Vita Coco Company, Inc.
For the period ended Jun 30, 2026. Filed Jul 23, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 23, 2026
COCO$62.45-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-29.
0001482981-26-000120
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-23.
0001482981-26-000173
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 115 current paragraphs.
68 unchanged; 25 reworded; 22 added; 17 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Recent Developments
Current report
On July 22, 2026, we completed the acquisition of Copra Inc., a super-premium Thai Nam Hom coconut water producer of private label and Copra branded products that owns and operates a factory in Thailand, which became a wholly owned subsidiary of the Company. We believe the acquisition enhances our supply chain capabilities and supports our long-term growth strategy. Additional information regarding the acquisition is included in Note 18, Subsequent Events.
Current report
•We source products imported into the U.S. primarily from the Philippines and Brazil, with additional sourcing from several other countries. During 2025, tariffs imposed on certain imports increased our costs. In November 2025, the U.S. government granted exemptions applicable to most of our coconut water products and waived incremental tariffs on coconut water imports from Brazil, significantly reducing our tariff exposure, although certain miscellaneous tariffs remain in effect.
Current report
For the six months ended June 30, 2026, the consolidated net sales increased 32.1%, driven by Vita Coco Coconut Water, which had a 29.5% net sales increase, with a case equivalents CE volume increase of 22.1%. Private label net sales increased 52.5%, driven by CE volume growth of 50.2%. Other category net sales increased 7.8%.
Current report
For the three months ended June 30, 2026, the increase in Vita Coco Coconut Water net sales was primarily driven by higher sales volume and favorable pricing, partially offset by the earlier timing of a retailer promotion in the first quarter of 2026 compared to primarily in the second quarter of 2025. For the six months ended June 30, 2026, the increase in Vita Coco Coconut Water net sales was primarily driven by the increase in CE volume driven by strong consumer demand, and by favorable pricing.
Current report
For the three and six months ended June 30, 2026, the increase in Private Label net sales was primarily driven by an increase in CE volume, due to new and regained distribution and increased velocities.
Current report
For the three and six months ended June 30, 2026, the increase in Other net sales was primarily driven by CE volume growth in Vita Coco Treats.
Current report
For the three months ended June 30, 2026, the increase in Vita Coco Coconut Water net sales was primarily driven by strong volume growth in Europe, particularly in Germany and the U.K.. For the six months ended June 30, 2026, the increase in Vita Coco Coconut Water net sales was primarily driven by strong CE volume growth in Europe, particularly in Germany and the U.K., coupled with favorable pricing.
Current report
For the three and six months ended June 30, 2026, the increase in Private Label net sales was primarily driven by the 71.0% and 66.9% increase, respectively, in CE volume in Europe due to very strong demand growth, coupled with favorable pricing.
Current report
Net sales from Other products decreased during both the three and six months ended June 30, 2026 compared to the prior-year periods, reflecting lower sales volumes across certain non-core product offerings.
Current report
For the three months ended June 30, 2026, the increase in cost of goods sold was primarily driven by higher CE volume and higher domestic logistics costs, partially offset by the recognition of the tariff refunds and lower ocean freight costs and lower finished goods costs. For the six months ended June 30, 2026, the increase in cost of goods sold was primarily related to increased CE volume, higher domestic logistics and finished goods costs, partially offset by the recognition of the tariff refunds and lower ocean freight costs.
Current report
For the three months ended June 30, 2026, the increase in consolidated gross profit was primarily driven by the recognition of the tariff refunds, higher sales, favorable pricing, and lower ocean freight and finished goods costs, partially offset by higher domestic logistics costs. For the six months ended June 30, 2026, the increase in gross profit was primarily driven by the recognition of the tariff refunds, higher sales, favorable pricing, and lower ocean freight costs.
Current report
Gross margin increased for both the three and six months ended June 30, 2026, primarily due to the recognition of thetariff refunds, favorable pricing, and lower ocean freight rates, slightly offset by higher domestic logistics costs.
Current report
For the three months ended June 30, 2026, the change in fair value of our outstanding forward foreign currency exchange contracts was less favorable than in the prior year period, primarily driven by unfavorable movements in the fair values of Brazilian Real and Thai Baht hedge contracts.
Current report
For the six months ended June 30, 2026, gains recognized on our outstanding forward foreign currency exchange contracts were lower than in the prior year period reflecting less favorable fair value adjustments in Brazilian Real and Thai Baht hedge contracts. These impacts were partially offset by more favorable adjustments on Great British Pound, Euro, and Canadian Dollar hedge contracts.
Current report
Foreign currency (loss) gain represents transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency. The foreign currency loss recorded during the three months ended June 30, 2026 was primarily driven by increased losses on operational foreign currency transactions and less favorable remeasurement of foreign currency-denominated balances, partially offset by higher realized gains on foreign currency derivative contracts used to economically hedge the Company's foreign currency exposures. See "Quantitative and Qualitative Disclosures about Market Risk -Foreign Currency Exchange Risk" for further information. The foreign currency loss in the six months ended June 30, 2026 was primarily driven by increased losses on operational foreign currency transactions. This impact was partially offset by higher realized gains on foreign currency derivative contracts and favorable changes in the remeasurement of foreign currency-denominated balances.
Current report
Interest Income, net
Current report
The increase in interest income for both the three and six months ended June 30, 2026 was primarily attributable to approximately $0.6 million of interest received from the U.S. government related to tariff refunds and $0.4 million increase in interest earned on cash investments. Higher average invested cash balances contributed to the increase in interest earned on cash investments, partially offset by lower interest rates.
Current report
Other Income, net
Current report
For the three months ended June 30, 2026, the change in other income, net was immaterial. For the six months ended June 30, 2026, the change in other income, net is due to the sale of intellectual property in the prior year period.
Current report
For the six months ended June 30, 2026 and 2025, our effective tax rate was 21.5% and 20.5%, respectively. The effective tax rate for the current period was higher than the U.S. federal statutory rate of 21.0%, primarily due to the geographic mix of earnings across jurisdictions with different tax rates. The increase in the effective tax rate compared to the prior-year period was primarily attributable to a lower benefit from discrete tax items, largely driven by reduced tax benefits associated with stock-based compensation awards.
Current report
As earlier disclosed, on July 22, 2026, we completed the acquisition of Copra Inc., a super-premium Thai Nam Hom coconut water producer of private label and Copra branded products, that owns and operates a factory in Thailand. The initial consideration for this transaction was $175.0 million, including $140.0 million in cash and $35.0 million paid in our Common Stock at the date of closing. The initial purchase price is subject to customary closing adjustments, with additional earnout consideration to be paid in 2029 based on 2028 financial performance with a minimum of $45 million and maximum of $100.0 million, which will be payable in a combination of cash and our Common Stock. The closing cash consideration of $140.0 million was funded with cash on hand.
Removed paragraphs (17)
Previous report
•The U.S. government implemented a 10% baseline tariff plus country-specific reciprocal rates effective April 2, 2025, with revised rates announced in early August 2025 of approximately 20% for Asian sourcing countries and 50% for Brazil. We source to the U.S. primarily from the Philippines and Brazil, with additional supply from Thailand, Vietnam, Malaysia, Sri Lanka, Canada, Mexico, and Indonesia. Our Mexico and Canada imports currently remain exempt under the United States-Mexico-Canada Agreement (“USMCA”). In November 2025, the White House granted relief from reciprocal tariffs for certain agricultural products, including the tariff codes applicable to coconut water products, which represent the majority of our portfolio, and waived incremental tariffs on coconut water imports from Brazil. These actions significantly reduced our tariff burden after November 21, 2025, although certain miscellaneous tariffs remain in effect.
Previous report
Net sales in the Americas segment increased $35.6 million, or 31.6%. The increase was primarily driven by CE volume growth of 29.4% of Vita Coco Coconut Water, with slower growth rates in Private Label and Other.
Previous report
Vita Coco Coconut Water net sales increased $31.9 million, or 37.1%, primarily driven by CE volume growth of 29.4% due to increased demand coupled with pricing benefits from higher front line prices implemented in the quarter and the earlier timing of a retailer promotion as compared to timing in 2025.
Previous report
Private Label net sales increased $3.2 million, or 15.1%, to $24.4 million for the three months ended March 31, 2026, from $21.2 million for the three months ended March 31, 2025, due to a CE volume increase of 17.6%. Regained regions offset the loss of regions that initially started in the first quarter of 2025.
Previous report
Net sales from Other products increased by $0.4 million, or 8.4%, to $5.7 million for the three months ended March 31, 2026 from $5.3 million for the three months ended March 31, 2025, primarily due to the increased CE volume related to coconut milk as well as shipping for the full quarter of Vita Coco Treats in the U.S. in the 2026 period versus a partial quarter in the prior year period, associated with the national launch in 2025.
Previous report
International net sales increased $13.3 million, or 72.5%, for the three months ended March 31, 2026, from the three months ended March 31, 2025. The growth was primarily driven by a 50.2% increase in CE volume, reflecting strong performance in Germany and the United Kingdom, partially offset by softness in China.
Previous report
Vita Coco Coconut Water net sales increased by $9.3 million, or 70.9%, to $22.5 million, for the three months ended March 31, 2026, from $13.2 million, for the three months ended March 31, 2025. The increase was primarily driven by higher volume in Europe due to strong demand for our products, along with net pricing benefits and favorable foreign exchange rates.
Previous report
Private Label net sales increased $4.1 million, or 85.7%, to $8.8 million for the three months ended March 31, 2026 from $4.8 million for the three months ended March 31, 2025. The increase was driven primarily by Private Label coconut water CE volume growth in Europe.
Previous report
Net sales from Other products decreased $0.1 million, or 36.6% for the three months ended March 31, 2026, compared to the same period in the prior year.
Previous report
Gross Profit
Previous report
On a consolidated basis, cost of goods sold increased $25.1 million, or 30.3%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. On a consolidated and segment basis, the increase was primarily driven by higher CE volume, higher finished goods and domestic logistics costs, as well as legacy tariff impacts, partially offset by lower ocean freight costs.
Previous report
For the three months ended March 31, 2026, consolidated gross profit increased $23.7 million, or 49.3%, primarily driven by increased sales, increased pricing, and lower ocean freight rates, partially offset by higher finished goods and domestic logistics costs along with legacy tariff impacts associated with inventory sold during the period compared to the prior year period. Gross margin was 39.9% compared to 36.7% in the prior year period. The increase resulted from higher pricing and lower ocean freight rates, slightly offset by the impact of higher-cost inventory flowing through cost of goods sold.
Previous report
For each of the three months ended March 31, 2026 and 2025, we recorded gains of $2.8 million for the mark-to-market changes in fair value on the outstanding derivative instruments for forward foreign currency exchange contracts, with the largest gain for the three months ended March 31, 2026 related to the hedging contracts for the Brazilian Real.
Previous report
For the three months ended March 31, 2026, we recorded a $0.5 million foreign currency loss compared to a foreign currency gain of $0.6 million in the three months ended March 31, 2025. The variance was a result of movements in various foreign currency exchange rates related to transactions denominated in currencies other than the functional currency. See "Quantitative and Qualitative Disclosures about Market Risk -Foreign Currency Exchange Risk" for further information.
Previous report
Interest Income
Previous report
For the three months ended March 31, 2026, interest income, net remained consistent compared to the prior year period.
Previous report
For the three months ended March 31, 2026 and 2025, our effective tax rate was 18.6% and 22.5%, respectively. The effective tax rate for the current period is lower than the U.S. statutory rate of 21% primarily as a result of discrete items recorded during the period. The effective tax rate for the period ending March 31, 2025 was higher than the U.S. statutory rate of 21% primarily as a result of state income taxes for the U.S. entity. The change in effective tax rates between the periods is primarily attributable to the impact of discrete items compared to the prior year period and geographical mix of earnings.
Reworded paragraphs (25)
Previous wording
As of March 31, 2026, we source our products from a diversified global network of approximately 16 factories, supported by coconut farmers across six countries. As we do not own any of these facilities, our supply chain is a fixed asset-lite model designed to better service our customers and react to changes in the market or consumer preferences.
Current wording
As of June 30, 2026, we sourced our products from a diversified global network of approximately 20 factories and co-packers, supported by coconut farmers across the world. As we did not own any of these facilities, our supply chain is a fixed asset-lite model designed to better service our customers and react to changes in the market or consumer preferences.
Previous wording
Vita Coco is available in over 35 countries, with our primary markets located in North America, the United Kingdom, and Germany. Our primary markets for Private Label are North America and Europe. Our products are distributed primarily through club, food, drug, mass, convenience, e-commerce and food service channels. Our products are also available in a variety of on-premise locations such as corporate offices, fitness clubs, airports, and educational institutions.
Current wording
Vita Coco is available in over 35 countries, with our primary markets located in North America, the United Kingdom ("U.K."), and Germany. Our primary markets for Private Label are North America and Europe. Our products are distributed primarily through club, food, drug, mass, convenience, e-commerce and food service channels. Our products are also available in a variety of on-premise locations such as corporate offices, fitness clubs, airports, and educational institutions.
Previous wording
We believe that our performance and future success depend on a number of factors that present significant opportunities for us. For changes to such factors from those described in the Form 10-K under the heading “Key Factors Affecting our Performance” please see below and the risks and challenges discussed in Part I, Item 1A. “Risk Factors” of this Form 10-Q and our the Form 10-K.
Current wording
We believe that our performance and future success depend on a number of factors that present significant opportunities for us. For changes to such factors from those described in the Form 10-K under the heading “Key Factors Affecting our Performance” please see below and the risks and challenges discussed in "Risk Factors" in Part II, Item 1A. of this Form 10-Q and Part I, Item 1A of the Form 10-K.
Previous wording
•Our global supply chain is subject to risks arising from geopolitical instability, including the ongoing military conflict involving Iran, as well as volatility in interest rates, foreign exchange rates, and our cost of goods including raw materials, factory costs, and transportation costs. The extent and duration of these conditions, and their ultimate impact on our business, results of operations, financial condition, and liquidity, cannot be determined with precision. For a further discussion of the risks and challenges posed by these events, please see Part I, Item 1A. “Risk Factors” of this Form 10-Q and our Form 10-K.
Current wording
•Our global supply chain is subject to risks arising from geopolitical instability, including the ongoing military conflict involving Iran, as well as volatility in interest rates, foreign exchange rates, and our cost of goods including raw materials, factory costs, and transportation costs. The extent and duration of these conditions, and their ultimate impact on our business, results of operations, financial condition, and liquidity, cannot be determined with precision. For a further discussion of the risks and challenges posed by these events, please see "Risk Factors" in Part II, Item 1A of this Form 10-Q and Part II, Item 1A of our Form 10-K.
Previous wording
•On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were unlawful. The U.S. Customs and Border Protection opened a portal on April 20, 2026 for tariff refund claims. The Company has filed refund claims for approximately $15.6 million of tariffs paid in 2025. The timing of any refunds and whether all claims will be accepted are uncertain. Accordingly, no recovery has been recognized in the accompanying financial statements. The administration has announced its intent to impose additional tariffs under other statutory authorities. While new tariffs announced to date have not materially impacted us, the duration, scope, and impact of future tariff policies remain uncertain and could materially and adversely affect our business, financial condition, and results of operations. We will continue to monitor the evolving tariff environment and may pursue pricing adjustments, sourcing modifications, and other cost-mitigation measures, but there can be no assurance that we will fully mitigate the impact of future tariff changes or related economic effects.
Current wording
•On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were unlawful. Following the ruling, U.S. Customs and Border Protection ("CBP") established a process for importers to seek refunds of previously paid tariffs. We submitted claims for eligible tariff payments made in prior periods and, during the three months ended June 30, 2026, received tariff refunds totaling approximately $15.6 million. The refunds were recognized as a reduction of cost of goods sold and favorably impacted gross profit, operating income, net income, and diluted earnings per share for the three and six months ended June 30, 2026. The refunds represent the recovery of tariffs paid in prior periods and provided a one-time benefit to our results during the quarter. The administration has announced its intent to impose additional tariffs under other statutory authorities. While tariffs announced to date have not had a material adverse impact on us, the scope, duration, and impact of future tariff policies remain uncertain and could adversely affect our business, financial condition, results of operations, and cash flows. We continue to monitor developments and may pursue pricing actions, sourcing modifications, and other cost-mitigation measures; however, there can be no assurance that such actions will fully offset the impact of future tariff changes or related economic effects.
Previous wording
•Our sales to one of our major customers include branded and Private Label product. As discussed in the Form 10-K, the Private Label coconut oil business with this customer discontinued in early 2024 and we also experienced an impact in Private Label coconut water sales in 2025 with this customer due to the loss of some regions that we previously serviced for this customer. In early 2026, at the request of this customer, we restarted supply to one of those lost regions. We will continue to service their needs if we are asked and it aligns with our long-term targets. For a further discussion of the risks and challenges posed by these events, please see Part I, Item 1A. “Risk Factors” of the Form 10-K.
Current wording
•Our sales to one of our major customers include branded and Private Label product. As discussed in our Form 10-K, the Private Label coconut oil business with this customer discontinued in early 2024 and we also experienced an impact in Private Label coconut water sales in 2025 with this customer due to the loss of some regions that we previously serviced for this customer. In early 2026, at the request of this customer, we restarted supply to one of those lost regions. We continue to service their needs, as asked and as it aligns with our long-term targets. For a further discussion of the risks and challenges posed by these events, please see "Risk Factors" in Part I, Item 1A. of the Form 10-K and Part II, Item 1A of this Form 10-Q.
Previous wording
We are subject to federal and state income taxes in the United States and taxes in foreign jurisdictions in which we operate. We recognize deferred tax assets and liabilities based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. We regularly assess the need to record a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Current wording
We are subject to federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate. We recognize deferred tax assets and liabilities based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. We regularly assess the need to record a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Previous wording
•Americas—The Americas segment is comprised of our operations in the Americas region, primarily in the United States and Canada.
Current wording
•Americas—The Americas segment is comprised of our operations in the Americas region, primarily in the U.S. and Canada.
Previous wording
•International—The International segment is comprised of our operations primarily in Europe, the Middle East, and the Asia Pacific regions, which includes the Company’s procurement arm.
Current wording
•International—The International segment is comprised of our operations primarily in Europe, the Middle East, and the Asia Pacific regions, which includes our procurement arm.
Previous wording
•Vita Coco Coconut Water—This product category consists of all branded coconut water product offerings under the Vita Coco labels, where the majority ingredient is coconut water. For these products, control is transferred upon customer receipt, at which point the Company recognizes the transaction price for the product as revenue.
Current wording
•Vita Coco Coconut Water—This product category consists of all branded coconut water product offerings under the Vita Coco labels, where the majority ingredient is coconut water. For these products, control is transferred upon customer receipt, at which point we recognize the transaction price for the product as revenue.
Previous wording
•Private Label—This product category consists of all Private Label product offerings, which includes coconut water and coconut oil. The Company determined the production and distribution of Private Label products represents a distinct performance obligation. Since there is no alternative use for these products and the Company has the right to payment for performance completed to date, the Company recognizes the revenue for the production of these Private Label products over time as the production for open purchase orders occurs, which may be prior to any shipment.
Current wording
•Private Label—This product category consists of all Private Label product offerings, which includes coconut water and coconut oil. We determined the production and distribution of Private Label products represents a distinct performance obligation. Since there is no alternative use for these products and we have the right to payment for performance completed to date, we recognize the revenue for these Private Label products over time as the products become available for shipment.
Previous wording
•Other—This product category consists of all other products, which includes Vita Coco product extensions beyond coconut water, consisting of coconut milk products, including Vita Coco Treats; and PWR LIFT product offerings; Vita Coco coconut oil sold internationally; and other revenue transactions (e.g., bulk product sales).
Current wording
•Other—This product category consists of all other products, which includes Vita Coco product extensions beyond coconut water, consisting of coconut milk products, including Vita Coco Treats; and PWR LIFT product offerings; Vita Coco coconut oil sold internationally; and other revenue transactions (e.g., bulk product sales). For these products, control is transferred upon customer receipt, at which point we recognize the transaction price for the product as revenue.
Previous wording
Comparison of the Three Months Ended March 31, 2026 and 2025
Current wording
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Previous wording
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025, respectively:
Current wording
The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025, respectively:
Previous wording
For the three months ended March 31, 2026, the primary driver of the consolidated net sales increase of 37.3% was strong Vita Coco Coconut Water volume growth in both the Americas and International segments. Vita Coco Coconut Water net sales increased 41.6%, underpinned by a case equivalents ("CE") volume increase of 32.0% driven by increased demand and the slight timing shift of a significant retailer promotion to the first quarter in 2026 and improved net pricing. In 2025, the retailer promotion fell more heavily in the second quarter. Private Label net sales increased 28.1% driven predominantly by growth in the International segment. Other category growth was 5.4%.
Current wording
For the three months ended June 30, 2026, consolidated net sales increased 28.1%, primarily driven by strong Vita Coco Coconut Water volume growth across both the Americas and International segments. Vita Coco Coconut Water net sales increased 20.9%, underpinned by a case equivalents ("CE") volume increase of 15.0% driven by increased demand, particularly within the International segment, and improved net pricing. The growth was partially offset by the timing shift of a significant retailer promotion, which occurred primarily in the first quarter of 2026 compared to the second quarter of 2025. Private Label net sales increased 82.8% driven by a CE volume increase of 78.1%, while Other category net sales increased 9.6%.
Previous wording
The following table provides a comparative summary of the percentage change in our volume in CE for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, by operating segment and product category:
Current wording
The following table provides a comparative summary of the percentage change in our volume in CE for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, by operating segment and product category:
Previous wording
For the three months ended March 31, 2026, SG&A increased $9.4 million, or 32.8%, compared to the three months ended March 31, 2025.The increase was primarily driven by higher people‑related expenses of $3.6 million, reflecting increased headcount and stock‑based compensation, as well as a $3.6 million increase in marketing expense to support sales growth initiatives and expansion into new markets. In addition, distributor‑related expenses increased $2.0 million.
Current wording
For the three months ended June 30, 2026, the increase in SG&A was primarily driven by higher people‑related expenses of $4.1 million, reflecting increased incentive compensation, headcount growth, and stock-based compensation, as well as a $2.0 million increase in marketing expense to support sales growth initiatives and expansion into new markets. For the six months ended June 30, 2026, the increase in SG&A was primarily driven by higher people-related costs of approximately $7.7 million, a $5.7 million increase in marketing investments and a distributor‑related expense increase of $2.1 million.
Previous wording
(c)The three months ended March 31, 2025 other adjustments include $0.6 million related to a one-time 2023 incentive program that is measured based on full-year 2025 performance and is structured differently from our other ongoing employee incentive programs, and $0.4 million of non-cash rent charges related to our new New York City office that overlap with our current New York City office rent charges. These amounts were offset by $0.1 million of partial recoveries of prepaid inventory from a supplier (refer to the 2025 Form 10-K for further details) and a gain of $0.2 million from a sale of intellectual property.
Current wording
(c)The three and six months ended June 30, 2025 included $0.6 million and $1.2 million, respectively, related to a one-time incentive program established in 2023 and measured based on full-year 2025 performance, and $0.4 million and $0.7 million, respectively, of overlapping rent expense associated with our new New York City office. The six-month period was partially offset by $0.1 million of partial recoveries of prepaid inventory from a supplier (refer to the Form 10-K for further details) and a $0.2 million gain from a sale of intellectual property.
Previous wording
Since our inception, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings through our credit facilities and term loans. We had $201.9 million and $196.9 million of cash and cash equivalents as of March 31, 2026 and December 31, 2025, respectively. From time to time, we may supplement our liquidity needs with incremental borrowing capacity under the Credit Facility.
Current wording
Since our inception, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings through our credit facilities and term loans. We had $278.6 million and $196.9 million of cash and cash equivalents as of June 30, 2026 and December 31, 2025, respectively. From time to time, we may supplement our liquidity needs with incremental borrowing capacity under the Credit Facility.
Previous wording
During the three months ended March 31, 2026, cash provided by operating activities increased $25.4 million compared to the three months ended March 31, 2025. The higher cash generation was driven by the $13.6 million increase in net income after adjusting for non-cash items and approximately $11.8 million working capital improvement.
Current wording
During the six months ended June 30, 2026, cash provided by operating activities increased $84.5 million compared to the six months ended June 30, 2025. The increase was driven by a $41.8 million rise in net income, after adjusting for non-cash items, and a $42.7 million improvement in working capital, primarily attributable to the timing of vendor invoices and inventory sales exceeding inventory purchases. Net income benefited from $15.6 million in tariff refunds and $0.6 million of related interest income.
Previous wording
During the three months ended March 31, 2026, cash used in investing activities was $0.5 million compared to $0.6 million for the three months ended March 31, 2025. The decrease was primarily due to the absence of leasehold improvements related spend on our new offices during the three months ended March 31, 2025 partly offset by higher expenditures on new software implementations during the current quarter.
Current wording
During the six months ended June 30, 2026, cash used in investing activities was $0.6 million compared to $1.5 million for the six months ended June 30, 2025. The decrease of cash used for investing activities was primarily due to the absence of leasehold improvements related spend on our new offices during the six months ended June 30, 2025.
Previous wording
During the three months ended March 31, 2026 compared to the three months ended March 31, 2025, net cash used by financing activities increased by $8.8 million, primarily driven by higher volume and price of share repurchases in the three months ended March 31, 2026 compared to the prior year period, partially offset by increased proceeds from the exercise of stock options. See Note 10, Stockholders' Equity, in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, for further discussion on share repurchases.
Current wording
During the six months ended June 30, 2026 compared to the six months ended June 30, 2025, net cash used by financing activities increased by $4.8 million, primarily driven by higher volume and price of share repurchases in the six months ended June 30, 2026 compared to the prior year period, partially offset by increased proceeds from the exercise of stock options. See Note 10, Stockholders' Equity, in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, for further discussion on share repurchases.
Previous wording
In May 2020, the Company entered into the Credit Facility, which currently provides for committed borrowings of $60 million. On February 14, 2025, the Credit Facility was amended, extending the maturity five years to February 13, 2030.
Current wording
In May 2020, we entered into the Credit Facility, which currently provides for committed borrowings of $60 million. On February 14, 2025, the Credit Facility was amended, extending the maturity five years to February 13, 2030.
Previous wording
Starting in December 2022, borrowings on the Credit Facility bear interest at rates based on either: 1) a fluctuating rate per annum determined to be the sum of Daily Simple SOFR plus the Spread; or 2) a fixed rate per annum determined to be the sum of the Term SOFR plus the Spread. The Spread ranges from 1.00% to 1.75%, which is based on the Company’s leverage ratio (as defined in the credit agreement) for the immediately preceding fiscal quarter as defined in the credit agreement. In addition, through February 13, 2025, the Company was subject to an unused commitment fee ranging from 0.10% and 0.20% on the unused amount of the line of credit, with the rate based on the Company’s leverage ratio (as defined in the credit agreement). Starting February 14, 2025, the unused commitment fees ranged from 0.13% and 0.23% on the unused amount of the line of credit, with the rate being based on the Company’s leverage ratio (as defined in the credit agreement).
Current wording
Starting in December 2022, borrowings on the Credit Facility bear interest at rates based on either: 1) a fluctuating rate per annum determined to be the sum of Daily Simple SOFR plus the Spread; or 2) a fixed rate per annum determined to be the sum of the Term SOFR plus the Spread. The Spread ranges from 1.00% to 1.75%, which is based on our leverage ratio (as defined in the credit agreement) for the immediately preceding fiscal quarter as defined in the credit agreement. In addition, through February 13, 2025, we were subject to an unused commitment fee ranging from 0.10% and 0.20% on the unused amount of the line of credit, with the rate based on our leverage ratio (as defined in the credit agreement). Starting February 14, 2025, the unused commitment fees ranged from 0.13% and 0.23% on the unused amount of the line of credit, with the rate being based on our leverage ratio (as defined in the credit agreement).
Previous wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in the Form 10-K and the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those discussed in the Form 10-K.
Current wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in the Form 10-K and the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. During the six months ended June 30, 2026, there were no material changes to our critical accounting policies from those discussed in the Form 10-K.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For these products, control is transferred upon customer receipt, at which point the Company recognizes the transaction price for the product as revenue.