favorable, ranking in the top 30% of over 250 Zacks industries, which historically outperforms the bottom 50% by more than 2 to 1 [8]

[Financial Statements](index=2&type=section&id=Financial%20Statements) This section presents SharkNinja, Inc.'s unaudited condensed consolidated financial statements, providing a comprehensive overview of its financial position and performance [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) The Condensed Consolidated Balance Sheets detail SharkNinja, Inc.'s financial position, showing a decrease in total assets and liabilities, and an increase in shareholders' equity Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------------------ | | Total assets | $4,175,402 | $4,394,159 | $(218,757) | -4.98% | | Total liabilities | $2,137,169 | $2,458,187 | $(321,018) | -13.06% | | Total shareholders' equity | $2,038,233 | $1,935,972 | $102,261 | 5.28% | | Cash and cash equivalents | $224,696 | $363,669 | $(138,973) | -38.22% | | Accounts receivable, net | $1,040,635 | $1,266,595 | $(225,960) | -17.84% | | Inventories | $973,198 | $899,989 | $73,209 | 8.13% | | Accounts payable | $462,495 | $612,031 | $(149,536) | -24.43% | | Accrued expenses and other current liabilities | $641,667 | $841,529 | $(199,862) | -23.75% | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) The Condensed Consolidated Statements of Income show increased net sales and net income for the three months ended March 31, 2025, despite a slight decrease in operating income Condensed Consolidated Statements of Income Highlights | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------------------ | | Net sales | $1,222,638 | $1,066,228 | $156,410 | 14.67% | | Cost of sales | $619,412 | $539,611 | $79,801 | 14.79% | | Gross profit | $603,226 | $526,617 | $76,609 | 14.55% | | Operating income | $144,946 | $154,942 | $(9,996) | -6.45% | | Net income | $117,835 | $109,612 | $8,223 | 7.50% | | Net income per share, basic | $0.84 | $0.79 | $0.05 | 6.33% | | Net income per share, diluted | $0.83 | $0.78 | $0.05 | 6.41% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) The Condensed Consolidated Statements of Comprehensive Income show a significant increase in comprehensive income, driven by foreign currency translation and derivative gains Condensed Consolidated Statements of Comprehensive Income Highlights | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------------------ | | Net income | $117,835 | $109,612 | $8,223 | 7.50% | | Foreign currency translation adjustments | $7,876 | $(3,374) | $11,250 | -333.45% | | Unrealized gain on derivative instruments, net | $6,024 | $1,870 | $4,154 | 222.14% | | Comprehensive income | $131,735 | $108,108 | $23,627 | 21.85% | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20(Unaudited)) The Condensed Consolidated Statements of Shareholders' Equity indicate an increase in total shareholders' equity, primarily due to net income and positive other comprehensive income Condensed Consolidated Statements of Shareholders' Equity Highlights | Metric | As of March 31, 2025 (in thousands) | As of December 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------ | :---------------------------------- | :----------------------------------- | :-------------------- | | Total Shareholders' Equity | $2,038,233 | $1,935,972 | $102,261 | | Net income (Q1 2025) | $117,835 | N/A | N/A | | Share-based compensation (Q1 2025) | $11,550 | N/A | N/A | | Other comprehensive income, net of tax (Q1 2025) | $13,900 | N/A | N/A | | Accumulated Other Comprehensive Income (Loss) | $2,621 | $(11,279) | $13,900 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) The Condensed Consolidated Statements of Cash Flows show a significant shift from cash provided to cash used in operating activities, resulting in a net decrease in cash Condensed Consolidated Statements of Cash Flows Highlights | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net cash (used in) provided by operating activities | $(54,856) | $43,882 | $(98,738) | | Net cash used in investing activities | $(36,809) | $(26,886) | $(9,923) | | Net cash used in financing activities | $(51,149) | $(37,920) | $(13,229) | | Net decrease in cash and cash equivalents | $(138,973) | $(22,167) | $(116,806) | | Cash and cash equivalents at end of period | $224,696 | $131,894 | $92,802 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements, covering accounting policies, balance sheet components, and other disclosures - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of SharkNinja, Inc. and its wholly-owned subsidiaries[22](index=22&type=chunk) - No significant changes occurred during the three months ended March 31, 2025, to the significant accounting policies disclosed in the company's audited consolidated financial statements for the year ended December 31, 2024[25](index=25&type=chunk) [1. Organization and Description of Business](index=9&type=section&id=1.%20Organization%20and%20Description%20of%20Business) This section describes SharkNinja, Inc. as a global product design and technology company, detailing its incorporation and separation from JS Global Lifestyle Company Limited - SharkNinja, Inc. is a global product design and technology company that creates innovative lifestyle product solutions under the 'Shark' and 'Ninja' brands[17](index=17&type=chunk) - The company was incorporated in the Cayman Islands on May 17, 2023, as a wholly-owned subsidiary of JS Global Lifestyle Company Limited[18](index=18&type=chunk) - SharkNinja, Inc. began trading on the NYSE on July 31, 2023, following its separation and distribution from JS Global[20](index=20&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the significant accounting policies used in preparing the financial statements, covering presentation, estimates, credit risks, sales, warranties, and segment information [Basis of Presentation](index=9&type=section&id=2.1%20Basis%20of%20Presentation) - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the accounts of SharkNinja, Inc. and its wholly-owned subsidiaries, with all intercompany transactions eliminated[22](index=22&type=chunk) - These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2024[23](index=23&type=chunk) [Use of Estimates](index=10&type=section&id=2.2%20Use%20of%20Estimates) - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, net sales, and expenses[26](index=26&type=chunk) - Significant estimates include variable consideration for returns, sales rebates, allowance for credit losses, product warranties, fair value of financial assets and liabilities, inventory valuation, intangible assets, share-based compensation, and deferred tax assets[26](index=26&type=chunk) [Concentration of Credit Risks](index=10&type=section&id=2.3%20Concentration%20of%20Credit%20Risks) - The company's financial instruments subject to credit risk include cash and cash equivalents, accounts receivable, and forward contracts[27](index=27&type=chunk) - A significant portion of products are sold through retailers, leading to individually significant receivable balances and exposure to credit risk if their financial condition deteriorates[29](index=29&type=chunk) Customers Representing 10% or More of Accounts Receivable, Net | Customer | As of March 31, 2025 | As of December 31, 2024 | | :--------- | :------------------- | :---------------------- | | Customer A | 17.7% | 29.1% | Customers Representing 10% or More of Net Sales | Customer | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--------- | :-------------------------------- | :-------------------------------- | | Customer A | 18.5% | 18.0% | | Customer B | < 10% | 11.7% | | Customer C | 13.0% | 14.6% | [Accounts Receivable, Net](index=11&type=section&id=2.4%20Accounts%20Receivable,%20Net) - Accounts receivable are presented net of allowance for credit losses and chargebacks, and net of liabilities when a right of setoff exists[31](index=31&type=chunk) - The allowance for credit losses is estimated using historical write-off activity, current conditions, and reasonable and supportable forecasts[33](index=33&type=chunk) Rollforward of Allowance for Credit Losses | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Beginning balance | $7,856 | $8,225 | | Provision for credit losses | $3,178 | $3,004 | | Write-offs and other adjustments | $(554) | $(87) | | Ending balance | $10,480 | $11,142 | [Disaggregation of Net Sales](index=12&type=section&id=2.5%20Disaggregation%20of%20Net%20Sales) Net Sales by Region | Region | Q1 2025 Amount (in thousands) | Q1 2025 % of Net Sales | Q1 2024 Amount (in thousands) | Q1 2024 % of Net Sales | | :----------- | :----------------------------- | :----------------------- | :----------------------------- | :----------------------- | | Domestic | $845,088 | 69.1% | $734,219 | 68.9% | | International | $377,550 | 30.9% | $332,009 | 31.1% | | Total net sales | $1,222,638 | 100.0% | $1,066,228 | 100.0% | Net Sales by Brand | Brand | Q1 2025 Amount (in thousands) | Q1 2025 % of Net Sales | Q1 2024 Amount (in thousands) | Q1 2024 % of Net Sales | | :------ | :----------------------------- | :----------------------- | :----------------------------- | :----------------------- | | Shark | $579,309 | 47.4% | $531,549 | 49.9% | | Ninja | $643,329 | 52.6% | $534,679 | 50.1% | | Total net sales | $1,222,638 | 100.0% | $1,066,228 | 100.0% | Net Sales by Product Category | Product Category | Q1 2025 Amount (in thousands) | Q1 2025 % of Net Sales | Q1 2024 Amount (in thousands) | Q1 2024 % of Net Sales | | :-------------------------------- | :----------------------------- | :----------------------- | :----------------------------- | :----------------------- | | Cleaning Appliances | $441,424 | 36.1% | $421,920 | 39.6% | | Cooking and Beverage Appliances | $345,937 | 28.3% | $329,642 | 30.9% | | Food Preparation Appliances | $297,392 | 24.3% | $205,036 | 19.2% | | Beauty and Home Environment Appliances | $137,885 | 11.3% | $109,630 | 10.3% | | Total net sales | $1,222,638 | 100.0% | $1,066,228 | 100.0% | [Warranty Costs](index=13&type=section&id=2.6%20Warranty%20Costs) - The company accrues the estimated cost of product warranties at the time of net sales recognition, with warranty expense recorded to cost of goods sold[37](index=37&type=chunk) Product Warranty Liabilities and Changes | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Beginning balance | $26,955 | $28,090 | | Accruals for warranties issued | $10,096 | $7,266 | | Changes in liability for pre-existing warranties | $— | $(842) | | Settlements made | $(12,439) | $(9,086) | | Ending balance | $24,612 | $25,428 | [Segment Information](index=13&type=section&id=2.7%20Segment%20Information) - The company operates in one operating and reportable segment, with the CEO serving as the chief operating decision maker (CODM)[39](index=39&type=chunk) - The CODM assesses performance and allocates resources based on consolidated net income, focusing on revenue performance and comparing actual functional spend categories to forecasts[41](index=41&type=chunk) Selected Financial Information for Single Operating Segment | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net sales | $1,222,638 | $1,066,228 | | Cost of sales | $619,412 | $539,611 | | Advertising expenses and consumer insight initiatives | $94,015 | $83,391 | | Personnel expenses (excluding share-based compensation) | $139,997 | $93,696 | | Delivery and distribution expenses | $90,174 | $71,109 | | Professional service expenses (excluding certain costs) | $34,312 | $28,948 | | Depreciation and amortization expenses (excluding acquired intangibles) | $16,756 | $13,844 | | Segment net income | $117,835 | $109,612 | [Recently Issued Accounting Pronouncements](index=15&type=section&id=2.8%20Recently%20Issued%20Accounting%20Pronouncements) - The FASB issued ASU 2023-09, 'Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024[43](index=43&type=chunk) - The FASB issued ASU 2024-03, 'Disaggregation of Income Statement Expenses,' effective for fiscal years beginning after December 15, 2026[44](index=44&type=chunk) - Management is currently evaluating the impact of these ASUs on the company's consolidated financial statements and disclosures[43](index=43&type=chunk)[44](index=44&type=chunk) [3. Condensed Consolidated Balance Sheet Components](index=15&type=section&id=3.%20Condensed%20Consolidated%20Balance%20Sheet%20Components) This section provides detailed breakdowns of specific balance sheet accounts, including property and equipment, net, and accrued expenses and other current liabilities [Property and Equipment, Net](index=15&type=section&id=3.1%20Property%20and%20Equipment,%20Net) Property and Equipment, Net Composition | Component | As of March 31, 2025 (in thousands) | As of December 31, 2024 (in thousands) | | :-------------------------------- | :---------------------------------- | :----------------------------------- | | Molds and tooling | $297,840 | $267,756 | | Displays | $70,049 | $64,960 | | Computer and software | $56,254 | $53,565 | | Leasehold improvements | $43,469 | $42,711 | | Equipment | $20,378 | $19,826 | | Furniture and fixtures | $18,513 | $17,694 | | Total property and equipment | $506,503 | $466,512 | | Less: accumulated depreciation and amortization | $(293,090) | $(266,800) | | Construction in progress | $8,287 | $11,752 | | Property and equipment, net | $221,700 | $211,464 | - Depreciation expense was **$25.9 million** for the three months ended March 31, 2025, compared to **$21.9 million** for the same period in 2024[45](index=45&type=chunk) [Accrued Expenses and Other Current Liabilities](index=16&type=section&id=3.2%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses and Other Current Liabilities Composition | Component | As of March 31, 2025 (in thousands) | As of December 31, 2024 (in thousands) | | :-------------------------------- | :---------------------------------- | :----------------------------------- | | Accrued customer incentives | $210,836 | $291,384 | | Accrued expenses | $126,717 | $177,573 | | Accrued compensation and benefits | $51,964 | $109,156 | | Accrued returns | $104,431 | $86,557 | | Accrued delivery and distributions | $56,907 | $52,711 | | Accrued warranty | $24,612 | $26,955 | | Accrued advertising | $6,038 | $20,779 | | Sales and other tax payable | $2,182 | $20,318 | | Accrued professional fees | $10,010 | $18,451 | | Operating lease liabilities, current | $21,657 | $18,133 | | Derivative liabilities | $456 | $66 | | Other | $25,857 | $19,446 | | Accrued expenses and other current liabilities | $641,667 | $841,529 | - Total accrued expenses and other current liabilities decreased by **$199,862 thousand** from December 31, 2024, to March 31, 2025[46](index=46&type=chunk) [4. Fair Value Measurements](index=16&type=section&id=4.%20Fair%20Value%20Measurements) This section presents financial assets and liabilities measured at fair value, categorizing them into Level 1 (money market funds) and Level 2 (derivative instruments) Fair Value Measurements as of March 31, 2025 | Item | Fair Value (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :---------------------------------------------------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | | Money market funds included in cash and cash equivalents | $1,025 | $1,025 | $— | $— | | Forward contracts included in accrued expenses and other current liabilities | $456 | $— | $456 | $— | - Money market funds are classified within Level 1 due to valuation using quoted prices in active markets[48](index=48&type=chunk) - Derivative financial instruments are classified within Level 2, valued using observable inputs other than quoted prices[48](index=48&type=chunk) [5. Derivative Financial Instruments and Hedging](index=17&type=section&id=5.%20Derivative%20Financial%20Instruments%20and%20Hedging) This section details the notional amounts of USD-denominated forward contracts and their effect on accumulated other comprehensive income Notional Amount of Forward Contracts | Metric | As of March 31, 2025 (in thousands) | As of December 31, 2024 (in thousands) | | :-------------------------- | :---------------------------------- | :----------------------------------- | | Forward contracts | $15,000 | $48,472 | | Total derivative instruments | $15,000 | $48,472 | Effect of Forward Contracts on Accumulated Other Comprehensive Income | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :---------------------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Beginning balance | $(8,263) | $(2,173) | | Amount of net (losses) gains recorded in other comprehensive income | $(555) | $3,033 | | Amount of net gains (losses) reclassified from other comprehensive income to earnings | $6,579 | $(1,163) | | Ending balance | $(2,239) | $(303) | [6. Intangible Assets, Net and Goodwill](index=18&type=section&id=6.%20Intangible%20Assets,%20Net%20and%20Goodwill) This section provides a breakdown of intangible assets, net, including amortization expenses and expected future amortization, showing a slight decrease in total Intangible Assets, Net Composition | Intangible Asset Category | As of March 31, 2025 (Net Carrying Value in thousands) | As of December 31, 2024 (Net Carrying Value in thousands) | | :-------------------------------- | :--------------------------------------------------- | :---------------------------------------------------- | | Customer relationships | $23,847 | $27,822 | | Patents | $36,549 | $35,761 | | Developed technology | $13,044 | $13,413 | | Trade name and trademarks | $386,099 | $385,682 | | Total intangible assets, net | $459,539 | $462,678 | Amortization Expenses for Intangible Assets | Expense Category | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | | Research and development | $2,118 | $1,914 | | Sales and marketing | $3,975 | $3,974 | | Total amortization expenses | $6,093 | $5,888 | Expected Future Amortization Expenses as of March 31, 2025 | Year Ending December 31, | Amount (in thousands) | | :----------------------- | :-------------------- | | Remainder of 2025 | $19,908 | | 2026 | $22,414 | | 2027 | $9,569 | | 2028 | $6,799 | | 2029 | $6,778 | | Thereafter | $7,972 | | Total | $73,440 | [7. Debt](index=20&type=section&id=7.%20Debt) This section details the company's debt structure, primarily a term loan and revolving credit facility, noting compliance with covenants and a slight decrease in total debt - The company entered into a 2023 Credit Agreement providing for an **$810.0 million** term loan facility and a **$500.0 million** revolving credit facility, both maturing in July 2028[53](index=53&type=chunk) - No amounts were outstanding on the 2023 Revolving Facility as of March 31, 2025, though **$150.0 million** was drawn and repaid during the quarter[54](index=54&type=chunk) - As of March 31, 2025, the company was in compliance with all financial covenants under the 2023 Credit Agreement[55](index=55&type=chunk) Debt Composition | Metric | As of March 31, 2025 (in thousands) | As of December 31, 2024 (in thousands) | | :------------------------------------------ | :---------------------------------- | :----------------------------------- | | 2023 Term Loans | $769,500 | $779,625 | | Less: deferred financing costs | $(3,853) | $(4,142) | | Total debt, net of deferred financing costs | $765,647 | $775,483 | | Less: debt, current | $(39,344) | $(39,344) | | Debt, noncurrent | $726,303 | $736,139 | Aggregate Maturities on Debt as of March 31, 2025 | Year Ending December 31, | Amount (in thousands) | | :----------------------- | :-------------------- | | Remainder of 2025 | $30,375 | | 2026 | $40,500 | | 2027 | $40,500 | | 2028 | $658,125 | | Total future principal payments | $769,500 | [8. Commitments and Contingencies](index=21&type=section&id=8.%20Commitments%20and%20Contingencies) This section covers non-cancelable purchase obligations, indemnification agreements, legal proceedings, and a recent product recall, including associated costs [Non-Cancelable Purchase Obligations](index=21&type=section&id=8.1%20Non-Cancelable%20Purchase%20Obligations) - As of March 31, 2025, the company has remaining obligations associated with marketing and endorsement agreements totaling **$25.3 million**[59](index=59&type=chunk) - These obligations are payable in a combination of cash and ordinary shares of SharkNinja, Inc. over terms of up to five years[59](index=59&type=chunk) Non-Cancelable Purchase Obligations as of March 31, 2025 | Year Ending December 31, | Amount (in thousands) | | :----------------------- | :-------------------- | | Remainder of 2025 | $5,750 | | 2026 | $6,500 | | 2027 | $6,000 | | 2028 | $6,000 | | 2029 | $1,000 | | Total | $25,250 | [Indemnifications and Contingencies](index=21&type=section&id=8.2%20Indemnifications%20and%20Contingencies) - The company enters into indemnification provisions for third-party intellectual property infringement claims in its customer agreements[60](index=60&type=chunk) - For certain large or strategic customers, the company also indemnifies for non-compliance with additional representations and warranties[60](index=60&type=chunk) [Legal Proceedings](index=22&type=section&id=8.3%20Legal%20Proceedings) - The company is involved in various legal proceedings, including patent infringement claims, false advertising claims, and product safety concerns[61](index=61&type=chunk) - Management believes the ultimate loss from any current legal proceedings will not have a material adverse effect on its business, financial condition, and results of operation[61](index=61&type=chunk) - In February 2025, the company received **$20.0 million** as a result of a patent infringement settlement reached in December 2024[62](index=62&type=chunk) [Product Recall](index=22&type=section&id=8.4%20Product%20Recall) - In May 2025, the company announced a voluntary recall of the Ninja Foodi OP300 series pressure cooker[63](index=63&type=chunk) - A liability of **$3.6 million** for the estimated cost of recall remedies was recorded and included in accrued expenses and other current liabilities as of March 31, 2025[63](index=63&type=chunk) [9. Shareholders' Equity and Equity Incentive Plan](index=22&type=section&id=9.%20Shareholders%27%20Equity%20and%20Equity%20Incentive%20Plan) This section details the company's equity incentive plans, including RSUs and ESPP, outlining shares available, grants, vesting, and associated compensation costs [Restricted Share Units](index=22&type=section&id=9.1%20Restricted%20Share%20Units) - The 2023 Equity Incentive Plan, adopted on July 28, 2023, initially made **13,898,287** ordinary shares available for future award grants[64](index=64&type=chunk) - An evergreen provision increased available shares by **842,084** on January 1, 2025, resulting in **10,295,505** ordinary shares available for future grant as of March 31, 2025[65](index=65&type=chunk) RSU Activities for Three Months Ended March 31, 2025 | Metric | Number of Shares | Weighted Average Grant Date Fair Value per share | | :-------------------------- | :----------------- | :--------------------------------------------- | | Unvested as of Dec 31, 2024 | 2,169,401 | $35.71 | | Granted | 54,078 | $96.52 | | Vested | (1,043,442) | $33.20 | | Cancelled/Forfeited | (62,290) | $43.00 | | Unvested as of Mar 31, 2025 | 1,117,747 | $40.59 | [Employee Stock Purchase Plan](index=23&type=section&id=9.2%20Employee%20Stock%20Purchase%20Plan) - The 2023 Employee Share Purchase Plan (ESPP) was approved on July 28, 2023, making a maximum of **1%** of outstanding ordinary shares (**1,389,828 shares**) available[67](index=67&type=chunk) - An evergreen provision increased available shares by **210,521** on January 1, 2025, with **1,465,485** ordinary shares available for future grant as of March 31, 2025[67](index=67&type=chunk) - During the three months ended March 31, 2025, **114,527** shares were purchased under the ESPP[67](index=67&type=chunk) [Share-Based Compensation](index=23&type=section&id=9.3%20Share-Based%20Compensation) Share-Based Compensation by Line Item | Line Item | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Research and development | $2,909 | $3,499 | | Sales and marketing | $2,538 | $2,572 | | General and administrative | $6,103 | $13,355 | | Total share-based compensation | $11,550 | $19,426 | - Total share-based compensation decreased by **$7,876 thousand** from Q1 2024 to Q1 2025[68](index=68&type=chunk) - As of March 31, 2025, the company had **$27.3 million** in unrecognized share-based compensation cost related to RSUs, to be recognized over a weighted average period of **0.9 years**[68](index=68&type=chunk) [10. Income Taxes](index=24&type=section&id=10.%20Income%20Taxes) This section reports the provision for income taxes and the effective tax rate, noting a decrease primarily due to share-based compensation Income Tax Provision and Effective Tax Rate | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Provision for income taxes | $27,698 | $33,856 | | Effective tax rate (ETR) | 19.0% | 23.6% | - The decrease in the effective tax rate is primarily driven by the impact of share-based compensation[71](index=71&type=chunk) [11. Net Income Per Share](index=24&type=section&id=11.%20Net%20Income%20Per%20Share) This section provides the computation of basic and diluted net income per share, showing an increase in both metrics Net Income Per Share Computation | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income | $117,835 | $109,612 | | Weighted-average shares used in computing net income per share, basic | 140,622,029 | 139,448,556 | | Dilutive effect of RSUs | 1,561,401 | 1,254,469 | | Weighted-average shares used in computing net income per share, diluted | 142,183,430 | 140,703,025 | | Net income per share, basic | $0.84 | $0.79 | | Net income per share, diluted | $0.83 | $0.78 | [12. Related Party Transactions](index=24&type=section&id=12.%20Related%20Party%20Transactions) This section details transactions with JS Global, including supplier agreements, sourcing services, brand licensing, product development, and transition services Summary of Related Party Transactions with JS Global | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Royalty income | $4,784 | $948 | | Cost of sales - purchases of goods and services, net | $27,476 | $67,696 | | Research and development services, net | $(1,658) | $418 | | General and administrative | $(750) | $(750) | | Accounts receivable, net (as of period end) | $16,521 | $9,381 (Dec 31, 2024) | | Accounts payable (as of period end) | $26,264 | $39,769 (Dec 31, 2024) | [Transactions with JS Global](index=24&type=section&id=12.1%20Transactions%20with%20JS%20Global) - JS Global continues to be a related party due to a common significant shareholder and board member of both SharkNinja and JS Global[73](index=73&type=chunk) - The company engaged in various transactions with JS Global entities both prior to and subsequent to the separation and distribution[73](index=73&type=chunk) [Supplier Agreements](index=24&type=section&id=12.2%20Supplier%20Agreements) - The company historically relied on a JS Global purchasing office entity for sourcing finished goods and providing procurement and quality control services[74](index=74&type=chunk) - Purchases of finished goods from JS Global entities were **$25.1 million** for the three months ended March 31, 2025, a decrease from **$55.8 million** for the same period in 2024[74](index=74&type=chunk) [Sourcing Services Agreement](index=25&type=section&id=12.3%20Sourcing%20Services%20Agreement) - In connection with the separation, SharkNinja entered into a sourcing services agreement with JS Global for coordination and management support with APAC suppliers[75](index=75&type=chunk) - Fees incurred by the company related to this agreement were **$2.4 million** for Q1 2025, down from **$11.9 million** for Q1 2024[75](index=75&type=chunk) [Brand License Agreement](index=25&type=section&id=12.4%20Brand%20License%20Agreement) - SharkNinja granted JS Global exclusive rights to distribute and sell its brands in certain international markets in APAC for a **20-year term**[76](index=76&type=chunk) - Under this agreement, JS Global pays SharkNinja a royalty of **3%** of net sales of licensed products[76](index=76&type=chunk) - Royalty income earned by SharkNinja was **$4.8 million** for Q1 2025, significantly up from **$0.9 million** for Q1 2024[76](index=76&type=chunk) [Product Development Agreements](index=25&type=section&id=12.5%20Product%20Development%20Agreements) - The company historically utilized JS Global subsidiaries for certain research and development services, incurring **$0** in costs for Q1 2025, down from **$0.9 million** in Q1 2024[77](index=77&type=chunk) - SharkNinja earned product development service fees of **$1.7 million** for Q1 2025, up from **$0.5 million** for Q1 2024, from JS Global for providing R&D services[78](index=78&type=chunk) [Transition Services Agreement](index=25&type=section&id=12.6%20Transition%20Services%20Agreement) - SharkNinja entered into a transition services agreement to provide certain services to JS Global for a **24-month term**, with a possible **three-month extension**[79](index=79&type=chunk) - Service fees related to this agreement were **$0.8 million** for both the three months ended March 31, 2025, and 2024, recorded as a reduction of general and administrative expenses[79](index=79&type=chunk)

The CARTIHEAL Implant will be featured at the Arthroscopy Association of North America Annual Meeting (AANA 2025) this week Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology company, today announces encouraging results for its CARTIHEAL AGILI-C Cartilage Repair Implant from a recent multicentre randomised controlled trial (RCT) treating knee cartilage defects. When compared to the current surgical standard of care,* the implant demonstrated: Superior pain relief: Patients treated with the CART ...