Hello, everybody, and welcome to the SharkNinja's Fourth Quarter 2025 and FY 2025 Earnings Call. My name is Elliot, and I will be coordinating your call today. If you would like to register a question during today's event, I would now like to hand over to James Lamb, Senior Vice President of Investor Relations and Treasury. Please go ahead. Good morning, and welcome to SharkNinja's Fourth Quarter 2025 Earnings Conference Call.

Earlier today, we issued our Q4 earnings release, which is available on the company's website at ir.sharkninja.com. A replay of today's webcast will also be available on the site shortly after the call. Let me remind you that today's discussion will include forward-looking statements based on our current perspective of the business environment. These statements involve risks and uncertainties, and actual results may differ materially. For more details, please refer to our earnings release and the company's most recent SEC filings, which outline factors that could impact these statements. The company assumes no obligation to update or revise forward-looking statements in the future. Additionally, during the call, we will reference non-GAAP financial measures, which we believe provide valuable insight into the underlying growth trends of our business. You can find a full reconciliation of these measures to their most directly comparable GAAP measures in the earnings release. Joining me today are our Chief Executive Officer, Mark Barrocas, and Chief Financial Officer, Adam Quigley. Mark will start by providing a business update, followed by Adam, who will review our Q4 and full year 2025 financial results and share our outlook for 2026. Mark will then offer some closing remarks before we open the call up to questions. During the Q&A session, please limit yourself to one question and one follow-up. I would now like to turn the call over to Mark.

Thank you, James. Good morning, everyone, and thank you for joining us today. 2025 concluded on a high note for SharkNinja. It was an outstanding holiday season driven by broad-based strength across product categories, geographies, and channels. Our remarkable fourth quarter and full year performance reflect many factors, but the simplest are the most crucial. Consumers want Shark and Ninja products, and they are discovering them in more places than ever before. We believe we are meeting consumers where they are by delivering accessible innovation and exceptional value. We are incredibly proud of what SharkNinja accomplished this year. Record financial results, swift and decisive execution, and an ever-growing array of groundbreaking products that consumers love. Our most important objective this year and every year is building trust with consumers. We win when consumers around the world get excited to buy our products and feel delighted when using them. To this day, nothing makes me happier than reading a five-star review online, and nothing gets me more motivated than feedback telling us where we can improve. Obsession with the consumer is in our DNA. It powers everything we do. We believe that when we successfully captivate consumers, we earn permission to expand further into their lives. With a never-ending spectrum of consumer problems to solve, we feel the opportunity ahead of us is enormous. Our Q4 results were excellent across the board, with net sales increasing nearly 18% year over year, the fastest growth rate of 2025. Domestic growth accelerated to almost 16%, complemented by international growth of over 21%. Adjusted gross margin expanded by nearly 40 basis points, and adjusted EBITDA increased 36% year over year. This performance reflects our third consecutive quarter of leverage in adjusted operating expenses as a percentage of net sales, a pattern we believe demonstrates…

Thank you, Mark, and good morning, everyone. I'm excited to review our results for the fourth quarter and full year 2025. Starting with a summary of 2025, SharkNinja achieved $6.4 billion in net sales, up nearly 16% year over year. Our domestic net sales grew 13.5%, and international net sales increased 20%. Adjusted EBITDA increased more than 19% year over year to $1.14 billion for the full year, with adjusted EBITDA margin expanding approximately 50 basis points. Finally, adjusted earnings per share reached a new record for Shark at $5.28, up nearly 21% year over year. A moment ago, Mark highlighted the consistency SharkNinja strives to achieve in our results. We think our sales growth this year is a powerful proof point of this model in action. On a rounded basis, our year-over-year total net sales increased 15%, 16%, and 18% through April 2025. Now let's dive into more detail about our performance in Q4 specifically, starting with sales. Net sales in the fourth quarter increased 17.6% year over year to $2.1 billion. By geography, domestic net sales increased 15.7% to just over $1.37 billion. International net sales were $729 million, up 21.4%. Our UK business grew nicely in Q4, with net sales up 9.2% year over year to $326 million. For the full year, our UK business grew 7.3% year over year. Even while air fryers, our single largest category in the UK, declined throughout 2025, the rest of our portfolio of categories more than offset the headwind, a testament to the power of our diversification. Our global category performance further reinforces how SharkNinja can win through diversification. Our overall air fryer sales increased in 2025 despite the tough comparables in the UK. Across the rest of our international business, we experienced a robust holiday selling season with high…

Let's move to our outlook. We entered the year excited about the multiple growth opportunities ahead and cognizant of the tariff-related headwinds that are now fully manifesting in the P&L. Consistent with prior quarters, our initial 2026 outlook assumes current tariff levels persist, including minimum rates of 20% for China, 20% for Vietnam, and 19% for Indonesia, Thailand, Malaysia, and Cambodia. For the full year 2026, we expect our net sales to increase between 10-11%, adjusted net income per diluted share to be in the range of $5.90 to $6.00, an increase of 12% to 14% year over year. Adjusted EBITDA to be in the range of $1.27 billion to $1.28 billion, representing growth of 12% to 13% year over year. Net interest expense to be flat relative to 2025, our GAAP effective tax rate to be approximately 22% to 23%, and capital expenditures to be between $190 million to $210 million for the year.

To close, performance in Q4 capped off a truly remarkable year for SharkNinja. In the face of extraordinary challenges, we relentlessly drove value for our consumers, retail partners, employees, and shareholders. 2025 will likely be remembered as an exceptional and unique period, but in many ways, it has been business as usual for SharkNinja. We remain squarely focused on delivering our goals, quarter after quarter, year after year. With that, I will now turn it back to Mark.

Thanks, Adam. During our Q1 conference call back in May, I reflected on some of the major macroeconomic challenges during my seventeen-year tenure: the great financial crisis, the COVID-19 pandemic, component shortages, and now the tariff-related upheaval of 2025. Our tremendous results this year reinforce our perspective that these are not roadblocks. They're opportunities. We believe SharkNinja has emerged from this period stronger, smarter, more agile, and unwaveringly committed to winning. All powered by our diversification strategy across the business. This is why I'm so excited for 2026 as a fresh chapter in SharkNinja's evolution as a company. On the business side, we're now a direct operator in more markets than ever before. There is a huge opportunity ahead to scale our international business, supported by the success in Mexico and early indications in EMEA. We also entered the year with a meaningfully stronger omnichannel presence, more placements at retailers, and momentum with many of our largest partners. This was complemented by our revamped direct-to-consumer presence rolling out across the globe in early 2026. On the financial side, we've achieved our goal of becoming a domestic filer. This is an exciting milestone for SharkNinja and the final step needed to earn consideration for broader index inclusion. Keep an eye out for our annual report on Form 10-K in the next few weeks and our proxy later in the spring. Across all facets of our business, we believe SharkNinja is set up incredibly well for success for years to come. I'm often asked by investors how and why we continue our pattern of strong net sales growth and profitability improvements going forward. We think the answer is simple. We focus on two foundational cornerstones: disruptive consumer-focused product innovation and viral marketing capabilities that create consumer demand. We feel the combination of these driving forces is powerful and differentiated, especially when considering how much white space we see. New categories to pursue, existing categories where we can go deeper, and new countries to enter. With so much opportunity ahead, we think our culture is a key enabler of success as long as we stay grounded in what matters the most. Positively impacting people's lives every day in every home around the world, and the existential need to be the very best. These mantras permeate everything we do: our focus on the consumer, our multilayered flywheel, our growth pillars, our ability to execute, and our guiding principles. To the over 4,000 team members committed to the outrageous and extraordinary mindset, I thank you for a truly incredible 2025. We feel like we're still at the beginning of an exciting journey and a bright future for SharkNinja.

Thank you. We will now kick off the Q&A. This concludes our prepared remarks, and I'll now turn it over to the operator to begin the Q&A session. Operator?

To ask a question, please ensure your device is unmuted locally. And today, we ask you to limit yourself to one question and one follow-up. The first question comes from Brooke Roach with Goldman Sachs. Your line is open. Please go ahead.

Good morning, and thank you for taking our question. Mark, given the momentum in the business, I was hoping you could outline what you believe is an appropriate medium-term growth algorithm for your US business. What does that mean for US growth in 2026? And what contribution do you expect from units versus price?

Brooke, I'm sorry. At the end, what contribution do you expect from units versus price?

Correct. Yes. Thank you, Mark.

Yeah. So, Brooke, look, we came out of Q4 and delivered great growth in the US. Our D2C business is growing nicely. Our retailer partners gave us tremendous support in the holiday season, and they're continuing to do that into 2026. New channels are emerging, like TikTok shop, as we talked about. So, we think the US business is a double-digit growth business. We delivered that in '25, and we expect to continue that momentum into '26.

We now turn to Steven Forbes with Guggenheim. Your line is open. Please go ahead.

Morning, Mark, Adam. I'm trying to get through this. We're having a little trouble hearing you guys on the call here, but my question really is about the international segment growth. So you mentioned triple-digit growth in Mexico. A lot of excitement around LatAm, but you also commented on the recent transitions to a direct model in a variety of countries. As we think about the first quarter in particular, given that we're cycling the disruption from Mexico last year, any way to help us just think through how you guys are planning for the international segment growth profile to evolve as we work through 2026?

Yes, that is much better. So we'll try this. I think I got most of your questions, Steve. This is Adam. So as we look at the international growth profile, we do continue to see international growing at a faster rate than the domestic business. We're seeing incredible momentum out of the LatAm business, specifically in Mexico, continuing to accelerate as we entered and exited the second half of this year. We do expect that to continue into 2026. And we've really laid some really great framework and foundations in that market to continue to build upon. Over on EMEA, I think what you've seen is an acceleration overall from the first half into 2025 as well. Obviously, we've talked a lot about lapping pretty strong air fryer comps overall. Pleased with the diversification that we're seeing, particularly in the UK. The UK is in a really good growth position now, having lapped and continuing to lap pretty strong air fryer comps there. Similar trends in Germany and France, where, again, our focus is on diversification in those markets. Continuing to bring the wealth of category expansions that we have across our developed markets into some of those new and expansion markets.

Look, Steve, I mean, we grew in the fourth quarter 21%. We said that there was going to be some noise in the numbers due to the transition of Benelux, Poland, and the Nordics. In Q1, there's some disruption as it relates to the movement of Spain and Italy. So, yes, we are comping the Mexico transition. There will be some kind of transition impacts that are going to happen in Q1. By the end of Q2, we're still on track to have a normalized business moving forward. And so we think this was the right thing to do. We're up and running now on a direct basis in the Nordics, Benelux, and Poland. By the second quarter, we'll be up on a direct basis in Spain and Italy. We think these distributor-to-direct major transitions will be gone as we come out of the second quarter. But overall, the UK growth was very nice. Our European business continues to be very strong. Latin America, we pointed out. And I'm very excited as we go into the second half of this year to the Middle East. I mean, I think we're seeing some really good signs out of some products that we launched in Q4 in the Middle East that our distributor will start getting back into inventory toward the end of Q1. So I think there's a lot of pathways for growth for us in the international business.

Maybe I'll just stick, Mark, with the international commentary because it's sort of where I was getting with the question. You think about the success in Mexico post the transition, post the disruption that you experienced. I don't know if you can maybe frame up for us here on the call how much visibility do you have into those countries that you've transitioned as you look out to '26 into 2027, you're planning for 2028. I mean, you're on record talking about the mix of the business eventually getting to fifty-fifty. Obviously, that's some pretty exciting international growth implications. So maybe I'll just leave the question there and have you comment on just the visibility behind the growth profile as we get past the disruptions.

Look, Steve, I think the biggest thing is let's start off with do consumers love the products? Okay? Like, first and foremost, are they resonating with the products? And I think we've got really good visibility as it relates to that. I mean, I think if you go online and you look at online reviews in Norway or you look at online reviews in Mexico, the products are really resonating with consumers and not just across one or two categories, but across lots of categories. The second is, is our demand generation model resonating and working? And while Adam pointed out the great Q4 that we had in Mexico, all of that Spanish language media is spilling over into the rest of Latin America as well. I mean, our PriceSmart business was very strong in Q4. We talked about expanding quite a bit with MercadoLibre in 2026. That's all coming because demand is being generated throughout Latin America by the social media and the demand generation that's happening in Mexico that's spilling over into these other markets. So I think we have great visibility on the consumers loving the products. I think we have really good visibility on is our demand generation model working? I think it's always slower to get into brick-and-mortar retailer placement. But our pure player business is growing quite a bit. Our D2C business is growing quite a bit. And look, the brick-and-mortars will come online as their planograms set and things like that. But at the end of the day, it's a matter of how are we resonating with the consumer, what kind of relationship are we building with the consumer. And I think whether it's Norway or Poland or Belgium or Mexico or Colombia, the consumer is resonating with our model and with our products. And so we're excited as we go into 2026.

We now turn to Jonah Kim with TD Cohen. Your line is open. Please go ahead.

Thank you, Mark and Adam, for taking my question. Just wanted to double-click a little bit on the beauty segment. Could you talk about the customers you're acquiring to the Shark brand through beauty? Any notable characteristics of these customers versus your other brands and products? And then also just related to that, how do you see the distribution opportunity within beauty? What are some white spaces both domestically and internationally? Thank you so much.

Look, what is the difference? I mean, we're obviously attracting a younger demographic. I mean, we're attracting a young female demographic in particular. You'd be surprised, actually, in our skincare business, we're also attracting a young male demographic. I think that we're creating lots of social media excitement, whether it's CryoGlow or whether it's FacialProGlow. But I'll give you a couple of interesting points about the beauty business. I mean, let's think about Christmas 2024. If you wanted to buy an LED mask, it was a fringe product that was sold online, mainly sold with some no-name brands. In 2025, we led the category. You could buy a Shark Cryo Glow at Costco in Bloomington, Indiana. And I think what bodes so well for this is that we're enlarging the size of the market. I mean, the total LED mask market in the United States was $35 million in 2024. We did more than two times that just in '25 ourselves. So what we're doing in skincare is a lot like what we did with the creamy or a lot like what we did in other categories where we're developing the category. I mean, we're the number one skincare facial device in the US coming out of the holiday season. But more than that, our goal is we want to be the number one beauty tech company in the world. And we think it starts with hair, and we think it extends into skin. We think there's a lot of other places for us to go within the beauty space. I mean, scalp, I think, is an interesting place. I think nails is an interesting place. I think wellness is quite interesting, and we're looking into it. So I think it bodes really well for a big expansive global category for us to develop, but it also opens up the next doors for us as to where does SharkNinja go next.

We now turn to Andrew Tadora with Bank of America. Your line is open. Please go ahead.

Good morning, everyone. So Mark, I guess, in 2025, you launched several new celebrity campaigns for both the likes of Tom Brady and Kevin Hart. I guess, how would you define the success of these campaigns? And maybe what new initiatives do you have to continue to engage your customer this year?

Okay. I think in '25, we absolutely became more part of culture. Our social media followers grew over 100%. Our engagement with consumers grew over 100%. Everything from how consumers viewed us in the F1 movie, which was a tremendous success for us. I think Tom and Kevin and David and what we're doing with those celebrity partnerships are kind of the tip of the pyramid. But I think it's all part of a campaign that starts at the celebrity level and looks at macro influencers like people like Alex Earl. We work with tons of micro-influencers that have very high engagement and followership in specific categories. I mean, that could be in something like outdoor cooking, or that could be in something like clean talk or food prep or other areas. But I think it's all part of how do we meet the consumer where they're engaging in content. Whether that is ask me anythings on Reddit, whether that is TikTok shop, whether that is Instagram, whether that's outdoor billboards. It's all part of a total demand generation approach. And I'll tell you something that I think is really exciting as we look at our business right now heading into 2026. It's the spillover effect of all the media. This social media has no borders to it. And so when you run social media content in the US or the UK, it's being viewed in places all around the world. I mean, we're now tracking influencer content based on what countries viewed their content and engaged with their content. We're getting much more sophisticated in does an influencer only have followership in the United States? Or if we hire them, does the influencer also have followership in Mexico and France and Germany and in other places? So I think the whole approach to our demand generation strategy is getting much, much more sophisticated. The analytics behind it are getting much more sophisticated. That's going to allow us to make sure that we're targeting the right content with the right influencers to the right consumers to drive POS.

That's great. Very helpful. Follow-up for Adam, and sorry if I missed this. I think things were cutting in and out a little bit. But can you speak to any gross margins, kind of headwinds and tailwinds that you see for this year? And how would you characterize your ability to grow gross margins in 2026? Thanks for taking the questions.

Yes, certainly. Thanks, Andrew. And a good piece to hit on. So as we look at 2026, we will be normalizing tariffs as we go into the year and having them come through the P&L in a way that we didn't have last year in the first half. We, of course, didn't really start to see those flow into our P&L until Q3 a bit and then into Q4. And so the first half, we expect a decent gross margin headwind driven by tariffs with slight offsets driven by all the cost optimization efforts that we have talked about before. And we've continued to ramp up. The other piece is that you will continue to see the operating expense leverage from us in the first half and into the second half as well. As we continue to not only optimize across various initiatives and spend areas, but also continue some of the initiatives that we've been doing for years now. So our goal overall remains, and you'll see it obviously in the guidance, is that our goal is to expand EBITDA rate as a percentage of sales, and we're certainly intent on doing just that, and you'll see that in the first half right out of the gate.

We now turn to Phillip Blee with William Blair. Your line is open. Please go ahead.

Good morning, guys. Thanks for the question. So the fourth quarter was very strong. Domestic growth of almost 16% is very impressive. So how do you think about that momentum flowing through into the first quarter, first half of this year? And then how do you think about lapping any retailer stockpiling ahead of tariffs or potentially some sales lift on the table from inventory constraints last year? And then just want to confirm since we had some sound issues earlier. You mentioned the US growth should be sustainable in the double-digit range, correct?

Yes. I mentioned, Phillip, that I think the US should continue to grow at double digits. We saw strong momentum coming out of '25. We feel good about our placement in '26 with retailers. We feel good about the momentum that our D2C site is going to continue to get as we get through the year and we stand that up with additional functionality. Look, I mean, there's always issues that you're lapping or constraints or one-offs or one-times. I mean, that's part of the diversification across the business that we're managing. I mean, it's hard for us to comment on any one specific thing at a quarterly level. I think the more important thing is that our business has multiple pathways of growth. I mean, we're going to enter into two new product categories this year in '26. We've got a really great pipeline of innovation in '26. We're going to be bringing to market with 25 new products. We're building our base business. We're continuing to take share in the base business, not just in North America, but in Europe and Latin America as well. We think there's a lot of continued pathways for international growth. So it's hard to comment on any individual one-time blip quarter to quarter. I think at a macro level, how do we feel about our three-pillar growth strategy? I mean, we feel like it's strong, and we feel like we've got good momentum as we head into '26.

Okay. Great. Very helpful. And then you've spoken a bit about how you're getting smarter about social spend, how you're paying affiliates. We saw quite a bit of leverage done in the sales and marketing line this quarter. How should we think about the impact of those efforts, both from maybe a marketing effectiveness standpoint, but then also a financial perspective? Should we expect that line to remain more flattish as a percentage of sales for the time being, or how should we think about that? Thank you.

Yeah. Thanks, Phillip. So as we look at sales and marketing, again, you saw significant leverage in Q4 across that line item. And that's really driven by a number of different factors. It's the media optimization type efforts that Mark talked about earlier. It's allocations between media spend and price and promo, depending on the category, depending on the region. And so that bucket has a lot of different moving pieces within it. But also, as we look ahead and move forward, there's a lot of great optimization efforts that will allow us to continue to leverage that line item. We're at a point of scale now that we can leverage some of these global campaigns. Mark touched on earlier, the F1 movie as an example. Some of the global brand ambassadors that are on board. Those are all assets that appeal across many different markets. So sales and marketing is certainly a line that, while it is a competitive advantage and will remain one that we continue to lean in on via investment for new geographies, new categories, it's also a massive area of leverage. So it's not about harvesting any sort of forced leverage there. It's really about optimizing what is a very large and healthy base of investment.

And our final question today comes from Rupesh Parikh with Oppenheimer. Your line is open. Please go ahead.

Good morning. Thanks for taking my question. So just curious, as you guys think about this upcoming fiscal year, how are you thinking about the consumer category backdrop? Do you expect it to be the same or better than the prior year? And then just any thoughts on whether your category could benefit from stimulus in the US market. Thank you.

Look, Rupesh. I mean, I think I've mentioned this. Other than the eighteen months during COVID, I don't remember kind of a frothy consumer time for us. So I would say the consumer is going to be kind of expected to be flat to where we were last year in general. Listen, when there's stimulus in the United States, it does seem like that stimulus does flow through the economy quite fast, and consumers use that money to spend on things that they want. I can't comment until we understand what that exactly looks like, but I would expect the consumer to be flat, and I think it's our job to earn the consumer's hard-earned dollar by making great products and delivering them at a great value and letting them choose as to whether they go out to dinner two times more or they buy a SharkNinja product. I mean, I don't think we're competing against our industry per se. I think we're competing against the pool of consumer discretionary dollars and how do we make sure that we put our best foot forward in making the case as to why they should invest in SharkNinja.

Great. Thank you.

Ladies and gentlemen, that's all the time we have for questions. This concludes our Q&A and today's conference call. I'd like to thank you for your participation. You may now disconnect your lines.