On Holding AG Q4 2025 Earnings Call - Crossed CHF 3 billion as premium innovation and LightSpray scale

Operator: Thank you for standing by. Welcome to the On Holding AG fourth quarter and full year 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. Thank you. I’d now like to turn the call over to Jerrit Peter, Head of Investor Relations. You may begin.

Jerrit Peter, Head of Investor Relations, On Holding AG: Good afternoon and good morning to our investor community. Thank you for joining On’s 2025 fourth quarter earnings conference call and webcast. With me today on the call are On’s Executive Co-Chairman and Co-founder, David Allemann, and CEO and CFO, Martin Hoffmann. Before we begin, I will briefly remind everyone that today’s call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our Form 20-F filed with the SEC earlier this morning for a detailed discussion of such risks and uncertainties. We will further reference certain non-IFRS financial measures such as adjusted EBITDA and adjusted EBITDA margin.

These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS accounting standards. Please refer to today’s release for a reconciliation to the most comparable IFRS measures. We will begin with David, followed by Martin, leading through today’s prepared remarks, after which we are looking forward to opening the call for a Q&A session. With that, I am very happy to turn the call over to David.

David Allemann, Executive Co-Chairman and Co-founder, On Holding AG: Good morning, everyone. A very warm welcome from, no, this time not the Swiss Alps, but the New York Stock Exchange. Standing here always brings me back to the day where we rang the bell for our IPO almost five years ago. That moment was never just about becoming a public company. It was about sharing a dream that a brand built on innovation and design and human energy could grow into the most premium global sportswear brand. Looking at where we are today, I feel both proud and deeply grateful to the global communities who choose to move with us every day. At the beginning of 2025, we set ambitious expectations for strong, profitable growth. What followed went well beyond them.

Demand for our brand accelerated faster than we had planned, and for the first time, sports brand On cleared the 3 billion CHF revenue hurdle in 2025. Sales grew 36% at constant currency, and we delivered our highest ever gross profit in adjusted EBITDA margins. For me, this outperformance is deeply meaningful because it shows our premium strategy is working and our elevated offer is resonating with consumers even stronger than anticipated. In fact, we see an acceleration in key areas. Let me zoom out. As this acceleration happens on the backdrop of a profound societal shift, the traditional leisure class is giving way to the movement class. Old signifiers of wealth, sedentary comfort, and overconsumption are being replaced by desire for vitality. You see this shift in the declining sales of self-indulgent categories. Today, status is an investment in the self. Health is the new wealth.

Longevity is the ultimate luxury. For these new ageless athletes, sportswear has shifted from utility to identity, capturing a massive share of their life and their spending power. The traditional volume-driven sportswear model is simply not built to capture this discerning consumer. This societal shift has blown the market wide open for new generational premium brands like On. We have to ask, what does the movement class demand from us? We see three defining answers driving our acceleration. First, relentless performance innovation. We don’t just talk about innovation; we engineer it. In the past 5 years, we scaled our R&D team by 1,000%. Today, over 400 experts, sports scientists, robotics specialists, and AI engineers operate out of our Zurich labs. It’s all about performance and feel for the movement class. In 2025, our engineers have made several industry-changing innovation breakthroughs.

On Labs in Zurich is home to the only advanced foam competence center outside of Asia. Thanks to this competitive advantage, we are the first brand which is able to combine structural engineering with superfoams. The immediate result is the upcoming Cloudsurfer 3, which is 15% lighter, 20% softer, and provides 15% more energy in push-offs. Over the next couple of years, we will bring this technology to a wide range of On’s everyday running shoes, making cutting-edge innovation accessible for many of our fans. Our crown jewel is LightSpray. We are completely rewriting the future of manufacturing by changing the very nature of how a shoe is constructed. We are no longer building uppers, we are spraying them. A robotic arm spins a 1.5 kilometer continuous filament into a perfect fit upper in exactly three minutes.

We took 200 assembly steps and reduced them to 1. It generates 75% less CO2, the entire shoe weighs just 170 grams, making it one of the lightest elite super shoes ever to compete in a marathon. The proof is on the podium. Wearing the Cloudboom Strike LightSpray, Hellen Obiri didn’t just win the marathon in New York in November, she shattered a 22-year-old course record. Now we scale. Last week, we opened our newest LightSpray facility in Busan, South Korea, increasing our production capacity 30-fold compared to 2025. Later this month, we will scale this elite record-breaking technology to everyday runners everywhere with the launch of the LightSpray Cloudmonster 3 Hyper. Second, premium inspiration. For the movement class, movement isn’t just a workout, it’s their identity.

They are buying into a brand that intersects with fashion and the zeitgeist. We aren’t following trends, we are co-creating culture. Take our collaboration with Loewe, now in its fifth year. We just launched our eighth drop featuring the Cloudsolo at $750. The consistent and strong demand we see at this premium price point is a profound validation of our premium pricing power. The global energy is electric. At Paris Fashion Week, our high-fashion collaboration soared with younger consumers from APAC to London. We are pushing the boundaries of what sportswear can be, like our highly sought-after ballerina shoe with FKA twigs. The ultimate cultural catalyst is Zendaya. We are shifting from a partnership to true co-creation, leading to our first fully co-created collection for spring/summer 2026. Expect an important moment from On Zendaya and an Academy of Art-winning director very soon.

Here is what matters to our long-term success. This cultural heat translates into undeniable revenue. We opened 80 new stores this past year. You see it in the queues outside our doors. The proof is in the hard numbers. Tokyo Ginza became a top 10 global store despite only opening in September. Seoul rocketed into the top 10 in just months. Our retail footprint will scale to close to 20 countries in the next few months. It proves that when you intersect pinnacle innovation with cultural relevance, the commercial results are extraordinary. A premium brand doesn’t stop at the physical product. It defines the entire experience. That’s why we are applying our Swiss engineering directly to our digital ecosystem. We recently deployed a conversational AI layer across our customer service platforms. This isn’t about processing returns. It’s about having deep, personalized conversations with our community at a massive scale.

This is just step one. We are building the digital engine for our future. Over the next few years, you are going to see this AI blueprint transform how we operate. It will elevate our premium experience and drive efficiency from the moment we design a shoe to how we run our global supply chain. Third, a complete expression of the brand from toe to head. Performance footwear will always be our anchor. To truly serve this community, we are building a complete sportswear house. The breakthrough is happening right now. In 2025, our apparel business delivered an incredible 76% net sales growth at constant currency, proving we can build a highly profitable multi-category business. We saw apparel share of sales climb across every single region and every single channel, driven primarily by our direct-to-consumer business.

Our foundation is running, but the movement class lives in our gear long after the run is over. They demand our performance in the gym, on the streets, and across entirely new sports. We are capturing these everyday hours with female-focused innovations like our new Sense-Tech fabric. The ultimate proof for this multi-category power? Tennis. Demand across all our apparel business was outstanding last year, and tennis was our fastest-growing category. This was fueled by extraordinary moments on the court, like Iga Świątek winning in Wimbledon and Ben Shelton taking the Masters 1000 in Toronto. It’s also combined with our off-court storytelling. By bringing Burna Boy into our tennis lifestyle brand, we are successfully redefining the courtside space for a younger demographic. We are taking the same useful energy straight into the global padel boom.

In January, we brought on the youngest world number one in history, Arturo Coello. Arturo isn’t just an athlete on our roster, he’s a co-creator driving our padel-specific innovation. What we have built courtside is a blueprint. Wherever sport and culture collide on a global stage, you can expect On to be there. Let me be clear. We are not just building a better performance footwear company. We are building a lasting premium house for the movement class. Our premium growth strategy is working and our global momentum is accelerating, and our foundation for the future is broader and stronger than ever. With that, it is my great pleasure to hand the baton to our CEO, Martin, to walk you through the numbers and the details of a historic foundational year. Martin, please.

Martin Hoffmann, CEO and CFO, On Holding AG: Thank you, David. I’m incredibly proud of what we achieved as a team in 2025. For the first time, On crossed the CHF 3 billion net sales mark, a milestone that in a single year matches our total sales from our first two full years as a public company combined. Growth re-accelerated. A 30% year-over-year growth rate on a reported basis and a 35.6% at constant currency proves that today On is the best version of itself it has ever been. Beyond the top line, our performance is anchored in operational health and power. We delivered a record gross profit margin of 62.8% and adjusted EBITDA margin of 18.8%, already exceeding our 2026 aspirations. Our cash flow generation strengthened further, lifting our cash position to more than CHF 1 billion.

These results are the fuel for us to dream on bigger and bolder than ever before. What stands out to me is the power of our vision to be the most premium global sportswear brand. Writing our own playbook, growing the addressable market for premium performance. At the same time, this has created a powerful financial engine. Our premium positioning generates high gross margins, which we partially reinvest into product innovation, brand experience, and our culture and our team, which in turn fuels future growth and even greater profitability. Strengthening this position while remaining the most authentic brand and maintaining our defining operational excellence remains our north star. Because we are so clear on who we are and where we are going, we’re able to take a huge step forward as an organization.

We expanded our reach meaningfully with global awareness now approaching 30%, still leaving 70% untapped growth opportunity. We saw our communities responding. New fans are building full looks, basket sizes are growing, and crucially, customers are choosing On at full price across every region. At the same time, we became a more integrated and focused operator, strengthening operational backbone and elevating the platforms that support our long-term growth. This process is visible in the broad-based strengths we see across all regions and channels. Our D2C share increased globally to 41.8%, a rise of 110 basis points, reflecting our deepening direct connection with our fans. While maintaining strong momentum in the Americas, we saw a strategic acceleration across EMEA and APAC. The result is a more balanced regional distribution, providing a significantly broader base for our future expansion.

We ended the year with a global footprint of 67 retail stores, representing a net addition of 18 locations since the end of 2024. These premium brand hubs showcase our fullest assortment through an elevated aesthetic. Our focus on larger high-impact spaces with 2025 store openings, nearly 40% bigger than our existing estate, is yielding exceptional results. Despite the relatively early stage of our retail rollout, these more experiential formats are driving further gains in our market-leading sales productivity, which increased by around 20% during the year. The resonance is evident across categories, with apparel and accessories now contributing 15% of our total retail net sales, with many flagship stores achieving an even higher share. Complementing this direct footprint, our select franchise and distributor partners operate 45 mono-brand stores within our wholesale business.

With its superior margin profile and the highest average item value across all channels, our retail network has solidified its position as a strategic cornerstone of our premium growth strategy. Multi-category expansion remains a standout driver of our performance too. On a constant currency basis, apparel grew by 75.5% and accessories by 135.1%. Today, they now represent 7% of our total net sales, a meaningful increase of 190 basis points year-over-year. With the majority of these sales in excess of 60% flowing through our high-margin D2C channels, this category growth is structurally improving our premium mix and overall business profitability. All of this is only possible through the passion and dedication of our nearly 4,000 team members globally, our countless partners, ambassadors, athletes, and our fans.

Thank you all so much. On a personal note, this was my first year as sole CEO. Spending time with our teams and communities has only deepened my belief in our unique combination of ambition and humility. I’m deeply grateful to our finance team for their support during this transition, and I’m incredibly excited to welcome Frank Sluis as our new CFO in May. Frank’s global experience and shared values make him the perfect partner to help elevate On to the next level as we continue to chart our own course. Our Q4 results are a direct reflection of the strong momentum of the On brand globally. The final month of the year are always a true reflection of the work done in the preceding quarters. We held our discipline and our commitment to premium execution across all regions.

Even during Black Friday and Cyber Monday, new customer acquisition was led by full price purchases. Despite being less promotional, we outperformed our gross expectations. Net sales reached CHF 743.8 million, increasing 22.6% year-over-year and 30.6% at constant currency, significantly ahead of our updated guidance in November. Our direct-to-consumer channel delivered another outstanding quarter. Net sales reached CHF 360.6 million, growing 21.7% reported and 30% constant currency. An impressive result on top of a very demanding prior year comparison. Our globally coordinated holiday campaign amplified brand heat, attracted new customers, and drove high repeat engagement, while disciplined full price execution was clearly visible across all regions. Our retail network continues to express the brand at its highest standards.

During the quarter, recent openings, including Tokyo, Ginza, Madrid, Stanford, and our two Seoul locations, performed strongly with many exceeding expectations and ranking among the top performing locations in our store network. Across the existing fleet, productivity rose further even as the network expanded, with particularly strong performances from stores in Paris, Miami, and Hong Kong. This sustained productivity growth reflects both the strength and the scalability of our retail strategy. Wholesale also delivered exceptional results, outperforming our expectations. Driven by strong sales through numbers and sustained demand from key accounts in the Americas and EMEA, together with strong momentum across our distribution markets in Southeast Asia, net sales reached CHF 383.2 million, increasing 23.4% year-on-year and 31.2% at the constant currency.

Looking across regions, the Americas delivered net sales of CHF 434.3 million, growing 12.8% reported and 21.3% at constant currency. Close to 50% of net sales were driven by our D2C channels. Even during the most promotional period of the year, our full price execution held firm and demand remained strong. Within D2C, we saw particular strength in our core running franchises, which grew their share of sales by over 5 percentage points. Our performance in D2C was complemented by exceptional demand across wholesale, where our key account partners are leaning further into the brand, expanding space, elevating presentation, and driving strong sales through.

Europe, Middle East, and Africa maintained excellent trajectory with net sales reaching CHF 183 million, increasing 24.2% year-over-year and 27.5% at constant currency. Growth was brought across market and channels. Momentum in the German-speaking region built further into year-end. The U.K. remained very strong across all channels, Southern Europe continued to scale rapidly. The opening of our first store with a distributor partner in Riyadh in November marked an important milestone, it’s already driving incredible strong consumer response. Asia-Pacific delivered another exceptional quarter, further solidifying its role as a key growth driver for the brand. Net sales reached CHF 126.5 million, increasing 70.8% reported and 85.1% at constant currency.

We continue to see deep resonance and incredibly high demand across the entire region and in all channels. We saw outstanding results from our Double 11 execution in China, ranking top five on Tmall for footwear over CHF 140 in December. This momentum carried into a very strong Chinese New Year performance, with in-store traffic in China more than doubling relative to our baseline. During the holiday, we saw our highest productivity globally in two of our Hong Kong stores and a stellar performance in our recently opened Shenzhen flagship, our largest retail store in China. This location is capturing a high share of Gen Z consumers and delivering an over 20% apparel share. With Asia-Pacific now surpassing the half a billion Swiss franc mark for the full year 2025. We are proving that scale and premium can and do go hand in hand.

Across product categories, it is inspiring to see how we are earning our place across the full spectrum of our fan stay. That’s happening not just on their feet, but on their bodies as well. Net sales from shoes reached CHF 687.3 million, increasing 20.8% reported and 28.8% at constant currency. Performance running maintains strong forward progress, supported by the Cloudsurfer franchise and the strong launch of the Cloudsurfer Max earlier in the year. We continue to strengthen our connection with both dedicated and everyday runners in Q4. Across other verticals, franchises such as Cloud, Cloudtilt, and the Roger also delivered excellent momentum. Apparel continues to become an increasingly important entry point into the brand. The share of new customers acquired through apparel grew from 6% to 10%.

Net sales reached CHF 45.1 million, growing 38.3% reported and 46% at constant currency against a tough prior year comparative. Growth was particularly pronounced in D2C, where apparel forward store concepts are delivering measurable improvements in key retail KPIs, including conversion. Performance running and training led growth, supported by strong reception of new court and courtside collections in performance tennis. Turning to profitability, we delivered another outstanding gross margin, reaching a new Q4 high of 63.9%. That is up 180 basis points year-over-year and materially ahead of our latest guidance. This result reflects our strategy at its best, an unwavering commitment to disciplined full price execution, supported and strengthened by sustainable operating efficiencies.

This powerful combination, alongside favorable foreign exchange dynamics, allowed us to fully absorb external pressures like higher U.S. import tariffs and still expand our profitability here. Clear proof of the strength of our execution. SG&A, excluding share-based compensation, was 50.9% of net sales, up 40 basis points year-over-year. This modest increase reflects a conscious and decisive choice. Our relentless focus on operational excellence is generating significant savings, particularly in distribution. We are strategically redeploying those savings to fuel our biggest growth drivers, our global retail expansion and brand building. This is a key tenet of our philosophy. Our growth is self-funding. It demonstrates our commitment to scaling with discipline by delivering strong top line and bottom-line growth. Moving to our balance sheet. Our commitment to disciplined high-impact growth is clear. We continue to demonstrate remarkable capital efficiency.

In Q4, capital expenditure was CHF 28.6 million, representing 3.8% of net sales, up 50 basis points year-on-year, representing significant targeted investments in our retail expansion, innovative infrastructure, and supply chain capabilities. Our year-end inventory stood at CHF 419.8 million, with net working capital improving to 18.9% of net sales. As in prior quarters, the underlying volume of products grew faster than the reported value due to the negative currency translation. Volume growth is more aligned with our sales expectations for 2026. We are also very pleased with the composition of our inventory across all channels, putting us in a strong position ahead of our Q1 launches, Cloudrunner 3 and Cloudmonster 3.

Driven by our strong profit and precise planning, we generated CHF 359.5 million operating cash flow in 2025 and ended the year with a milestone moment, crossing the CHF 1 billion mark in cash. This is the strongest cash position in our history, providing us with the power and flexibility to continue investing into our future. Now, looking ahead. 2026 will be defined by our commitment to premium growth by exciting brand moments and a very strong product pipeline rooted in innovation and performance. As I mentioned earlier, our vision is powered by a unique financial engine.

Our strong brand momentum, combined with high gross profit margins, allow us to dream bigger, accelerate product innovations, and reinvest into standout customer experiences and our culture while consistently delivering strong adjusted EBITDA growth. David highlighted it, the pinnacle projects that will reshape our industry, but I want to emphasize the operational groundwork behind them. Throughout 2025, our engineers and scientists laid the foundation for market-first advances in technology. With the upcoming launch of the Cloudsurfer 3 in the second half of the year, we will introduce a world-first in foam development. The combination of our unique CloudTec engineering with the new SURREAL foam delivers a step change in performance. We are also innovating in how we manufacture at scale. With the opening of our new LightSpray™ facility in South Korea last week, we increased our production capacity for this revolutionary technology.

This moves LightSpray from a breakthrough concept to a meaningful commercial reality, starting with the Cloudmonster franchise. This trajectory of performance excellence is already visible in our recent launches and a strong start into 2026. The successful introduction of the Cloudrunner 3 in February reinforced our momentum. Furthermore, pre-launch activations for the Cloudmonster 3, one of our largest franchises, generated exceptional consumer engagement. For example, at the marathon in Tokyo. The strength of our now complete fall/winter 26 order book, which exceeded our expectations, reflects high partner confidence in our product pipeline and our long-term trajectory. Apparel remains central to this evolution. In 2026, we will deepen its performance credibility, bringing proprietary and innovative materials to more consumers and unlocking the women’s opportunity through refined studio and training collections.

We will elevate our premium expression across all touchpoints, from higher productivity retail flagships to more immersive brand worlds within our key wholesale partnerships. This disciplined scaling ensures that our growth remains both brand accretive and highly profitable. All of this builds the foundation of our continued journey of sustainable growth as we enter the final year of our 3-year strategy. It allows us to perform materially ahead of our 2026 growth and margin aspiration that we laid out almost 3 years ago at our Investor Day. In 2026, we expect net sales to grow at least 23% at constant currency. It is important to recognize that this now factors in a significantly higher base following our Q4 results, and therefore represents a further elevation of our ambition, reflecting the compounding strength of the own brand as we continue to grow at an exceptional rate.

Our continued outperformance has fundamentally shifted our trajectory. Now implying a 3-year constant currency CAGR from 2023 to 2026 of at least 30.5%. The opportunities ahead are compelling, underpinned by the continued strength of demand we see across the entire business. We anticipate robust, high-quality growth to persist across all regions. Our relentless innovation in footwear and apparel is engineered to drive an even more premium mix, leading to D2C outperforming wholesale. As part of this category expansion, we expect apparel to meaningfully outpace overall growth. This further elevation of our D2C share is a strategic catalyst. It allows us to expand our member base and engage more directly with our fans, leveraging the unique opportunities created by our ongoing investments in technology.

By fostering deeper connections, we are positioned to achieve increased engagement, significantly higher repeat purchase rates, and ultimately, stronger customer lifetime values. As we grow, we remain intentional about every step forward, ensuring we build a lasting premium community. We are navigating an exceptional currency environment. At current spot rates, we anticipate a reported net sales target of at least CHF 3.44 billion. These foreign exchange fluctuations do not affect the underlying health or strength of our business. Alongside the raise of our 2023-2026 top-line CAGR, we expect a full-year gross margin of at least 63% above our 2025 result, despite the additional impact from tariffs.

The sustained desirability of our brand, the continued expansion of our premium full-price offer, cumulative benefits of our operational efficiencies, and an ongoing shift towards our D2C channel, alongside some foreign exchange tailwind, are expected to drive new highs to our margin. As outlined in our last call, the combination of strong net sales growth and exceptional gross profit generation allows us to accomplish three strategic objectives simultaneously. Offset material foreign exchange headwinds on our Swiss franc-heavy cost base.

Martin Hoffmann, CEO and CFO, On Holding AG: Accelerate targeted investments into our brand, technology, and innovation pipeline, and elevate our profitability outlook for the year. We now expect an adjusted EBITDA margin in the range of 18.5%-19%, significantly beyond the 18% target set at our Investor Day in 2023. We are confident that when we look back at 2026 in a year from now, we will be able to share that we have built a foundation for something much bigger through our relentless innovations, incredible products, unique brand moments, but most importantly, through an even larger and more powerful team. With that, thank you to our investment community for your continued trust and partnership over the past year and as we look to the horizon. Operator, we are now ready to open the line for Q&A.

Operator: Thank you. We’ll now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of Jonathan Komp from Baird. Your line is open.

Jonathan Komp, Analyst, Baird: Hi, good afternoon. Thank you. Martin, could you talk a little bit more about your expectations for growth across regions at a high level for 2026? Maybe more specifically, when you look at North America, you know, what are some of the key drivers that stand out to you and how are your, you know, partners accepting some of the new innovation as they build out their assortments?

Martin Hoffmann, CEO and CFO, On Holding AG: Hi, John. Thanks for the question. The On brand is extremely hot in every part of the world. I think if we look into 2026, we have clearly the strongest product pipeline in terms of innovation and performance that we ever had. We will redefine how a running shoe performs and feels. LightSpray is not just a manufacturing revolution, it’s a revolution on really how upper materials allow us to provide a new sensation for runners in terms of lightness and feel. With the Cloudmonster and the Cloudrunner, we are relaunching two of our three most important franchises in the category. You saw the amazing success that we have with apparel as a growth engine on an ever-growing base.

Then when it comes to our premium position, we are so clear that where we are and where we are going and how we are charting our own way. This is a global story. This is the momentum that we have all around the world. As a result, we are seeing a much broader demographic coming into the brand. The growth with the 15 to 35 is the strongest across all the demographics. We expect very strong growth rates in each of the regions. As we said, we expect a stronger growth rate in our D2C channel given the innovations and investments that we also made in technology, our expansion of own retail.

We had a good start into the year across all the different regions. We expect that the first half of the year is growing slightly higher than the full year. We leave in some cushioning for the second half of the year. We indicated that we have a very strong order book, which puts us in a good position also for the second half to deliver additional growth. I think the momentum that you have seen in our numbers in 25 and especially also in Q4 just reflect the momentum of the brand.

David Allemann, Executive Co-Chairman and Co-founder, On Holding AG: John, this is David. I believe you have been at our TRE, at The Running Event in San Antonio, and have seen all the behind-the-scenes innovation that is coming. We’re really also extremely excited how the run specialty community is reacting to that. I think they voted us the most innovative and memorable booth at TRE, and that probably speaks to the excitement. You already see how we’re winning share in running, and this will continue with all the exciting innovation that comes from us in CloudTec, but also in superfoams, and of course in uppers and the whole manufacturing revolution in LightSpray.

Jonathan Komp, Analyst, Baird: That’s great. Martin, David, thank you.

Operator: Your next question comes from the line of Janine Stichter from BTIG. Your line is open.

Martin Hoffmann, CEO and CFO, On Holding AG: Hi. Good morning. Thanks for taking my question. Just on the wholesale distribution, I think you said that you’re in 40%-50% of your major wholesale doors with your U.S. partners. I’m wondering how you’re thinking about expanding that this year. Do you see the opportunity to add more doors, or is it more, shelf spacing category-driven? Just broadly, if you could give us some insights into how you’re planning global door expansion this year. Thank you. Hi, Janine. Thanks for the question. Yeah, I think the important way to look at this is, we still have 50% opportunity to expand in basically all of the key accounts all around the world. We are so laser-focused on growing our brand in a very premium, in a very durable, long-standing way.

At the same time, the opportunity is right there. We could grow at a higher pace, but we are fully committed to that elevating that customer experience. Also, driving a higher share of apparel sales in our key accounts. If you look further out, there are many opportunities to expand our product portfolio to then drive additional growth even on the same store base in the stores that we are in. While wholesale remains an incredibly important partner, as I said, we expect that our D2C channel continues to outgrow our wholesale channel, allowing us to just deepen the direct relationship with our consumers.

At the same time, really showcasing the brand in a more premium way to elevate our premium assortment, reach new price points, like David alluded to the Cloudsolo and the Loewe collection. I think really what we are doing with the brand and direction where we are going will allow us to grow comp stores, expand in new stores, and then drive incremental D2C share into the brand.

Anna Andreeva, Analyst, Piper Sandler: Great. Great, thanks so much.

Operator: Your next question comes from a line of Anna Andreeva from Piper Sandler. Your line is open.

Anna Andreeva, Analyst, Piper Sandler: Great. Thank you so much and congrats guys on nice results. You mentioned coming into 2026 in a position of strength and pipeline of innovation, the best you’ve ever seen. Should we think strong momentum from the holiday is continuing so far into 2026? Just a little bit of color on that. With the expectation for DTC to outperform wholesale again in 2026, just curious, can you talk about what kind of growth did you see in your database in 2025 and any color on the new customer adds specifically with the younger consumer? Thank you so much.

David Allemann, Executive Co-Chairman and Co-founder, On Holding AG: Probably just kind of talking to D2C and retail expansion, it’s fantastic to see how our brand becomes really super multidimensional across regions, across channels, across product. Retail is a super important factor in that because as the most premium global sports brand that we want to be, it’s about really serving our consumer, this movement class that I have been speaking about in a very premium way. We can do that in our D2C channel. We can especially also do it in our retail channels. That gives us the opportunity to present our product in the most exciting way. If you’re seeing how we are presenting apparel in a very, very exciting way to consumers, you also understand why now this becomes a very important entry point, especially also for our young consumer.

When it comes to basket adds, often it’s the fastest way how consumers add additional items in apparel to in our D2C channel. The way how you can experience DryTec, Sense-Tech, but then also all the new innovation in our product footwear, is very exciting in retail.

Martin Hoffmann, CEO and CFO, On Holding AG: This development goes hand in hand with being more attractive towards a younger consumer group. Again, this is not a replacement. It’s an additional consumer group that comes into the brand. At the same time, we know there is still a huge untapped opportunity also with the younger male consumer that we are clearly going after in the near-term future. We expect the next drop of our co-created apparel products with Zendaya in 2 months from now. Clearly those are products that very strongly resonate with a younger female consumer. The Cloud, the Cloudsurfer, those are products that skewing much stronger to the younger consumer.

This is an important pillar of growth. At the same time, as said with all the innovation that comes in the running space, we clearly expect an acceleration of winning share on the key running routes all around the world.

Anna Andreeva, Analyst, Piper Sandler: Terrific. Thank you, Martin.

Operator: Your next question comes from a line of Lorraine Hutchinson from Bank of America. Your line is open.

Anna Andreeva, Analyst, Piper Sandler: Yes, thank you very much. Good afternoon, gentlemen. 3 questions for me. First, do you confirm that you will organize a CMD in the second half? If yes, what do you think are the key investor questions that you want to address in the CMD? Secondly, you expect about 10 points slowdown, if I’m not wrong, of the organic growth rate for the group this year. It’s pretty large. Can you tell us what regions and what categories you expect will drive this drop? Lastly, on the LightSpray product, you highlighted how much larger production capacity you’re gonna have this year with the South Korean opening. Can you give us an idea of the percentage of volume that will be under LightSpray in 2026 and in 2027 approximately, please?

Martin Hoffmann, CEO and CFO, On Holding AG: Yeah. Just on the Investor Day. We clearly will do an Investor Day to outline our big aspirations that we have for the years to come. We are currently looking into the dates. We are trending a bit more towards the first quarter of next year. Also given that Frank is just starting as the new CFO, and I think it would be important to develop that journey together. At the moment we expect it more to be in early next year. David, you wanna talk a bit about LightSpray?

David Allemann, Executive Co-Chairman and Co-founder, On Holding AG: Yes. I mean, LightSpray is fast developing. I mean, 2024 was when we had proof of concept, Hellen Obiri winning the Boston Marathon. 2025 when we really expanded with our athlete community. The Cloudboom Strike LS has been at the feet winning gold medals, world champion titles, and Hellen Obiri winning the New York Marathon. This is clearly the year where we’re scaling. You’ve seen how we opened the Busan LightSpray factory that gives us a 30-fold increase in terms of capacity. Going from thousands of shoes to hundreds of thousands of shoes, it really leads to the democratization of this technology. Also with the Cloudmonster 3 LightSpray coming along, it’s really broadening out. This is not just a product for athletes. This is really a product for the wide market.

If you’ve just seen how the Cloudboom Strike that we now made for the first time available to a broader user base sold out in 2 weeks. We’re very positive about the momentum of this technology.

Martin Hoffmann, CEO and CFO, On Holding AG: When it comes to the growth rate by region, I said before, we expect strong momentum across all the different regions. Very clearly, Americas is our strongest region, our largest region, and we’ll not be able to put out a such a strong growth outlook without full confidence in that region. Asia-Pacific had an amazing run, more than doubling quarter-over-quarter. I think given the fact that this is now a CHF 500 million business, we also need to be realistic on the speed of growth and maintaining the premium-ness of growth.

I think being more conscious on the growth rates here is just super important in the benefit of this multi-billion opportunity that is there for the years to come. We are super excited about Europe because it’s the momentum there, from U.K. to Southern Europe, but also the accelerated momentum in Central Europe, I think is huge. Again, it’s gonna be a continuous story of strong growth across all the different regions and all product groups and channels.

David Allemann, Executive Co-Chairman and Co-founder, On Holding AG: I think probably a last point, Thierry. What’s really important, we’re building a brand not just for the next years, but for the next decades. We see an incredible demand. You’ve just seen how our awareness just lifted from 20% to 30%. Really demand is incredible, but we’re very, very disciplined how we fill it in terms of which channels that we go, how we also kind of add stores, how we add to our digital community, and how we also make sure that we build long-lasting franchises.

Martin Hoffmann, CEO and CFO, On Holding AG: Okay. Thank you. Thank you.

Operator: Your next question comes from the line of Cristina Fernández from Telsey Advisory Group. Your line is open.

Cristina Fernández, Analyst, Telsey Advisory Group: Hi. Thanks for taking my question. I had 2. I wanted to see if you could give more color on the 30% brand awareness you mentioned the brand has gotten to, how it differs by region in customer demographic, if you can share those details. 2, on the gross margin for the year, should we expect a higher gross margin in the first half of better strength, just given your comment on the sales growth being better earlier in the year? Thank you.

David Allemann, Executive Co-Chairman and Co-founder, On Holding AG: Hey. I mean, awareness is just, through the roof. Good thing is there’s also still 70% of people that don’t know us, so, there’s a lot of potential as well. Of course, we are seeing in specific hubs, we see, even higher awareness. This is the overall awareness number. If you look at what we’re gonna build out, this year with a incredible first co-created, partnership with Zendaya and an Academy-winning, director doing that together with us, with all the partnerships that continue with Roger, with Loewe. You can expect a lot of cultural relevance and heat that is continue to drive this awareness.

Martin Hoffmann, CEO and CFO, On Holding AG: On the gross margin. Really the strength in the gross margin is fundamental, and we expect this to be very strong throughout the whole year. Of course, Q4 with the highest D2C share, usually we’ll see or is expected to see also the strongest gross margin. Really is a strength that is deeply embedded in the business and will positively benefit each quarter. Of course, compared to last year, the strongest upsides are then in the first two quarters. Very important, the guidance that we have given, the 63% and more, is still based on the tariff regime that we have seen before the Supreme Court ruling.

It’s still embedded on the 20%. All our inventory, of course, is behind customs. All customs changes always come in with a bit of a delay of 2-3 months. If we are now seeing that the 15% or 10% incremental tariffs are becoming the new norm, there’s even upside to the guidance that we have given. There are also no refunds embedded into our guidance at the moment, although this would come incremental and would just give us so many more opportunities to accelerate some of the strategic projects for the future.

Operator: Your next question comes from a line of Aubrey Tianello from BNP Paribas. Your line is open.

Aubrey Tianello, Analyst, BNP Paribas: Hey, thanks for taking the questions. I’d love to hear more about EBITDA margin and specifically how we should be thinking about the distribution and G&A line items in your guidance for 2026, but also how these two line items should develop longer term beyond this year, especially after seeing some really nice levers there in 4Q. Thanks.

Martin Hoffmann, CEO and CFO, On Holding AG: I think we really see the incredible work that the operations and supply chain team is doing there together with our partners, continue to automate our supply chain, driving efficiencies. We have seen a huge improvement on the distribution line this year, and we expect that there’s more upside in the future. As we reiterated many times in the past, our focus is to drive incremental profitability in a very controlled way and to really reinvest into the brand, into building a much bigger business for the future while driving incremental profitability.

I think if you look into Q4, you see, how this is working out and the ability that we had to reinvest into bigger brand stories, into our holiday campaign, clearly is driving the strong momentum and then also the positive outlook. We’ll continue to do this. Really combining the strong profitability and increasing profitability with those reinvestments.

Aubrey Tianello, Analyst, BNP Paribas: Thank you.

Operator: Our last question comes from a line of Jay Sole from UBS Financial. Your line is open.

Jay Sole, Analyst, UBS Financial: Great. Thank you so much. David, my question is for you. You know, you talked a lot about building a community on a global basis in multi-categories as well. Can you just talk about how you think about the total size of the addressable market that you’re going after, given, you know, the community that you see, and also maybe what market share you think you have of that total addressable market today and where you think you can go? Then maybe Martin, just to follow up on gross margin, you talked about some efficiencies that are gonna be positive drivers of gross margin in fiscal 2026. Can you outline what some of those efficiencies are? That would be helpful. Thank you.

David Allemann, Executive Co-Chairman and Co-founder, On Holding AG: Jay, thank you for the question. Let me probably zoom out here a little bit. I spoke about the movement class and that this is not just a trend, but it’s really a societal shift. We believe that investing in oneself in is becoming much more important, and we’ve seen that over the last 10, 15 years, and we’ve been part of that story. Even if you look outside of our market, how you invest in yourself when it comes to travel, when it comes to food. Just look at hotel prices or restaurant prices in the U.S. and how this has been expanding 3x, 4x. We feel there’s a complete wide space opening beyond how you traditionally think about the sportswear market. This is where we’re tapping into.

This is a huge growth opportunity, and we’re best positioned to actually fill this demand because we’re not just about utility, but we’re very much about identity. You see that in the margins. You see it in the willingness of people to invest in our innovation, to invest into the cultural relevance of On. Now increasingly also to invest into toe to head, which is an additional growth opportunity for us, and you see the growth rates behind it.

Martin Hoffmann, CEO and CFO, On Holding AG: To the gross profit margin. Really, the fundamental driver here is our premium position, and with that, the pricing power that we have. We were able to increase the average selling price of our products quite substantially. This is not driven by price increases, but it’s driven by the mix and the ability to basically bring the customer into higher price points as well, which links to the opportunity that David just mentioned. Besides that, I mean, you see that our inventory position is very strong, we can fully focus on full price sales. We made huge steps forward in planning our business, reducing the share of air freight. We are still scaling.

We’re scaling with our factories, which also gives us additional opportunities there to have a wider spread between purchase and selling price.

Jay Sole, Analyst, UBS Financial: Got it. Thank you so much.

Operator: This concludes today’s conference call. Thank you for joining. You may now disconnect.