Sales and Market Performance - For the fiscal year ended September 30, 2025, the Salt segment sales accounted for approximately 82% of total sales, compared to 81% in 2024 and 84% in 2023[30]. - Approximately 88% of Plant Nutrition segment sales in fiscal 2025 were made to U.S. customers, including retail fertilizer dealers and distributors[52]. - Highway deicing, including salt sold to chemical customers, constituted 63% of fiscal 2025 Salt segment sales[36]. - The company is the leading SOP producer and marketer in North America, with a significant market share due to its logistically favorable production site[56]. - Demand for products in the agricultural sector is influenced by crop prices, planted acreage, and weather conditions, which can significantly affect sales[136]. - The agricultural sector's supply and demand imbalances can impact product pricing and demand, particularly for potash fertilizers[138]. Financial Performance and Capital Expenditures - Capital expenditures decreased by 39.0%, or $44.5 million, during the fiscal year ended September 30, 2025, compared to the previous fiscal year[28]. - The Board of Directors does not expect to declare dividends for the foreseeable future to focus on accelerating cash flow generation and debt reduction[28]. - The company ceased paying cash dividends in fiscal 2024 to focus on accelerating cash flow generation and debt reduction[156]. - As of September 30, 2025, the company had $845.8 million in outstanding indebtedness, with significant interest payments based on variable rates[141]. - The consolidated first lien net leverage ratio was 0.01x as of September 30, 2025, with a default threshold of 2.75x[146]. - The company may incur additional indebtedness or refinance existing debt, increasing leverage risks and potentially impacting financial flexibility[142]. Environmental and Regulatory Compliance - Environmental-specific capital expenditures for fiscal 2025 were estimated at $0.9 million, with expectations of $2.2 million for fiscal 2026[75]. - The company recorded $2.8 million of accruals for environmental liabilities as of September 30, 2025[76]. - The company has a Voluntary Agreement with the Utah Division of Forestry, Fire and State Lands to cap brine withdrawals, reducing consumption to 50% of certificated water rights for 2026[83]. - The company is subject to complex and evolving environmental, health, and safety laws and regulations impacting its operations[88]. - Compliance costs with laws and regulations, including environmental improvements, are expected to remain significant and unpredictable[91]. - Compliance with evolving environmental, health, and safety (EHS) laws may lead to increased operational costs and require modifications to facilities[162]. - The company is subject to complex regulatory requirements, including import and export laws, which could increase the cost of doing business[168]. Workforce and Labor Relations - As of September 30, 2025, the company employed 1,849 employees, with 906 in the U.S., 761 in Canada, and 182 in the UK[65]. - The company has 12 collective bargaining agreements (CBAs) in effect, with six expiring in fiscal 2025 and four in fiscal 2026[68]. - The company provides over 500 learning modules through Compass Minerals University for employee training and development[70]. - A labor shortage or loss of key personnel may adversely affect the company's performance and operational efficiency[178]. - The company’s ability to attract and retain skilled personnel is critical, and a decline in its compensation package competitiveness could weaken its workforce[180]. Legal and Litigation Risks - The company is involved in ongoing litigation, including a securities class action lawsuit with a settlement of $48.0 million approved on July 30, 2025[161]. - Legal and regulatory challenges, including permit revocations and compliance costs, could materially affect operations and financial condition[157]. - Tax liabilities and disputes with tax authorities could adversely affect profitability and cash flow, with potential material impacts from unresolved assessments[149]. Operational Risks and Challenges - The company faces currency transaction risks due to a significant portion of cash flow generated in Canadian dollars and British pounds, impacting financial results when translated to U.S. dollars[134]. - The company invests in product innovation but faces risks that new products may not generate sufficient revenue or meet customer expectations[177]. - The company relies on computer systems for business operations, and disruptions could adversely impact financial transactions and operational efficiency[182]. - The company may incur significant costs related to product liability claims and recalls, which could harm its reputation and financial performance[171]. - Changes in tariffs or trade regulations could materially affect the company's sales and financial condition, particularly regarding salt imports[170]. - The company is susceptible to cyber-attacks and technological disruptions, with increasing sophistication of attackers due to AI tools[183]. - Unauthorized access attempts have been made, but none have resulted in material adverse impacts to the business[183]. - Climate change could negatively impact customer demand for products and increase operational costs due to changing weather patterns[185]. - Transition risks from climate change regulations may require capital expenditures and could increase operational costs[187]. - The company may face challenges in expanding through acquisitions and investments, limiting business growth opportunities[188]. - Acquisitions may not perform as expected, potentially leading to increased debt obligations and management distractions[189]. - Successful integration of acquired businesses is critical, with risks of losing key employees and higher-than-expected costs[190].

Financial Performance - Revenue increased by $2.8 million, or 11%, to $27.4 million for the three months ended September 30, 2025, compared to $24.6 million for the same period in 2024 [188]. - Revenue decreased by $0.6 million, or 1%, to $74.5 million for the nine months ended September 30, 2025, from $75.1 million in the same period in 2024 [198]. - Net loss for the three months ended September 30, 2025, was $17.4 million, a decrease of $3.7 million or 17% compared to the net loss of $21.1 million for the same period in 2024 [188]. User Acquisition and Marketing - User acquisition (UA) marketing spend for the nine months ended September 30, 2025, was approximately $12.4 million, down from approximately $14.1 million in the same period of 2024, indicating a reduction of about 12.1% [174]. - Sales and marketing expenses decreased by $1.9 million, or 10%, to $17.4 million for the three months ended September 30, 2025, primarily due to lower marketing expenses [191]. - Sales and marketing costs decreased by $9.3 million, or 15%, to $51.8 million for the nine months ended September 30, 2025, driven by lower marketing expenses [201]. Legal and Settlement Matters - The company received a total of $50 million from AviaGames as part of a settlement agreement, with Skillz receiving $48 million of that amount [182]. - The company recorded a gain of $46 million from the AviaGames litigation settlement, netting the gross payment of $48 million less $2 million for the Loan and Security Agreement [182]. - The company filed suit against Tether on September 1, 2025, seeking injunctive and declaratory relief regarding Tether's breach of agreements, which could materially affect business operations [177]. Cash Flow and Financial Obligations - Net cash used in operating activities was $56.2 million for the nine months ended September 30, 2025, compared to net cash provided of $12.4 million in the same period in 2024 [212]. - Net cash used in operating activities was $56.2 million for the nine months ended September 30, 2025, primarily due to a net loss of $52.5 million and non-cash expenses of $14.2 million related to stock-based compensation [214]. - Net cash used in investing activities amounted to $4.7 million, driven by software development costs of $2.6 million and property and equipment purchases of $2.1 million [215]. - Net cash used in financing activities was $8.2 million, mainly from the repurchase of common stock [216]. - The company has lease payment obligations of $1.3 million as of September 30, 2025, with $0.4 million payable within 12 months [219]. - The total principal amount of long-term debt is $129.7 million, due on December 15, 2026 [220]. Operational Insights - The company worked diligently to file its Annual Report on Form 10-K for the year ended December 31, 2024, on November 6, 2025, to regain compliance with NYSE listing requirements [179]. - The NYSE granted an extension for continued listing through December 17, 2025, contingent upon the company becoming current with SEC filings [180]. - The company’s operating segments include Skillz and Aarki, with Aarki focusing on AI-driven advertising solutions for mobile app developers [183]. - The company’s SDK allows developers to monitor and update their games seamlessly, enhancing data-driven algorithms and LiveOps systems [171]. Research and Development - Research and development costs rose by $0.7 million, or 15%, to $5.4 million for the three months ended September 30, 2025, driven by a $1.0 million increase in employee-related costs [190]. - Research and development costs increased by $1.5 million, or 11%, to $15.1 million for the nine months ended September 30, 2025, primarily due to higher employee-related costs [200]. Engagement Marketing - Engagement marketing expenses may be impacted by end-user incentives, which include Bonus Cash for entering paid contests [173].

Financial Performance - Revenue decreased by $0.1 million, or less than 0.1%, to $25.2 million for the three months ended June 30, 2025, compared to $25.3 million for the same period in 2024 [188]. - Revenue decreased by $3.4 million, or 7%, to $47.1 million for the six months ended June 30, 2025, from $50.5 million in 2024 [199]. - Net loss for the three months ended June 30, 2025, was $17.9 million, compared to a net income of $26.0 million in the same period in 2024, representing a decrease of $43.9 million [197]. - Total costs and expenses increased by $26.8 million, or 52%, to $78.6 million for the six months ended June 30, 2025, compared to $51.8 million in 2024 [198]. - Net cash used in operating activities was $31.7 million for the six months ended June 30, 2025, primarily reflecting a net loss of $35.1 million [213]. User Acquisition and Marketing - User acquisition (UA) marketing spend for the six months ending June 30, 2025, was approximately $8.1 million, down from approximately $9.8 million for the same period in 2024, indicating a reduction in marketing expenses that is expected to continue impacting revenue negatively [173]. - Engagement marketing expenses may be impacted by end-user incentives, including Bonus Cash, which could affect user engagement on the platform [172]. - Sales and marketing costs decreased by $4.4 million, or 21%, to $16.4 million for the three months ended June 30, 2025, compared to $20.8 million in 2024 [191]. Legal and Compliance - The company filed suit against Tether for breach of agreements, seeking injunctive and declaratory relief, with potential implications for its business if the litigation is unsuccessful [176]. - The company is involved in ongoing litigation related to its De-SPAC process, with an insurance recovery of $9.75 million recorded as an offset to general and administrative expenses [182]. - The company presented a compliance plan to the NYSE in September 2025, requesting an extension to continue listing its shares, which was granted through December 17, 2025 [179]. Revenue Sources and Dependencies - Tether accounted for 45% of the company's revenue for the year ended December 31, 2024, and the termination of agreements with Tether could have a material adverse effect on business operations if suitable replacements are not identified [175]. - The company received a total of $50 million from AviaGames as part of a settlement agreement, with Skillz receiving $48 million, which included a $2 million repayment under a Loan and Security Agreement [182]. - The company recorded a gain of $46 million from a litigation settlement with AviaGames, netting the gross payment received [182]. Costs and Expenses - General and administrative costs decreased by $0.5 million, or 3%, to $16.7 million for the three months ended June 30, 2025, from $17.2 million in 2024 [192]. - Research and development costs increased by $0.6 million, or 13%, to $4.8 million for the three months ended June 30, 2025, from $4.3 million in the same period in 2024 [190]. Financial Position - As of June 30, 2025, the company had cash, cash equivalents, and restricted cash totaling $238.7 million [208]. - As of June 30, 2025, the company has lease payment obligations totaling $0.3 million, all of which is due within 12 months [217]. - The company's long-term debt consists of the 2021 Senior Secured Notes, with a total principal amount of $129.7 million due on December 15, 2026 [218]. - There are currently no off-balance sheet financing arrangements or relationships with unconsolidated entities [219]. - There have been no material changes to the critical accounting policies and estimates as noted in the Annual Report [220]. - Recent accounting pronouncements and their potential impact on financial condition and results of operations are detailed in the condensed consolidated financial statements [221]. Business Segments and Technology - The company’s operating segments include Skillz and Aarki, with Aarki focusing on AI-driven advertising solutions for mobile app developers [183]. - The company’s technological capabilities include a software development kit (SDK) that allows developers to monitor and update their games seamlessly, enhancing data-driven algorithms [170].

Retail Operations - As of November 1, 2025, the company operated a total of 74 retail locations globally, including 68 in North America and 6 in Europe[139]. - The company plans to incorporate hospitality experiences into new Design Galleries, enhancing the retail experience and driving incremental sales[148]. - The company has invested significant capital in developing new Design Galleries, with adjusted capital expenditures of $223 million for the nine months ended November 1, 2025[230]. Financial Performance - Net revenues for the three months ended November 1, 2025, were $883,810,000, representing a 8.9% increase from $811,732,000 for the same period in 2024[152]. - Gross profit for the three months ended November 1, 2025, was $389,736,000, with a gross margin of 44.1%, compared to $361,340,000 and 44.5% in the prior year[152]. - Operating income for the three months ended November 1, 2025, was $105,930,000, or 12.0% of net revenues, compared to $101,468,000, or 12.5% in the same period last year[152]. - Net income for the three months ended November 1, 2025, was $36,265,000, a 6.3% increase from $33,168,000 in the prior year[158]. - Adjusted operating income for the three months ended November 1, 2025, was $102,555,000, compared to $121,874,000 for the same period in 2024[158]. - EBITDA for the three months ended November 1, 2025, was $143,418,000, compared to $133,012,000 in the same period last year[166]. - Adjusted EBITDA for the three months ended November 1, 2025, was $155,810,000, down from $168,547,000 in the prior year[166]. - Consolidated net revenues increased by $72 million, or 8.9%, to $884 million for the three months ended November 1, 2025, compared to $812 million for the same period in 2024[176]. - RH Segment net revenues rose by $68 million, or 8.8%, to $836 million for the three months ended November 1, 2025, compared to $768 million in the prior year[177]. - Consolidated net revenues increased by $229 million, or 9.7%, to $2,597 million for the nine months ended November 1, 2025, compared to $2,368 million for the same period in 2024[199]. - RH Segment net revenues rose by $221 million, or 9.9%, to $2,448 million for the nine months ended November 1, 2025, driven by higher core business revenue and increased hospitality revenue from new Gallery openings[200][201]. - Consolidated gross profit grew by $102 million, or 9.7%, to $1,154 million for the nine months ended November 1, 2025, with a gross margin of 44.5%[203]. - RH Segment gross profit increased by $97 million, or 9.9%, to $1,074 million, maintaining a gross margin of 43.9%[204]. Expenses and Taxation - Selling, general and administrative expenses rose by $24 million, or 9.2%, to $284 million for the three months ended November 1, 2025, compared to $260 million in the same period in 2024[185]. - Selling, general and administrative expenses rose by $64 million, or 8.0%, to $864 million for the nine months ended November 1, 2025[207]. - Income tax expense for the three months ended November 1, 2025, was $11,625,000, compared to $9,256,000 in the prior year[158]. - Income tax expense increased to $33.8 million with an effective tax rate of 26.0% for the nine months ended November 1, 2025, compared to 15.7% in the previous year[217]. - The effective tax rate increased to 24.3% for the three months ended November 1, 2025, compared to 21.8% for the same period in 2024[193]. Capital Expenditures and Financing - Adjusted capital expenditures for the nine months ended November 1, 2025, were $223,078 thousand, compared to $212,929 thousand for the same period in 2024[169]. - The company anticipates adjusted capital expenditures of $275 million to $325 million in fiscal 2025, mainly for growth and expansion initiatives[230]. - The company has a total authorized share repurchase program of $2,450 million, with $201 million remaining available for future repurchases as of November 1, 2025[246]. - The company entered into a $2,000 million term debt financing in October 2021, with a maturity date of October 20, 2028, requiring quarterly principal payments of $5 million[227]. - For the nine months ended November 1, 2025, net cash used in financing activities was $163 million, primarily due to net repayments under the asset-based credit facility of $135 million[238]. - The company amended the ABL Credit Agreement in July 2025, providing an asset-based credit facility with an initial availability of up to $600 million, expandable to $900 million under certain conditions[226]. Market Conditions and Strategic Initiatives - The company is facing challenges due to macroeconomic conditions, including high interest rates and inflation, which have negatively impacted the luxury home market[140]. - The company is adapting its supply chain to mitigate risks related to tariffs and trade policies, which may affect product costs[141]. - The company is focused on digital reimagination, enhancing its online presence through The World of RH portal and plans to upgrade its website throughout 2025[151]. - The company is committed to elevating its brand by conceptualizing and selling spaces, creating an ecosystem of products and experiences[149]. - The company is exploring new real estate models, including transitioning from leasing to development, which may require different levels of capital investment[231]. - The company expects to continue taking an opportunistic approach regarding capital allocation and may pursue additional debt financing for investments[224]. - The company is implementing significant business initiatives that may lead to variability in financial performance and results of operations[145].

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to______ Commission file number: 001-39243 SKILLZ INC. (Exact name of registrant as specified in its charter) (State or other jurisdicti ...

Financial Performance - Revenue for the three months ended October 31, 2025, was $22,565,000, representing a 53.5% increase from $14,710,000 in the same period of 2024[14] - Gross profit for the six months ended October 31, 2025, was $20,276,000, up from $10,030,000 in the prior year, indicating a 102.5% increase[14] - Total operating expenses for the three months ended October 31, 2025, were $43,179,000, compared to $24,964,000 in the same period of 2024, reflecting a 73.0% increase[14] - The net loss for the three months ended October 31, 2025, was $32,785,000, compared to a net loss of $20,621,000 for the same period in 2024, representing a 58.7% increase in losses[14] - For the six months ended October 31, 2025, the company incurred a net loss of $58,611 thousand, compared to a net loss of $40,944 thousand for the same period in 2024, representing an increase of 43% in losses year-over-year[31] - The net loss attributable to common shareholders for the six months ended October 31, 2025, was $58,611,000, compared to $45,958,000 for the same period in 2024[102] - Basic net loss per share attributable to common shareholders for the three months ended October 31, 2025, was $(0.64), compared to $(1.19) for the same period in 2024[102] Cash and Assets - Cash and cash equivalents decreased to $175,424,000 as of October 31, 2025, down from $237,595,000 as of April 30, 2025[12] - Total assets decreased to $246,701,000 as of October 31, 2025, from $295,744,000 as of April 30, 2025[12] - The company reported a total shareholders' equity of $164,081,000 as of October 31, 2025, down from $205,406,000 as of April 30, 2025[12] - As of October 31, 2025, the company had an accumulated deficit of $578,860 thousand[31] - The company had cash and cash equivalents of $175,424,000 as of October 31, 2025, down from $237,595,000 as of April 30, 2025[69] Operating Activities - Cash used in operating activities for the six months ended October 31, 2025, was $44,617 thousand, up from $35,555 thousand in 2024, indicating a 25.8% increase in cash outflow[31] - The company has experienced negative operating cash flows since inception, with net cash used in operating activities totaling $44,617 thousand for the six months ended October 31, 2025[31] Shareholder Equity and Stock Compensation - The company incurred share-based compensation expenses of $13,232 thousand for the six months ended October 31, 2025, compared to $1,499 thousand for the same period in 2024, reflecting a significant increase[21] - Total share-based compensation expense for the three months ended October 31, 2025, was $8,653,000, compared to $1,122,000 for the same period in 2024[93] - The company granted 2,251,618 restricted stock units during the six months ended October 31, 2025, with a weighted average grant date fair value of $16.26[87] - The total unrecognized compensation cost related to unvested market-based restricted stock units was $3,180,000, expected to be recognized over approximately 1.71 years[92] - As of October 31, 2025, there was $32,843,000 of total unrecognized compensation cost related to unvested restricted units expected to be recognized over approximately 2.68 years[89] Debt and Financing - The Company entered into a Credit Agreement on September 29, 2023, providing a Senior Secured Delayed Draw Term Loan Facility of up to $60 million, maturing on September 29, 2028[62] - The Company drew an initial $45 million from the Term Loan 2024 and incurred a facility fee of $600,000 upon the first draw[63] - As of October 31, 2025, the total long-term debt was $41,873,000, an increase from $41,098,000 as of April 30, 2025[68] - The Company recognized total expenses related to the Term Loan 2024 of $3,783,000 for the six months ended October 31, 2025, compared to $3,779,000 for the same period in 2024[68] - The fair value of long-term debt, net of discounts, was approximately $48,330,000 as of October 31, 2025, compared to $47,330,000 as of April 30, 2025[70] Market and Product Strategy - The company plans to continue expanding the commercialization of its ASSURE WCD and associated products as part of its Cardiac Recovery System platform[8] - The company is focused on maintaining regulatory approvals for its products and plans to enter new markets[8] - The company faces risks related to market acceptance, manufacturing scalability, and competition that could impact future performance[8] Other Financial Information - The Company recorded a provision for income taxes of $67,000 for the six months ended October 31, 2025, with an effective tax rate of 0.11%[94] - The Company completed a public offering on December 4, 2025, issuing 6,900,000 common shares at $23.00 per share, resulting in net proceeds of $149.2 million[103] - As of October 31, 2025, there were 7,701,304 potentially dilutive securities outstanding, which were excluded from the computation of weighted-average shares due to their antidilutive impact[102] - The Company’s matching and discretionary contributions to the 401(k) Plan totaled $1,025,000 for the six months ended October 31, 2025[99] - The Company has provided a full valuation allowance against its net deferred tax assets as of October 31, 2025, indicating that realization is not more likely than not[95]

Financial Performance - For the third quarter of fiscal 2025, sales decreased by 5.2% to $101.9 million compared to $107.5 million in the prior year, primarily due to a 7.4% decline in comparable store sales [106]. - Net loss for the third quarter was $4.1 million, compared to a loss of $1.8 million in the same period last year [106]. - Gross margin as a percentage of sales was 42.7%, down from 45.1% in the prior year [106]. - Total sales for Q3 fiscal 2025 were $101.9 million, a decrease of 5.8% compared to $107.5 million in Q3 fiscal 2024, primarily due to a 7.4% decline in comparable sales [116]. - Comparable sales decreased by 8.7% for the first nine months of fiscal 2025, with store sales down 6.3% and direct sales down 14.6% [119]. - Gross margin rate for Q3 fiscal 2025 was 42.7%, down from 45.1% in Q3 fiscal 2024, driven by a 210 basis point increase in occupancy costs [120][121]. - SG&A expenses as a percentage of sales increased to 44.7% in Q3 fiscal 2025 from 44.1% in Q3 fiscal 2024, although dollar SG&A expenses decreased by $1.9 million [124][125]. - The company recorded a net loss of $(4.1) million, or $(0.08) per diluted share, for Q3 fiscal 2025, compared to a net loss of $(1.8) million, or $(0.03) per diluted share, in Q3 fiscal 2024 [134]. - Sales for the nine months ended November 1, 2025, were $322.9 million, compared to $347.8 million for the same period in the previous year [150]. - Free cash flow for the nine months ended November 1, 2025, was $(20.2) million, compared to $(7.0) million for the same period in the previous year [150]. - Adjusted EBITDA for the nine months ended November 1, 2025, was $2.8 million, with an adjusted EBITDA margin of 0.9% [150]. Cash Flow and Investments - Cash and investments as of November 1, 2025, were $27.0 million, down from $43.0 million a year earlier, with no debt outstanding [110]. - Cash flow from operations was $(3.2) million for the first nine months of fiscal 2025, a decrease from $12.5 million in the same period of fiscal 2024 [139]. - Free cash flow before capital expenditures for store development was $(10.9) million for the first nine months of fiscal 2025, compared to $2.5 million in the same period of fiscal 2024 [140]. - Outstanding standby letters of credit as of November 1, 2025, were $3.6 million [144]. - The company is subject to an unused line fee of 0.25% on the Credit Facility [143]. Store Operations and Expansion - The company has opened 18 new DXL stores and converted 24 Casual Male XL stores to the DXL format since the beginning of fiscal 2023 [110]. - The company opened eight new DXL stores during the first nine months of fiscal 2025, increasing the total number of stores to 296, with a total square footage of 1,999 thousand [145]. - The company aims to expand FiTMAP technology to an additional 100 stores by the end of the first half of fiscal 2026 [1]. - FiTMAP technology has scanned over 30,000 customers and is available in 88 retail locations, with plans to expand to another 100 stores in the first half of fiscal 2026 [113]. Strategic Initiatives - The company plans to grow private brand sales penetration from 57% at the start of fiscal 2025 to over 60% in 2026 and over 65% in 2027 [1]. - Strategic initiatives include enhancing product assortment, expanding FiTMAP technology, and refining promotional strategies to improve competitiveness and value perception [111]. Mergers and Financial Facilities - The merger with FullBeauty Brands is expected to close in the first half of 2026, with FBB shareholders owning 55% of the combined company [104][105]. - The maturity date of the Credit Facility was extended from October 28, 2026, to August 13, 2030, with revolving commitments reduced from $125.0 million to $100.0 million [142]. - As of November 1, 2025, there were no outstanding borrowings under the Credit Facility, and the average unused excess availability during the first nine months of fiscal 2025 was approximately $71.1 million [144]. - The sublimit for swing-line loans was reduced from $15.0 million to $10.0 million as part of the Credit Facility amendment [142]. - Capital expenditures for fiscal 2025 are expected to range from $17.0 million to $19.0 million, net of tenant incentives [145].

Financial Performance - Total sales for Q3 2025 were $101.9 million, down 5.2% from $107.5 million in Q3 2024, with comparable sales decreasing by 7.4%[5] - Net loss for Q3 2025 was $(4.1) million, or $(0.08) per diluted share, compared to a net loss of $(1.8) million, or $(0.03) per diluted share, in Q3 2024[22] - Adjusted EBITDA for Q3 2025 was $(2.0) million, a decline from $1.0 million in Q3 2024[23] - Comparable sales for the first five weeks of Q4 2025 were down 5.7%, showing an improvement in trend over Q3 2025[12] - For the three months ended November 1, 2025, net loss was $4.1 million, compared to a net loss of $1.8 million for the same period in fiscal 2024[48] - Adjusted EBITDA for the nine months ended November 1, 2025, was $2.8 million, a decrease from $15.7 million in the same period of 2024[51] - Free Cash Flow for the nine months ended November 1, 2025, was $(20.2) million, compared to $(7.0) million in the same period of 2024, indicating a significant decrease[53] - Adjusted EBITDA margin for the nine months ended November 1, 2025, was 0.9%, down from 4.5% in the same period of 2024[51] Cash and Investments - Cash and investments totaled $27.0 million as of November 1, 2025, down from $43.0 million a year earlier, with no outstanding debt[29] - Cash and cash equivalents increased to $14.594 billion in November 2025, up from $11.901 billion in November 2024, marking a rise of 22.5%[50] Inventory and Sales - As of November 1, 2025, inventory decreased by $4.1 million to $85.0 million compared to $89.1 million as of November 2, 2024, with clearance inventory at 10.0% of total inventory[31] - For the third quarter of fiscal 2025, direct sales were $27.3 million, representing 26.8% of total sales, down from $31.3 million or 29.1% in the same quarter of fiscal 2024[33] - The inventory turnover rate has improved by over 30% since fiscal 2019, indicating better inventory management[31] Expenses and Margins - Gross margin rate for Q3 2025 was 42.7%, down from 45.1% in Q3 2024, primarily due to increased occupancy costs and markdown activity[13][14] - SG&A expenses as a percentage of sales were 44.7% in Q3 2025, compared to 44.1% in Q3 2024, with a dollar decrease of $1.9 million[16] - The company anticipates that tariffs could negatively impact gross margin by approximately $2.0 million for fiscal 2025[42] Strategic Initiatives - The company plans to increase private brand sales penetration from 57% at the start of fiscal 2025 to over 60% in 2026 and over 65% in 2027[7] - FiTMAP technology has been implemented in 88 retail locations, with plans to expand to another 100 stores in the first half of fiscal 2026[8] - The company opened eight new DXL stores during the first nine months of fiscal 2025, with total retail square footage increasing to 1,999,000 sq ft as of November 1, 2025[32] - The merger with FullBeauty Brands is expected to close in the first half of fiscal 2026, pending shareholder approval[34] Capital Expenditures and Assets - Capital expenditures for fiscal 2025 are expected to range from $17.0 million to $19.0 million, net of tenant incentives[32] - Total assets increased to $401.539 billion in November 2025, up from $380.955 billion in November 2024, representing a growth of 5.5%[50] - Operating lease right-of-use assets rose to $198.303 billion in November 2025, compared to $171.084 billion in November 2024, an increase of 15.9%[50] - Stockholders' equity decreased to $137.204 billion in November 2025 from $141.223 billion in November 2024, a decline of 2.1%[50] - Capital expenditures for store development were $(9.3) million for the nine months ended November 1, 2025, slightly down from $(9.4) million in the same period of 2024[53]

Exhibit 99.2 THIRD QUARTER 2025 FINANCIAL RESULTS AND SHAREHOLDER LETTER RH REPORTS THIRD QUARTER 2025 REVENUES INCREASED 9%, NET INCOME INCREASED 9% AND FREE CASH FLOW OF $83M THIRD QUARTER 2025 HIGHLIGHTS GAAP Net Revenues Increased 9% to $884M GAAP Net Income Increased 9% to $36M GAAP Operating Margin of 12.0%, Adjusted Operating Margin of 11.6% EBITDA Margin of 16.2%, Adjusted EBITDA Margin of 17.6% Free Cash Flow of $83M Please see the tables below for reconciliations of all GAAP to non-GAAP measures r ...

Financial Performance - Net revenue for Fiscal 2025 was $18.2 million, a decrease of 9% compared to $20.0 million in the prior year[5] - The company reported a net loss of $167.0 million for Fiscal 2025, compared to a net loss of $2.0 million in the prior year, primarily due to a $160.0 million non-cash, unrealized loss on SOL holdings[5] - Basic loss per share from continuing operations was $24.90 for Fiscal 2025, compared to $1.97 in the prior year, highlighting the impact of increased losses[11] Operating Expenses - Total operating expenses increased to $13.6 million, up from $7.3 million in the prior year, reflecting a significant rise in operational costs[5] Revenue Sources - In the fourth quarter of Fiscal 2025, Forward Industries generated approximately $4.6 million in staking revenue from its newly launched Solana treasury strategy[3] Asset Management - Total current assets increased to $41.2 million in Fiscal 2025, compared to $9.6 million in the prior year, driven by a significant increase in cash holdings[9] - Digital assets on the balance sheet amounted to $1.43 billion as of September 30, 2025, reflecting the company's investment in Solana[9] - The company’s total assets reached $1.47 billion in Fiscal 2025, a substantial increase from $14.8 million in the prior year, reflecting its growth in digital asset investments[9] Strategic Focus - Forward Industries is focused on expanding its treasury strategy to unlock additional on-chain yield opportunities, indicating a strategic shift towards digital asset management[3] - The company’s gross profit for Fiscal 2025 was $5.2 million, slightly up from $5.2 million in the previous year, indicating stable gross margins despite revenue decline[11]