SharkNinja(SN) - 2025 Q2 - Quarterly Report

Condensed Consolidated Balance Sheets (Unaudited) Total assets increased to $4.54 billion, driven by accounts receivable and inventories, while total liabilities decreased and shareholders' equity significantly increased - The company's total assets increased to $4.54 billion as of June 30, 2025, from $4.39 billion at December 31, 2024, driven by increases in accounts receivable, inventories, and prepaid expenses. Total liabilities decreased, while shareholders' equity significantly increased due to retained earnings and accumulated other comprehensive income[6] Key Balance Sheet Items (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $188,229 | $363,669 | | Accounts receivable, net | $1,324,984 | $1,266,595 | | Inventories | $1,052,711 | $899,989 | | Prepaid expenses and other current assets | $190,586 | $114,008 | | Total current assets | $2,756,510 | $2,644,261 | | Total assets | $4,539,257 | $4,394,159 | | Total current liabilities | $1,418,526 | $1,529,452 | | Total liabilities | $2,331,584 | $2,458,187 | | Retained earnings | $1,166,457 | $909,024 | | Accumulated other comprehensive income (loss) | $22,323 | $(11,279) | | Total shareholders' equity | $2,207,673 | $1,935,972 | Condensed Consolidated Statements of Income (Unaudited) Net sales increased by 15.7% for the three months and 15.2% for the six months ended June 30, 2025, leading to significant net income growth - For the three months ended June 30, 2025, net sales increased by 15.7% year-over-year, leading to a significant 105.1% increase in net income. For the six months ended June 30, 2025, net sales grew by 15.2%, and net income increased by 44.9% compared to the prior year period[9] Income Statement Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $1,444,876 | $1,248,658 | $2,667,514 | $2,314,886 | | Cost of sales | $736,709 | $647,759 | $1,356,121 | $1,187,370 | | Gross profit | $708,167 | $600,899 | $1,311,393 | $1,127,516 | | Operating income | $168,647 | $103,836 | $313,593 | $258,778 | | Income before income taxes | $180,885 | $89,681 | $326,418 | $233,149 | | Provision for income taxes | $41,287 | $21,633 | $68,985 | $55,489 | | Net income | $139,598 | $68,048 | $257,433 | $177,660 | | Net income per share, basic | $0.99 | $0.49 | $1.83 | $1.27 | | Net income per share, diluted | $0.98 | $0.48 | $1.81 | $1.26 | Condensed Consolidated Statements of Comprehensive Income (Unaudited) Comprehensive income significantly increased for both periods, driven by higher net income and positive foreign currency translation adjustments - Comprehensive income significantly increased for both the three and six months ended June 30, 2025, primarily driven by higher net income and positive foreign currency translation adjustments, which reversed from a loss in the prior year period[10] Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $139,598 | $68,048 | $257,433 | $177,660 | | Foreign currency translation adjustments | $18,783 | $1,252 | $26,659 | $(2,122) | | Unrealized gain (loss) on derivative instruments, net | $919 | $(3,599) | $6,943 | $(1,729) | | Comprehensive income | $159,300 | $65,701 | $291,035 | $173,809 | Condensed Consolidated Statements of Shareholders' Equity (Unaudited) Total shareholders' equity increased to $2.21 billion, primarily due to net income and other comprehensive income, partially offset by RSU vesting - Total shareholders' equity increased significantly to $2.21 billion as of June 30, 2025, from $1.94 billion at December 31, 2024, primarily due to net income and positive other comprehensive income, partially offset by vesting of restricted stock units[12][15] Total Shareholders' Equity (in thousands) | Period | June 30, 2025 | December 31, 2024 | June 30, 2024 | December 31, 2023 | | :-------------------------- | :-------------- | :---------------- | :-------------- | :---------------- | | Total Shareholders' Equity | $2,207,673 | $1,935,972 | $1,646,043 | $1,478,893 | - For the six months ended June 30, 2025, key changes in shareholders' equity included $257.4 million in net income, $22.5 million in share-based compensation, a $(49.2) million impact from vesting of restricted stock units (net of taxes), and $33.6 million in other comprehensive income[15] Condensed Consolidated Statements of Cash Flows (Unaudited) The company experienced a net decrease in cash of $175.4 million, primarily due to increased cash used in operating and financing activities - For the six months ended June 30, 2025, the company experienced a net decrease in cash and cash equivalents of $175.4 million, a significant change from a $15.9 million decrease in the prior year. This was primarily driven by increased cash used in operating activities and financing activities, despite a slight increase in cash used in investing activities[17] Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(63,938) | $(19,931) | | Net cash used in investing activities | $(64,415) | $(59,216) | | Net cash (used in) provided by financing activities | $(62,062) | $64,660 | | Effect of exchange rates changes on cash | $14,975 | $(1,436) | | Net decrease in cash and cash equivalents | $(175,440) | $(15,923) | | Cash and cash equivalents at end of period | $188,229 | $138,138 | - Key drivers of the change in operating cash flow for the six months ended June 30, 2025, included an increase in net income, a smaller decrease in accounts receivable, and larger increases in prepaid expenses and other assets, alongside significant decreases in accounts payable and accrued expenses and other liabilities[17] Notes to Condensed Consolidated Financial Statements (Unaudited) This section details the company's accounting policies, financial statement components, debt, commitments, equity, income taxes, and related party transactions 1. Organization and Description of Business SharkNinja, Inc. is a global product design and technology company specializing in innovative lifestyle product solutions under the "Shark" and "Ninja" brands. The company was incorporated in the Cayman Islands in May 2023 and began trading on the NYSE in July 2023 following its separation from JS Global Lifestyle Company Limited - SharkNinja, Inc. is a global product design and technology company that creates innovative lifestyle product solutions across multiple sub-categories, including Cleaning Appliances, Cooking and Beverage Appliances, Food Preparation Appliances and Beauty and Home Environment Appliances products under the brands of "Shark" and "Ninja"[20] - The Company was incorporated in the Cayman Islands on May 17, 2023, as a wholly-owned subsidiary of JS Global Lifestyle Company Limited and began trading on the NYSE on July 31, 2023, following its separation and distribution from JS Global[21][23] 2. Summary of Significant Accounting Policies The condensed consolidated financial statements are prepared in accordance with U.S. GAAP, reflecting all normal recurring adjustments. The company relies on estimates for various financial items, manages credit risk with major retailers, and operates as a single reportable segment with revenue disaggregated by geography, brand, and product category Basis of Presentation The condensed consolidated financial statements are prepared under U.S. GAAP, including all wholly-owned subsidiaries, with no significant accounting policy changes - 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 and balances eliminated[25] - These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes as of and for the year ended December 31, 2024, as certain disclosures have been condensed or omitted[26] - Management believes the statements reflect all normal recurring adjustments necessary for fair presentation, and there have been no significant changes to accounting policies during the six months ended June 30, 2025[27][28] Use of Estimates Financial statement preparation requires management estimates for various items, including variable consideration, credit losses, warranties, and fair value measurements - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts, including variable consideration for returns/rebates, allowance for credit losses, product warranties, fair value of financial assets/liabilities (including derivatives), inventory valuation, acquired intangible assets and goodwill, useful lives of intangibles, lease incremental borrowing rates, share-based compensation, and deferred tax assets/uncertain tax positions[29] Concentration of Credit Risks The company faces credit risk from cash, receivables, and forward contracts, with significant sales concentrated among a few major retail customers - The Company is exposed to credit risk from cash and cash equivalents, accounts receivable, and forward contracts, with a significant portion of products sold through retailers[30][31][32] Customer Concentration (Accounts Receivable, Net) | Customer | As of June 30, 2025 | As of December 31, 2024 | | :--------- | :------------------ | :---------------------- | | Customer A | 29.0 % | 29.1 % | | Customer B | 10.9 % | * (Less than 10%) | Customer Concentration (Net Sales) | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Customer A | 25.4 % | 24.0 % | 22.2 % | 21.2 % | | Customer B | 12.5 % | 10.4 % | 11.0 % | 11.0 % | | Customer C | 11.2 % | 12.6 % | 12.0 % | 13.5 % | Accounts Receivable, Net Accounts receivable are presented net of allowances for credit losses and chargebacks, with estimates based on historical write-off activity and current conditions - Accounts receivable are presented net of allowance for credit losses and chargebacks, with allowances for customer incentives and sales returns recorded as liabilities. The allowance for credit losses is estimated using a loss-rate method based on historical write-off activity, current conditions, and forecasts[35][37] Allowance for Credit Losses Rollforward (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $10,480 | $11,142 | $7,856 | $8,225 | | Provision for credit losses | $204 | $(479) | $3,382 | $2,525 | | Write-offs and other adjustments | $(6,122) | $(2,971) | $(6,676) | $(3,058) | | Ending balance | $4,562 | $7,692 | $4,562 | $7,692 | Disaggregation of Net Sales Net sales are disaggregated by region, brand, and product category, showing shifts in domestic vs. international, Shark vs. Ninja, and various appliance categories Net Sales by Region (Percentage of Total Net Sales) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic | 68.4% | 69.6% | 68.7% | 69.3% | | International | 31.6% | 30.4% | 31.3% | 30.7% | Net Sales by Brand (Percentage of Total Net Sales) | Brand | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Shark | 46.7% | 48.4% | 47.0% | 49.1% | | Ninja | 53.3% | 51.6% | 53.0% | 50.9% | Net Sales by Product Category (Percentage of Total Net Sales) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cleaning Appliances | 34.7% | 37.3% | 35.3% | 38.4% | | Cooking and Beverage Appliances | 25.3% | 30.4% | 26.7% | 30.6% | | Food Preparation Appliances | 28.0% | 21.2% | 26.3% | 20.3% | | Beauty and Home Environment Appliances | 12.0% | 11.1% | 11.7% | 10.7% | Warranty Costs The company accrues estimated product warranty costs at the time of sale, based on sales volume and historical repair and return experience - The Company accrues the estimated cost of product warranties at the time of net sales recognition, based on sales volume and past experience of repairs and returns. Warranty expense is recorded to cost of goods sold[43] Product Warranty Liabilities (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $24,612 | $25,428 | $26,955 | $28,090 | | Accruals for warranties issued | $14,015 | $9,673 | $24,111 | $15,953 | | Settlements made | $(6,460) | $(7,875) | $(18,899) | $(16,817) | | Ending balance | $32,167 | $27,226 | $32,167 | $27,226 | Segment Information The company operates as a single reportable segment, with the CEO as CODM, assessing performance based on consolidated net income and functional spend - The Company operates in one operating and reportable segment, focusing on small household appliances sold under the Shark and Ninja brands. The CEO serves as the chief operating decision maker (CODM)[45] - The CODM assesses performance and allocates resources based on consolidated net income, focusing on revenue performance and comparing actual functional spend to forecasts and prior-year results[47] Segment Net Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Segment net income | $139,598 | $68,048 | $257,433 | $177,660 | Recently Issued Accounting Pronouncements The FASB issued ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), which will require enhanced disclosures for income taxes and specific expense categories, respectively. The company is currently evaluating the impact of these ASUs on its financial statements - ASU 2023-09, effective for annual periods beginning after December 15, 2024, requires disaggregated income taxes paid and standard categories for effective tax rate reconciliation[50] - ASU 2024-03, effective for fiscal years beginning after December 15, 2026, requires incremental disclosures about specific expense categories, including purchases of inventory, employee compensation, depreciation, amortization, and selling expenses[51] - Management is currently evaluating the impact of both ASUs on the Company's consolidated financial statements and disclosures[50][51] 3. Condensed Consolidated Balance Sheet Components This section details the composition and changes in property and equipment, prepaid expenses and other current assets, and accrued expenses and other current liabilities. Property and equipment, net, remained stable, while prepaid expenses significantly increased, and accrued expenses decreased Property and Equipment, Net Property and equipment, net, remained stable at $212.8 million, with molds and tooling being the largest component, and depreciation expense increasing year-over-year Property and Equipment, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Molds and tooling | $292,602 | $267,756 | | Total property and equipment | $509,373 | $466,512 | | Less: accumulated depreciation and amortization | $(300,197) | $(266,800) | | Construction in progress | $3,595 | $11,752 | | Property and equipment, net | $212,771 | $211,464 | Depreciation Expense (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $28,900 | $23,300 | $54,800 | $45,300 | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets significantly increased to $190.6 million, primarily due to a new $61.2 million 'Sales and other tax receivable' - Prepaid expenses and other current assets significantly increased to $190.6 million as of June 30, 2025, from $114.0 million at December 31, 2024, primarily due to the introduction of a $61.2 million 'Sales and other tax receivable'[53] Prepaid Expenses and Other Current Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Other receivables | $58,460 | $68,145 | | Prepaid taxes | $46,268 | $27,073 | | Prepaid expenses | $17,653 | $10,705 | | Prepaid media | $7,051 | $8,085 | | Sales and other tax receivable | $61,154 | $0 | | Total | $190,586 | $114,008 | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities decreased to $766.6 million, mainly driven by reductions in accrued customer incentives, general accrued expenses, and compensation - Accrued expenses and other current liabilities decreased to $766.6 million as of June 30, 2025, from $841.5 million at December 31, 2024. This reduction was mainly driven by decreases in accrued customer incentives, accrued expenses, and accrued compensation and benefits[54] Accrued Expenses and Other Current Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Accrued customer incentives | $268,587 | $291,384 | | Accrued expenses | $147,211 | $177,573 | | Accrued compensation and benefits | $78,064 | $109,156 | | Accrued returns | $84,388 | $86,557 | | Accrued delivery and distributions | $73,992 | $52,711 | | Accrued warranty | $32,167 | $26,955 | | Accrued advertising | $12,198 | $20,779 | | Sales and other tax payable | $696 | $20,318 | | Accrued professional fees | $11,161 | $18,451 | | Operating lease liabilities, current | $22,962 | $18,133 | | Derivative liabilities | $0 | $66 | | Other | $35,204 | $19,446 | | Total | $766,630 | $841,529 | 4. Fair Value Measurements The company's financial assets measured at fair value on a recurring basis consist solely of money market funds, classified as Level 1. As of June 30, 2025, there were no derivative financial instruments classified as Level 2, a change from December 31, 2024 Financial Assets and Liabilities at Fair Value (in thousands) | Item | June 30, 2025 | December 31, 2024 | Fair Value Level | | :--------------------------------------- | :-------------- | :---------------- | :--------------- | | Financial assets: | | | | | Money market funds | $1,058 | $581 | Level 1 | | Financial liabilities: | | | | | Forward contracts (derivatives) | $0 | $66 | Level 2 | - Money market funds are classified within Level 1 due to valuation using quoted prices in active markets. Derivative financial instruments are classified within Level 2, valued using observable inputs other than quoted prices[55] - As of June 30, 2025, the Company had no remaining Level 2 derivative financial instruments[55] 5. Derivative Financial Instruments and Hedging The company had no outstanding forward contracts designated as hedging instruments as of June 30, 2025, a decrease from $48.5 million at December 31, 2024. The effect of these contracts on accumulated other comprehensive income shifted from a net loss to a net gain reclassified to earnings for the six months ended June 30, 2025 Notional Amount of Forward Contracts The notional amount of forward contracts designated as hedging instruments decreased to zero as of June 30, 2025, from $48.5 million at December 31, 2024 Notional Amount of Forward Contracts (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Derivatives designated as hedging instruments: Forward contracts | $0 | $48,472 | | Total derivative instruments | $0 | $48,472 | Effect of Forward Contracts on Accumulated Other Comprehensive Income The impact of forward contracts on accumulated other comprehensive income shifted from a net loss to a net gain reclassified to earnings for the six months ended June 30, 2025 Effect of Forward Contracts on Accumulated Other Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $(2,239) | $(303) | $(8,263) | $(2,173) | | Amount of net losses recorded in accumulated other comprehensive income | $(295) | $(3,448) | $(850) | $(415) | | Amount of net gains (losses) reclassified from accumulated other comprehensive income to earnings | $1,214 | $(151) | $7,793 | $(1,314) | | Ending balance | $(1,320) | $(3,902) | $(1,320) | $(3,902) | 6. Intangible Assets, Net and Goodwill Intangible assets, net, decreased slightly to $457.5 million as of June 30, 2025, from $462.7 million at December 31, 2024. Trade names and trademarks, which are not subject to amortization, constitute the largest portion. Amortization expenses for intangible assets increased year-over-year Intangible Assets, Net Intangible assets, net, decreased slightly to $457.5 million, with trade names and trademarks forming the largest non-amortized component, and amortization expenses increasing Intangible Assets, Net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Total intangible assets subject to amortization (net) | $71,092 | $76,996 | | Trade name and trademarks (not subject to amortization) | $386,444 | $385,682 | | Total intangible assets, net | $457,536 | $462,678 | Amortization Expenses for Intangible Assets (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $2,120 | $1,910 | $4,238 | $3,824 | | Sales and marketing | $3,974 | $3,974 | $7,949 | $7,949 | | Total amortization expenses | $6,094 | $5,884 | $12,187 | $11,773 | Expected Future Amortization Expenses (in thousands) | Years ending December 31, | Amount | | :------------------------ | :----- | | Remainder of 2025 | $12,607 | | 2026 | $21,111 | | 2027 | $8,264 | | 2028 | $5,495 | | 2029 | $5,473 | | Thereafter | $18,142 | | Total | $71,092 | 7. Debt The company's total debt, net of deferred financing costs, decreased to $755.8 million as of June 30, 2025, from $775.5 million at December 31, 2024. This is primarily due to repayments on the 2023 Term Loans. The company remains in compliance with all financial covenants under its 2023 Credit Agreement Debt Composition (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | 2023 Term Loans (principal) | $759,375 | $779,625 | | Less: deferred financing costs | $(3,564) | $(4,142) | | Total debt, net of deferred financing costs | $755,811 | $775,483 | | Less: debt, current | $(39,344) | $(39,344) | | Debt, noncurrent | $716,467 | $736,139 | - The 2023 Credit Agreement provides for an $810.0 million term loan facility and a $500.0 million revolving credit facility, both maturing in July 2028. The company was in compliance with all financial covenants as of June 30, 2025[62][64] - No amounts were outstanding on the 2023 Revolving Facility as of June 30, 2025, with $300.0 million in drawdowns during the six months ended June 30, 2025, fully repaid[63] 8. Commitments and Contingencies The company has non-cancelable purchase obligations, primarily for marketing and endorsement agreements, totaling $22.3 million as of June 30, 2025, with a new material agreement signed in July 2025. It is also involved in various legal proceedings and initiated a product recall in May 2025, accruing $3.3 million for remedies Non-Cancelable Purchase Obligations Non-cancelable purchase obligations totaled $22.3 million as of June 30, 2025, with a new material marketing agreement signed in July 2025 not yet reflected Remaining Non-Cancelable Purchase Obligations (in thousands) | Years ending December 31, | Amount | | :------------------------ | :----- | | Remainder of 2025 | $2,738 | | 2026 | $6,300 | | 2027 | $6,150 | | 2028 | $6,150 | | 2029 | $1,000 | | Total | $22,338 | - On July 15, 2025, the Company entered into a five-year, non-cancelable marketing and endorsement agreement with a well-known public figure, requiring total cash payments of $36.5 million through December 31, 2030. This agreement is a material future commitment and is not reflected in the June 30, 2025 financial statements[69] Indemnifications and Contingencies The company includes indemnification provisions in customer agreements for intellectual property infringement and non-compliance with representations and warranties - The Company enters into indemnification provisions in customer agreements for third-party intellectual property infringement claims and, for certain large or strategic customers, for non-compliance with additional representations and warranties[70] Legal Proceedings The company is involved in various legal proceedings, but management believes the ultimate loss will not materially adversely affect its financial condition or operations - The Company may be involved in various legal proceedings, including patent infringement claims, false advertising claims, and product safety concerns. 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[71] Product Recall A voluntary recall of the Ninja Foodi OP300 series pressure cooker was initiated in May 2025, with a $3.3 million liability accrued for estimated remedies - In May 2025, the Company announced a voluntary recall of the Ninja Foodi OP300 series pressure cooker, recording a liability of $3.3 million for estimated recall remedies as of June 30, 2025[72] - The estimated cost of recall remedies is based on expected consumer participation rates and the estimated cost of the new lid design, subject to reevaluation and adjustment[72] 9. Shareholders' Equity and Equity Incentive Plan The company's equity incentive plans, including the 2023 Equity Incentive Plan (2023 Plan) and the 2023 Employee Share Purchase Plan (ESPP), aim to attract and retain talent. Both plans have evergreen provisions for increasing available shares. Share-based compensation expense decreased for the six months ended June 30, 2025, compared to the prior year Restricted Share Units The 2023 Equity Incentive Plan, with an evergreen provision, made 13.9 million ordinary shares initially available, with 10.2 million remaining for future grants - The 2023 Equity Incentive Plan, adopted on July 28, 2023, initially made 13,898,287 ordinary shares available for future award grants and includes an evergreen provision for annual increases[73][74] - As of June 30, 2025, 10,214,509 ordinary shares were available for future grant under the 2023 Plan, with 842,084 additional shares registered on January 1, 2025, due to the evergreen provision[74] RSU Activity (Six Months Ended June 30, 2025) | Item | Number of Shares | Weighted Average Grant Date Fair Value per share | | :-------------------------- | :--------------- | :--------------------------------------- | | Unvested as of Dec 31, 2024 | 2,169,401 | $35.71 | | Granted | 181,217 | $85.16 | | Vested | (1,060,676) | $33.96 | | Cancelled/Forfeited | (108,592) | $42.28 | | Unvested as of June 30, 2025 | 1,181,350 | $44.26 | Employee Stock Purchase Plan The 2023 Employee Share Purchase Plan (ESPP) allows for up to 1% of outstanding shares to be purchased, with 114,527 shares purchased in the current period - The 2023 Employee Share Purchase Plan (ESPP) was approved on July 28, 2023, making a maximum of 1% of outstanding ordinary shares available for sale, with an evergreen provision for annual increases[76] - During the six months ended June 30, 2025, 114,527 shares were purchased under the ESPP. As of June 30, 2025, $0.4 million of unrecognized share-based compensation related to the ESPP is to be recognized over 0.1 years[76] Share-Based Compensation Total share-based compensation decreased for both the three and six months ended June 30, 2025, with $26.4 million in unrecognized costs remaining Share-Based Compensation Expense (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $1,867 | $2,286 | $4,776 | $5,785 | | Sales and marketing | $4,634 | $2,135 | $7,172 | $4,707 | | General and administrative | $4,427 | $9,709 | $10,530 | $23,064 | | Total share-based compensation | $10,928 | $14,130 | $22,478 | $33,556 | - As of June 30, 2025, the Company had $26.4 million in unrecognized share-based compensation cost related to RSUs granted under the 2023 Plan, to be recognized over a weighted average period of 0.7 years[78] 10. Income Taxes The company's effective tax rate decreased for both the three and six months ended June 30, 2025, primarily due to the impact of share-based compensation. New tax legislation (OBBBA) enacted in July 2025 is being evaluated but is not expected to materially impact financial statements Provision for Income Taxes and Effective Tax Rate | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes (in thousands) | $41,287 | $21,633 | $68,985 | $55,489 | | Effective Tax Rate (ETR) | 22.8% | 24.1% | 21.1% | 23.8% | - The decrease in the effective tax rate for both periods was primarily driven by the impact of share-based compensation[81] - The "One Big Beautiful Bill Act" (OBBBA) was signed into law on July 4, 2025, with key corporate tax provisions including restoration of 100% bonus depreciation and immediate expensing for domestic R&E. The Company is evaluating its impact but does not expect it to be material[82] 11. Net Income Per Share Both basic and diluted net income per share significantly increased for the three and six months ended June 30, 2025, reflecting higher net income. The dilutive effect of RSUs slightly decreased the per-share amounts Net Income Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income per share, basic | $0.99 | $0.49 | $1.83 | $1.27 | | Net income per share, diluted | $0.98 | $0.48 | $1.81 | $1.26 | Weighted-Average Shares (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Weighted-average shares used in computing net income per share, basic | 141,044 | 139,888 | 140,834 | 139,668 | | Dilutive effect of RSUs | 827 | 1,036 | 1,197 | 1,145 | | Weighted-average shares used in computing net income per share, diluted | 141,871 | 140,924 | 142,031 | 140,813 | 12. Related Party Transactions The company continues to engage in various transactions with JS Global, its former parent, due to a common significant shareholder. These include supplier agreements, a sourcing services agreement, a brand license agreement, product development services, and a transition services agreement, with a general trend of decreasing expenses paid to JS Global and increasing royalty income received Transactions with JS Global JS Global remains a related party due to a common significant shareholder and board member, influencing ongoing business transactions - Following the separation and distribution, JS Global continues to be a related party due to a common significant shareholder and board member of both the Company and JS Global[84] Supplier Agreements Purchases of finished goods from JS Global subsidiaries significantly decreased for both the three and six months ended June 30, 2025 - The Company purchases certain finished goods directly from a subsidiary of JS Global. Finished goods purchased from JS Global entities decreased significantly for both the three and six months ended June 30, 2025, compared to the prior year[85] Finished Goods Purchases from JS Global (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Purchases from JS Global entities | $23,500 | $51,300 | $48,600 | $107,100 | Sourcing Services Agreement JS Global provides sourcing services for Asia-Pacific suppliers, with service fees paid by SharkNinja decreasing over time - Under a sourcing services agreement, JS Global provides coordination, process management, and relationship management support for products procured by SharkNinja from Asia-Pacific suppliers. The service fee paid to JS Global is based on the aggregate procurement amount and has decreased over time[86] Sourcing Services Fees Incurred (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fees incurred | $2,500 | $13,100 | $4,800 | $25,000 | Brand License Agreement The company granted JS Global exclusive rights to distribute its brands in APAC for 20 years, earning a 3% royalty on licensed product net sales - The Company granted JS Global exclusive rights to distribute and sell its brands in certain international markets in APAC for a 20-year term, with JS Global paying a royalty of 3% of net sales of licensed products[87] Royalty Income from Brand License Agreement (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Royalty income | $3,800 | $1,400 | $8,600 | $2,300 | Product Development Agreements The company now provides R&D services to JS Global, earning increased fees, while no longer incurring costs for R&D services from JS Global - The Company historically utilized JS Global subsidiaries for R&D services, incurring no costs for these services in the current three and six-month periods ended June 30, 2025, compared to $0.8 million and $1.7 million in the prior year periods, respectively[88] - SharkNinja now provides R&D and related product management services to JS Global entities, earning product development service fees of $1.6 million and $3.2 million for the three and six months ended June 30, 2025, respectively, an increase from the prior year[89] Transition Services Agreement The company provided transition services to JS Global, earning consistent fees, with the agreement concluding on July 31, 2025 - The Company provided transition services to JS Global for a term of twenty-four months, which ended on July 31, 2025[90] Transition Service Fees Earned (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service fees earned | $700 | $800 | $1,500 | $1,500 | Related Party Balances (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Accounts receivable, net | $12,333 | $9,381 | | Accounts payable | $26,628 | $39,769 | 13. Subsequent Events The company has evaluated subsequent events up to the financial statement issuance date and disclosed a new material marketing agreement and the enactment of the OBBBA tax legislation in Note 8 and Note 10, respectively. No other subsequent events require disclosure or adjustment - The Company has evaluated subsequent events and disclosed a new material marketing and endorsement agreement (Note 8) and the enactment of the "One Big Beautiful Bill Act" (OBBBA) tax legislation (Note 10)[92] - Except for the disclosed items, no other subsequent events would require disclosure in, or adjustment to, the unaudited condensed consolidated financial statements[92]