Core Insights - On Holding AG reported record results for 2025, achieving over CHF 3 billion in annual net sales for the first time, driven by premium positioning and disciplined full-price selling [2][5] - The company expects at least 23% net sales growth at constant currency for 2026, with a gross margin target of at least 63% and an adjusted EBITDA margin of 18.5% to 19% [4][17] Financial Performance - For Q4, net sales reached CHF 743.8 million, a 22.6% increase year-over-year on a reported basis and 30.6% at constant currency, exceeding previous guidance [1] - Full-year 2025 results included a gross profit margin of 62.8% and an adjusted EBITDA margin of 18.8%, with operating cash flow of CHF 359.5 million and over CHF 1 billion in cash at year-end [1][5] Regional Growth - APAC led growth in Q4 with net sales of CHF 126.5 million, increasing 70.8% reported and 85.1% at constant currency, supported by strong performance during key shopping events [10] - The Americas reported Q4 net sales of CHF 434.3 million, up 12.8% reported and 21.3% at constant currency, with nearly 50% of sales driven by direct-to-consumer (DTC) channels [7] Product and Innovation - The company is focusing on product innovation, including the upcoming launch of the Cloudsurfer 3 in H2 2026, which features new foam technology [11] - On's apparel business grew 76% in 2025 at constant currency, with apparel and accessories now contributing 15% of total retail net sales [14] Manufacturing and Sustainability - On opened a LightSpray manufacturing facility in Busan, South Korea, increasing production capacity by 30 times compared to 2025, while significantly reducing CO₂ emissions [12] - The new manufacturing approach streamlines production, reducing assembly steps from 200 to 1 [12] Strategic Outlook - The company anticipates that DTC sales will outpace wholesale growth in 2026, with apparel expected to significantly exceed overall growth [18] - On is planning a future investor day in the first quarter of next year to align with the incoming CFO [19]

Financial Data and Key Metrics Changes - On Holding AG achieved a significant milestone by crossing the CHF 3 billion revenue mark for the first time in 2025, with a reported growth rate of 30% year-over-year and 35.6% at constant currency [16][23] - The company reported a record gross profit margin of 62.8% and an adjusted EBITDA margin of 18.8%, exceeding their 2026 aspirations [16][30] - Cash flow generation improved, resulting in a cash position of over CHF 1 billion, marking the strongest cash position in the company's history [16][32] Business Line Data and Key Metrics Changes - The apparel business saw a remarkable 76% net sales growth at constant currency, indicating a successful expansion into multi-category offerings [13][21] - Accessories experienced a growth of 135.1%, contributing to a structural improvement in the premium mix and overall business profitability [21] - Performance running maintained strong momentum, supported by the Cloudsurfer franchise and the successful launch of the Cloudsurfer Max [28] Market Data and Key Metrics Changes - The Americas delivered net sales of CHF 434.3 million, growing 12.8% reported and 21.3% at constant currency, with nearly 50% of net sales driven by D2C channels [25] - Europe, Middle East, and Africa (EMEA) saw net sales reach CHF 183 million, increasing 24.2% year-over-year and 27.5% at constant currency [26] - Asia-Pacific delivered exceptional results with net sales of CHF 126.5 million, increasing 70.8% reported and 85.1% at constant currency, solidifying its role as a key growth driver [27] Company Strategy and Development Direction - The company aims to be the most premium global sportswear brand, focusing on performance innovation, premium inspiration, and a complete expression of the brand [8][12] - A significant investment in R&D has led to a 1,000% increase in the R&D team, focusing on performance and feel for the movement class [8][9] - The company is expanding its retail footprint, with plans to scale to close to 20 countries, and opened 80 new stores in the past year [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's momentum, with expectations for strong growth rates across all regions in 2026, particularly in the D2C channel [44][45] - The company anticipates a reported net sales target of at least CHF 3.44 billion for 2026, reflecting a significant elevation of ambition [38] - Management highlighted the importance of maintaining premium positioning and operational excellence as key to future growth [17][18] Other Important Information - The company is leveraging AI technology to enhance customer service and improve operational efficiency [12][13] - The LightSpray manufacturing technology is expected to democratize high-performance footwear, with a significant increase in production capacity [63][64] Q&A Session Summary Question: Expectations for growth across regions in 2026 - Management indicated strong product pipeline and innovation, expecting robust growth across all regions, particularly in North America and D2C channels [42][43] Question: Insights on wholesale distribution expansion - Management confirmed opportunities for expanding wholesale distribution while focusing on elevating customer experience and increasing apparel sales [49][50] Question: Brand awareness and gross margin expectations - Management noted brand awareness has reached 30%, with significant potential for growth, and expects strong gross margins throughout the year [70][73] Question: EBITDA margin and distribution line items guidance - Management emphasized ongoing operational efficiencies and reinvestment into the brand to drive profitability while maintaining growth [76][78] Question: Addressable market size and market share - Management discussed the societal shift towards investing in oneself, indicating a large growth opportunity beyond traditional sportswear markets [81][84]

Financial Data and Key Metrics Changes - On Holding AG achieved a significant milestone by crossing the CHF 3 billion revenue mark for the first time in 2025, with sales growing 36% at constant currency and a reported growth rate of 30% year-over-year [6][17] - The company reported a record gross profit margin of 62.8% and an adjusted EBITDA margin of 18.8%, exceeding their 2026 aspirations [17][30] - Cash flow generation improved, resulting in a cash position of over CHF 1 billion, marking the strongest cash position in the company's history [17][33] Business Line Data and Key Metrics Changes - The apparel business saw a remarkable 76% net sales growth at constant currency, indicating a successful expansion into multi-category offerings [13][21] - The performance running segment maintained strong momentum, with net sales from shoes reaching CHF 687.3 million, growing 20.8% reported and 28.8% at constant currency [29] - Accessories experienced a significant increase in sales, growing by 135.1% year-over-year, now representing 7% of total net sales [21] Market Data and Key Metrics Changes - The Americas delivered net sales of CHF 434.3 million, growing 12.8% reported and 21.3% at constant currency, with close to 50% of net sales driven by direct-to-consumer channels [25] - Europe, Middle East, and Africa (EMEA) saw net sales of CHF 183 million, increasing 24.2% year-over-year and 27.5% at constant currency, with strong performance across all channels [26] - Asia-Pacific delivered exceptional growth, with net sales reaching CHF 126.5 million, increasing 70.8% reported and 85.1% at constant currency [27] Company Strategy and Development Direction - The company aims to be the most premium global sportswear brand, focusing on performance innovation and cultural relevance to capture the movement class [8][18] - A significant investment in R&D has led to a 1,000% increase in the R&D team, focusing on performance and feel for consumers [8] - The introduction of innovative manufacturing technologies like LightSpray is expected to democratize high-performance products, expanding market reach [9][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's momentum, expecting strong growth rates across all regions in 2026, particularly in the direct-to-consumer channel [45][68] - The company anticipates a reported net sales target of at least CHF 3.44 billion for 2026, reflecting a strong demand and brand desirability [39] - Management highlighted the importance of maintaining premium positioning and operational excellence as key to future growth [18][19] Other Important Information - The company opened 80 new stores in 2025, expanding its retail footprint to nearly 20 countries [12][20] - The brand's awareness has increased from 20% to 30%, indicating significant growth potential in untapped markets [70] - The company plans to continue leveraging cultural partnerships and innovative product launches to drive brand relevance and consumer engagement [11][76] Q&A Session Summary Question: Expectations for growth across regions in 2026 - Management indicated strong product pipeline and innovation, expecting robust growth across all regions, particularly in North America [43][44] Question: Insights on wholesale distribution expansion - Management confirmed opportunities for expanding product offerings in existing key accounts while focusing on enhancing customer experience [50][51] Question: Continuation of strong momentum into 2026 - Management noted that the strong holiday momentum is expected to carry into 2026, with a focus on younger consumers and direct-to-consumer growth [56][59] Question: Brand awareness and gross margin expectations - Management highlighted the potential for increased brand awareness and confirmed strong gross margins throughout the year, with potential upside from tariff changes [74][76] Question: Distribution and G&A line items in guidance for 2026 - Management emphasized ongoing operational efficiencies and reinvestment strategies to drive profitability while expanding the brand [79][81] Question: Addressable market size and market share - Management discussed the societal shift towards investing in self-identity, indicating a significant growth opportunity beyond traditional sportswear markets [85][86]

Financial Data and Key Metrics Changes - On Holding AG achieved a significant milestone by crossing the CHF 3 billion revenue mark for the first time in 2025, with a reported growth rate of 30% year-over-year and 35.6% at constant currency [16][23] - The company reported a record gross profit margin of 62.8% and an adjusted EBITDA margin of 18.8%, exceeding their 2026 aspirations [16][30] - Cash flow generation improved, resulting in a cash position of over CHF 1 billion, the strongest in the company's history [33] Business Line Data and Key Metrics Changes - The apparel business saw a remarkable 76% net sales growth at constant currency, indicating a successful multi-category expansion strategy [12][20] - Accessories experienced a growth of 135.1%, contributing to a structural improvement in the premium mix and overall business profitability [20] - Performance running maintained strong momentum, supported by the Cloudsurfer franchise and the successful launch of the Cloudsurfer Max [28] Market Data and Key Metrics Changes - The Americas delivered net sales of CHF 434.3 million, growing 12.8% reported and 21.3% at constant currency, with nearly 50% driven by D2C channels [25] - EMEA region reported net sales of CHF 183 million, increasing 24.2% year-over-year and 27.5% at constant currency, with strong momentum in the German-speaking region [26] - Asia-Pacific net sales reached CHF 126.5 million, increasing 70.8% reported and 85.1% at constant currency, solidifying its role as a key growth driver [27] Company Strategy and Development Direction - The company aims to redefine the sportswear market by focusing on premium positioning and innovation, targeting the "movement class" that values vitality and health [5][14] - A significant investment in R&D has led to a 1,000% increase in the R&D team, focusing on performance innovation and engineering breakthroughs [6][12] - The company is expanding its retail footprint, with 80 new stores opened in the past year, and plans to scale to nearly 20 countries [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's momentum and the strength of the product pipeline for 2026, expecting net sales to grow at least 23% at constant currency [36][39] - The company anticipates robust growth across all regions, driven by a strong demand for innovative products and a focus on direct-to-consumer channels [38][65] - Management highlighted the importance of maintaining operational excellence while investing in brand experience and product innovation [17][31] Other Important Information - The company is leveraging AI technology to enhance customer service and improve operational efficiency [11][12] - The introduction of the LightSpray technology is expected to revolutionize shoe manufacturing and expand production capacity significantly [9][63] - The brand's awareness has increased to 30%, with a significant opportunity for growth as 70% of potential customers remain untapped [18][70] Q&A Session Summary Question: Expectations for growth across regions in 2026 - Management indicated strong product pipeline and innovation, expecting robust growth across all regions, particularly in North America and D2C channels [43][44] Question: Insights on wholesale distribution expansion - Management confirmed a focus on expanding brand presence in key accounts while enhancing customer experience and driving apparel sales [49][50] Question: Brand awareness and gross margin expectations - Management noted a significant increase in brand awareness and expected strong gross margins throughout the year, with potential upside from tariff changes [70][73] Question: Distribution and G&A line items for 2026 - Management highlighted ongoing improvements in operational efficiencies and a commitment to reinvest in brand growth while maintaining profitability [78] Question: Addressable market size and market share - Management discussed the societal shift towards investing in oneself, indicating a large growth opportunity beyond traditional sportswear markets [81][84]

Core Viewpoint - On Holding AG is experiencing growth driven by strong footwear franchises, but potential pressures from tariffs are anticipated in 2026 [1][4]. Group 1: Growth and Market Performance - On is expected to report its fourth quarter and full-year earnings results soon, with analysts believing it will remain a compelling growth story due to increasing brand awareness globally [2]. - Online search trends for On have seen over 30% growth in the U.S. and over 75% growth globally, with social media followers increasing nearly 30% year-over-year [2]. - Most of On's growth has been primarily from North America, but Asia and EMEA are emerging markets expected to contribute more to overall growth this year, with Asia now accounting for a "high-teens percent" of sales [3]. Group 2: Regional Developments - EMEA has experienced a re-acceleration in growth, with four consecutive quarters of growth exceeding 33%, outpacing the U.S. growth of 20% to 25% [3]. - The cleanup of distribution channels in Europe, including exiting family footwear channels, has positioned On as a premium athletic brand, expanding through key retailers like Foot Locker and JD Sports [3]. Group 3: Supply Chain and Financial Outlook - The impact of tariffs is expected to be fully felt in the first quarter of fiscal year 2026, with a planned gross margin decline anticipated for that year [4]. - Although On sources almost none of its products from China, it is affected by tariffs on Vietnamese imports, and there may be foreign exchange headwinds due to a stronger Swiss franc [4]. Group 4: Product Introductions and Expansion Plans - On has a strong lineup of footwear product introductions planned for 2026, including Cloudmonster 3 and Cloudrunner 3 in the first quarter, and Cloudsurfer 3 in the third quarter [5]. - The company plans to open between 20 to 25 new stores and continue expanding in underpenetrated markets such as Asia Pacific, parts of Europe, and Latin and South America [5].