SharkNinja(SN) - 2025 Q1 - Quarterly Report

Financial Statements 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 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 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 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 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 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 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] - 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] 1. Organization and Description of Business 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] - The company was incorporated in the Cayman Islands on May 17, 2023, as a wholly-owned subsidiary of JS Global Lifestyle Company Limited[18] - SharkNinja, Inc. began trading on the NYSE on July 31, 2023, following its separation and distribution from JS Global[20] 2. Summary of Significant Accounting Policies 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 - 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] - 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] Use of Estimates - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, net sales, and expenses[26] - 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] Concentration of Credit Risks - The company's financial instruments subject to credit risk include cash and cash equivalents, accounts receivable, and forward contracts[27] - 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] 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 - Accounts receivable are presented net of allowance for credit losses and chargebacks, and net of liabilities when a right of setoff exists[31] - The allowance for credit losses is estimated using historical write-off activity, current conditions, and reasonable and supportable forecasts[33] 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 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 - 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] 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 - The company operates in one operating and reportable segment, with the CEO serving as the chief operating decision maker (CODM)[39] - 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] 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 - The FASB issued ASU 2023-09, 'Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024[43] - The FASB issued ASU 2024-03, 'Disaggregation of Income Statement Expenses,' effective for fiscal years beginning after December 15, 2026[44] - Management is currently evaluating the impact of these ASUs on the company's consolidated financial statements and disclosures[43][44] 3. Condensed Consolidated Balance Sheet Components 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 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] Accrued Expenses and Other Current Liabilities 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] 4. Fair Value Measurements 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] - Derivative financial instruments are classified within Level 2, valued using observable inputs other than quoted prices[48] 5. Derivative Financial Instruments and Hedging 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 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 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] - 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] - As of March 31, 2025, the company was in compliance with all financial covenants under the 2023 Credit Agreement[55] 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 This section covers non-cancelable purchase obligations, indemnification agreements, legal proceedings, and a recent product recall, including associated costs Non-Cancelable Purchase Obligations - As of March 31, 2025, the company has remaining obligations associated with marketing and endorsement agreements totaling $25.3 million[59] - These obligations are payable in a combination of cash and ordinary shares of SharkNinja, Inc. over terms of up to five years[59] 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 - The company enters into indemnification provisions for third-party intellectual property infringement claims in its customer agreements[60] - For certain large or strategic customers, the company also indemnifies for non-compliance with additional representations and warranties[60] Legal Proceedings - The company is involved in various legal proceedings, including patent infringement claims, false advertising claims, and product safety concerns[61] - 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] - In February 2025, the company received $20.0 million as a result of a patent infringement settlement reached in December 2024[62] Product Recall - In May 2025, the company announced a voluntary recall of the Ninja Foodi OP300 series pressure cooker[63] - 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] 9. Shareholders' Equity and Equity Incentive Plan 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 - The 2023 Equity Incentive Plan, adopted on July 28, 2023, initially made 13,898,287 ordinary shares available for future award grants[64] - 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] 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 - 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] - 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] - During the three months ended March 31, 2025, 114,527 shares were purchased under the ESPP[67] Share-Based Compensation 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] - 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] 10. Income Taxes 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] 11. Net Income Per Share 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 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 - JS Global continues to be a related party due to a common significant shareholder and board member of both SharkNinja and JS Global[73] - The company engaged in various transactions with JS Global entities both prior to and subsequent to the separation and distribution[73] Supplier Agreements - The company historically relied on a JS Global purchasing office entity for sourcing finished goods and providing procurement and quality control services[74] - 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] Sourcing Services Agreement - In connection with the separation, SharkNinja entered into a sourcing services agreement with JS Global for coordination and management support with APAC suppliers[75] - 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] Brand License Agreement - SharkNinja granted JS Global exclusive rights to distribute and sell its brands in certain international markets in APAC for a 20-year term[76] - Under this agreement, JS Global pays SharkNinja a royalty of 3% of net sales of licensed products[76] - Royalty income earned by SharkNinja was $4.8 million for Q1 2025, significantly up from $0.9 million for Q1 2024[76] Product Development Agreements - 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] - 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] Transition Services Agreement - 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] - 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]