SN earnings call transcript, November 4, 2026

One thing is clear. Shark Ninja is a consumer technology company operating at hyperscale. That's not a new idea for us. It's the natural extension of how we have described Shark Ninja as a consumer problem solving company. To us, hyperscale means scale the compounds where every product, market and piece of content is designed to make the next one better, more innovative. and more successful. This concept shows up in what we make, how we market, how we sell, how fast we learn, and how far we reach. Starting with product, today... We compete in 41 subcategories, from vacuums to espresso makers, air purifiers, beauty tools, air fryers, outdoor products, and everything in between. That is hyperscale in action. Which we believe is the first enabler of our long-term diversified growth opportunity. We're complementing that scale by introducing more technologically advanced products across the portfolio. Take the Ninja Auto Barista as an example. The complex software that automates countless drink options is significant. We're completely more sophisticated than our capabilities even a year ago. You will see more examples like this in our 2027 new product lineup. Clear evidence that we're a consumer technology leader. Next, how we market. Which brings me to a concept internally we call spillover. In short, spillover is the global demand generation benefit we see from how far our content reaches. Content from Canada.

Canada gets watched in the United States. Content from Spain can influence Chile. Content from France finds an audience in Quebec. Picture a spider web with threads running back and forth and in every direction. Where the content originates is often not the only places where it's consumed. We have always known spillover exists. What we didn't have was a data science driven way to measure it and immediately act on it. Not in weeks, but in hours. Over the last 12 to 18 months, we built proprietary technology. platforms that do exactly that. Today, we can identify a piece of content from the UK taking off in Norway, alert our marketing teams immediately, and amplify it same day across our media ecosystems. Social media scale makes us uniquely positioned to succeed at this. Now, spillover only matters if you can serve the consumer. As our products become more available and our brands become better known in more countries, we can build a sales strategy around what the content is telling us. is a great example. When we converted to a direct model, we knew where to lean in with retailers. We had seen how Spanish language content from places like Mexico was landing with Spanish consumers and which. products they were asking for by name. Investments in technology paired with globalizing our demand generation strategy. That is hyperscale marketing befitting a true consumer technology company. How we sell is the next lens. We operate in more than 30 countries with more than 180.

partners worldwide. Our goal is simple. Be everywhere the consumer shops. This starts with our long-standing retail partnerships where increased placements, media activations, and big support create a tremendous amount of excitement as we move toward the holiday season. Simply put, consumers want Shark and Ninja products, so retailers want to feature our products. We're privileged to have earned this status with retailers both domestically and internationally. And as we expand worldwide, this means establishing new channels of growth with regional pure player partners like MercadoLibre in Latin America and Allegro in Poland, to name a few. As shopping... ...behaviors evolve in the coming years, we feel our scale advantage can compound further. I believe social commerce is the biggest change in consumer retail since Amazon. We're a leader on TikTok shop and our global... ...presence gives Shark Ninja access to an enormous number of affiliates and the technology to identify and succeed with them. This opportunity extends beyond TikTok shop with affiliate networks emerging on Meta, YouTube, Snap and other platforms. Results so far have been incredibly encouraging and we're... excited to continue to build this capability worldwide. Social commerce represents selling scale we could not have unlocked even 18 to 24 months ago. All managed using proprietary... ...technology and KPI dashboards that we have developed. These social commerce efforts don't just benefit their respective platforms. They help fuel a demand flywheel for Shark Ninja products across the entire e-commerce system. We're leveraging our digital presence with learnings from our own direct-to-consumer overhaul to drive much stronger...

...outcomes on traditional retailers' digital storefronts. In fact, year-to-date POS across our major U.S. retailer sites is up more than 30% year-over-year. We believe Shark Ninja's case... ...capabilities as a global consumer technology company deepen our omnichannel competitive advantage. Next, how fast we learn. We have always moved fast at Shark Ninja, but AI is supercharging our capabilities across the organization. Our internal AI proliferation initiative, Jailbreak Shark Ninja... ...has been a runaway success this year. The impacts we're seeing from the people closest to the business have been eye-popping. So much so that we are doing another Hack Week starting next Monday. But timing is intentional. We're refilling the pipeline with lots of additional initiatives focused on supercharging 2027. Our most significant AI investments are targeted at... two of our largest costs, media spending and promotional dollars. At our hyperscale, the total opportunity here is massive. We spend more than $1.5 billion annually in these two areas combined. We're doing the work now in 2026 to pay off in 27 and 28 and beyond. Even in the early stages, we're discovering meaningful insights, all of which we anticipate will help optimize. I share gains, gross profits and contribution margin. The dawn of agenda commerce is another major opportunity for Shark Ninja. While it remains early days, we continue to work closely with leading AI and commerce platforms to develop and test new consumer experiences. Holiday 2026 will.

be an important measure of how consumers utilize these platforms for product discovery and brand engagement. Because our goal is to be everywhere the consumer shops, we intend to remain at the forefront. As this exciting channel opportunity evolves in 2027, the same drive is powering new initiatives on sharkninja.com. AI powered searches live with early results showing a nice high single digit increase in revenue per search visitor. Consumers can also now add products directly to. their carts within our shopping agent. Agenda commerce is another area where we believe our scale is a meaningful differentiator versus our peers. Finally, how far we reach. Becoming a consumer technology company has significantly broadened our demographic profile. This summer, our consumer insights and analytics teams conducted a deep dive into a question I hear most from investors. How durable is this growth and who is it coming from? We looked at Shark Ninja inside the American. Household. Based on our internal data and external sources such as Sercana's consumer panel, we measured household penetration across age, income, household size, and more. And here's a big takeaway. We're seeing widespread gains across the demographic spectrum. Success isn't concentrated in one age group, one income level, or one household size. It's broad-based. Two powerful trends in the data really stand out. First, our fastest-growing cohort is our youngest one. We've discussed previously how 10 years ago, our core consumer was typically

a percentile. Currently, 35 to 55 years old. Today, our demographic data shows that among 18 to 24-year-olds, household penetration is up more than 50% over two years to the high single-digit range. This is significantly faster than the next fastest cohort. With the shark and ninja brands, both driving gains with these younger consumers. Naturally, discretionary buying power in this cohort is still relatively low compared to other demographic groups. This means that success in capturing younger consumers isn't just about revenue today. It's about laying roots for future. growth and customer lifetime value. When you earn a consumer at an early age, you get the opportunity to grow with them. The college dorm room, the first apartment, getting married, the first. home and more. Each of these moments is a reason to engage with Shark Ninja. We're developing that relationship earlier than ever with a long runway to deepen it. Second, when looking at cohorts by household size, penetration grew fastest in families with four or more members. This matters. Because a bigger household has more consumer problems to solve. Encouragingly, we also see evidence of multiple members in a family unit purchasing from Shark Ninja. More density in the household. Means more occasions, more needs, and likely a larger wallet to access. That's a cross-selling opportunity, both for existing categories and new ones. What this means is Shark Ninja has a growing presence in the American home. Two things are happening at once. Younger customers are...

finding us early, which means decades of potential growth. And larger households are buying more of our products because they value our ability to solve multiple problems across their lives. It all adds... up to a growing buyer base that continues to engage across the breadth of the shark and ninja brands. That's a powerful compounding growth driver and another example of increasing scale. The journey to become a consumer technology leader didn't happen overnight, but it feels like we're accelerating. Consider where... the business was only a year ago. We were replatforming our direct-to-consumer website from three URLs into one upgraded sharkninja.com. TikTok shop had just launched only in the United States and the United Kingdom. We were in the midst of converting key markets from distributor-led to direct models. In some countries, too few categories and channels were limiting our growth. We have worked diligently to address every one of these areas, and we're now seeing the fruits of that labor in our results. We're just getting started. Scale drives success, and success builds more scale. It's a positive flywheel that has enabled our transformation. Shark Ninja is a consumer technology company with limited- list potential in my mind. In fact, I've never been more excited to be in business than I am today. Now, let me walk you through our three-pillar growth strategy, beginning with our first pillar.

Expansion into new and adjacent categories. In August, we launched the Ninja HydraSense, a revolutionary new water filtration product. This is a perfect example of consumer technology in action. At first glance, water filtration appears to be a crowded category, but we believe we found a real white space. Our consumer insights research identified a highly bifurcated market between entry-level and very costly products. Importantly, we also discovered that consumers don't often fully understand filter performance, especially with low-end solutions. The Ninja HydraSense is designed to be an innovative disruptor. Our new precision pressure. Technology removes up to 10 times more contaminants than the leading filter. This level of performance is akin to a reverse osmosis system, which can often cost $2,000 or more. For $199, we feel the Ninja Hydra Sense has democratized Great Water. We view this as a clear opportunity in a large market we have sized to over $6 billion. Consumer response has been extraordinary. With social media posts testing the Hydra Sense on everything from soda to pickle brine. This is also a real repeat purchase opportunity with replacement filters. Early subscribe and save attached. On our D2C site more than tripled our internal expectations. A strong early sign as we look to apply this concept to other parts of our business. The launch of Ninja Hydra Sense was years in the making. We took the time to really.

understand the consumer problem, the market opportunity, and the competition. While we're thrilled with the debut, we're even more excited to develop a technology platform here to drive years of future innovation. Shark Ninja doesn't just introduce products, we launch consumer technology franchises. And we always strive to bring a differentiated perspective on where the white space is. The opportunity of water filtration is a great example. But we took a similar approach to espresso, to microwaves, to fans, and countless other categories. We believe Shark Ninja is at its best when people ask, why didn't anyone else think of this? Looking into 2027, we're committed to entering two additional new subcategories to build on our 41 today. The ability to repeatedly and successfully introduce new and adjacent categories is one of the biggest differentiators for Shark Ninja. Our scale across existing categories, consumer insights, social media, and more gives us a unique ability to keep expanding our scope. Our second pillar is growing share in existing categories. This pillar is the cornerstone of everything else we do at Shark Ninja. We never stop innovating, even in categories where our market share lead is dominant. Each of the major initiatives we introduced in our core franchises in 2026, the Shark Power Detect Transformer in the Upright Vacuums, the new Shark AquaReach Vacuum Mop, and the Ninja Crush Boss Kitchen System shows...

how we continue to reinvent our core as the bedrock of our growth. It comes from an obsessive focus on the consumer and from the technology scale and expertise that allows Shark Ninja to be a disruptor. Time and time again. Consistently delivering on product development is key and we're increasingly confident that the Shark Ninja machine is built to do this broadly. The Ninja multipot is one of the best selling launches we ever had. The Ninja Preppy went from zero to 10 million impressions on social media at a speed that impressed even us. These two respective categories. Multi cookers and food processors are as core as it gets. When consumers respond to existing category launches in such a huge way it reinforces our strategy to focus so much. And as subcategories evolve from new into existing franchises, Shark Ninja's scale advantages continue to compound. Our third pillar is international expansion. I want to start with EMEA, where balanced growth drove our robust Q3 26 results. The UK continued the excellent performance we have seen throughout 2026. Led by contributions from several categories. Several of our recently converted distributor to direct markets also delivered noteworthy growth in the quarter. Spain and Italy were standouts, and we can't wait for our first holiday season. As a direct operator in these countries. This same excitement extends to Germany and France. Meaningful expansion and category diversification and retailer product placements set us up.

For a strong finish to the year. The Latin America region further extended its run of excellent results. Mexico has set the standard for what a distributor to direct conversion should look like. Partnering. Effectively with retailers. Driving consumer demand with local language social media. And executing operationally to fulfill that demand. Beyond Mexico, our Latin America distributor markets had their best net sales quarter ever. We believe this underscores how much Latin American consumers want Shark Ninja products while showing the power of our omnichannel approach. We enter holiday 2026 with. huge excitement across the region to reach more countries and more consumers than ever before. All of this is augmented by the newer ways we're reaching the consumer. Our recent D2C upgrades and tick tock. launches have exceeded our expectations to date. We remain on track to be live with tick tock shop in 14 countries ahead of the holiday shopping season. This increasingly robust omni channel approach. gives us confidence that international net sales growth can re-accelerate year over year in Q4 relative to Q3. That brings me back to where I started. What sets Shark Ninja apart is our ability to leverage our hype. to serve the consumer, solving their pain points, rapidly innovating across products and markets, and reaching them wherever they are. We see clear evidence that our focus on investment is a key enabler of

this strong position. In this quarter, we proactively reinvested a portion of our tariff refund across multiple high return opportunities. There are a lot more places where we want to plant seeds, and we intend to remain opportunistic. in Q4. This is a moment for Shark Ninja to be on offense, to widen our moat by investing for the benefit of future years. Zooming out, there's a consistent theme here. Hard work. and investments that we made in 2024 and 2025 are paying off now. We're doubling down and making big investments in 2026 to plant more seeds across product, technology, demand generation. and more. We expect these will pay off in 2027 and 2028 as we continue pursuing our mission of positively impacting people's lives every day in every home around the world. This raise reflects the continued strength we are seeing in the business while we balance investment with a focus on profitability and margin expansion. We could not be more enthusiastic as we look at. With all our hyperscale advantages poised to deliver exceptional performance. With that, I'll turn it over to Adam, who will walk you through our financial results and share our updated outlook.

For 2026. Thank you, Mark. And good morning, everyone. Q3 was a tremendous quarter for Shark Ninja. Simply put, the business is firing on all cylinders, and I'm excited to walk through the details. Net sales in the third quarter. Increased 21.2% year over year to $1.98 billion. By geography, domestic net sales, which includes U.S. and Canada, increased 19.4% to $1.31 billion. National net sales were $663 million, up 25.2%. Starting with the strength of the U.S. business, net sales grew 20.8% to $1.22 billion. This is our highest growth rate in the U.S. since Q4 2024. As we highlighted last quarter, this strength is primarily coming from our focused efforts within the base business. We see core momentum in multiple subcategories and across our omnichannel ecosystem. Our large diversified collection of existing categories is growing through execution and innovation as a consumer technology company. This quarter is a clear proof point of compounding growth at scale within our U.S. business. Moving to the international business, we saw broad-based strength across all regions. In the third quarter, as Mark highlighted earlier, our results were robust with significant strength in places like Spain and Italy, where we recently converted from a distributor led to a direct model. Mexico and the rest of Latin America. And continue to see strong sales trends as well. Our UK business grew 13.3% year over year to $268 million and is up nearly 17% year to date. As a reminder, we are

comping over 26% UK growth in the third quarter last year following the launch of TikTok Shop while also lapping the point at which air fryer headwinds began to ease. We remain as convicted as ever in our ability to be a long-term grower in the largest and most mature markets as demonstrated by the U.S. and U.K. performance this quarter. Turning to performance by category. Net sales in the cleaning category increased 4.1% year-over-year to $617 million, driven by our quartered and quartered. Cordless Vacuum subcategories. Here again, we saw the power of relentless innovation to drive sales in our core businesses. Net sales in the cooking and beverage category increased 36.6% year-over-year to $598 million. Multiple franchises contributed to the strength in the quarter, including the Ninja Luxe Cafe, Ninja Crispy, and more. Net sales in the food preparation category increased 18.3% year-over-year to $486 million. Driven by robust growth in our blending subcategory as we continue to innovate with launches like the Ninja Crush Boss. Frozen treats also perform nicely in the quarter. This is a good example of how growth compounds as we increasingly diversify the number of core categories at Shark Ninja. Finally, our beauty and... home environment category increased 45.8% year-over-year to $276 million with continued strength across product lines. This quarter, we saw particular momentum in our Shark Beauty portfolio, both hair care and skin care.

Now let's move to gross profit. Adjusted gross margin increased 560 basis points to 55.9% of net sales, and our GAAP gross margin increased by roughly 910 basis points to 59.2% of net sales. As previewed last quarter, the primary driver of the Q3 gross margin expansion is the recognition of refund claims accepted by the U.S. Customs and Border Protection for duties previously paid under IEPA that are attributable to duties, expense, and cost of sales. For the portion of the tariff refund claims attributable to duties, expense, and fiscal 2025, we exclude the benefit from our adjusted results. These duties were recognized in a prior period and are not indicative of our ongoing operating performance. The portion of the refund claims attributable to duties, expense, and fiscal 2026 is not excluded and remains in our adjusted results. The IEPA tariff refund claim related to 2025 of approximately $110 million represents the gross number recognized in Q3. This differed slightly from our original expectation of roughly $124 million or about half of the total refund claim. of approximately $247 million. The difference is due mostly to slight changes in the realized split between duties attributable to FY 2025 and FY 2026. and million dollars of gross FY 2025 duties is partially offset by intentional reinvestment into our cost of goods sold by in Q3, we recorded approximately 45 million due to our factory partners as recognition of their

extraordinary partnership during the tariff related headwinds in 2025. moving down the P&L, our adjusted operating expenses this quarter totaled 680 million dollars or 34.4% of net sales. there's the 32.6% of net sales in the year ago quarter before i break down each operating expense line item i want to take a moment to remind everyone of the plans we laid out last quarter our updated outlook in august reflected stronger underlying operating performance as well as the expected net benefit from the tariff refund associated with fyi 2026 duties we foreshadowed opportunistic reinvestment of a portion of that benefit in targeted areas that support long-term growth these include retail activation media technology and ai capabilities along with the acceleration of some r d efforts some of these investments impacted the following operating expense lines the numbers i will walk through here are non-gap results for the full recon reconciliation to our gap measures please reference our earnings release non-gap research and development expenses increased 24.4 percent year-over-year to 111 million dollars compared to 89 million dollars in the prior year period averaging roughly 10 basis points year-over-year disruptive innovation has always been a competitive advantage for shark ninja and we will continue to invest in our r d engine including opportunistically accelerating the timeline of investments when we

believe it makes sense to do so non-gap sales and marketing expenses increased 25.3 percent year-over-year to 445 million dollars compared to 355 million dollars in the prior year de-leveraging approximately 70 basis points year-over-year leaning into our media and selling efforts especially as we ramp up new categories and geographies help shark ninja build a stronger global brand non-gap general and administrative expenses increased 43.3 percent year-over-year to 125 million dollars compared to 87 million dollars in the prior year period de-leveraging just about 100 basis points year-over-year investments in shark shark to personnel and technology including the acceleration of strategic ai investments drove the increase here ultimately we delivered over 21 sales growth and approximately 46 adjust ebit of growth in the third quarter for an adjusted ebit of margin of 23.3 percent of net sales this is consistent with shark ninja's profitability goal of delivering full year adjusted ebit of growth ahead of net sales growth we continue to do this while spending proactively on high roi investment opportunities balanced by remaining prudent and disciplined when considering operating expenses as a percent of net sales to wrap up the income statement our gap effective tax rate in q3 was 23.3 percent while our non-gap effective tax rate was 21.7 percent adjusted net income in the period was 331 million dollars or two dollars and 34 cents per diluted share compared to 213 million dollars or one

dollar and 50 cents per diluted share in the year ago period. our adjusted net income in q3 grew roughly 55 percent year over year marking growth of 25 percent or better in 13 of the last 15 quarters. turning to the balance sheet and cash flow. at the end of the third quarter cash and cash equivalents totaled almost 488 million dollars up approximately 85 percent year over year. total debt outstanding at quarter end was 700. and nine million dollars and we continue to have nearly 495 million dollars of capacity available to us on our 500 million dollar revolving credit facility. total inventories were 1.43 billion dollars exiting the quarter up 23. year-over-year. we have now lapped the large levels of tariff pre-built inventory from late 2024 and early 2025 with inventory growth tracking closer net sales growth. in the quarter we repurchased roughly 50 million dollars worth of stock as part of our authorization. this brings our year-to-date activity to 170 million dollars so far in 2026. we are pleased with our stock buyback activity and will continue to utilize the program opportunistically. let's move to our outlook. consistent with prior quarters our updated 2026 outlook assumes current tariff levels persist for the remainder of the year including minimum rates of 10 percent for indonesia malaysia and cambodia and 12. 0.5 percent for china vietnam and thailand as i mentioned earlier we utilize the portion of

the tariff refund benefit recognized in q3 to reinvest across multiple areas of the pno last quarter we had sized this opportunity at approximately 95 million dollars as the difference between the approximately 125 million dollars expected tariff refund amount attributable to duties expense in fiscal 2026 and the anticipated flow through to adjusted EBITDA of approximately 30 million dollars in the quarter we actually recognized approximately 134 million dollars of tariff refund benefit associated with fiscal 2026 duties this slightly higher amount allows us additional flexibility to reinvest in the same priorities I outlined earlier as we began to execute on the reinvestments in Q3 some timing and other considerations spread a portion of the spending across two quarters we see multiple opportunities in Q4 to complete these reinvestment initiatives in targeted areas designed to drive exciting momentum in 2027 and beyond our updated outlook reflects this timing dynamic in tandem with our various strong core business performance. For the full year 2026, we now expect net sales to increase between 18% and 19% compared to our prior guidance of a 16% to 17% increase. Adjusted net income per diluted share to be in the range of $6.65 to $6.75 compared to $6.45 to $6.55 previously. It had to be in the range of $1.38 billion to $1.391 billion, representing growth of 21.5% to 22.5% year-over-year, compared to the prior expectation of $1.36 billion to $1.3 billion.

$1.37 billion, representing growth of 19.5% to 20.5% year-over-year. We continue to expect net interest expense to be down relative to 2025, our gap-effective tax rate to be approximately 22% to 23%. And capital expenditures to be between $190 million to $210 million for the year, where we are now tracking closer to the midpoint instead of the high end. Our Q3 actuals and the high end of our updated... ...2026 outlook imply that in the fourth quarter of 2026, we expect our net sales growth to be up approximately 17% year over year. With some timing shifts of previously planned reinvestments from Q3 into Q4, we... anticipate adjusted gross margins in the fourth quarter to be down approximately 100 basis points year over year. Finally, the high end of our updated 2026 outlook implies that in the fourth quarter of 2026, we expect adjusted... growth in Q4 to be up approximately 9% year over year. It's important to reiterate that this is simply the timing of certain tariff refund reinvestments, all of which we expect to be contained in Q4. Furthermore, these investments are intentionally designed to benefit 2027 and beyond, not 2026. Take our additional media spending as an example. When SharkNinja converts a distributor-led market to direct operations, we have a major marketing opportunity. We have the capability to ramp up advertising and media in a way the distributor partner simply cannot afford. Historically, the spending surge leads to meaningfully increased consumer awareness of SharkNinja products. In turn,

we tend to see a demand generation uptick that typically leads to sizeable inflection in sales. With several countries having recently transitioned to direct operations in EMEA, we are utilizing a portion of the tariff refund windfall to target incremental media dollars in these areas. For simplicity and clarity, consider the second half of 2026 compared to the second half of 2025. When looking at the top line and bottom line in totality, based on the high end of our updated outlook, we anticipate net sales in the second half. the second half of 2026 to grow roughly 19% and adjusted EBITDA to grow roughly 25% compared with the second half of 2025. Once again, this is consistent with our annual goal of growing adjusted EBITDA dollars. faster than net sales. Our growth and profitability algorithm remains intact. Importantly, we intend to perpetuate this into next year and beyond. Our main objective remains the same to grow adjusted EBITDA. EBITDA dollars faster than net sales dollars in 2027. To close, our Q3 performance reflects powerful momentum across the business. All elements of our net sales engine are firing across products, geographies, and channels. As components of our three pillar growth strategy. Most importantly, we continue to pair exceptional profitability improvement alongside top line growth. I could not agree more with the point Mark made earlier. We believe there has never.

been a more exciting time for shark ninja to be in business. Thank you. With that, I will now turn it back to Mark. Thanks, Adam. This has truly been a transformational year for shark ninja. We've made significant strides across the board in what we made.

How we market, how we sell, how fast we learn, and how far we reach. We've done all of this globally with a larger and more complex business than ever before. Investors constantly wonder how shark ninja can keep growing at this size and we continue to deliver. In fact, our 21% net sales growth this quarter is right in line with our longer term track record. A 21% compound annual revenue growth. rate over the last 18 years. It all adds up to one thing. Shark Ninja is a consumer technology company operating at hyperscale. In my experience, consistent success requires. There's constant reinvention and the willingness to adapt. We can't wait to show the world what we're capable of as we close out a strong 2026 and look ahead to 2027. While Shark Ninja will never stop. At the end of the day, it always comes back to the consumer. Everything we do is grounded in remaining true to this mantra. It keeps us diligent, ambitious and laser focused on solving the next consumer problem. I express my gratitude to the more than 4,100 team members around the globe who make this possible. Because of you, we believe Shark Ninja is powerful and differentiated with an incredibly bright future.

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

Thank you. We will now begin the question and answer session. Please limit yourself to... ...one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow... ...for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Your first question comes from the line of Randy Koenig with Jeffries.

you know, if you think about our current guidance at a little under $8 billion this year, we're very, very small percentage right now of that available TAMP. Now, to me, and I think the biggest change from kind of three years ago, when you and I had this conversation, was, were we going to be able to really take advantage of that TAMP in markets like Latin America, in markets like non-English speaking Europe? And I think that we've really proved that over the last couple of years. of, you know, consumers are responding to us as much in Chile, you know, and in Poland, as they are in the UK or the United States. I mean, we're obviously just still in the very early stages in those markets, but demand is. Strong consumer engagement is strong. Obviously, our distribution model is going to need to mature and improve and we're going to need to be able to scale up more categories in those markets. So we're in the very, very early stages. But for us. The main question is always, do consumers love the products? I mean, that's where everything starts. I mean, if if we developed a water purifier and we said, great, you know, consumers in America love the product, but we're not really sure the consumers in Norway are going to respond to it. Consumers in Mexico are going to respond to it. I think that that is a huge change from three years ago that consumers are in these markets responding to it. Our demand generation model is resonating and working in these markets.

I remember people saying to me, Mark, you know, continental Europe is so different than anywhere else in the world. It's not so different than anywhere else in the world. I mean, you know, there's a robust direct to consumer business. There's a strong pure player market, TikTok shop. And social commerce is penetrating into these markets. We're in all the major brick and mortar retailers and we're scaling up and consumers are engaging with the content in these markets as well as they're engaging with the content. In the United States or the UK. So I think the market's big. I think you'll expect us to get into more new categories next year that will only continue to enlarge the size of the available market. Super helpful. My last question would be, I want to talk about unpacking your comments around the core, you know, growing. I think it gets lost sometimes when we're all focused on the innovation part of your business and the new categories. But maybe talk about. how you're thinking about proportion over the next, over the next few years, maybe three to five years of how much of the business is going to come from the core, how much from innovation and based on that, plus what you've talked about. framing out the customer cohorts and the customer base changing and expanding and widening that breadth. Do you think that that would give you an opportunity to continue to grow double digits in the United States market over the medium to long term?

You know, Randy, we came out of the first quarter and, you know, we grew high single digits in North America. And I got asked constantly, you know, what we're concerned about. I mean, look at what North America has done in the last two quarters. I mean, our North America business is on fire in these markets right now. And it is really being driven by the core, by the base business. I mean, and it's not just, you know, enhancements. I mean, we talked about product assortment changes a year ago. You know, assortments of retailers have gotten stale in certain categories. We talked about things that we did with the blend boss a year ago. Look what we did. And what we did to upright vacuum cleaners and look at what we've done with the crush boss that we launched in the last quarter to reinvent the blending category. I mean, we've got, you know, food prep back to really significant growth year on year in the largest category. within food prep is blenders and kitchen systems. So I think between product assortment, between new products in these base categories, between things like colors and and you're going to see a lot more prints and collectibles coming out in these categories, you know, we're doing a lot in terms of, you know, AI work around promotion and media analytics and segmentation. I'm really excited about the base business. And I'll tell you, you know, one of the proof points of that is we've got a lot of engineers that want to work on the base business. I mean, they want to work on reinventing corded sticks.

And what corded sticks can be moving forward. It's not that everyone is kind of going to the new shiny object. I mean, we've got a lot of our engineering team that wants to go and really revolutionize the base business. And I think that is something that is so different in the business than. It was, you know, 15, 18 months ago. Super helpful. Thanks, guys. Your next question comes from the line of Brooke Roach with Goldman Sachs. Your line is open.

Please go ahead. Good morning, and thank you for taking our question. Mark, in your prepared remarks, you indicated international will accelerate in 4Q versus 3Q. When I put that in the context of your 17% 4Q revenue guide, the lower rate of growth in the US exiting the year. Can you contextualize what you're seeing there?

Yeah, thanks, Brooke. I appreciate it. I think what you saw from us in Q3 was an outstanding performance within the investing market, right? In the US, you know, one of the most impressive growth rates that you've seen all year. And so I think, you know, what happened in the quarter was really sales execution, operational execution, and we feel great about the holiday selling that's happening in Q3. As you look into Q3, Q4, we're comping some massive, you know, social commerce numbers from last year as well. And so, you know, TikTok shop and, you know, other avenues were live for the first time last Q4 as well. And so exiting the year, you know, domestic is very firmly a double digit grower. And I think we've proven that now quarter after quarter this year and going into next year, the trajectory is as strong as ever, both across new categories, across what social commerce has done. And to Mark's point on reinventing the core. You know, the domestic business has a massive core component to it. And so I think that's been one of the real proof points for us as we've grown the domestic businesses, you know, what we're doing in the core is directly showing up in that domestic growth. So that'll continue into 27. Brooke, I mean, you know, listen, a real standout in the quarter, and I think we'll see that in Q4 is the Walmart business, you know, has really rebounded tremendously for us. You know, all of our major brick and mortar retailers are doing really, really well, you know.

We're growing our R.com business. I mean, things like Walmart.com and BestBuy.com and Target.com are doing great. Our club business is strong. So there's really, you know, nice broad-based growth within. North America. It's not coming from any one particular channel or retailer. And the last thing I would say is that we've really lapped all of the Canada changes. I think you're going to see really nice growth come from Canada in Q4. And I think we're set up for a strong Canada business in 2027 with a really new model in that category that's going to take on much more of a look like the U.S. business. Great. And then just a follow up for Adam, can you contextualize the underlying growth margin drivers, excluding the refund and one time reinvestment? How should we be thinking about the biggest buckets of opportunity? and headwinds across tariffs, raw materials, freight mix, and pricing as we enter 2027? Sure. I think, you know, when you think about the Q3 gross margin, certainly the tariff rate fund is a big component of it. To exclude the refund, gross margin would have been down around 100 basis points. That 100 basis points was really a choice that once we had visibility into the refund, we delayed any price increases. You know, we've been taking on commodity increases. We've been taking on FX. There's been a number of headwinds, as you mentioned. And, you know, the refund, once we had line of sight, it allowed us to delay some of those price increases. Now, exiting this year and then going into 2027, the dynamic that we're looking at is some of those headwinds remain headwinds. And this is where

we've kicked off work well earlier in the year across operating expenses as well as gross margin to start to get ahead of that. I think the headwinds, there's no new headwinds over the last couple months. It's really the same ones that we've been talking about all year. This is, again, where the Shark Ninja playbook is on full display in terms of looking at every single lever that we have. And I think looking at 27 above all else, our overall growth algorithm remains unchanged, right? It's to grow, adjust it even at a faster rate than that. And we feel very confident in our ability to continue to do that as we go into 2027. Operating expense leverage, that's going to be a massive component. You've seen us leverage before. You've seen us leverage significantly. And then you've seen us be opportunistic when we're able to. And so this is a very dynamic business that's enabled by the persification in which we operate. And going into 27, that will be no different. Thanks so much. I'll pass it on.

Your next question comes from the line of Bob Durbel with BTIG. Your line is open. Please go ahead.

You know, put out there on social commerce where the consumer might decide later on that they're going to buy the product, but they're not going to buy it on the platform. The second is on the D2C business. You know, we saw really nice D2C growth in Q3. globally. I think we're set up for a great holiday season from a D2C perspective. We're a really credible destination now for the consumer to shop for our products. You know, that is not something that I could have said globally. For Christmas 2025, you know, our site experience wasn't great. We had multiple sites. So I think, Bob, and we're just getting started in this. I mean, we're just, you know, we just put an agent force. You know, we're still working. With Salesforce on implementing marketing cloud. So I think the CRM piece of it, the loyalty piece of it, you know, are all things that into 2027, I think there's still a lot of opportunity for us to scale. The D2C business, you know, and I do believe through 27 that will come in at a faster growth rate than the rest of the business.

Thank you very much.

Our next question comes from the line of Philip Lee with William Blair. Your line is open. Please go ahead.

But, you know, I would say, you know, 50% of our product in Spain and Italy this holiday season is only going to be available on D2C and social commerce and Amazon. So, you know, the consumer is going to have a much broader assortment from us on those platforms than they will in some of the brick and mortar retailers. Now, I think the brick and mortar retailers will catch up, but I think it will take time. But, you know, I'm excited because, you know, we're somewhat more in control of our own destiny as it relates to our ability to be able to innovate, create demand, and still get the product to the consumer without the blocker. The fact that it's not distributed in a particular market, we have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.