UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
 
FORM 6-K
 
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of October 2024
 
Commission File Number: 001-41754
 
 
 
SHARKNINJA, INC.
(Translation of registrant’s name into English)
 
 
 
89 A Street
Needham, MA 02494
(Address of principal executive office)
 
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
 
 
 
 


 
 
 
Explanatory Note
 
On October 31, 2024, SharkNinja, Inc. (the “Company”) announced its financial results for the third quarter ended September 30, 2024. The announcement of the Company’s financial results for the third quarter ended September 30, 2024 is furnished as Exhibit 99.3 to this Report on Form 6-K.
 
Exhibit 99.1 and Exhibit 99.2 to this Report on Form 6-K are hereby incorporated by reference to the Company's Registration Statement on Form S-8 (File No. 333-273518), as amended or supplemented. 
 
 


 
 
 
EXHIBIT INDEX
 
 
 


 
 
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 SHARKNINJA, INC.
  
 By:/s/ Patraic Reagan
Date: October 31, 2024
 
Name: Patraic Reagan
  
Title: Chief Financial Officer
 
 
 


Exhibit 99.1
 
SHARKNINJA, INC.
 
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 
 
 
1

SHARKNINJA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
 As of
 
September 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents$127,948 $154,061 
Accounts receivable, net(1)
1,190,410 985,172 
Inventories1,076,246 699,740 
Prepaid expenses and other current assets
121,721 58,311 
Total current assets2,516,325 1,897,284 
Property and equipment, net196,002 166,252 
Operating lease right-of-use assets149,975 63,333 
Intangible assets, net466,826 477,816 
Goodwill834,781 834,203 
Deferred tax assets19,713 12 
Other assets, noncurrent53,703 48,170 
Total assets$4,237,325 $3,487,070 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable(2)
$632,850 $459,651 
Accrued expenses and other current liabilities
640,947 620,333 
Tax payable22,025 20,991 
Debt, current214,344 24,157 
Total current liabilities1,510,166 1,125,132 
Debt, noncurrent745,975 775,483 
Operating lease liabilities, noncurrent152,100 63,043 
Deferred tax liabilities3,750 16,500 
Other liabilities, noncurrent30,795 28,019 
Total liabilities2,442,786 2,008,177 
Commitments and contingencies (Note 10)
Shareholders’ equity:
Ordinary shares, $0.0001 par value per share, 1,000,000,000 shares authorized; 140,219,933 and 139,083,369 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
14 14 
Additional paid-in capital1,012,407 1,009,590 
Retained earnings780,308 470,319 
Accumulated other comprehensive income (loss)1,810 (1,030)
Total shareholders’ equity1,794,539 1,478,893 
Total liabilities and shareholders’ equity$4,237,325 $3,487,070 
 
(1) Including amounts from a related party of $7,948 and $3,594 as of September 30, 2024 and December 31, 2023, respectively.
(2) Including amounts to a related party of $52,740 and $101,538 as of September 30, 2024 and December 31, 2023, respectively.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 
2

SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(unaudited) 
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Net sales(1)
$1,426,566 $1,070,617 $3,741,452 $2,876,211 
Cost of sales(2)
731,559 583,124 1,918,929 1,591,254 
Gross profit695,007 487,493 1,822,523 1,284,957 
Operating expenses:  
Research and development(3)
94,808 60,691 254,457 180,430 
Sales and marketing300,841 207,599 818,594 568,035 
General and administrative(4)
119,096 124,655 310,432 263,682 
Total operating expenses514,745 392,945 1,383,483 1,012,147 
Operating income180,262 94,548 439,040 272,810 
Interest expense, net(16,916)(13,003)(46,482)(28,523)
Other income (expense), net11,031 (5,865)14,968 (41,315)
Income before income taxes 174,377 75,680 407,526 202,972 
Provision for income taxes42,048 56,958 97,537 85,218 
Net income$132,329 $18,722 $309,989 $117,754 
Net income per share, basic$0.94 $0.13 $2.22 $0.85 
Net income per share, diluted$0.94 $0.13 $2.20 $0.85 
Weighted-average number of shares used in computing net income per share, basic140,114,282 139,073,181 139,818,196 139,059,206 
Weighted-average number of shares used in computing net income per share, diluted
141,305,999 139,430,805 140,974,062 139,179,724 
 
 
(1) Including amounts associated with related parties of $4,612 and $620 for the three months ended September 30, 2024 and 2023, respectively; and $6,962 and $1,871 for the nine months ended September 30, 2024 and 2023, respectively.
(2) Including amounts associated with related parties of $56,997 and $259,784 for the three months ended September 30, 2024 and 2023, respectively; and $189,149 and $953,013 for the nine months ended September 30, 2024 and 2023, respectively.
(3) Including amounts associated with related parties of $355 and $640 for the three months ended September 30, 2024 and 2023, respectively; and $1,095 and $2,405 for the nine months ended September 30, 2024 and 2023, respectively.
(4) Including amounts associated with related parties of $(750) and $(500) for the three months ended September 30, 2024 and 2023, respectively; and $(2,250) and $(500) for the nine months ended September 30, 2024 and 2023, respectively.

 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Net income$132,329 $18,722 $309,989 $117,754 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments23,351 (12,380)21,229 (3,967)
Unrealized (loss) gain on derivative instruments, net(16,660)14,486 (18,389)5,545 
Comprehensive income$139,020 $20,828 $312,829 $119,332 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
 
 Three Months Ended September 30, 2024
 Accumulated Other Comprehensive (Loss) Income
 Additional Paid-in CapitalTotal Shareholders' Equity
 Ordinary sharesRetained Earnings
 SharesAmount
Balance as of June 30, 2024139,936,246 $14 $1,002,931 $647,979 $(4,881)$1,646,043 
Share-based compensation— — 13,785 — — 13,785 
Vesting of restricted stock units, net of shares withheld for taxes148,823 — (9,796)— — (9,796)
Shares issued under employee stock purchase plan134,864 — 5,487 — — 5,487 
Other comprehensive income, net of tax— — — — 6,691 6,691 
Net income— — — 132,329 — 132,329 
Balance as of September 30, 2024140,219,933 $14 $1,012,407 $780,308 $1,810 $1,794,539 

 Three Months Ended September 30, 2023
 Accumulated Other Comprehensive Loss
 Additional Paid-in CapitalTotal Shareholders' Equity
 Ordinary sharesRetained Earnings
 SharesAmount
Balance as of June 30, 2023138,982,872 $14 $941,206 $935,487 $(10,197)$1,866,510 
Share-based compensation— — 21,337 — — 21,337 
Distribution paid to Former Parent— — — (383,035)— (383,035)
Sale of SharkNinja Co, Ltd. to Former Parent— — (3,295)— — (3,295)
Other comprehensive income, net of tax— — — — 2,106 2,106 
Net income— — — 18,722 — 18,722 
Balance as of September 30, 2023138,982,872 $14 $959,248 $571,174 $(8,091)$1,522,345 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

 SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
 
 Nine Months Ended September 30, 2024
 Accumulated Other Comprehensive (Loss) Income
 Additional Paid-in CapitalTotal Shareholders' Equity
 Ordinary sharesRetained Earnings
 SharesAmount
Balance as of December 31, 2023139,083,369 $14 $1,009,590 $470,319 $(1,030)$1,478,893 
Share-based compensation— — 47,341 — — 47,341 
Vesting of restricted stock units, net of shares withheld for taxes1,001,700 — (50,011)— — (50,011)
Shares issued under employee stock purchase plan134,864 — 5,487 — — 5,487 
Other comprehensive income, net of tax— — — — 2,840 2,840 
Net income— — — 309,989 — 309,989 
Balance as of September 30, 2024140,219,933 $14 $1,012,407 $780,308 $1,810 $1,794,539 

 Nine Months Ended September 30, 2023
 Accumulated Other Comprehensive Loss
 Additional Paid-in CapitalTotal Shareholders' Equity
 Ordinary sharesRetained Earnings
 SharesAmount
Balance as of December 31, 2022138,982,872 $14 $941,206 $896,738 $(9,669)$1,828,289 
Distribution paid to Former Parent— — — (443,318)— (443,318)
Share-based compensation— — 24,502 — — 24,502 
Recharge from Former Parent for share-based compensation— — (3,165)— — (3,165)
Sale of SharkNinja Co, Ltd. to Former Parent— — (3,295)— — (3,295)
Other comprehensive income, net of tax— — — — 1,578 1,578 
Net income— — — 117,754 — 117,754 
Balance as of September 30, 2023138,982,872 $14 $959,248 $571,174 $(8,091)$1,522,345 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months Ended September 30,
 20242023
Cash flows from operating activities:  
Net income$309,989 $117,754 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:  
Depreciation and amortization86,870 77,394 
Share-based compensation47,341 24,502 
Provision for credit losses3,744 2,266 
Non-cash lease expense15,963 9,688 
Deferred income taxes, net(32,420)3,905 
Other1,631 1,662 
Changes in operating assets and liabilities:  
Accounts receivable(1)
(193,151)(192,209)
Inventories(357,114)(258,982)
Prepaid expenses and other assets(2)
(69,477)65,508 
Accounts payable(3)
162,019 343,603 
Tax payable1,034 883 
Operating lease liabilities(7,428)(9,280)
Accrued expenses and other liabilities(4)
(12,050)(90,914)
Net cash (used in) provided by operating activities(43,049)95,780 
Cash flows from investing activities:  
Purchase of property and equipment(95,232)(70,501)
Purchase of intangible asset(6,571)(6,905)
Capitalized internal-use software development(1,100)(683)
Cash receipts on beneficial interest in sold receivables— 16,777 
Other investing activities, net— (3,051)
Net cash used in investing activities(102,903)(64,363)
Cash flows from financing activities: 
Proceeds from issuance of debt, net of issuance cost— 800,915 
Repayment of debt(15,188)(437,500)
Net proceeds from borrowings under revolving credit facility175,000 — 
Distribution paid to Former Parent— (435,292)
Recharge from Former Parent for share-based compensation— (3,165)
Net ordinary shares withheld for taxes upon issuance of restricted stock units(50,011)— 
Proceeds from shares issued under employee stock purchase plan5,487 — 
Net cash provided by (used in) financing activities115,288 (75,042)
Effect of exchange rates changes on cash4,551 (4,768)
Net decrease in cash, cash equivalents, and restricted cash(26,113)(48,393)
Cash, cash equivalents, and restricted cash at beginning of period154,061 218,770 
Cash and cash equivalents at end of period$127,948 $170,377 
Supplemental disclosures of noncash investing and financing activities:  
Purchase of property and equipment accrued and not yet paid$1,390 $408 
Cancellation of related party note through distribution— (8,026)
Unrealized loss on cash flow hedges(20,562)5,725 
 
 
(1) Including changes in related party balances of $(4,354) and $(5,048) for the nine months ended September 30, 2024 and 2023, respectively.
(2) Including changes in related party balances of $0 and $18,555 for the nine months ended September 30, 2024 and 2023, respectively.
(3) Including changes in related party balances of $(48,798) and $(119,704) for the nine months ended September 30, 2024 and 2023, respectively.
(4) Including changes in related party balances of $0 and $(8,399) for the nine months ended September 30, 2024 and 2023, respectively.
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


7
SHARKNINJA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Organization and Description of Business
 
SharkNinja, Inc. (the “Company”) is a global product design and technology company that creates innovative lifestyle product solutions across multiple sub-categories, including Cleaning Appliances, Cooking and Beverage Appliances, Food Preparation Appliances and Other products under the brands of “Shark” and “Ninja.” SharkNinja is headquartered in Needham, Massachusetts, and distributes products throughout North America, Europe, and other select international markets.

SharkNinja, Inc. was incorporated in the Cayman Islands on May 17, 2023 as a wholly-owned subsidiary of JS Global Lifestyle Company Limited (“JS Global” or the "Former Parent"). The Company was formed for the purpose of completing the listing of the Company on the New York Stock Exchange (“NYSE”) and related transactions to carry on the business of SharkNinja Global SPV, Ltd., and its subsidiaries.

SharkNinja Global SPV, Ltd. was incorporated in 2017 as a wholly-owned subsidiary of JS Global. Prior to July 28, 2023, SharkNinja Global SPV, Ltd. operated as a combination of wholly-owned businesses of JS Global, which is a listed entity on the Hong Kong Stock Exchange.

On July 30, 2023, in connection with (1) the separation (the “separation”) of the Company from JS Global and (2) the distribution to the holders of JS Global ordinary shares of all of JS Global’s equity interest in SharkNinja Global SPV, LTD. in the form of a dividend of the Company’s ordinary shares, JS Global contributed all outstanding shares of SharkNinja Global SPV, Ltd. to SharkNinja, Inc. in exchange for shares of SharkNinja, Inc. On July 31, 2023, JS Global distributed 138,982,872 ordinary shares of SharkNinja, Inc. to the holders of JS Global ordinary shares and SharkNinja, Inc. began trading on the NYSE.

Because the separation and distribution was considered a transaction between entities under common control, the financial statements for periods prior to the transaction and the listing on the NYSE have been adjusted to combine the previously separate entities, SharkNinja, Inc. and SharkNinja Global SPV, Ltd., for presentation purposes. Further, the distributed share amount of SharkNinja, Inc. is reflected for all shares and related financial information in these condensed consolidated financial statements.

SharkNinja Global SPV, Ltd. prior to the separation and distribution, together with SharkNinja, Inc. and its subsidiaries subsequent to the separation and distribution are herein referred to as "SharkNinja" or the "Company".
 
2. Summary of Significant Accounting Policies
 
Basis of Presentation
 
The condensed consolidated financial statements that accompany these notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of SharkNinja, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. For the purposes of comparability, certain prior period amounts have been reclassified to conform to current period presentation.
 
The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements as of that date, but does not include all of the disclosures, including certain notes required by U.S. GAAP on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023.

In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only
8

normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2024 and the Company’s condensed consolidated statements of income, comprehensive income, and shareholders’ equity for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results expected for the year ended December 31, 2024 or any future operating periods.
 
The Company has identified the significant accounting policies that are critical to understanding its business and results of operations. There have been no significant changes during the nine months ended September 30, 2024 to the significant accounting policies disclosed in the Company’s audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2023 within the Form 20-F filed on March 1, 2024.

Use of Estimates
 
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of net sales and expenses during the reporting periods and accompanying notes. Significant items subject to such estimates and assumptions include but are not limited to variable consideration for returns, sales rebates and discounts, the allowance for credit losses, reserve for product warranties, the fair value of financial assets and liabilities including the accounting and fair value of derivatives, valuation of inventory, the fair value of acquired intangible assets and goodwill, the useful lives of acquired intangible assets, determination of incremental borrowing rate for leases, share-based compensation, including probability of the attainment of awards with performance conditions and grant-date fair value of awards with market conditions, and the valuation of deferred tax assets and uncertain tax positions. Actual results could differ from those estimates.
 
Concentration of Credit Risks
 
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, accounts receivable, and forward contracts. The Company maintains its cash and cash equivalents with high-quality financial institutions, the composition and maturities of which are regularly monitored by the Company.
 
The Company has outstanding accounts receivable balances with retailers, distributors and direct-to-consumer (“DTC”) customers. The Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amounts recorded in the condensed consolidated balance sheets. The Company extends different levels of credit to customers, without requiring collateral deposits, and when necessary, maintains reserves for potential credit losses based upon the expected collectability of accounts receivable. The Company manages credit risk related to its customers by performing periodic evaluations of credit worthiness and applying other credit risk monitoring procedures.
 
The Company sells a significant portion of its products through retailers and, as a result, maintains individually significant receivable balances with these parties. If the financial condition or operations of these retailers deteriorates substantially, the Company’s operating results could be adversely affected.
9

 
The following table summarizes the Company’s customers that represented 10% or more of accounts receivable, net:
 As of
 
September 30, 2024
December 31, 2023
Customer A25.5 %22.4 %
Customer B12.0 16.7 

The following table summarizes the Company’s customers that represented 10% or more of net sales:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Customer A23.5 %19.2 %20.1 %18.9 %
Customer C12.1 15.2 11.7 15.0 

Accounts Receivable, Net
 
Accounts receivable are presented net of allowance for credit losses and allowance for chargebacks. Accounts receivable are presented net of liabilities when a right of setoff exists. The Company determined the allowance for customer incentives and allowance for sales returns should be recorded as a liability.
 
The Company maintains an allowance related to customer incentives based on specific terms and conditions included in the customer agreements or based on historical experience and the Company’s expectation of discounts.
 
The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that will not be collected. To estimate the allowance for credit losses the Company applied the loss-rate method using relevant available information including historical write-off activity, current conditions and reasonable and supportable forecasts. The allowance for credit losses is measured on a pooled basis when similar risk characteristics exist. When assessing whether to measure certain financial assets on a pooled basis, the Company considered various risk characteristics, including geographic location and industry of the customer.
 
Expected credit losses are estimated over the contractual term of the financial assets. Write-offs of accounts receivable are recorded to the allowance for credit losses. Any subsequent recoveries of previously written off balances are recorded as a reduction to credit loss expense.
 
Below is a rollforward of the Company’s allowance for credit losses:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
  
 (in thousands)
Beginning balance$7,692 $6,926 $8,225 $6,998 
Provision for credit losses1,219 1,048 3,744 2,266 
Write-offs and other adjustments(1,211)(1,328)(4,269)(2,618)
Ending balance$7,700 $6,646 $7,700 $6,646 
 
10

Disaggregation of Net Sales

The following table summarizes net sales by region based on the billing address of customers:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
 AmountPercentage of Net SalesAmountPercentage of Net SalesAmountPercentage of Net SalesAmountPercentage of Net Sales
 (in thousands, except percentages)
Domestic(1)
$1,005,667 70.5 %$797,344 74.5 %$2,609,152 69.7 %$2,044,986 71.1 %
International(2)
420,899 29.5 273,273 25.5 1,132,300 30.3 831,225 28.9 
Total net sales$1,426,566 100.0 %$1,070,617 100.0 %$3,741,452 100.0 %$2,876,211 100.0 %
 
(1) Domestic consists of net sales in the United States and Canada. Net sales from the United States represented 64.6% and 67.8% of total net sales for the three months ended September 30, 2024 and 2023, respectively; and 64.3% and 65.5% of total net sales for the nine months ended September 30, 2024 and 2023, respectively.
(2) Net sales from the United Kingdom represented 13.1% and 16.6% of total net sales for the three months ended September 30, 2024 and 2023, respectively; and 16.0% and 19.2% of total net sales for the nine months ended September 30, 2024 and 2023, respectively.

The following table presents net sales by brand:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024 202320242023
 AmountPercentage of Net SalesAmountPercentage of Net SalesAmountPercentage of Net SalesAmountPercentage of Net Sales
 (in thousands, except percentages)
Shark$648,279 45.4 %$519,828 48.6 %$1,784,299 47.7 %$1,464,466 50.9 %
Ninja778,287 54.6 550,789 51.4 1,957,153 52.3 1,411,745 49.1 
Total net sales$1,426,566 100.0 %$1,070,617 100.0 %$3,741,452 100.0 %$2,876,211 100.0 %

The following table presents net sales by product category:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
 AmountPercentage of Net SalesAmountPercentage of Net SalesAmountPercentage of Net SalesAmountPercentage of Net Sales
    
 (in thousands, except percentages)
Cleaning Appliances$527,453 37.0 %$449,319 42.0 %$1,415,488 37.8 %$1,277,986 44.4 %
Cooking and Beverage Appliances411,453 28.8 339,328 31.7 1,120,371 29.9 939,060 32.7 
Food Preparation Appliances366,834 25.7 211,461 19.7 836,782 22.4 472,685 16.4 
Other120,826 8.5 70,509 6.6 368,811 9.9 186,480 6.5 
Total net sales$1,426,566 100.0 %$1,070,617 100.0 %$3,741,452 100.0 %$2,876,211 100.0 %
 
11

Warranty Costs
 
The Company accrues the estimated cost of product warranties at the time it recognizes net sales and records warranty expense to cost of goods sold. The Company’s standard warranty provides for repair or replacement of the associated products during the warranty period. The amount of the provision for the warranties is estimated based on sales volume and past experience of the level of repairs and returns. If actual product failure rates or repair costs differ from estimates, revisions to the estimated warranty obligation may be required.
 
Product warranty liabilities and changes were as follows:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
  
 (in thousands)
Beginning balance$27,226 $21,173 $28,090 $20,958 
Accruals for warranties issued12,927 17,738 28,880 31,488 
Changes in liability for pre-existing warranties— (964)— (964)
Settlements made(11,140)(13,621)(27,957)(27,156)
Ending balance$29,013 $24,326 $29,013 $24,326 
 
Segment Information
 
The Company operates in one operating and reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the Company’s chief executive officer (“CEO”), in deciding how to allocate resources and assessing performance. The Company’s CEO allocates resources and assesses performance based upon discrete financial information at the consolidated level.
 
Net sales by geographical region can be found in the disaggregation of net sales in Note 2 above. The following table presents the Company’s property and equipment, net of depreciation and amortization, by geographic region:
 
 As of
 September 30, 2024December 31, 2023
  
 (in thousands)
United States$63,706 $60,644 
China108,471 92,931 
Rest of World23,825 12,677 
Total property and equipment, net$196,002 $166,252 
 
Recently Issued Accounting Pronouncements
 
In November 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require, among other things, disclosure of significant segment expenses that are regularly provided to an entity’s chief operating decision maker (“CODM”) and a description of other segment items (the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss) by reportable segment,
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as well as disclosure of the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The new standard is effective for the Company in fiscal year 2024, and interim periods beginning in fiscal year 2025. Retrospective application is required. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The standard is effective for the Company in fiscal year 2025, and may be applied prospectively or retrospectively. The Company is currently evaluating the impact this ASU may have on its consolidated financial statements.

3. Condensed Consolidated Balance Sheet Components
 
Property and Equipment, Net
 
Property and equipment, net consisted of the following:
 
 As of
 September 30, 2024December 31, 2023
  
 (in thousands)
Molds and tooling$279,518 $286,305 
Computer and software53,998 100,225 
Displays59,261 91,074 
Equipment20,334 19,391 
Furniture and fixtures13,098 10,614 
Leasehold improvements41,247 36,061 
Total property and equipment467,456 543,670 
Less: accumulated depreciation and amortization(294,403)(389,689)
Construction in progress22,949 12,271 
Property and equipment, net$196,002 $166,252 
 
Depreciation and amortization expense was $23.9 million and $20.0 million for the three months ended September 30, 2024 and 2023, respectively, and $69.2 million and $60.6 million for the nine months ended September 30, 2024 and 2023, respectively.

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Accrued Expenses and Other Current Liabilities
 
Accrued expenses and other current liabilities consisted of the following:
 
 As of
 September 30, 2024December 31, 2023
  
 (in thousands)
Accrued customer incentives$208,408 $207,593 
Accrued expenses134,927 106,198 
Accrued compensation and benefits83,903 89,658 
Accrued returns46,569 58,828 
Sales and other tax payable3,629 19,904 
Accrued advertising4,007 35,968 
Accrued delivery and distributions52,844 29,850 
Accrued warranty29,013 28,090 
Operating lease liabilities, current14,745 8,390 
Accrued professional fees and legal reserves34,301 8,071 
Derivative liabilities13,907 3,370 
Other14,694 24,413 
Accrued expenses and other current liabilities$640,947 $620,333 
 
4. Sale of SharkNinja Co., Ltd

On July 27, 2023, as part of the separation, the Company executed a reorganization whereby SharkNinja sold its Japanese subsidiary, SharkNinja Co., Ltd., to JS Global for a note equal to $8.0 million. The transaction did not result in a change in reporting entity or meet the criteria for discontinued operations and, therefore, the Company has reflected SharkNinja Co., Ltd. in its financial position and results of operations using SharkNinja Co., Ltd.'s carrying values, prior to the separation, and has accounted for the transaction on a prospective basis.

The transaction was accounted for as a common control transaction during the three months ended September 30, 2023, whereby the difference of $3.3 million between the proceeds received through the note of $8.0 million and the net carrying value of the assets at the time of the transaction of $11.3 million was recorded as a reduction to additional paid-in capital. The note of $8.0 million was then distributed to JS Global and recorded as a reduction to retained earnings.

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5. Fair Value Measurements
 
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2024:
 
 September 30, 2024
 Fair ValueLevel 1Level 2Level 3
   
 (in thousands)
Financial Assets:
Money market funds included in cash and cash equivalents$10,838 $10,838 $— $— 
Total financial assets$10,838 $10,838 $— $— 
Financial Liabilities:    
Derivatives designated as hedging instruments:    
Forward contracts included in accrued expenses and other current liabilities (Note 6)
$13,907 $— $13,907 $— 
Total financial liabilities$13,907 $— $13,907 $— 
 
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023:
 
 December 31, 2023
 Fair ValueLevel 1Level 2Level 3
    
 (in thousands)
Financial Assets:    
Money market funds included in cash and cash equivalents$1,806 $1,806 $— $— 
Total financial assets$1,806 $1,806 $— $— 
Financial Liabilities:
Derivatives designated as hedging instruments:
Forward contracts included in accrued expenses and other current liabilities (Note 6)
$3,370 $— $3,370 $— 
Total financial liabilities$3,370 $— $3,370 $— 
 
The Company classifies its money market funds within Level 1 because they are valued using quoted prices in active markets. The Company classifies its derivative financial instruments within Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded.
 
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6. Derivative Financial Instruments and Hedging
 
Notional Amount of Forward Contracts
 
The gross notional amounts of the Company’s forward contracts are USD denominated. The notional amounts of outstanding forward contracts in USD as of the periods presented were as follows:
 
 As of
 
September 30, 2024
December 31, 2023
 
 (in thousands)
Derivatives designated as hedging instruments:
Forward contracts$183,670 $350,000 
Total derivative instruments$183,670 $350,000 
 
Effect of Forward Contracts on the Condensed Consolidated Statements of Income
 
The Company did not have any forward contracts that were not designated as hedging instruments for the three and nine months ended September 30, 2024. Total gain (loss) recognized from derivatives that were not designated as hedging instruments was $0.7 million for the three months ended September 30, 2023 and $(31.6) million for the nine months ended September 30, 2023, and was recorded in other expense, net within the condensed consolidated statements of income.
 
Effect of Forward Contracts on Accumulated Other Comprehensive Income
 
The following table represents the unrealized gains (losses) of forward contracts that were designated as hedging instruments, net of tax effects, that were recorded in accumulated other comprehensive income as of September 30, 2024 and 2023, and their effect on other comprehensive income for the three and nine months ended September 30, 2024 and 2023: 
 Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
 (in thousands)
Beginning balance$(3,902)$(8,941)$(2,173)$— 
Amount of net (losses) gains recorded in other comprehensive income(16,423)15,698 (16,838)5,607 
Amount of net losses reclassified from other comprehensive income to earnings(237)(1,212)(1,551)(62)
Ending balance$(20,562)$5,545 $(20,562)$5,545 

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7. Intangible Assets, Net and Goodwill
 
Intangible Assets, Net
 
Intangible assets consisted of the following as of September 30, 2024:
 
 Gross Carrying ValueAccumulated Amortization Net Carrying ValueWeighted-Average Remaining Useful Life
  
 (in thousands)(in years)
Intangible assets subject to amortization:    
Customer relationships$143,083 $(111,287)$31,796 2.0
Patents63,442 (29,027)34,415 5.4
Developed technology22,860 (7,509)15,351 7.4
Total intangible assets subject to amortization$229,385 $(147,823)$81,562  
Intangible assets not subject to amortization: 
Trade name and trademarks$385,264 $— $385,264 Indefinite
Total intangible assets, net$614,649 $(147,823)$466,826  
 
Intangible assets consisted of the following as of December 31, 2023:
 
 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted-Average Remaining Useful Life
    
 (in thousands) (in years)
Intangible assets subject to amortization:      
Customer relationships$143,083 $(99,363)$43,720  2.8
Patents57,436 (24,763)32,673  5.4
Developed technology22,677 (5,953)16,724  8.3
Total intangible assets subject to amortization$223,196 $(130,079)$93,117   
Intangible assets not subject to amortization:  
Trade name and trademarks$384,699 $— $384,699  Indefinite
Total intangible assets, net$607,895 $(130,079)$477,816   
 
Amortization expenses for intangible assets were as follows:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
  
 (in thousands)
Research and development$1,914 $1,632 $5,738 $4,918 
Sales and marketing3,974 3,975 11,923 11,924 
Total amortization expenses$5,888 $5,607 $17,661 $16,842 
 
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The expected future amortization expenses related to the intangible assets as of September 30, 2024 were as follows: 
 Amount
 (in thousands)
Years ending December 31, 
Remainder of 2024$6,310 
202524,269 
202620,294 
20277,449 
20284,682 
Thereafter18,558 
Total$81,562 
 
Goodwill
 
The following table represents the changes to goodwill:
 
 Carrying Amount
 (in thousands)
Balance as of December 31, 2023$834,203 
Effect of foreign currency translation578 
Balance as of September 30, 2024$834,781 
 
8. Operating Leases

The components of total lease costs for operating leases for the periods presented were as follows:

 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
  
 (in thousands)
Operating lease cost$7,437 $4,429 $21,317 $13,822 
Variable lease cost5,236 4,233 12,032 9,672 
Short-term lease cost305 172 663 363 
Total lease cost$12,978 $8,834 $34,012 $23,857 

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The supplemental cash flow information related to operating leases for the periods presented were as follows:

 Nine Months Ended September 30,
 20242023
  
 (in thousands)
Cash payments for operating lease liabilities$14,223 $13,669 
Operating lease liabilities arising from obtaining new operating lease right-of-use assets during the period$99,345 $9,116 

The weighted-average remaining lease terms and discount rates for operating leases were as follows:

As of
 
September 30, 2024
December 31, 2023
Weighted-average remaining lease term (years)7.15.7
Weighted-average discount rate6.3%4.6%

Future minimum lease payments under non-cancellable leases as of September 30, 2024, were as follows:

 Amount
 (in thousands)
Years ending December 31, 
Remainder of 2024$4,614 
202525,272 
202630,195 
202730,562 
202830,536 
Thereafter89,316 
Total undiscounted lease payments210,496 
Less: imputed interest(43,651)
Total operating lease liabilities$166,845 

9. Debt
 
On July 20, 2023, the Company entered into a credit agreement (“2023 Credit Agreement”) with Bank of America, N.A., as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The 2023 Credit Agreement provides for an $810.0 million term loan facility (the “2023 Term Loans”) and a $500.0 million revolving credit facility (“2023 Revolving Facility”). The 2023 Term Loans and 2023 Revolving Facility mature in July 2028, and both facilities bear interest at the Secured Overnight Financing Rate (“SOFR”) plus 1.75%. All SOFR borrowings under the 2023 Credit Agreement also incur a 0.1% credit adjustment. The Company has the ability to borrow in certain alternative currencies under the 2023 Credit Agreement. Alternative currency loans are priced using an Alternative Currency Term Rate plus any applicable spread adjustments. The Company may request increases to the 2023 Term Loans or 2023 Revolving Facility in a maximum aggregate amount not to exceed the greater of $520.0 million or 100% of adjusted earnings before interest, taxes, depreciation, and amortization, as defined in the 2023 Credit Agreement, for the most recently completed fiscal year. The 2023 Credit Agreement replaced the Company’s existing credit facility that had a
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remaining principal balance of $400.0 million and accrued interest of $9.2 million.

No amounts were outstanding on the 2023 Revolving Facility as of December 31, 2023. During the nine months ended September 30, 2024, there were $210.0 million in draw downs on the 2023 Revolving Facility, of which $35.0 million has been repaid and $175.0 million remained outstanding as of September 30, 2024 and is recorded within debt, current on the condensed consolidated balance sheets. As of September 30, 2024, $9.1 million of letters of credit were outstanding, resulting in an available balance of $315.9 million under the 2023 Revolving Facility.

The Company is required to meet certain financial covenants customary with this type of agreement, including, but not limited to, maintaining a maximum ratio of indebtedness and a minimum specified interest coverage ratio. As of September 30, 2024, the Company was in compliance with the covenants under the 2023 Credit Agreement.

The obligations of the loan parties under the 2023 Credit Agreement with respect to the 2023 Term Loans and 2023 Revolving Facility are secured by (i) equity interests owned by the loan parties in each other loan party and in certain of the Company's wholly-owned domestic restricted subsidiaries and (ii) substantially all assets of the domestic loan parties (subject to certain customary exceptions). In addition, subject to certain customary exceptions, these obligations are guaranteed by (i) the Company, (ii) each subsidiary of the Company that directly or indirectly owns a borrower and (iii) each other direct and indirect wholly-owned domestic restricted subsidiary of the Company.

Debt consisted of the following:
 
 As of
 
September 30, 2024
December 31, 2023
  
 (in thousands)
2023 Term Loans with principal payments due quarterly; final balance due on maturity date of July 20, 2028$789,750 $804,938 
2023 Revolving Facility175,000 — 
Less: deferred financing costs(4,431)(5,298)
Total debt, net of deferred financing costs960,319 799,640 
Less: debt, current(214,344)(24,157)
Debt, noncurrent$745,975 $775,483 
 
Aggregate maturities on debt (excluding the 2023 Revolving Facility) as of September 30, 2024 were as follows:
 
 Amount
 (in thousands)
Years ending December 31, 
Remainder of 2024$10,125 
202540,500 
202640,500 
202740,500 
2028658,125 
Total future principal payments$789,750 
 
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The Company recognizes and records interest expense related to its debt in interest expense, net, which totaled $18.0 million and $14.0 million for the three months ended September 30, 2024 and 2023, respectively, and $49.3 million and $28.3 million for the nine months ended September 30, 2024 and 2023, respectively.

10. Commitments and Contingencies    
 
Non-Cancelable Purchase Obligations
 
In the normal course of business, the Company enters into non-cancelable purchase commitments, including marketing and endorsement agreements. Certain of these agreements extend over terms of up to five years, with payments required in varying installments over the term. As of September 30, 2024, the Company has remaining obligations associated with agreements with original terms greater than 12 months totaling $28.7 million, which is payable in a combination of cash and ordinary shares of SharkNinja, Inc.
 
Indemnifications and Contingencies
 
The Company enters into indemnification provisions under certain agreements with other parties in the ordinary course of business. In its customer agreements, the Company has agreed to indemnify, defend and hold harmless the indemnified party for third-party claims and related losses suffered or incurred by the indemnified party from actual or threatened third-party intellectual property infringement claims. For certain large or strategic customers, the Company has agreed to indemnify, defend and hold harmless the indemnified party for non-compliance with certain additional representations and warranties made by the Company.
 
Legal Proceedings
 
From time to time, the Company may be involved in various legal proceedings arising from the normal course of business activities, including certain patent infringement claims and false advertising claims against us. The Company investigates these claims as they arise. In the opinion of management, the amount of ultimate loss with respect to any current legal proceedings and claims, if determined adversely to the Company, will not have a material adverse effect on its business, financial condition and results of operation.

During the three months ended September 30, 2024, the Company reached a settlement agreement related to asserted patent infringement claims associated with certain product technology. Under the terms of the settlement, both parties agreed to dismiss all claims and counterclaims with prejudice. As a result of this settlement, the Company recognized a liability of $13.5 million as of September 30, 2024, which was recorded in accrued expenses and other current liabilities in the condensed consolidated balance sheet, and such amount was paid in full in October 2024.
 
11. Shareholders' Equity and Equity Incentive Plan
 
Distributions to Former Parent
 
During the year ended December 31, 2022, the Company entered into a note agreement with the Former Parent (the “2022 Intercompany Note to Former Parent”) in which SharkNinja transferred $49.3 million to its Former Parent. Due to the nature of the note receivable, the Company considered it to be an in-substance distribution to its Former Parent accounted for as contra-equity at inception. During the nine months ended September 30, 2023, the Company declared and issued distributions to the Former Parent of $485.4 million which included amounts receivable of $50.4 million under the 2022 Intercompany Note to Former Parent, including interest, in satisfaction of such note, a cash distribution of $60.3 million paid in February, a cash distribution of $375.0 million paid in July for the repayment of JS Global’s outstanding debt under the 2020 Facilities Agreement as discussed in Note 9 - Debt, and a non-cash distribution of the note of $8.0 million related to the sale of the Company's Japanese subsidiary, SharkNinja Co., Ltd, as discussed in Note 4 - Sale of SharkNinja Co., Ltd.

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Restricted Share Units

SharkNinja Equity Incentive Plan

On July 28, 2023, the Company's board of directors adopted the 2023 Equity Incentive Plan (the "2023 Plan”) to grant cash and equity incentive awards to eligible participants in order to attract, motivate and retain talent. The 2023 Plan provides for the issuance of stock options, share appreciation rights, restricted stock awards, restricted share units (“RSUs”), performance awards and other awards. The 2023 Plan initially made 13,898,287 ordinary shares available for future award grants.

RSU activities for the nine months ended September 30, 2024 for RSUs granted under the 2023 Plan to the Company's employees were as follows:
 Number of SharesWeighted Average Grant Date Fair Value per share
Unvested as of December 31, 2023
3,857,986 $28.32 
Granted212,750 63.07 
Vested(1,862,980)(26.17)
Cancelled/Forfeited(98,295)(30.05)
Unvested as of September 30, 2024
2,109,461 $33.64 

RSUs granted for the nine months ended September 30, 2024 under the 2023 Plan were 212,750, of which 85,174 RSUs were granted with service-only conditions, 115,452 performance-based RSUs were granted with vesting conditions tied to the achievement of certain performance growth metrics, such as net sales, gross profit and operating cash flow and 12,124 market-based RSUs were granted with conditions tied to the achievement of a certain level of market capitalization over a consecutive period of time.

In October 2024, the compensation committee and our board of directors approved the grant of 227,371 market-based RSUs to certain senior executives with vesting conditions tied to the achievement of a certain level of market capitalization over a consecutive period of time. Vesting of these market-based RSUs and recognition of all related compensation expense is expected to occur during the three months ended December 31, 2024.

Employee Stock Purchase Plan

On July 28, 2023, the board of directors approved the 2023 Employee Share Purchase Plan (the "ESPP"). A maximum of 1% of the Company's outstanding ordinary shares (or 1,389,828 shares) were made available for sale under the ESPP. The ESPP contains an evergreen provision whereby the shares available for sale will automatically increase on the first day of each calendar year from January 1, 2025 through and including January 1, 2033, in an amount equal to the lesser of (i) 0.15% of the total number of shares of the Company's ordinary shares outstanding on December 31 of the preceding year; (ii) 300,000 shares; or (iii) such lesser number of shares as determined by the board at any time prior to the first day of a given calendar year. The ESPP provides for six-month offering periods during which the Company will grant rights to purchase ordinary shares to eligible employees. The first offering period began in February 2024. During the nine months ended September 30, 2024, there were 134,864 shares purchased under the ESPP. As of September 30, 2024, total unrecognized share-based compensation was $1.8 million, which is to be recognized over a weighted-average remaining period of 0.3 years.

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Share-Based Compensation
 
The share-based compensation by line item in the accompanying condensed consolidated statements of income is summarized as follows:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
 (in thousands)
Research and development$2,030 $3,160 $7,815 $4,229 
Sales and marketing2,778 1,920 7,485 2,432 
General and administrative8,977 16,257 32,041 17,841 
Total share-based compensation$13,785 $21,337 $47,341 $24,502 
 
As of September 30, 2024, the Company had $38.3 million unrecognized share-based compensation cost related to RSUs granted under the 2023 Plan that will be recognized over a weighted average period of 1.3 years. Of this unrecognized share-based compensation cost, $19.9 million related to RSUs granted under the 2023 Plan with performance conditions. There was no unrecognized share-based compensation cost related to RSUs granted under the 2023 Plan with market conditions.

For those RSUs with service conditions, performance conditions or a combination of both, the grant date fair value was measured based on the quoted price of our ordinary shares at the date of grant. The weighted average grant date fair value of these awards for the nine months ended September 30, 2024 was $63.52 per share.

The total grant-date fair value of RSUs vested during the nine months ended September 30, 2024 was $48.8 million.
 
12. Income Taxes
 
The Company recorded a provision for income taxes of $42.0 million and $57.0 million for the three months ended September 30, 2024 and 2023, respectively, and $97.5 million and $85.2 million for the nine months ended September 30, 2024 and 2023, respectively. The Company’s effective tax rate (“ETR”) was 24.1% and 75.3% for the three months ended September 30, 2024 and 2023, respectively, and 23.9% and 42.0% for the nine months ended September 30, 2024 and 2023, respectively. This decrease in the ETR was primarily related to the impacts of the separation and distribution and refinancing, such as withholding taxes and transaction costs, in the prior year.
 
13. Net Income Per Share
 
On July 31, 2023, in connection with the separation from JS Global, 138,982,872 ordinary shares of SharkNinja, Inc. were distributed to JS Global shareholders. The distributed share amount of SharkNinja, Inc. is utilized for the calculation of basic and diluted net income per share of the Company for all periods presented prior to the separation and distribution from JS Global. For the three and nine months ended September 30, 2024 and 2023, these shares are treated as issued and outstanding for purposes of calculating historical net income per share. For periods prior to the separation and distribution, it is assumed that there are no dilutive equity instruments as there were no equity awards of SharkNinja, Inc. outstanding prior to the separation and distribution.
 
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The following table sets forth the computation of basic and diluted net income per share for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
  
 (in thousands, except share and per share data)
Numerator:
Net income$132,329 $18,722 $309,989 $117,754 
Denominator:
Weighted-average shares used in computing net income per share, basic140,114,282 139,073,181 139,818,196 139,059,206 
Dilutive effect of RSUs1,191,717 357,624 1,155,866 120,518 
Weighted-average shares used in computing net income per share, diluted141,305,999 139,430,805 140,974,062 139,179,724 
Net income per share, basic$0.94 $0.13 $2.22 $0.85 
Net income per share, diluted$0.94 $0.13 $2.20 $0.85 
 
Potential ordinary shares of certain performance-based and market-based RSUs of approximately 736,405 and 959,263 for the three and nine months ended September 30, 2024, respectively, for which all targets required to trigger vesting had not been achieved, were excluded from the calculations of weighted average shares used in computing diluted net income per share.
 
14. Related Party Transactions
 
Transactions with JS Global

Prior to the separation, the Company operated as part of JS Global’s broader corporate organization rather than as a stand-alone public company and engaged in various transactions with JS Global entities. Following the separation and distribution, JS Global continues to be a related party due to a common shareholder that has majority control of both the Company and JS Global. Our arrangements with JS Global entities and/or other related persons or entities as of the separation are described below.

Supplier Agreements
 
The Company historically relied on a JS Global purchasing office entity to source finished goods on the Company’s behalf and to provide certain procurement and quality control services. Additionally, the Company purchases certain finished goods directly from a subsidiary of JS Global. Finished goods purchased by the Company from JS Global entities amounted to $49.1 million and $242.8 million for the three months ended September 30, 2024 and 2023, respectively, and $156.2 million and $952.0 million for the nine months ended September 30, 2024 and 2023, respectively. In connection with these agreements, the Company historically incurred costs related to certain procurement and quality control activities that were reimbursed by JS Global entities. For the three and nine months ended September 30, 2024, JS Global entities made no payments of this nature to the Company. In comparison, for the three and nine months ended September 30, 2023, JS Global entities paid the Company $2.0 million and $18.0 million, respectively, which were recorded as a reduction to cost of sales for services rendered under these agreements.

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Sourcing Services Agreement

In connection with the separation, the Company entered into a sourcing services agreement with JS Global. Pursuant to the agreement, the Company procures products from certain suppliers in the Asia-Pacific region (“APAC”), and JS Global provides coordination, process management and relationship management support to us with respect to such suppliers. The Company retains the right to procure such products and services from third parties. The Company pays JS Global a service fee based on the aggregate amount of products procured by the Company from such suppliers managed by JS Global under the agreement. The Sourcing Services Agreement has a term commencing July 28, 2023 and ending on June 30, 2025. The Company will pay JS Global the following: (i) for the period July 28, 2023 to June 30, 2024, an amount equal to 4% of the procurement amount during such period; and (ii) for the period from July 1, 2024 until December 31, 2024, an amount equal to 2% of the procurement amount during such period; and (iii) for the period from January 1, 2025 until the end of the Term, an amount equal to 1% of the procurement amount during such period. Fees incurred by the Company related to this agreement were $7.9 million and $19.0 million for the three months ended September 30, 2024 and 2023, respectively, and $32.9 million and $19.0 million for the nine months ended September 30, 2024 and 2023, respectively, and were included in cost of inventories.

Brand License Agreement

In connection with the separation, the Company entered into a brand license agreement with JS Global, in which the Company granted to JS Global the non-exclusive rights to obtain, produce and source, and the exclusive rights to distribute and sell, our brands of products in certain international markets in APAC. The brand license agreement has a term of 20 years from the date of the separation. Under this agreement, JS Global pays to SharkNinja a royalty of 3% of net sales of licensed products. The Company earned royalty income of $4.6 million and $0.6 million for the three months ended September 30, 2024 and 2023, respectively, and $7.0 million and $0.6 million for the nine months ended September 30, 2024 and 2023, respectively, which was included in net sales.

Product Development Agreements

The Company has historically utilized JS Global subsidiaries for certain research and development services. For these services, the Company paid $0.9 million and $0.8 million for the three months ended September 30, 2024 and 2023, respectively, and $2.6 million for the nine months ended September 30, 2024 and 2023.

In connection with the separation, the Company entered into an agreement with JS Global to provide certain research and development, and related product management, services to JS Global entities related to the distribution of products in APAC. Under this agreement, the Company earned product development service fees of $0.5 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively, and $1.5 million and $0.2 million for the nine months ended September 30, 2024 and 2023, respectively, which were recorded as a reduction of research and development expenses.

Transition Services Agreement

In connection with the separation, the Company entered into a transition services agreement with JS Global pursuant to which the Company provides certain transition services to JS Global, in order to facilitate the transition of the separated JS Global business. The services are provided on a transitional basis for a term of twenty-four months, subject to a three-month extension by JS Global. Service fees related to this agreement were $0.8 million and $0.5 million for the three months ended September 30, 2024 and 2023, respectively, and $2.3 million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively, and were recorded as a reduction of general and administrative expenses.

Transactions with Former Parent
 
See “Note 11 - Shareholders' Equity and Equity Incentive Plan” for details on the Company’s distributions to Former Parent.
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The following is a summary of the related party transactions associated with JS Global:

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(in thousands)
Related party revenue
Sale of goods$— $13 $— $1,264 
Royalty income4,612 607 6,962 607 
Related party expense (income)
Cost of sales - purchases of goods and services, net$56,997 $259,784 $189,149 $953,013 
Research and development services, net355 640 1,095 2,405 
General and administrative(750)(500)(2,250)(500)

 As of
 September 30, 2024December 31, 2023
  
 (in thousands)
Related party assets  
Accounts receivable, net$7,948 $3,594 
Related party liabilities
Accounts payable$52,740 $101,538 
 

26

Exhibit 99.2
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of our results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our Unaudited Interim Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, Unaudited Interim Condensed Consolidated Statements of Income, Comprehensive Income and Shareholders' Equity for the three and nine months ended September 30, 2024 and September 30, 2023, Unaudited Interim Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and September 30, 2023, and Notes to the Unaudited Interim Condensed Consolidated Financial Statements included elsewhere in this Form 6-K, and our audited consolidated financial statements and the related notes and other information for the year ended December 31, 2023 included in our Annual Report on Form 20-F as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 1, 2024 (the “Form 20-F”).
 
Cautionary Note Regarding Forward Looking Statements
 
Some information in this Form 6-K may contain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended), that reflect our current views with respect to, among other things, future events and our future business, financial condition, results of operations and prospects. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or phrases or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not statements of historical fact, and are based on current expectations, estimates and projections about our industry as well as certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, which you should consider and read carefully, including but not limited to:
 
•our ability to maintain and strengthen our brands to generate and maintain ongoing demand for our products;

•our ability to commercialize a continuing stream of new products and line extensions that create demand;

•our ability to effectively manage our future growth;

•general economic conditions and the level of discretionary consumer spending;

•our ability to expand into additional consumer markets;

•our ability to maintain product quality and product performance at an acceptable cost;

•our ability to compete with existing and new competitors in our markets;

•problems with, or loss of, our supply chain or suppliers, or an inability to obtain raw materials;

•the risks associated with doing business globally;

•inflation, changes in the cost or availability of raw materials, energy, transportation and other necessary supplies and services;

•our ability to hire, integrate and retain highly skilled personnel;
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•our ability to maintain, protect and enhance our intellectual property;

•our ability to securely maintain consumer and other third-party data;

•our ability to comply with ongoing regulatory requirements;

•the increased expenses associated with being a public company;

•our status as a “controlled company” within the meaning of the rules of the New York Stock Exchange (“NYSE”);

•our ability to achieve some or all of the anticipated benefits of the separation from JS Global;

•the payment of any declared dividends; and

•the other risks and uncertainties described under “Item 3. Key Information — D. Risk Factors” in our Form 20-F.

This list of factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Form 6-K. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Form 6-K, and our future levels of activity and performance, may not occur and actual results could differ materially and adversely from those described or implied in the forward-looking statements. As a result, you should not regard any of these forward-looking statements as a representation or warranty by us or any other person or place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
 
In addition, statements that contain “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Form 6-K. While we believe that this information provides a reasonable basis for these statements, this information may be limited or incomplete. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. We qualify all of our forward-looking statements by the cautionary statements contained in this section and elsewhere in this Form 6-K.
 
Overview
 
SharkNinja is a global product design and technology company that creates innovative 5-star rated lifestyle solutions for consumers around the world. We have built two billion-dollar brands that drive strong growth and innovation across the 35 sub-categories in which we compete today. We have a proven track record of entering and establishing leadership positions by disrupting the market across household product categories, including Cleaning, Cooking and Beverage, Food Preparation and Other, which includes Home Environment and Beauty.
 
Our success is centered around our advanced engineering and innovation capabilities coupled with our deep understanding of consumer needs. We relentlessly seek to deliver innovative home appliances at compelling value in order to delight consumers. Our continued growth in sales and increasing market share demonstrate that our products deliver lifestyle solutions that meet our consumers’ evolving needs and desires.
 
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We drive high brand engagement through our dynamic approach to solutions-driven storytelling in categories that we believe have not been historically known for high engagement. This solutions-driven approach focuses on educating the consumer on our innovative solution to a consumer problem that makes their experience more efficient and more enjoyable. Our differentiated storytelling complements our innovative products across a variety of channels, including in-store, online, on television and across social media. This approach engages current and new consumers, fueling demand for our solutions across a variety of categories. Utilizing this strategy, we have built a global community of passionate brand ambassadors who we believe value our innovation, quality and performance.
 
We sell our products using an omnichannel distribution strategy that consists primarily of retail and direct-to-consumer (“DTC”) channels. Our retail channel covers brick-and-mortar retailers, e-commerce platforms and multichannel retailers, which, in turn, sell our products to the end consumers. Some of the largest retailers we sell to include Walmart, Amazon, Target and Best Buy, as well as a significant number of independent retailers. Our DTC channel covers sales directly to consumers through our websites. The goal of our omnichannel distribution strategy is to be the most prominent and relevant brand wherever our consumers choose to shop.
 
We have built an agile and efficient supply chain over time and have made significant investments to optimize manufacturing and sourcing. Our supply chain infrastructure harnesses three differentiating factors: (i) long-standing factory partnerships that allow us to rapidly develop and produce our products, (ii) factory flexibility that allows us to incorporate insights and adapt at any stage of the production process and (iii) our volumes and long-term strategic partnerships with key shippers allow us to attain competitive inbound freight rates, even when the market is constrained. We have also made significant investments in local talent to help oversee the production process and ensure that our manufacturers’ products meet our strenuous quality standards.
 
Key Factors Affecting Our Performance
 
We believe that our performance and results of operations have been and will continue to be, affected by a number of factors, including those described below and in “Item 3. Key Information — D. Risk Factors” included in our Form 20-F.
 
Continued Product Innovation in Existing Categories and New Adjacent Categories
 
Our future growth depends, in part, on our ability to introduce new and enhanced products in our existing categories and enter adjacent categories. The success of our new products depends on many factors, including finding innovative solutions to consumer problems, differentiating our products from those of our competitors, obtaining protection for our intellectual property and anticipating consumer trends. By introducing new products, we appeal to a broader range of consumers, which expands our use cases and increases our presence in underserved or untapped markets. To continue with our rapid pace of innovation, we will need to continue to invest in Research and Development ("R&D") to enhance our product offerings. We believe that our consumer insight capabilities and robust in-house R&D teams, with dedicated engineering and development experts around the globe, enables us to maintain a product pipeline several years into the future. We are relentlessly focused on staying at the forefront of our product categories while entering new adjacent categories through our continuous innovation and ever-evolving consumer insights.
 
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Ability to Attract and Retain Consumers and Increase Consumer Engagement
 
We believe that we are still in the early stages of growth across our markets and that we can significantly grow our consumer base and the number of our products per household. Our performance will depend on our continued ability to retain existing consumers and attract new consumers to purchase products across our portfolio, which is reliant on us maintaining consumer loyalty and satisfaction. Consumer engagement with our brands is integral to the continued growth and success of our business. We have strategically invested and will continue to invest, significant time and resources towards our marketing initiatives, including long-form advertising to the latest social media platforms, that educate consumers, highlight our quality and value, inspire conversion in-store and online. We have also invested and expect to continue to invest, in our ability to glean consumer insights from a variety of sources, including direct and indirect interactions with consumers and consumer reviews of our products. We believe that continued interactions with consumers allow us to understand their needs and desires, enhancing our product storytelling and inspiring purchases.
 
Continued Geographic Expansion Within Existing and New International Markets
 
We believe our ability to expand within existing international markets and enter new international markets will continue to play an integral role in our future growth. We have cultivated our presence in international markets for years, accumulating experience and local resources while building long-term, in-depth cooperation with key retailers. Our ability to grow our business in new international markets will depend on factors such as our marketing efforts, continued consumer satisfaction with our products and understanding consumer preferences in different markets. International expansion may require us to invest in sales and marketing, infrastructure and personnel. As we scale in new markets, we anticipate that we will leverage our existing relationships with key international retail partners and build partnerships with new retailers.
 
Ability to Manage Costs and Inventory
 
Our results of operations are affected by our ability to manage our manufacturing and supply costs effectively. Our product costs vary based on the category, level of technological innovation and complexity, as well as the arrangements with our manufacturing partners and the input costs they face. We have continued to expand our supplier base as we have expanded into new categories and geographies. We strive to ensure that we are multi-sourced across high-volume products to ensure sufficient product supply. Our supply chain remains highly agile with competitive bidding to secure favorable pricing, allowing us to offer greater value to our consumers. Further, we generally have long-standing relationships with our key suppliers that have solidified our supply chain infrastructure and enabled us to source our products effectively.
 
Continued Execution of Our Omni-Channel Strategy
 
Since our inception, we have relentlessly focused on meeting our consumers where they shop. Our omnichannel strategy has continued to evolve as consumer shopping habits have evolved. We have established credibility through key retail channels, built numerous years’ worth of trust with leading retailers and have had success in our DTC channel, allowing us to gain deeper consumer insights. We have also invested and expect to continue to invest in growing our teams of sales representatives to keep pace with increasing consumer demand and expand our relationships with both brick-and-mortar and online retailers. Our ability to execute this strategy will depend on various factors such as retailer satisfaction with the sales and profitability of our products, our ability to continue to innovate and our ability to maintain and expand the number of categories in which we are a category captain at key retailers.
 
4

Economic Conditions and Seasonality
 
Demand for our products is impacted by various economic factors that affect our consumers, such as consumer confidence, demographic trends, employment levels, inflation and other economic factors. These factors may influence the extent to which consumers purchase small household appliances. We believe that small appliances, such as our product offerings, are less cyclical than large appliances, which are typically more expensive and involve less frequent purchases by consumers. We also believe that consumers are attracted to our products because of the potential to save money; for instance, purchasing a Ninja Coffee Maker or Foodi Oven enables consumers to reduce spend on coffee and food away from home. In addition, we believe that our net sales include a seasonal component. We expect our net sales to be highest in our third and fourth quarters as retailers are buying products in advance of the holiday season and our online retail and DTC sales, in particular, increase during the holiday season. We expect this seasonality to continue to be a factor in our results of operations.
 
Key Components of Results of Operations
 
Net Sales
 
We offer a broad range of products that span 35 sub-categories primarily within small household appliances. We generate net sales from product sales to retailers, both brick-and-mortar and online, as well as through DTC sales and distributors. We recognize sales upon transfer of control of products to retailers, consumers and distributors, net of returns, discounts and allowances provided to retailers and funding provided to retailers for promotions and advertising of our products. Control is generally transferred upon shipment or delivery of the products, depending on shipping terms. Net sales are impacted by the effect of foreign exchange rates, competition, consumer spending habits and general economic conditions.
 
We disaggregate the net sales of our products across four categories:

•Cleaning Appliances, which includes corded and cordless vacuums, including handheld and robotic vacuums, as well as other floorcare products including steam mops, wet/dry cleaning floor products and carpet extraction;

•Cooking and Beverage Appliances, which includes air fryers, multi-cookers, outdoor and countertop grills and ovens, coffee systems, carbonation, cookware, cutlery, kettles, toasters and bakeware;

•Food Preparation Appliances, which includes blenders, food processors, ice cream makers, juicers, frozen drink appliances and coolers; and

•Other, which includes beauty appliances such as hair dryers and stylers, home environment products, such as air purifiers and fans.
 
Gross Profit and Gross Margin
 
Gross profit reflects net sales less the cost of sales. Cost of sales primarily consists of the purchase cost of our products from third-party manufacturers, inbound freight costs, tariffs, product quality testing and inspection costs, the costs associated with receiving inventory into our warehouses, depreciation on molds and tooling that we own, warranty costs, damages, obsolescence and shrinkage costs and allocated overhead, including the service fee paid to JS Global for supply chain services.
 
We calculate gross margin as gross profit divided by net sales. Gross margin is generally impacted by changes in channel mix since our DTC sales usually generate a higher gross margin than sales to retailers and distributors. Additionally, gross margin is also impacted by product category mix, changes in foreign currency fluctuations, changes in tariff policies, fluctuations in inbound freight costs and fluctuations in commodity and component costs.
 
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Operating Expenses
 
Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. Advertising expenses are the most significant component of our operating expenses and consist of television advertising as well as digital advertising. Personnel-related expenses are the second most significant component of operating expenses and consist of salaries and bonuses, share-based compensation and employee benefit costs. Our operating expenses also include allocated overhead. Overhead costs that are not substantially dedicated for use by a specific functional group are allocated based on headcount. Allocated overhead costs include shared costs associated with facilities, including rent and utilities, information technology and related personnel and depreciation of property and equipment. We expect our operating expenses to increase on an absolute dollar basis for the foreseeable future as we continue to increase investments to support our growth including through increasing staff levels, expanding research and development and greater marketing activities. We also anticipate increased administrative and compliance costs as a result of becoming a public company.
 
Research and Development
 
Research and development costs primarily consist of personnel-related costs for our engineering and product development personnel responsible for the design, development and testing of our products, contractors and consulting expenses, the cost of components and test equipment used for product, tooling and prototype development, prototype expenses, overhead cost and amortization of intangible assets related to patents and amortization expenses related to capitalized development software.
 
Sales and Marketing
 
Sales and marketing expenses primarily consist of advertising, marketing and other brand-building costs, salaries and associated expenses for sales and marketing teams, shipping and fulfillment costs, including costs for third-party delivery services and shipping materials, overhead cost, amortization expenses of intangible assets related to customer relationships and depreciation expenses.
 
General and Administrative
 
General and administrative expenses primarily consist of personnel-related costs for finance, legal, human resources, information technology and administrative functions, third-party professional service fees for external legal, accounting and other consulting services, depreciation expenses, overhead costs and expenses associated with operating as a public company, including expenses to comply with the rules and regulations of the SEC and the listing rules of NYSE, as well as expenses for corporate insurance, director and officer insurance, and investor relations.
 
Interest Expense, Net
 
Interest expense, net of any interest earned on our cash and cash equivalents, primarily consists of interest on our borrowings, including our term loan facility. See “—Liquidity and Capital Resources—Indebtedness.”
 
Other Income (Expense), Net
 
Other income (expense), net primarily consists of gains and losses on foreign currency transactions, foreign currency forward contracts and other income and expenses that are not part of our normal operating activities. See “—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Risk.”
 
Provision for Income Taxes
 
Provision for income taxes consists primarily of income taxes in the United States and other foreign jurisdictions in which we conduct our business.
 
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Results of Operations
 
The following table sets forth our selected condensed consolidated statements of income information for each of the periods indicated:
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2024202320242023
Net sales$1,426,566 $1,070,617 $3,741,452 $2,876,211 
Cost of sales731,559 583,124 1,918,929 1,591,254 
Gross profit695,007 487,493 1,822,523 1,284,957 
Operating expenses:
Research and development(1)
94,808 60,691 254,457 180,430 
Sales and marketing(1)
300,841 207,599 818,594 568,035 
General and administrative(1)
119,096 124,655 310,432 263,682 
Total operating expenses514,745 392,945 1,383,483 1,012,147 
Operating income180,262 94,548 439,040 272,810 
Interest expense, net(16,916)(13,003)(46,482)(28,523)
Other income (expense), net11,031 (5,865)14,968 (41,315)
Income before income taxes 174,377 75,680 407,526 202,972 
Provision for income taxes42,048 56,958 97,537 85,218 
Net income$132,329 $18,722 $309,989 $117,754 
 
(1)     Includes share-based compensation as follows:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2024202320242023
Research and development$2,030 $3,160 $7,815 $4,229 
Sales and marketing2,778 1,920 7,485 2,432 
General and administrative8,977 16,257 32,041 17,841 
Total share-based compensation$13,785 $21,337 $47,341 $24,502 
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The following table sets forth our selected condensed consolidated statements of income information as a percentage of our total net sales for each of the periods indicated:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Net sales100.0 %100.0 %100.0 %100.0 %
Cost of sales51.3 54.5 51.3 55.3 
Gross profit48.7 45.5 48.7 44.7 
Operating expenses:  
Research and development6.6 5.7 6.8 6.3 
Sales and marketing21.1 19.4 21.9 19.7 
General and administrative8.3 11.6 8.3 9.2 
Total operating expenses36.0 36.7 37.0 35.2 
Operating income12.7 8.8 11.7 9.5 
Interest expense, net(1.3)(1.2)(1.3)(1.0)
Other (expense) income, net0.8 (0.6)0.4 (1.4)
Income before income taxes 12.2 7.0 10.8 7.1 
Provision for income taxes2.9 5.3 2.6 3.0 
Net income9.3 %1.7 %8.2 %4.1 %
 
Comparison of the Three Months Ended September 30, 2024 and 2023
 
Net Sales
 
 Three Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Net sales$1,426,566 $1,070,617 $355,949 33.2 %
 
Our net sales increased by $355.9 million, or 33.2%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase in net sales resulted from growth in each of our four major product categories of Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances and Other, which includes beauty and home environment products.

Net sales in our product categories were as follows:
 
 Three Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Cleaning Appliances $527,453 $449,319 $78,134 17.4 %
Cooking and Beverage Appliances411,453 339,328 72,125 21.3 
Food Preparation Appliances 366,834 211,461 155,373 73.5 
Other 120,826 70,509 50,317 71.4 
Total net sales$1,426,566 $1,070,617 $355,949 33.2 %
 
•Cleaning Appliances net sales increased by $78.1 million, or 17.4%, to $527.5 million in the three months ended September 30, 2024, compared to $449.3 million for the three months ended
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September 30, 2023. This increase was driven by the carpet extractor and cordless vacuums sub-categories.

•Cooking and Beverage Appliances net sales increased by $72.1 million, or 21.3%, to $411.5 million in the three months ended September 30, 2024, compared to $339.3 million for the three months ended September 30, 2023. This increase was driven by growth in Europe and the continued momentum within heated cooking.

•Food Preparation Appliances net sales increased by $155.4 million, or 73.5%, to $366.8 million in the three months ended September 30, 2024, compared to $211.5 million for the three months ended September 30, 2023 driven by strong sales of our ice cream makers and the launch of frozen drink appliances.

•Other net sales increased by $50.3 million, or 71.4%, to $120.8 million in the three months ended September 30, 2024, compared to $70.5 million for the three months ended September 30, 2023. This increase was driven by strength of haircare products and air purifiers.
 
Gross Profit and Gross Margin
 
 Three Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Gross profit$695,007 $487,493 $207,514 42.6 %
Gross margin48.7 %45.5 %  
 
Our gross profit increased by $207.5 million, or 42.6%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
 
Our gross margin increased by 320 basis points for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase in gross margin was derived from optimizations within our supply chain, sourcing and costing strategy and foreign exchange benefit, as well as a reduction in the contractual sourcing service fee paid to JS Global for supply chain services. This was partially offset by the impact of tariffs.
 
Operating Expenses
 
 Three Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Research and development$94,808 $60,691 $34,117 56.2 %
Percentage of net sales6.6 %5.7 %
Selling and marketing$300,841 $207,599 $93,242 44.9 %
Percentage of net sales21.1 %19.4 %
General and administration$119,096 $124,655 $(5,559)(4.5)%
Percentage of net sales8.3 %11.6 %
Total operating expenses$514,745 $392,945 $121,800 31.0 %
Percentage of net sales36.0 %36.7 %  
 
Research and Development
 
Research and development expenses increased by $34.1 million, or 56.2%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This increase was primarily driven by incremental personnel-related expenses of $12.7 million to support new product categories and new market expansion. The overall increase was also driven by an increase of $8.8 million in prototype and testing costs, an
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increase of $4.5 million in professional and consulting fees, an increase of $4.5 million in depreciation and amortization expense and an increase of $2.1 million in consumer insight initiatives.

Sales and Marketing
 
Sales and marketing expenses increased by $93.2 million, or 44.9%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This increase was primarily attributable to increases of $42.1 million in advertising-related expenses; an increase of $33.4 million in delivery and distribution costs driven by higher volumes, particularly in our DTC business; $14.5 million in personnel-related expenses to support new product launches and expansion into new markets; an increase of $5.4 million in professional and consulting fees; offset by a decrease in depreciation and amortization expense of $4.4 million.
 
General and Administrative
 
General and administrative expenses decreased by $5.6 million, or 4.5%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This decrease was primarily driven by a decrease in transaction costs related to the separation and distribution from JS Global of $41.5 million. The decrease was offset by an increase of $27.9 million in legal fees, including a $13.5 million legal settlement reserve related to certain patent infringement claims; an increase of $3.9 million in professional and consulting fees; an increase of $2.8 million in technology support costs and an increase of $2.2 million in credit card processing and merchant fees.

Interest Expense, Net
 
 Three Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Interest expense, net$16,916 $13,003 $3,913 30.1 %
Percentage of net sales1.3 %1.2 %  
 
Interest expense, net increased by $3.9 million, or 30.1%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. This increase was primarily due to a $2.7 million increase in interest expense on our term loans, which was driven by higher principal and interest on the new debt entered into on July 20, 2023 and a $1.0 million increase in interest expense on our revolving credit facility.
 
Other Income (Expense), Net
 
 Three Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Other income (expense), net$11,031 $(5,865)$16,896 288.1 %
Percentage of net sales0.8 %(0.6)%  
 
Other income (expense), net increased by $16.9 million, or 288.1%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The difference was primarily attributable to changes in foreign currency year over year, primarily driven by the strengthening of the British Pound.
 
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Provision for Income Taxes
 
 Three Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Provision of income taxes$42,048 $56,958 $(14,910)(26.2)%
Percentage of income before income taxes24.1 %75.3 %  
 
Provision for income taxes decreased by $14.9 million, or 26.2%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Our effective tax rate (“ETR”) was 24.1% and 75.3% of our income before income taxes for the three months ended September 30, 2024 and 2023, respectively. This decrease in the ETR was primarily related to the impacts of the separation and distribution and refinancing, such as withholding taxes and transaction costs, in the prior year.
 
Comparison of the Nine Months Ended September 30, 2024 and 2023
 
Net Sales
 
 Nine Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Net sales$3,741,452 $2,876,211 $865,241 30.1 %
 
Our net sales increased by $865.2 million, or 30.1%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in net sales resulted from growth in each of our four major product categories of Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances and Other, which includes beauty and home environment products.

Net sales in our product categories were as follows:
 
 Nine Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Cleaning Appliances $1,415,488 $1,277,986 $137,502 10.8 %
Cooking and Beverage Appliances1,120,371 939,060 181,311 19.3 
Food Preparation Appliances 836,782 472,685 364,097 77.0 
Other 368,811 186,480 182,331 97.8 
Total net sales$3,741,452 $2,876,211 $865,241 30.1 %
 
•Cleaning Appliances net sales increased by $137.5 million, or 10.8%, to $1,415.5 million in the nine months ended September 30, 2024, compared to $1,278.0 million for the nine months ended September 30, 2023. This increase was driven by the carpet extractor and robotics sub-categories.

•Cooking and Beverage Appliances net sales increased by $181.3 million, or 19.3%, to $1,120.4 million in the nine months ended September 30, 2024, compared to $939.1 million for the nine months ended September 30, 2023. This increase was driven by growth in Europe. Global growth was supported by the success of the outdoor grill and outdoor oven across both the US and European markets.

•Food Preparation Appliances net sales increased by $364.1 million, or 77.0%, to $836.8 million in the nine months ended September 30, 2024, compared to $472.7 million for the nine months ended September 30, 2023 driven by strong sales of our ice cream makers and compact blenders, specifically our portable blenders.

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•Other net sales increased by $182.3 million, or 97.8%, to $368.8 million in the nine months ended September 30, 2024, compared to $186.5 million for the nine months ended September 30, 2023. This increase was driven by strength of haircare products, our FlexBreeze fans, and air purifiers.
 
Gross Profit and Gross Margin
 
 Nine Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Gross profit$1,822,523 $1,284,957 $537,566 41.8 %
Gross margin48.7 %44.7 %
 
Our gross profit increased by $537.6 million, or 41.8%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
 
Our gross margin increased by 400 basis points for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in gross margin was derived from optimizations within our supply chain, sourcing and costing strategy, regional expansion, and foreign exchange benefit, as well as a reduction in the contractual sourcing service fee paid to JS Global for supply chain services.
 
Operating Expenses
 
 Nine Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Research and development$254,457 $180,430 $74,027 41.0 %
Percentage of net sales6.8 %6.3 %
Selling and marketing$818,594 $568,035 $250,559 44.1 %
Percentage of net sales21.9 %19.7 %
General and administration$310,432 $263,682 $46,750 17.7 %
Percentage of net sales8.3 %9.2 %
Total operating expenses$1,383,483 $1,012,147 $371,336 36.7 %
Percentage of net sales37.0 %35.2 %  
 
Research and Development
 
Research and development expenses increased by $74.0 million, or 41.0%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This increase was primarily driven by incremental personnel-related expenses of $33.4 million driven by increased headcount to support new product categories and new market expansion, and includes an increase of $3.6 million in share-based compensation. The overall increase was also driven by an increase of $20.4 million in prototypes and testing costs, an increase of $12.9 million in professional and consulting fees, an increase of $3.2 million in travel costs and an increase of $3.0 million in consumer insight initiatives and an increase $2.1 million in depreciation and amortization expense.

Sales and Marketing
 
Sales and marketing expenses increased by $250.6 million, or 44.1%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This increase was primarily attributable to increases of $127.5 million in advertising-related expenses; an increase of $79.1 million in delivery and distribution costs driven by higher volumes, particularly in our DTC business; $38.9 million in personnel-related expenses to support new product launches and expansion into new markets, which includes an incremental $5.1 million of share-based compensation; $4.0 million in travel costs; $8.9 million in professional and consulting fees; offset by a decrease in depreciation and amortization expense of $7.5 million.
 
12

General and Administrative
 
General and administrative expenses increased by $46.8 million, or 17.7%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This increase was primarily driven by an increase of $44.9 million in legal fees, including a $13.5 million legal settlement reserve related to certain patent infringement claims; an increase in personnel-related expenses of $32.5 million, including a $14.2 million increase in share-based compensation; an increase of $17.3 million in professional and consulting fees; an increase of $11.9 million in technology support costs; an increase of $9.0 million in credit card processing and merchant fees; an increase of $4.8 million in product liability and insurance; an increase of $3.4 million in depreciation and amortization; offset by a decrease in transaction costs related to the separation and distribution from JS Global and secondary offering of $76.5 million.

Interest Expense, Net
 
 Nine Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Interest expense, net$46,482 $28,523 $17,959 63.0 %
Percentage of net sales1.3 %1.0 %
 
Interest expense, net increased by $18.0 million, or 63.0%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. This increase was primarily due to a $18.8 million increase in interest expense on our term loans, which was driven by higher principal and interest on the new debt entered into on July 20, 2023.

Other Income (Expense), Net
 
 Nine Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Other income (expense), net$14,968 $(41,315)$56,283 136.2 %
Percentage of net sales0.4 %(1.4)%
 
Other income (expense), net increased by $56.3 million, or 136.2%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily attributable to changes in foreign currency year over year, primarily related to derivatives that were not designated as hedging instruments in the prior year, as well as a $5.0 million gain upon a settlement that was reached with a supplier.
 
Provision for Income Taxes
 
 Nine Months Ended September 30,
($ in thousands, except %)20242023$ Change% Change
Provision of income taxes$97,537 $85,218 $12,319 14.5 %
Percentage of income before income taxes23.9 %42.0 %
 
Provision for income taxes increased by $12.3 million, or 14.5%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. Our ETR was 23.9% and 42.0% of our income before income taxes for the nine months ended September 30, 2024 and 2023, respectively. This decrease in the ETR was primarily related to the impacts of the separation and distribution and refinancing, such as withholding taxes and transaction costs, in the prior year.
 
13

Non-GAAP Financial Measures
 
In addition to the measures presented in our condensed consolidated financial statements, we regularly review other financial measures, defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions.
 
The key non-GAAP financial measures we consider are Adjusted Net Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income, Adjusted Net Income Per Share, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. These non-GAAP financial measures are used by both management and our Board, together with comparable GAAP information, in evaluating our current performance and planning our future business activities. These non-GAAP financial measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and/or which management considers to be unrelated to our core operations and excludes the financial results from our APAC distribution channels, both of which were be transferred to JS Global concurrently with the separation (the “Divestitures”), as well as the cost of sales from (i) inventory markups that will be eliminated as a result of the transition of certain product procurement functions from a subsidiary of JS Global to SharkNinja concurrently with the separation and (ii) costs related to the transitional Sourcing Services Agreement with JS Global that was entered into in connection with the separation (collectively, the “Product Procurement Adjustment”). Management believes that tracking and presenting these non-GAAP financial measures provides management and the investment community with valuable insight into our ongoing core operations, our ability to generate cash and the underlying business trends that are affecting our performance. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry and to better understand and interpret the results of the ongoing business following the separation and distribution. These non-GAAP financial measures should not be viewed as a substitute for our financial results calculated in accordance with GAAP and you are cautioned that other companies may define these non-GAAP financial measures differently.

We define Adjusted Net Sales as net sales as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including net sales from our Divestitures. We believe that Adjusted Net Sales is an appropriate measure of our performance because it eliminates the impact of our Divestitures that do not relate to the ongoing performance of our business.
 
The following table reconciles Adjusted Net Sales to the most comparable GAAP measure, net sales, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2024202320242023
Net sales$1,426,566 $1,070,617 $3,741,452 $2,876,211 
Divested subsidiary adjustment(1)
— (13,196)— (77,544)
Adjusted Net Sales$1,426,566 $1,057,421 $3,741,452 $2,798,667 
 
(1)Adjusted for net sales from SharkNinja Co., Ltd. (“SNJP”) and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.
 
We define Adjusted Gross Profit as gross profit as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including the net sales and cost of sales from our Divestitures and the cost of sales from the Product Procurement Adjustment. We define Adjusted Gross Margin as Adjusted Gross Profit divided by Adjusted Net Sales. We believe that Adjusted Gross Profit and Adjusted Gross Margin are appropriate measures of our operating performance because each eliminates the impact our Divestitures and certain other adjustments that do not relate to the ongoing performance of our business.
 
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The following table reconciles Adjusted Gross Profit and Adjusted Gross Margin to the most comparable GAAP measure, gross profit and gross margin, respectively, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands, except %)2024202320242023
Net sales$1,426,566 $1,070,617 $3,741,452 $2,876,211 
Cost of sales(731,559)(583,124)(1,918,929)(1,591,254)
Gross profit695,007 487,493 1,822,523 1,284,957 
Gross margin
48.7 %45.5 %48.7 %44.7 %
Divested subsidiary net sales adjustment(1)
— (13,196)— (77,544)
Divested subsidiary cost of sales adjustment(2)
— 7,628 — 45,116 
Product Procurement Adjustment(3)
9,571 23,574 37,876 53,369 
Adjusted Gross Profit$704,578 $505,499 $1,860,399 $1,305,898 
Adjusted Net Sales$1,426,566 $1,057,421 $3,741,452 $2,798,667 
Adjusted Gross Margin49.4 %47.8 %49.7 %46.7 %

(1)Adjusted for net sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

(2)Adjusted for cost of sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

(3)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SharkNinja (Hong Kong) Company Limited (“SNHK”), and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
 
We define Adjusted Operating Income as operating income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) amortization of certain acquired intangible assets, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including operating income from our Divestitures and cost of sales from our Product Procurement Adjustment.
 
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The following table reconciles Adjusted Operating Income to the most comparable GAAP measure, operating income, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2024202320242023
Operating income$180,262 $94,548 $439,040 $272,810 
Share-based compensation(1)    
13,785 21,337 47,341 24,502 
Litigation costs(2)
29,035 3,965 42,691 4,600 
Amortization of acquired intangible assets(3)
4,896 4,897 14,690 14,690 
Transaction-related costs(4)
— 41,455 1,342 76,549 
Product Procurement Adjustment(5)
9,571 23,574 37,876 53,369 
Divested subsidiary operating income adjustment(6)
— 287 — (8,456)
Adjusted Operating Income $237,549 $190,063 $582,980 $438,064 

(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.

(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.

(3)Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculating Adjusted Operating Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations. Of the amortization of acquired intangible assets, $0.9 million for the three months ended September 30, 2024 and 2023, and $2.8 million for the nine months ended September 30, 2024 and 2023, was recorded to research and development expenses, and $4.0 million for the three months ended September 30, 2024 and 2023, and $11.9 million for the nine months ended September 30, 2024 and 2023, was recorded to sales and marketing expenses.

(4)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.

(5)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.

(6)Adjusted for operating income from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

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We define Adjusted Net Income as net income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) amortization of certain acquired intangible assets, (v) certain transaction-related costs, (vi) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment, (vii) the tax impact of the adjusted items and (viii) certain withholding taxes.
 
Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the diluted weighted average number of ordinary shares.
 
The following table reconciles Adjusted Net Income and Adjusted Net Income Per Share to the most comparable GAAP measures, net income and net income per share, diluted, respectively, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands, except share and per share amounts)2024202320242023
Net income
$132,329 $18,722 $309,989 $117,754 
Share-based compensation(1)
13,785 21,337 47,341 24,502 
Litigation costs(2)
29,035 3,965 42,691 4,600 
Foreign currency (gains) losses, net(3)
(11,156)3,862 (9,569)43,479 
Amortization of acquired intangible assets(4)
4,896 4,897 14,690 14,690 
Transaction-related costs(5)
— 41,455 1,342 76,549 
Product Procurement Adjustment(6)
9,571 23,574 37,876 53,369 
Tax impact of adjusting items(7)
(7,996)(4,704)(25,711)(30,686)
Tax withholding adjustment(8)
— 19,474 — 19,474 
Divested subsidiary net income adjustment(9)
— 394 — (6,586)
Adjusted Net Income
$170,464 $132,976 $418,649 $317,145 
Net income per share, diluted
$0.94 $0.13 $2.20 $0.85 
Adjusted Net Income Per Share
$1.21 $0.95 $2.97 $2.28 
Diluted weighted-average number of shares used in computing net income per share and Adjusted Net Income Per Share(10)
141,305,999 139,430,805 140,974,062 139,179,724 
 
(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.

(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.

(3)Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.

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(4)Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculated Adjusted Net Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations. Of the amortization of acquired intangible assets, $0.9 million for the three months ended September 30, 2024 and 2023, and $2.8 million for the nine months ended September 30, 2024 and 2023, was recorded to research and development expenses, and $4.0 million for the three months ended September 30, 2024 and 2023, and $11.9 million for the nine months ended September 30, 2024 and 2023, was recorded to sales and marketing expenses.

(5)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.

(6)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.

(7)Represents the income tax effects of the adjustments included in the reconciliation of net income to Adjusted Net Income determined using the tax rate of 22%, which approximates our effective tax rate, excluding (i) divested subsidiary net income adjustment described in footnote (9), and (ii) certain share-based compensation costs and separation and distribution-related costs that are not tax deductible.

(8)Represents withholding taxes associated with the cash dividend paid to JS Global in connection with the separation and related refinancing.

(9)Adjusted for net income (loss) from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

(10)In calculating net income per share and Adjusted Net Income Per Share, we used the number of shares transferred in the separation and distribution for the denominator for all periods prior to completion of the separation and distribution on July 31, 2023.
 
We define EBITDA as net income excluding: (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA excluding (i) share-based compensation cost, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including Adjusted EBITDA from our Divestitures and cost of sales from our Product Procurement Adjustment. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Adjusted Net Sales. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are appropriate measures because they facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results according to GAAP, we believe provide a more complete understanding of the factors and trends affecting our business than GAAP measures alone.
 
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The following table reconciles EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable GAAP measure, net income, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands, except %)2024202320242023
Net income$132,329 $18,722 $309,989 $117,754 
Interest expense, net16,916 13,003 46,482 28,523 
Provision for income taxes42,048 56,958 97,537 85,218 
Depreciation and amortization29,828 25,602 86,870 77,394 
EBITDA221,121 114,285 540,878 308,889 
Share-based compensation (1)
13,785 21,337 47,341 24,502 
Litigation costs (2)
29,035 3,965 42,691 4,600 
Foreign currency losses (gains), net(3)
(11,156)3,862 (9,569)43,479 
Transaction-related costs(4)
— 41,455 1,342 76,549 
Product Procurement Adjustment(5)
9,571 23,574 37,876 53,369 
Divested subsidiary Adjusted EBITDA adjustment(6)
— 264 — (11,020)
Adjusted EBITDA$262,356 $208,742 $660,559 $500,368 
Adjusted Net Sales$1,426,566 $1,057,421 $3,741,452 $2,798,667 
Adjusted EBITDA Margin18.4 %19.7 %17.7 %17.9 %

(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.

(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.

(3)Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.

(4)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.

(5)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.

(6)Adjusted for Adjusted EBITDA from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023. The divested subsidiary Adjusted EBITDA adjustment represents net (loss) income from our Divestitures excluding interest expense, income tax expense, depreciation and amortization expense and foreign currency gains and losses recorded at the subsidiary level.
 
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Liquidity and Capital Resources
 
Our principal sources of liquidity are our cash and cash equivalents, cash generated from operations and our revolving credit facility (“2023 Revolving Facility”). Our principal uses of cash in recent periods have been investing in international expansion, new product development, working capital, capital expenditures, and repayment of debt. As of September 30, 2024, our principal sources of liquidity were cash and cash equivalents of $127.9 million and our available balance of $315.9 million under our 2023 Revolving Facility. Our cash and cash equivalents consist primarily of cash on deposits with banks.

We believe that our existing cash and cash equivalents together with cash provided by operations and the availability under our 2023 Revolving Facility will be sufficient to meet our needs for at least the next 12 months from the date of the filing of this Form 6-K. We plan to use our current cash on hand, cash generated by operations and our 2023 Revolving Facility to support our core business operations and strategic plan to accelerate our go-to-market strategy, invest in new product development and enhance our global distribution. We may be required to seek additional equity or debt financing to fund our activities. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, the results of operations and financial conditions of the business would be materially and adversely affected.
 
We have lease obligations and other contractual obligations and commitments as part of our ordinary course of business. We did not have during the periods presented and we do not currently have, any off-balance sheet arrangements involving commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect on our business, financial condition, results of operations, liquidity, cash requirements or capital resources.

Indebtedness
 
In July 2023, we entered into a credit agreement (“2023 Credit Agreement”) with Bank of America, N.A., as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The 2023 Credit Agreement provides for an $810.0 million term loan facility (the “2023 Term Loans”) and a $500.0 million 2023 Revolving Facility. The 2023 Term Loans and 2023 Revolving Facility mature in July 2028, and both facilities bear interest at the Secured Overnight Financing Rate (“SOFR”) plus 1.750%. We may request increases to the 2023 Term Loans or 2023 Revolving Facility in a maximum aggregate amount not to exceed the greater of $520.0 million or 100% of adjusted earnings before interest, taxes, depreciation, and amortization, as defined in the 2023 Credit Agreement, for the most recently completed fiscal year. As of September 30, 2024, we had $964.8 million debt outstanding under the 2023 Credit Agreement.

No amounts were outstanding on the 2023 Revolving Facility as of December 31, 2023. During the nine months ended September 30, 2024, there were $210.0 million in draw downs on the 2023 Revolving Facility, of which $35.0 million has been repaid and $175.0 million remained outstanding as of September 30, 2024. As of September 30, 2024, $9.1 million of letters of credit were outstanding, resulting in an available balance of $315.9 million under the 2023 Revolving Facility.

The Company is required to meet certain financial covenants customary with this type of agreement, including, but not limited to, maintaining a maximum ratio of indebtedness and a minimum specified interest coverage ratio. As of September 30, 2024, the Company was in compliance with the covenants under the 2023 Credit Agreement.
 
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Cash Flows
 
The following table summarizes our cash flows for the periods presented:
 
 Nine Months Ended September 30,
($ in thousands)20242023
Net cash (used in) provided by operating activities$(43,049)$95,780 
Net cash used in investing activities(102,903)(64,363)
Net cash provided by (used in) financing activities115,288 (75,042)
 
Operating Activities
 
Net cash used in operating activities for the nine months ended September 30, 2024 of $43.0 million was primarily related to our net income of $310.0 million, adjusted for non-cash charges of $123.1 million and net cash outflows of $476.1 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $86.9 million, share-based compensation of $47.3 million, non-cash lease expenses of $16.0 million, provision for credit losses of $3.7 million and other non-cash adjustments of $1.6 million, offset by deferred income tax of $32.4 million. The main drivers of the net cash outflows derived from the changes in operating assets and liabilities were related to an increase in inventories of $357.1 million, an increase in accounts receivable of $193.1 million, an increase in prepaid expenses and other assets of $69.5 million, a decrease in accrued expenses and other liabilities of $12.0 million, a decrease in operating lease liabilities of $7.4 million and a decrease in tax payable of $1.0 million, partially offset by an increase in accounts payable of $162.0 million.

Net cash provided by operating activities for the nine months ended September 30, 2023 of $95.8 million was primarily related to our net income of $117.8 million, adjusted for non-cash charges of $119.4 million and net cash outflows of $141.4 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $77.4 million, share-based compensation of $24.5 million, non-cash lease expenses of $9.7 million, deferred income tax of $3.9 million, provision for credit losses of $2.2 million and other non-cash adjustments of $1.7 million. The main drivers of the net cash outflows derived from the changes in operating assets and liabilities were related to an increase in inventories of $259.0 million, an increase in accounts receivable of $192.2 million, a decrease in accrued expenses and other liabilities of $90.9 million and a decrease in operating lease liabilities of $9.3 million, partially offset by an increase in accounts payable of $343.6 million, a decrease in prepaid expenses and other assets of $65.5 million and an increase in tax payable of $0.9 million.

Investing Activities
 
Investing activities consist primarily of purchases of property and equipment and intangible assets.
 
Cash used in investing activities for the nine months ended September 30, 2024 of $102.9 million consisted of purchases of property and equipment of $95.2 million, purchases of intangible assets of $6.6 million and capitalized software development costs of $1.1 million.

Cash used in investing activities for the nine months ended September 30, 2023 of $64.4 million consisted of purchases of property and equipment of $70.5 million, purchases of intangible assets of $6.9 million, capitalized software development costs of $0.7 million, and other investing activities, net of $3.1 million, which was partially offset by cash receipts on beneficial interest in sold receivables of $16.8 million.
 
Financing Activities
 
Financing activities consist primarily of debt repayments and the taxes paid for shares withheld upon vesting of restricted stock units.
 
21

Cash provided by financing activities for the nine months ended September 30, 2024 of $115.3 million consisted of net proceeds from borrowings under the revolving credit facility of $175.0 million and proceeds from employee stock purchase plan contributions of $5.5 million, offset by net ordinary shares withheld for taxes of $50.0 million and repayment of debt on the 2023 Term Loans of $15.1 million.

Cash used in financing activities for the nine months ended September 30, 2023 of $75.0 million consisted of repayment of the principal balance on the 2020 Term Loans of $437.5 million, distributions paid to JS Global of $435.3 million and a recharge from JS Global for share-based compensation of $3.1 million, which was offset by the net proceeds from the issuance of the 2023 Term Loans of $800.9 million.
 
Quantitative and Qualitative Disclosures About Market Risk
 
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is principally the result of fluctuations in interest rates and foreign currency exchange rates.
 
Interest Rate Risk
 
Our exposure to interest rate risk relates to the interest income generated by cash and cash equivalents and interest expense on our debt. Our interest rate sensitivity is affected by changes in the general level of U.S. interest rates, particularly because our cash equivalents are in the form of checking accounts, government money market funds and money market deposit accounts in the United States. Interest income is sensitive to changes in the general level of interest rates. However, due to the short-term maturities of our cash equivalents, we believe a hypothetical 100 basis point increase or decrease in interest rates during any of the periods presented would not have had a material impact on our unaudited interim condensed consolidated financial statements.

During the nine months ended September 30, 2024 and 2023, average debt borrowings, excluding the impact of debt issuance costs, totaled $859.1 million and $512.0 million, respectively, with interest rates tied to LIBOR through July 20, 2023, and to SOFR thereafter. A hypothetical 100 basis point fluctuation to interest rates would have increased or decreased interest expense by $8.6 million and $5.1 million for the nine months ended September 30, 2024 and 2023, respectively.
 
Foreign Currency Exchange Risk
 
Our international net sales, cost of sales and operating expenses are denominated in multiple currencies, including British Pounds (“GBP”), Canadian Dollars, Chinese Renminbi, and Euros. As such, we have exposure to adverse changes in exchange rates associated with the net sales and operating expenses of our foreign operations. Any fluctuations in other currencies will have minimal direct impact on our international net sales.
 
The functional currency of our non-U.S. subsidiaries is generally the respective local currency, although there are some subsidiaries whose functional currency is not their respective local currency. Asset and liability balances denominated in non-U.S. Dollar currencies are translated into U.S. Dollars using period-end exchange rates, while translation of net sales, cost of sales and operating expenses is based on average monthly rates. Translation adjustments are recorded as a component of accumulated other comprehensive income (loss) and transaction gains and losses are recorded in other income (expense), net in our condensed consolidated statements of income.
 
Our primary foreign currency exchange risk relates to the purchase of inventory from manufacturers located in China. Although our inventory purchases are denominated in U.S. Dollars, as the foreign exchange rate between the Chinese Renminbi and the U.S. Dollar fluctuates, the amount paid to suppliers for our inventory will generally fluctuate accordingly based on our contractual terms. Our subsidiaries in Europe conduct business in their local currencies but are exposed to fluctuations between their functional currency and the U.S. Dollar, in particular due to their inventory purchases being denominated in U.S. Dollars. We regularly monitor the forecast of non-U.S. Dollar expense and the level of non-U.S. Dollar monetary asset and liability balances to determine if any actions,
22

including possibly entering into foreign currency contracts, should be taken to minimize the impact of fluctuating exchange rates on our results of operations.
 
We currently utilize foreign currency forward contracts, with financial institutions to protect against a portion of foreign exchange risks, mainly the exposure to changes in the exchange rate of the GBP against the U.S. Dollar that are associated with future cash flows denominated in GBP. These contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the related GBP denominated cash flows. The fair value of outstanding derivative instruments and associated disclosure are presented within “Note 5 - Fair Value Measurements” to our unaudited interim condensed consolidated financial statements included elsewhere in our Form 6-K. We may in the future enter into other derivative financial instruments if it is determined that such hedging activities are appropriate to further reduce our foreign currency exchange risk.
 
The estimated translation impact to our unaudited interim condensed consolidated financial statements of a hypothetical 1,000 basis points change in foreign currency exchange rates would amount to $0.8 million, $3.4 million, $9.5 million, and $9.2 million for the three months ended September 30, 2024 and 2023 and nine months ended September 30, 2024 and 2023, respectively. During the three months ended September 30, 2024 and 2023, and nine months ended September 30, 2024 and 2023, approximately 27.9%, 22.6%, 28.4%, and 25.6%, respectively, of our net sales and approximately 34.3%, 27.1%, 32.9%, and 28.6%, respectively, of our operating expenses were denominated in non-U.S. Dollar currencies.

Critical Accounting Policies and Estimates
 
There have been no material changes to our critical accounting policies and accounting estimates as compared to those disclosed in the Form 20-F.
23

Exhibit 99.3
 
SharkNinja Reports Third Quarter 2024 Results

Raises Fiscal Year 2024 Outlook on Key Metrics
 
NEEDHAM, Massachusetts, October 31, 2024 – SharkNinja, Inc. (“SharkNinja” or the “Company”) (NYSE: SN), a global product design and technology company, today announced its financial results for the third quarter ended September 30, 2024.
 
Highlights for the Third Quarter 2024 as compared to the Third Quarter 2023

•Net sales increased 33.2% to $1,426.6 million and Adjusted Net Sales increased 34.9% to $1,426.6 million.
•Gross margin and Adjusted Gross Margin increased 320 and 160 basis points, respectively.
•Net income increased 606.8% to $132.3 million. Adjusted Net Income increased 28.2% to $170.5 million.
•Adjusted EBITDA increased 25.7% to $262.4 million, or 18.4% of Adjusted Net Sales.

Mark Barrocas, Chief Executive Officer, commented: “SharkNinja delivered another quarter of outstanding top and bottom-line performance, demonstrating the continued success of our three-pillar growth strategy. Our robust innovation pipeline, unparalleled consumer insights, and strong demand creation engine are driving strong double-digit growth across our portfolio, enabling us to gain share in existing categories, enter new categories, and expand globally. As we enter the holiday season, we are pleased with the momentum in our business, despite the ongoing challenges in the global operating environment. We remain confident in our ability to deliver sustainable long-term profitable growth as we capture increasing share in our large and growing addressable market.”
 
Three Months Ended September 30, 2024
 
Net sales increased 33.2% to $1,426.6 million, compared to $1,070.6 million during the same period last year. Adjusted Net Sales increased 34.9% to $1,426.6 million, compared to $1,057.4 million during the same period last year, or 33.9% on a constant currency basis. The increase in net sales and Adjusted Net Sales resulted from growth in each of our four major product categories of Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances and Other, which includes beauty and home environment products.

•Cleaning Appliances net sales increased by $78.1 million, or 17.4%, to $527.5 million, compared to $449.3 million in the prior year quarter. Adjusted Net Sales of Cleaning Appliances increased by $85.0 million, or 19.2%, from $442.5 million to $527.5 million, driven by the carpet extractor and cordless vacuums sub-categories.

•Cooking and Beverage Appliances net sales increased by $72.1 million, or 21.3%, to $411.5 million, compared to $339.3 million in the prior year quarter. Adjusted Net Sales of Cooking and Beverage Appliances increased by $73.3 million, or 21.7%, from $338.1 million to $411.5 million, driven by growth in Europe and the continued momentum within heated cooking.

•Food Preparation Appliances net sales increased by $155.4 million, or 73.5%, to $366.8 million, compared to $211.5 million in the prior year quarter. Adjusted Net Sales of Food Preparation Appliances increased by $157.5 million, or 75.2%, from $209.3 million to $366.8 million, driven by strong sales of our ice cream makers and the launch of frozen drink appliances.

•Net sales in the Other category increased by $50.3 million, or 71.4%, to $120.8 million, compared to $70.5 million in the prior year quarter. Adjusted Net Sales in the Other category increased by $53.4 million, or 79.1%, from $67.5 million to $120.8 million, primarily driven by strength of haircare products and air purifiers.



Gross profit increased 42.6% to $695.0 million, or 48.7% of net sales, compared to $487.5 million, or 45.5% of net sales, in the third quarter of 2023. Adjusted Gross Profit increased 39.4% to $704.6 million, or 49.4% of Adjusted Net Sales, compared to $505.5 million, or 47.8% of Adjusted Net Sales in the third quarter of 2023. The increase in gross margin and Adjusted Gross Margin of 320 and 160 basis points, respectively, was derived from optimizations within our supply chain, sourcing and costing strategy and foreign exchange benefit, partially offset by the impact of tariffs.
 
Research and development expenses increased 56.2% to $94.8 million, or 6.6% of net sales, compared to $60.7 million, or 5.7% of net sales, in the prior year quarter. This increase was primarily driven by incremental personnel-related expenses of $12.7 million to support new product categories and new market expansion. The overall increase was also driven by an increase of $8.8 million in prototype and testing costs, an increase of $4.5 million in professional and consulting fees and an increase of $4.5 million in depreciation and amortization expense.
 
Sales and marketing expenses increased 44.9% to $300.8 million, or 21.1% of net sales, compared to $207.6 million, or 19.4% of net sales, in the prior year quarter. This increase was primarily attributable to increases of $42.1 million in advertising-related expenses; an increase of $33.4 million in delivery and distribution costs driven by higher volumes, particularly in our direct-to-consumer (“DTC”) business; $14.5 million in personnel-related expenses to support new product launches and expansion into new markets; an increase of $5.4 million in professional and consulting fees; offset by a decrease in depreciation and amortization expense of $4.4 million.
 
General and administrative expenses decreased 4.5% to $119.1 million, or 8.3% of net sales, compared to $124.7 million, or 11.6% of net sales, in the prior year quarter. This decrease was primarily driven by transaction costs incurred in the prior year quarter related to the separation and distribution from JS Global of $41.5 million. The decrease was offset by an increase of $27.9 million in legal fees, including a $13.5 million legal settlement reserve related to certain patent infringement claims and an increase of $3.9 million in professional and consulting fees.
 
Operating income increased 90.7% to $180.3 million, or 12.6% of net sales, compared to $94.5 million, or 8.8% of net sales, during the prior year quarter. Adjusted Operating Income increased 25.0% to $237.5 million, or 16.7% of Adjusted Net Sales, compared to $190.1 million, or 18.0% of Adjusted Net Sales, in the third quarter of 2023.
 
Net income increased 606.8% to $132.3 million, or 9.3% of net sales, compared to $18.7 million, or 1.7% of net sales, in the prior year quarter. Net income per diluted share increased 623.1% to $0.94, compared to $0.13 in the prior year quarter.
 
Adjusted Net Income increased 28.2% to $170.5 million, or 11.9% of Adjusted Net Sales, compared to $133.0 million, or 12.6% of Adjusted Net Sales, in the prior year quarter. Adjusted Net Income per diluted share increased 27.4% to $1.21, compared to $0.95 in the prior year quarter.
 
Adjusted EBITDA increased 25.7% to $262.4 million, or 18.4% of Adjusted Net Sales, compared to $208.7 million, or 19.7% of Adjusted Net Sales in the prior year quarter.

Nine Months Ended September 30, 2024

Net sales increased 30.1% to $3,741.5 million, compared to $2,876.2 million during the same period last year. Adjusted Net Sales increased 33.7% to $3,741.5 million, compared to $2,798.7 million during the same period last year, or 32.6% on a constant currency basis. The increase in net sales and Adjusted Net Sales resulted from growth in each of our four major product categories of Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances and Other, which includes beauty and home environment products.

•Cleaning Appliances net sales increased by $137.5 million, or 10.8%, to $1,415.5 million, compared to $1,278.0 million during the same period last year. Adjusted Net Sales of Cleaning Appliances increased by $186.9 million, or 15.2%, from $1,228.6 million to $1,415.5 million, driven by the carpet extractor and robotics sub-categories.



•Cooking and Beverage Appliances net sales increased by $181.3 million, or 19.3%, to $1,120.4 million, compared to $939.1 million during the same period last year. Adjusted Net Sales of Cooking and Beverage Appliances increased by $187.5 million, or 20.1%, from $932.9 million to $1,120.4 million, driven by growth in Europe. Global growth was supported by the success of the outdoor grill and outdoor oven across both the US and European markets.

•Food Preparation Appliances net sales increased by $364.1 million, or 77.0%, to $836.8 million, compared to $472.7 million during the same period last year. Adjusted Net Sales of Food Preparation Appliances increased by $372.4 million, or 80.2%, from $464.4 million to $836.8 million, driven by strong sales of our ice cream makers and compact blenders, specifically our portable blenders.

•Net sales in the Other category increased by $182.3 million, or 97.8%, to $368.8 million, compared to $186.5 million during the same period last year. Adjusted Net Sales in the Other category increased by $196.0 million, or 113.5%, from $172.8 million to $368.8 million, primarily driven by strength of haircare products, our FlexBreeze fans, and air purifiers.

Gross profit increased 41.8% to $1,822.5 million, or 48.7% of net sales, compared to $1,285.0 million, or 44.7% of net sales, in the same period last year. Adjusted Gross Profit increased 42.5% to $1,860.4 million, or 49.7% of Adjusted Net Sales, compared to $1,305.9 million, or 46.7% of Adjusted Net Sales in the same period last year. The increase in gross margin and Adjusted Gross Margin of 400 and 300 basis points, respectively, was derived from optimizations within our supply chain, sourcing and costing strategy, regional expansion, and foreign exchange benefit.
 
Research and development expenses increased 41.0% to $254.5 million, or 6.8% of net sales, compared to $180.4 million, or 6.3% of net sales, during the same period last year. This increase was primarily driven by incremental personnel-related expenses of $33.4 million driven by increased headcount to support new product categories and new market expansion, and includes an increase of $3.6 million in share-based compensation. The remainder of the increase was primarily driven by an increase of $20.4 million in prototypes and testing costs, an increase of $12.9 million in professional and consulting fees to support overall growth in the business, an increase of $3.2 million in travel costs and an increase of $3.0 million in consumer insight initiatives.
 
Sales and marketing expenses increased 44.1% to $818.6 million, or 21.9% of net sales, compared to $568.0 million, or 19.7% of net sales, during the same period last year. This increase was primarily attributable to increases of $127.5 million in advertising-related expenses; an increase of $79.1 million in delivery and distribution costs driven by higher volumes, particularly in our DTC business; $38.9 million in personnel-related expenses to support new product launches and expansion into new markets, which includes an incremental $5.1 million of share-based compensation; $4.0 million in travel costs; $8.9 million in professional and consulting fees; offset by a decrease in depreciation and amortization expense of $7.5 million.
 
General and administrative expenses increased 17.7% to $310.4 million, or 8.3% of net sales, compared to $263.7 million, or 9.2% of net sales, during the same period last year. This increase was primarily driven by an increase of $44.9 million in legal fees, including a $13.5 million legal settlement reserve related to certain patent infringement claims; an increase in personnel-related expenses of $32.5 million, including a $14.2 million increase in share-based compensation; an increase of $17.3 million in professional and consulting fees; an increase of $11.9 million in technology support costs; an increase of $9.0 million in credit card processing and merchant fees; an increase of $4.8 million in product liability and insurance; an increase of $3.4 million in depreciation and amortization; offset by a decrease in transaction costs related to the separation and distribution from JS Global and secondary offering of $76.5 million.
 
Operating income increased 60.9% to $439.0 million, or 11.7% of net sales, compared to $272.8 million, or 9.5% of net sales, during the same period last year. Adjusted Operating Income increased 33.1% to $583.0 million, or 15.6% of Adjusted Net Sales, compared to $438.1 million, or 15.7% of Adjusted Net Sales, in the prior year period.
 


Net income increased 163.3% to $310.0 million, or 8.3% of net sales, compared to $117.8 million, or 4.1% of net sales, during the same period last year. Net income per diluted share increased 158.8% to $2.20, compared to $0.85 in the prior year period.
 
Adjusted Net Income increased 32.0% to $418.6 million, or 11.2% of Adjusted Net Sales, compared to $317.1 million, or 11.3% of Adjusted Net Sales, during the same period last year. Adjusted Net Income per diluted share increased 30.3% to $2.97, compared to $2.28 in the prior year period.
 
Adjusted EBITDA increased 32.0% to $660.6 million, or 17.7% of Adjusted Net Sales, compared to $500.4 million, or 17.9% of Adjusted Net Sales, in the prior year period.
 
Balance Sheet and Cash Flow Highlights
 
Cash and cash equivalents decreased to $127.9 million, compared to $154.1 million as of December 31, 2023.
 
Inventories increased 53.8% to $1,076.2 million, compared to $699.7 million as of December 31, 2023.
 
Total debt, excluding unamortized deferred financing costs, was $964.8 million, compared to $804.9 million as of December 31, 2023. The existing credit facility provides for a $810.0 million term loan and a $500.0 million revolving credit facility, which had an available balance of $315.9 million as of September 30, 2024.

Fiscal 2024 Outlook
 
For fiscal year 2024, SharkNinja is increasing its outlook on key metrics and now expects:
 
•Net sales to increase 25% to 26% compared to the prior expectation of 20% to 22%.

•Adjusted Net Sales to increase between 27% and 28% compared to the prior expectation of 22% to 24%.

•Adjusted Net Income per diluted share between $4.13 and $4.24, reflecting a 28% to 32% increase, compared to the prior expectation of between $4.05 and $4.21, reflecting a 26% to 31% increase.

•Adjusted EBITDA between $925 million and $945 million, reflecting a 29% to 31% increase, compared to the prior expectation of between $910 million and $940 million, reflecting a 26% to 31% increase.

•A GAAP effective tax rate of approximately 24% to 25%.

•Diluted weighted average shares outstanding of approximately 141 million.

•Capital expenditures of $160 million to $180 million primarily to support investments in new product launches, technology, and incremental investments in tooling to support the diversification of our sourcing outside of China.
 
Conference Call Details
 
A conference call to discuss the third quarter 2024 financial results is scheduled for today, October 31, 2024, at 8:30 a.m. Eastern Time. A live audio webcast of the conference call will be available online at http://ir.sharkninja.com. Investors and analysts interested in participating in the live call are invited to dial 1-833-470-1428 or 1-404-975-4839 and enter confirmation code 930420. The webcast will be archived and available for replay.
 


About SharkNinja
 
SharkNinja is a global product design and technology company, with a diversified portfolio of 5-star rated lifestyle solutions that positively impact people’s lives in homes around the world. Powered by two trusted, global brands, Shark and Ninja, the company has a proven track record of bringing disruptive innovation to market, and developing one consumer product after another has allowed SharkNinja to enter multiple product categories, driving significant growth and market share gains. Headquartered in Needham, Massachusetts with more than 3,300 associates, the company’s products are sold at key retailers, online and offline, and through distributors around the world. For more information, please visit SharkNinja.com.
 
Forward-looking statements
 
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our future business, financial condition, results of operations and prospects and Fiscal 2024 outlook. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or phrases or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not statements of historical fact, and are based on current expectations, estimates and projections about our industry as well as certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, which you should consider and read carefully, including but not limited to:

•our ability to maintain and strengthen our brands to generate and maintain ongoing demand for our products;
•our ability to commercialize a continuing stream of new products and line extensions that create demand;
•our ability to effectively manage our future growth;
•general economic conditions and the level of discretionary consumer spending;
•our ability to expand into additional consumer markets;
•our ability to maintain product quality and product performance at an acceptable cost;
•our ability to compete with existing and new competitors in our markets;
•problems with, or loss of, our supply chain or suppliers, or an inability to obtain raw materials;
•the risks associated with doing business globally;
•inflation, changes in the cost or availability of raw materials, energy, transportation and other necessary supplies and services;
•our ability to hire, integrate and retain highly skilled personnel;
•our ability to maintain, protect and enhance our intellectual property;
•our ability to securely maintain consumer and other third-party data;
•our ability to comply with ongoing regulatory requirements;
•the increased expenses associated with being a public company;
•our status as a “controlled company” within the meaning of the rules of NYSE;
•our ability to achieve some or all of the anticipated benefits of the separation; and
•the payment of any declared dividends.




This list of factors should not be construed as exhaustive and should be read in conjunction with those described in our Annual Report on Form 20-F filed with the SEC under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other filings we make with the SEC. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release, and our future levels of activity and performance, may not occur and actual results could differ materially and adversely from those described or implied in the forward-looking statements. As a result, you should not regard any of these forward-looking statements as a representation or warranty by us or any other person or place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. In addition, statements that contain “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. While we believe that this information provides a reasonable basis for these statements, this information may be limited or incomplete. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. We qualify all of our forward-looking statements by the cautionary statements contained in this press release.
 
Contacts
Investor Relations:
Arvind Bhatia, CFA
SVP, Investor Relations
IR@sharkninja.com
 
Anna Kate Heller
ICR
SharkNinja@icrinc.com
 
Media Relations:
Jane Carpenter
SVP, Chief Communications Officer
PR@sharkninja.com
 
 
 
 
 


SHARKNINJA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
 As of
 
September 30, 2024
December 31, 2023
Assets  
Current assets:  
Cash and cash equivalents$127,948 $154,061 
Accounts receivable, net1,190,410 985,172 
Inventories1,076,246 699,740 
Prepaid expenses and other current assets121,721 58,311 
Total current assets2,516,325 1,897,284 
Property and equipment, net196,002 166,252 
Operating lease right-of-use assets149,975 63,333 
Intangible assets, net466,826 477,816 
Goodwill834,781 834,203 
Deferred tax assets19,713 12 
Other assets, noncurrent53,703 48,170 
Total assets$4,237,325 $3,487,070 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$632,850 $459,651 
Accrued expenses and other current liabilities640,947 620,333 
Tax payable22,025 20,991 
Debt, current214,344 24,157 
Total current liabilities1,510,166 1,125,132 
Debt, noncurrent745,975 775,483 
Operating lease liabilities, noncurrent152,100 63,043 
Deferred tax liabilities3,750 16,500 
Other liabilities, noncurrent30,795 28,019 
Total liabilities2,442,786 2,008,177 
Shareholders’ equity:
Ordinary shares, $0.0001 par value per share, 1,000,000,000 shares authorized; 140,219,933 and 139,083,369 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
14 14 
Additional paid-in capital1,012,407 1,009,590 
Retained earnings780,308 470,319 
Accumulated other comprehensive income (loss)1,810 (1,030)
Total shareholders’ equity1,794,539 1,478,893 
Total liabilities and shareholders’ equity$4,237,325 $3,487,070 
 
 


SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net sales(1)
$1,426,566 $1,070,617 $3,741,452 $2,876,211 
Cost of sales731,559 583,124 1,918,929 1,591,254 
Gross profit695,007 487,493 1,822,523 1,284,957 
Operating expenses:
Research and development94,808 60,691 254,457 180,430 
Sales and marketing300,841 207,599 818,594 568,035 
General and administrative119,096 124,655 310,432 263,682 
Total operating expenses514,745 392,945 1,383,483 1,012,147 
Operating income180,262 94,548 439,040 272,810 
Interest expense, net(16,916)(13,003)(46,482)(28,523)
Other income (expense), net11,031 (5,865)14,968 (41,315)
Income before income taxes 174,377 75,680 407,526 202,972 
Provision for income taxes42,048 56,958 97,537 85,218 
Net income$132,329 $18,722 $309,989 $117,754 
Net income per share, basic$0.94 $0.13 $2.22 $0.85 
Net income per share, diluted$0.94 $0.13 $2.20 $0.85 
Weighted-average number of shares used in computing net income per share, basic140,114,282 139,073,181 139,818,196 139,059,206 
Weighted-average number of shares used in computing net income per share, diluted141,305,999 139,430,805 140,974,062 139,179,724 
 
 
(1) Net sales in our product categories were as follows:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2024202320242023
Cleaning Appliances $527,453 $449,319 $1,415,488 $1,277,986 
Cooking and Beverage Appliances411,453 339,328 1,120,371 939,060 
Food Preparation Appliances 366,834 211,461 836,782 472,685 
Other 120,826 70,509 368,811 186,480 
Total net sales$1,426,566 $1,070,617 $3,741,452 $2,876,211 
 
 

 
 


SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months Ended September 30,
 20242023
Cash flows from operating activities:  
Net income$309,989 $117,754 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization86,870 77,394 
Share-based compensation47,341 24,502 
Provision for credit losses3,744 2,266 
Non-cash lease expense15,963 9,688 
Deferred income taxes, net(32,420)3,905 
Other1,631 1,662 
Changes in operating assets and liabilities:
Accounts receivable(193,151)(192,209)
Inventories(357,114)(258,982)
Prepaid expenses and other assets(69,477)65,508 
Accounts payable162,019 343,603 
Tax payable1,034 883 
Operating lease liabilities(7,428)(9,280)
Accrued expenses and other liabilities(12,050)(90,914)
Net cash (used in) provided by operating activities(43,049)95,780 
Cash flows from investing activities:
Purchase of property and equipment(95,232)(70,501)
Purchase of intangible asset(6,571)(6,905)
Capitalized internal-use software development(1,100)(683)
Cash receipts on beneficial interest in sold receivables— 16,777 
Other investing activities, net— (3,051)
Net cash used in investing activities(102,903)(64,363)
Cash flows from financing activities:
Proceeds from issuance of debt, net of issuance cost800,915 
Repayment of debt(15,188)(437,500)
Net proceeds from borrowings under revolving credit facility175,000 — 
Distribution paid to Former Parent— (435,292)
Recharge from Former Parent for share-based compensation— (3,165)
Net ordinary shares withheld for taxes upon issuance of restricted stock units(50,011)— 
Proceeds from shares issued under employee stock purchase plan5,487 — 
Net cash provided by (used in) financing activities115,288 (75,042)
Effect of exchange rates changes on cash4,551 (4,768)
Net decrease in cash, cash equivalents, and restricted cash(26,113)(48,393)
Cash, cash equivalents, and restricted cash at beginning of period154,061 218,770 
Cash and cash equivalents at end of period$127,948 $170,377 


Non-GAAP Financial Measures
 
In addition to the measures presented in our consolidated financial statements, we regularly review other financial measures, defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts, and make strategic decisions.
 
The key non-GAAP financial measures we consider are Adjusted Net Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income, Adjusted Net Income Per Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Net Sales growth on a constant currency basis. These non-GAAP financial measures are used by both management and our Board, together with comparable GAAP information, in evaluating our current performance and planning our future business activities. These non-GAAP financial measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and/or which management considers to be unrelated to our core operations and excludes the financial results from our former Japanese subsidiary, SharkNinja Co., Ltd. (“SNJP”), and our Asia Pacific Region and Greater China ("APAC") distribution channels, both of which were transferred to JS Global Lifestyle Company Limited (“JS Global”) concurrently with the separation (the “Divestitures”), as well as the cost of sales from (i) inventory markups that were eliminated as a result of the transition of certain product procurement functions from a subsidiary of JS Global to SharkNinja concurrently with the separation and (ii) costs related to the transitional Sourcing Services Agreement with JS Global that was entered into in connection with the separation (collectively, the “Product Procurement Adjustment”). Management believes that tracking and presenting these non-GAAP financial measures provides management and the investment community with valuable insight into our ongoing core operations, our ability to generate cash and the underlying business trends that are affecting our performance. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry and to better understand and interpret the results of the ongoing business following the separation and distribution. These non-GAAP financial measures should not be viewed as a substitute for our financial results calculated in accordance with GAAP and you are cautioned that other companies may define these non-GAAP financial measures differently.

SharkNinja does not provide a reconciliation of forward-looking Adjusted Net Income and Adjusted EBITDA to GAAP net income or of Adjusted Net Income Per Share to net income per share, diluted because such reconciliations are not available without unreasonable efforts. This is due to the inherent difficulty in forecasting with reasonable certainty certain amounts that are necessary for such reconciliations, including, in particular, the realized and unrealized foreign currency gains or losses reported within other expense. For the same reasons, we are unable to forecast with reasonable certainty all deductions and additions needed in order to provide forward-looking GAAP net income at this time. The amount of these deductions and additions may be material, and, therefore, could result in forward-looking GAAP net income being materially different or less than forward-looking Adjusted Net Income, Adjusted EBITDA, and Adjusted Net Income Per Share. See “Forward-looking statements” above.
 
We define Adjusted Net Sales as net sales as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including net sales from our Divestitures. We believe that Adjusted Net Sales is an appropriate measure of our performance because it eliminates the impact of our Divestitures that do not relate to the ongoing performance of our business.
 


The following table reconciles Adjusted Net Sales to the most comparable GAAP measure, net sales, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands, except %)2024202320242023
Net sales$1,426,566 $1,070,617 $3,741,452 $2,876,211 
Divested subsidiary net sales adjustment(1)
— (13,196)— (77,544)
Adjusted Net Sales(2)
$1,426,566 $1,057,421 $3,741,452 $2,798,667 
 

(1)Adjusted for net sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

(2)The following tables reconcile Adjusted Net Sales to net sales per product category, for the periods presented:

 
Three Months Ended September 30, 2024
Three Months Ended September 30, 2023
($ in thousands, except %)Net salesDivested subsidiary adjustmentAdjusted Net SalesNet salesDivested subsidiary adjustmentAdjusted Net Sales
Cleaning Appliances$527,453 $— $527,453 $449,319 $(6,838)$442,481 
Cooking and Beverage Appliances411,453 — 411,453 339,328 (1,190)338,138 
Food Preparation Appliances366,834 — 366,834 211,461 (2,133)209,328 
Other120,826 — 120,826 70,509 (3,035)67,474 
Total net sales$1,426,566 $— $1,426,566 $1,070,617 $(13,196)$1,057,421 
 
 Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
($ in thousands, except %)Net salesDivested subsidiary adjustmentAdjusted Net SalesNet salesDivested subsidiary adjustmentAdjusted Net Sales
Cleaning Appliances$1,415,488 $— $1,415,488 $1,277,986 $(49,392)$1,228,594 
Cooking and Beverage Appliances1,120,371 — 1,120,371 939,060 (6,161)932,899 
Food Preparation Appliances836,782 — 836,782 472,685 (8,289)464,396 
Other368,811 — 368,811 186,480 (13,702)172,778 
Total net sales$3,741,452 $— $3,741,452 $2,876,211 $(77,544)$2,798,667 

We define Adjusted Gross Profit as gross profit as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including the net sales and cost of sales from our Divestitures and the cost of sales from the Product Procurement Adjustment. We define Adjusted Gross Margin as Adjusted Gross Profit divided by Adjusted Net Sales. We believe that Adjusted Gross Profit and Adjusted Gross Margin are appropriate measures of our operating performance because each eliminates the impact our Divestitures and certain other adjustments that do not relate to the ongoing performance of our business.
 


The following table reconciles Adjusted Gross Profit and Adjusted Gross Margin to the most comparable GAAP measure, gross profit and gross margin, respectively, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands, except %)
2024202320242023
Net sales$1,426,566 $1,070,617 $3,741,452 $2,876,211 
Cost of sales(731,559)(583,124)(1,918,929)(1,591,254)
Gross profit695,007 487,493 1,822,523 1,284,957 
Gross margin
48.7%45.5%48.7%44.7%
Divested subsidiary net sales adjustment(1)    
— (13,196)— (77,544)
Divested subsidiary cost of sales adjustment(2)
— 7,628 — 45,116 
Product Procurement Adjustment(3)
9,571 23,574 37,876 53,369 
Adjusted Gross Profit$704,578 $505,499 $1,860,399 $1,305,898 
Adjusted Net Sales$1,426,566 $1,057,421 $3,741,452 $2,798,667 
Adjusted Gross Margin49.4%47.8%49.7%46.7%
 
(1)Adjusted for net sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

(2)Adjusted for cost of sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

(3)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SharkNinja (Hong Kong) Company Limited (“SNHK”), and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
 
We define Adjusted Operating Income as operating income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) amortization of certain acquired intangible assets, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including operating income from our Divestitures and cost of sales from our Product Procurement Adjustment.
 


The following table reconciles Adjusted Operating Income to the most comparable GAAP measure, operating income, for the periods presented: 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)
2024202320242023
Operating income$180,262 $94,548 $439,040 $272,810 
Share-based compensation(1)
13,785 21,337 47,341 24,502 
Litigation costs(2)
29,035 3,965 42,691 4,600 
Amortization of acquired intangible assets(3)
4,896 4,897 14,690 14,690 
Transaction-related costs(4)
— 41,455 1,342 76,549 
Product Procurement Adjustment(5)
9,571 23,574 37,876 53,369 
Divested subsidiary operating income adjustment(6)
— 287 — (8,456)
Adjusted Operating Income $237,549 $190,063 $582,980 $438,064 
 
(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.

(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.

(3)Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculating Adjusted Operating Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations. Of the amortization of acquired intangible assets, $0.9 million for the three months ended September 30, 2024 and 2023, and $2.8 million for the nine months ended September 30, 2024 and 2023, was recorded to research and development expenses, and $4.0 million for the three months ended September 30, 2024 and 2023, and $11.9 million for the nine months ended September 30, 2024 and 2023, was recorded to sales and marketing expenses.

(4)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.

(5)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.

(6)Adjusted for operating income from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.
 
We define Adjusted Net Income as net income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) amortization of certain acquired intangible assets, (v) certain transaction-related costs, (vi) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment, (vii) the tax impact of the adjusted items and (viii) certain withholding taxes.



Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the diluted weighted average number of ordinary shares.
 
The following table reconciles Adjusted Net Income and Adjusted Net Income Per Share to the most comparable GAAP measures, net income and net income per share, diluted, respectively, for the periods presented:
 

Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands, except share and per share amounts)
2024202320242023
Net income
$132,329 $18,722 $309,989 $117,754 
Share-based compensation(1)
13,785 21,337 47,341 24,502 
Litigation costs(2)
29,035 3,965 42,691 4,600 
Foreign currency (gains) losses, net(3)
(11,156)3,862 (9,569)43,479 
Amortization of acquired intangible assets(4)
4,896 4,897 14,690 14,690 
Transaction-related costs(5)
— 41,455 1,342 76,549 
Product Procurement Adjustment(6)
9,571 23,574 37,876 53,369 
Tax impact of adjusting items(7)
(7,996)(4,704)(25,711)(30,686)
Tax withholding adjustment(8)
— 19,474 — 19,474 
Divested subsidiary net income adjustment(9)
— 394 — (6,586)
Adjusted Net Income
$170,464 $132,976 $418,649 $317,145 
Net income per share, diluted
$0.94 $0.13 $2.20 $0.85 
Adjusted Net Income Per Share
$1.21 $0.95 $2.97 $2.28 
Diluted weighted-average number of shares used in computing net income per share and Adjusted Net Income Per Share(10)
141,305,999139,430,805140,974,062139,179,724
 
(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.

(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.

(3)Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.

(4)Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculated Adjusted Net Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations. Of the amortization of acquired intangible assets, $0.9 million for the three months ended September 30, 2024 and 2023, and $2.8 million for the nine months ended September 30, 2024 and 2023, was recorded to research and development expenses, and $4.0 million for the three months ended September 30, 2024 and 2023, and $11.9 million for the nine months ended September 30, 2024 and 2023, was recorded to sales and marketing expenses.

(5)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.



(6)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.

(7)Represents the income tax effects of the adjustments included in the reconciliation of net income to Adjusted Net Income determined using the tax rate of 22.0%, which approximates our effective tax rate, excluding (i) divested subsidiary net income adjustment described in footnote (9), and (ii) certain share-based compensation costs and separation and distribution-related costs that are not tax deductible.

(8)Represents withholding taxes associated with the cash dividend paid to JS Global in connection with the separation and related refinancing.

(9)Adjusted for net income (loss) from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.

(10)In calculating net income per share and Adjusted Net Income Per Share, we used the number of shares transferred in the separation and distribution for the denominator for all periods prior to completion of the separation and distribution on July 31, 2023.
 
We define EBITDA as net income excluding: (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA excluding (i) share-based compensation cost, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including Adjusted EBITDA from our Divestitures and cost of sales from our Product Procurement Adjustment. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Adjusted Net Sales. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are appropriate measures because they facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results according to GAAP, we believe provide a more complete understanding of the factors and trends affecting our business than GAAP measures alone.
 


The following table reconciles EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable GAAP measure, net income, for the periods presented:
 
 Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands, except %)
2024202320242023
Net income$132,329 $18,722 $309,989 $117,754 
Interest expense, net16,916 13,003 46,482 28,523 
Provision for income taxes42,048 56,958 97,537 85,218 
Depreciation and amortization29,828 25,602 86,870 77,394 
EBITDA221,121 114,285 540,878 308,889 
Share-based compensation(1)
13,785 21,337 47,341 24,502 
Litigation costs(2)
29,035 3,965 42,691 4,600 
Foreign currency losses (gains), net(3)
(11,156)3,862 (9,569)43,479 
Transaction-related costs(4)
— 41,455 1,342 76,549 
Product Procurement Adjustment(5)
9,571 23,574 37,876 53,369 
Divested subsidiary Adjusted EBITDA adjustment(6)
— 264 — (11,020)
Adjusted EBITDA$262,356 $208,742 $660,559 $500,368 
Adjusted Net Sales$1,426,566 $1,057,421 $3,741,452 $2,798,667 
Adjusted EBITDA Margin18.4%19.7%17.7%17.9%
 
 
(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.    

(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.

(3)Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.

(4)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.

(5)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.

(6)Adjusted for Adjusted EBITDA from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023. The divested subsidiary Adjusted EBITDA adjustment represents net (loss) income from our Divestitures excluding interest expense, income tax expense, depreciation and amortization expense and foreign currency gains and losses recorded at the subsidiary level.
 
We refer to growth rates in Adjusted Net Sales on a constant currency basis so that results can be viewed without the impact of fluctuations in foreign currency exchange rates. These amounts are calculated by translating


current year results at prior year average exchange rates. We believe elimination of the foreign currency translation impact provides useful information in understanding and evaluating trends in our operating results.

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