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- **Revenue Surge**: Q3 net sales up 34.5% YoY, with apparel sales tripling and Asia Pacific growing 109%.
- **Profit Leap**: Gross margin 65.7%, EBITDA 22.6%, driven by D2C expansion and cost efficiencies.
- **Innovation Lead**: LightSpray tech wins NYC Marathon; Cloudsurfer Max ranks top 5 in specialty stores.
- **Guidance Raised**: 2025 sales growth 34%, 2026 CAGR 30% (vs. prior 26%), fueled by 1M+ apparel units and 20+ new stores/year.
- **Sustainability**: Gross margin 62.5% target achievable despite tariffs, with 2026 EBITDA margin >18%.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 net sales reached CHF 794.4 million, up 24.9% YoY (34.5% at constant currency), driven by premium strategy and innovation. Apparel sales surpassed 1 million units, contributing 8% of total revenue.
- **Regional Momentum**: Asia Pacific grew 109.2% YoY (constant currency), with standout performance in Japan, China, and South Korea. Flagship stores in Tokyo and Zurich achieved record sales.
- **Product Innovation**: Launch of Cloudsurfer Max and LightSpray technology in running shoes, with Q1 2026 Cloudrunner 3 and Cloudrunner Max set to redefine the category.
- **Brand Expansion**: Collaborations with Zendaya and Burna Boy expanded appeal to younger demographics, with kid’s line products selling out rapidly.

**【CFO Financial Commentary】**
- **Profitability**: Gross profit margin 65.7% (vs. 60.6% prior year), EBITDA margin 22.6% (vs. 18.9% prior year), driven by D2C growth (37.5% YoY) and operational efficiencies.
- **Cost Management**: Freight and tariff savings reduced SG&A by 200bps, with FX tailwinds adding 100bps to gross margin. Inventory turnover improved, with cash conversion cycle reduced.
- **Guidance Update**: 2025 net sales expected to grow 34% (vs. prior 31%), with gross margin 62.5% (vs. 60.5%-61% prior). 2026 CAGR target raised to 30% (from 26%), implying 23% 2026 growth.

**【Q&A Highlights】**
- **Apparel Growth**: 100.2% YoY growth, D2C-focused strategy with 20-25 new stores/year. Apparel EBITDA margin expected to exceed footwear.
- **Gross Margin Sustainability**: Structural improvements (D2C share, scale) offset tariffs, with 62.5% 2025 gross margin target achievable despite 2026 tariff headwinds.
- **Inventory Management**: Lean inventory (CHF 380.6M) supports full-price selling, with Q4 holiday campaign showing strong demand despite no discounts.
- **Long-Term Outlook**: 3-year CAGR 30% driven by product pipeline (LightSpray, Cloudrunner 3), retail expansion, and brand awareness (75% of target market unaware of On).

On Holding AG (ONON) Q3 2025 Earnings Call Transcript

- **Record Growth**: Q2 net sales up 38.2% YoY to CHF 749.2M, with DTC at 41.1% mix and APAC tripling sales.
- **Margin Expansion**: Gross margin 61.5% (up 160bps), EBITDA margin 18.2% (up 220bps), despite U.S. dollar weakness.
- **Strategic Wins**: LightSpray factory launched; Singapore store opened with 11,000+ wholesale doors.
- **Apparel Surge**: 75.5% YoY growth, driven by Zendaya and FKA twigs collaborations.
- **Guidance Upped**: 2025 net sales +31%, gross margin 60.5-61%, EBITDA margin 17-17.5%.

**【CEO Summary Section】**
- **Revenue Growth**: Q2 2025 net sales reached CHF 749.2 million, up 38.2% YoY on a constant currency basis, driven by 54.3% DTC growth and 110.9% APAC expansion.
- **Margin Expansion**: Gross profit margin improved to 61.5% (up 160bps YoY), with DTC mix at 41.1% and selective price increases in the U.S.
- **Product Momentum**: 9 footwear franchises >5% of sales, including Cloudsurfer 2 and Cloud 6; apparel sales grew 75.5% YoY, with Zendaya and FKA twigs collaborations.
- **Global Resilience**: EMEA up 46.1%, Americas up 23.6%, APAC triple-digit growth; Singapore store opened with 11,000+ wholesale doors globally.
- **Innovation**: LightSpray factory launched in Zurich, reducing production time to 3 minutes with robotic arms.

**【CFO Financial Commentary】**
- **Q2 Financials**: Adjusted EBITDA of CHF 136.1 million (18.2% margin), up 220bps YoY. Net loss CHF 40.9 million due to U.S. dollar depreciation, but operational cash flow strong.
- **Guidance Update**: 2025 net sales growth ≥31% (prev. 28%), gross margin 60.5-61% (prev. 60-60.5%), EBITDA margin 17-17.5% (prev. 16.5-17.5%).
- **Tariff Mitigation**: 40% U.S. tariffs on Vietnam imports offset by DTC growth, price increases, and operational efficiencies.
- **Balance Sheet**: CHF 846.6 million cash (70% in U.S. dollars), inventory CHF 360.4 million, working capital improving with better demand forecasting.

**【Q&A Highlights】**
- **Guidance Confidence**: Q3 start strongest in brand history; order book supports 31%+ growth despite 2024 H2 comparables.
- **Apparel Strategy**: 75.5% YoY growth, 20%+ repeat purchases; expanding DTC and premium wholesale (e.g., Selfridges pop-up).
- **Tariff Impact**: 20% tariff increase absorbed via DTC mix, price hikes, and supply chain optimization; no further price increases needed.
- **LightSpray Expansion**: Zurich factory with 4 robotic arms; plans to scale globally for faster, localized production.
- **Wholesale Growth**: Mid-single-digit door expansion focused on same-store growth; U.S. wholesale partners report strong sell-out rates.


On Holding AG (ONON) Q2 2025 Earnings Call Transcript

- **Record Q1 Growth**: CHF726.6M net sales (+40% YoY), driven by 42.4% D2C surge and apparel doubling. Gross margin 59.9%, EBITDA 16.5%.
- **Iconic Launch Success**: Cloud 6 priced 10% higher yet sold out, with Zendaya campaign boosting apparel share to 50% in pop-ups.
- **2025 Outlook Upped**: Growth guidance raised to ≥28% (vs. 25%), reflecting strong preorders and LightSpray tech scalability.
- **Tariff Resilience**: Pricing strategy offsets 10% Vietnam tariffs, with gross margin guidance unchanged at 60-60.5%.
- **Store Powerhouse**: 53 stores globally, 18/20 non-China stores exceed targets, with China flagship in Chengdu performing beyond expectations.

**【CEO & Co-Founder Caspar Coppetti Key Highlights】**
- **Q1 2025 Financial Performance**: Net sales exceeded CHF725 million, up 40% YoY (constant currency). Gross profit margin expanded to 59.9%, with adjusted EBITDA margin reaching 16.5%.
- **Brand Momentum**: Strong demand across all channels, driven by D2C growth (42.4% YoY) and apparel sales doubling YoY. Flagship store in Tokyo outperformed London's Regent Street store.
- **Innovation Showcase**: Launch of Cloud 6, the largest product launch ever, with 10% price increase yet no demand drop. LightSpray technology pilot in Zurich and Boston pop-up success.
- **Strategic Initiatives**: Expansion of cultural relevance through Zendaya campaign, and 15-year anniversary Global Summit to align teams on 2026 vision.

**【CFO & Co-CEO Martin Hoffmann Financial Breakdown】**
- **Revenue by Region**: Americas grew 32.7% YoY, EMEA 33.6%, APAC surged 130.1% (constant currency). D2C share rose to 38.1% (vs. 37.5% YoY), with e-commerce and retail synergies.
- **Product Performance**: Running franchises (CloudSurfer 2, CloudMonster) led 40.5% shoe sales growth. Apparel net sales hit CHF38.1 million, highest quarterly record.
- **Financial Health**: Gross margin 59.9%, SG&A expenses down 1.5ppts to 47.3% of sales. Cash position CHF871.8 million, despite FX losses.
- **2025 Outlook**: Constant currency growth updated to ≥28% (vs. prior 25%), driven by strong preorder pipeline and brand momentum. Gross margin guided 60-60.5%, EBITDA 16.5-17.5%.

**【Q&A Key Takeaways】**
- **Tariff Mitigation**: Pricing strategy for select US styles to offset 10% Vietnam tariffs. Gross margin guidance reflects FX and tariff impacts.
- **Apparel Success**: Sizing harmonization and FKA Twigs/Zendaya campaigns boosted repeat rates. Wholesale apparel growth lagging D2C but accelerating.
- **Store Expansion**: 53 stores globally, 18/20 non-China stores exceed expectations. On track for 10%+ revenue share from retail by end-2025.
- **Automation Progress**: Atlanta warehouse automation live-testing, processing 90% D2C orders. LightSpray production ramping in Zurich and global trials.
- **Consumer Demand**: April was strongest month in company history, with no signs of slowdown despite macro uncertainty.

On Holding (ONON)-13 May 25-2025 Q1 Earnings call transcript

- **Record Growth**: FY2024 net sales up 33.2% to CHF2.32B, exceeding 26% CAGR target.
- **Margin Strength**: 60.6% gross margin and 16.7% EBITDA margin, driven by DTC expansion (48.8% Q4 share).
- **Cloud 6 Momentum**: Q1 2025 preorder volumes exceed prior franchise launches, targeting 2025+ growth.
- **China Expansion**: 80+ stores planned by end-2025, with flagships in key cities.
- **Apparel Surge**: FY2024 apparel sales surpass CHF100M, targeting 10%+ of total sales via co-creations and retail flagships.

**【CEO Summary Section】**
- On achieved a 33.2% constant currency net sales growth in FY2024, reaching CHF2.32 billion, exceeding strategic targets of 26% CAGR.
- Gross profit margin of 60.6% and adjusted EBITDA margin of 16.7% validate premium brand positioning.
- Key initiatives include: 
  - Expansion of DTC share by 3+ percentage points, driven by 19 new retail stores in iconic locations (e.g., Paris, Milan, Chicago).
  - Strategic partnerships with Zendaya, FKA Twigs, and Roger Federer to enhance cultural relevance, especially among Gen Z (US awareness doubled in 1 year).
  - Launch of Cloud 6, expected to become a key growth driver in 2025 with strong preorder momentum.
  - Apparel business surpassing CHF100 million in net sales, supported by training collections featuring FKA Twigs and Zendaya.

**【CFO Financial Commentary】**
- Q4 2024 net sales: CHF606.6 million (40.6% constant currency growth), with DTC share reaching 48.8% (CHF296.2 million).
- Strong operating cash flow of CHF510.6 million, driving cash position to CHF924.3 million.
- Regional highlights: 
  - Americas: 33.9% constant currency growth, Brazil sales doubled YoY.
  - EMEA: 33.1% constant currency growth, France/Italy stores driving halo effects.
  - APAC: 124.6% constant currency growth, China Lunar New Year campaign success.
- FY2025 outlook: 27%+ constant currency growth, gross margin ~60.5%, EBITDA margin 17-17.5%.
- Key investments: Atlanta warehouse automation, LightSpray production scale-up in Zurich/South Korea.

**【Q&A Key Takeaways】**
- **Cloud 6 Strategy**: Expected to replicate Cloud 5's success, with early retailer demand exceeding prior franchise launches.
- **Regional Growth**: 
  - US: DTC focus, Gen Z engagement via live sports (e.g., Miami Clubhouse Nights).
  - China: 80+ stores planned by end-2025, flagship openings in Chengdu/Shenzhen.
- **Apparel Ambition**: Target 10%+ of total sales via: 
  - Streamlined collections (e.g., FKA Twigs' Body is Art campaign).
  - Retail flagships (e.g., 20%+ apparel mix in On stores).
  - Co-creations with Zendaya for footwear/apparel.
- **Competitive Positioning**: Differentiated by premium pricing (60%+ GM), full-price sell-through, and innovation (e.g., LightSpray).

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