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    ONON
    Earnings call· Dec 2025(Q4 FY25)

    On Holding AG Q4 FY25 earnings call ONON

    Mar 3, 2026 Source

    Executive summary

    On Holding AG Q4 FY25 — Record Revenue, Margin, and Cash Position Driven by Premium Strategy and Innovation

    On Holding AG delivered a strong Q4 FY25, surpassing CHF 3 billion in annual revenue and achieving record gross and adjusted EBITDA margins. The company's premium strategy, driven by relentless innovation and cultural relevance, continues to resonate with consumers, leading to accelerated demand across all regions and channels. Strategic investments in D2C, retail expansion, and multi-category growth are fueling future profitability and market expansion, positioning On for continued sustainable growth.

    Highlights

    5

    • Net sales crossed CHF 3 billion for the full year 2025, growing 36% at constant currency.

    • Q4 FY25 net sales reached CHF 743.8 million, increasing 30.6% at constant currency, significantly ahead of updated guidance.

    • Record gross profit margin of 62.8% for FY25 and 63.9% for Q4 FY25, up 180 bps year-on-year.

    • Adjusted EBITDA margin of 18.8% for FY25, exceeding 2026 aspirations.

    • Cash position exceeded CHF 1 billion, providing strong financial flexibility.

    Concerns

    3

    • Higher U.S. import tariffs continue to be an external pressure, though fully absorbed by profitability expansion.

    • Guidance for 2026 includes cushioning for potential slower growth in the second half of the year.

    • Asia-Pacific's growth rate, while exceptional, needs to be managed consciously to maintain premiumness given its CHF 0.5 billion scale.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year 2026 Net Sales Growth
    at least 23%
    high materiality
    High
    Full-year 2026 Reported Net Sales
    at least CHF 3.44 billion
    high materiality
    High
    Full-year 2026 Gross Margin
    at least 63%
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Margin
    18.5% to 19%
    high materiality
    High
    3-year Constant Currency CAGR (2023-2026)
    at least 30.5%
    high materiality
    High
    Investor Day
    early next year (2027)
    low materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Americas
    Strong demand across D2C and wholesale, with key account partners expanding space and driving sell-through. Full price execution held firm even during promotional periods.
    Constant currency growth: 21.3%D2C share of net sales: Close to 50%Core running franchises share of D2C sales growth: Over 5 percentage points
    		CHF 434.3 million12.8%——
    Europe, Middle East and Africa (EMEA)
    Broad-based growth across markets and channels. Strong momentum in German-speaking regions and the U.K., with rapid scaling in Southern Europe. First store with a distributor partner opened in Riyadh.
    Constant currency growth: 27.5%
    		CHF 183 million24.2%——
    Asia Pacific (APAC)
    Exceptional quarter, solidifying role as key growth driver. Deep resonance and high demand across all channels. Strong performance during Double Eleven and Chinese New Year. Highest global productivity in Hong Kong stores and Shenzhen flagship.
    Constant currency growth: 85.1%Full year 2025 net sales: Over CHF 0.5 billionTmall ranking for footwear over $140 in December: Top 5In-store traffic in China during Chinese New Year: More than doubled relative to baselineShenzhen flagship apparel share: Over 20%
    		CHF 126.5 million70.8%——
    Direct-to-Consumer (D2C) Channel
    Outstanding quarter with impressive results on top of demanding prior year comparison. Globally coordinated holiday campaign amplified brand heat and drove high repeat engagement with disciplined full price execution.
    Constant currency growth: 30%Share of total net sales: 41.8%Share of total net sales increase: 110 basis points year-over-year
    		CHF 360.6 million21.7%——
    Wholesale Channel
    Exceptional results, outperforming expectations, driven by strong sell-through and sustained demand from key accounts in Americas and EMEA, and strong momentum in Southeast Asia distribution markets.
    Constant currency growth: 31.2%
    		CHF 383.2 million23.4%——

    Operational metrics

    17
    Net Sales Growth
    30%YoY reported
    FY25

    First time crossing CHF 3 billion net sales mark.

    Net Sales Growth
    22.6%YoY reported
    Q4 FY25

    Significantly ahead of updated guidance in November.

    Adjusted EBITDA Margin
    18.8%
    FY25

    Already exceeding 2026 aspirations.

    Cash Position
    CHF 1 billion
    FY25 end

    Strongest cash position in company history.

    Global Awareness
    30%vs 20% prior
    FY25

    Still leaving 70% untapped growth opportunity.

    Retail Stores
    6718 net additions
    FY25 end

    Focus on larger, high-impact spaces yielding exceptional results.

    Retail Net Sales Contribution from Apparel & Accessories
    15%
    FY25

    Many flagship stores achieving even higher share.

    Apparel Net Sales Growth
    75.5%YoY constant currency
    FY25

    Meaningful increase in contribution to total net sales.

    Accessories Net Sales Growth
    135.1%YoY constant currency
    FY25

    Meaningful increase in contribution to total net sales.

    Apparel & Accessories Share of Total Net Sales
    7%Up 190 bps YoY
    FY25

    Structurally improving premium mix and overall business profitability.

    Apparel Net Sales Growth
    38.3%YoY reported
    Q4 FY25

    Against a tough prior year comparative. Growth particularly pronounced in D2C.

    New Customers Acquired Through Apparel
    10%Up from 6%
    Q4 FY25

    Apparel becoming an increasingly important entry point into the brand.

    SG&A excluding Share-Based Compensation
    50.9%Up 40 bps YoY
    Q4 FY25

    Modest increase reflects strategic redeployment of savings from operational excellence into growth drivers like retail expansion and brand building.

    Capital Expenditure
    CHF 28.6 millionUp 50 bps YoY as % of net sales
    Q4 FY25

    Significant targeted investments in retail expansion, innovative infrastructure, and supply chain capabilities.

    Net Working Capital
    18.9%Improved
    FY25 end

    Reflects strong profit and precise planning.

    LightSpray Production Capacity Increase
    30-foldvs 2025
    2026

    Due to the opening of the new LightSpray facility in Busan, South Korea, moving from thousands to hundreds of thousands of shoes.

    Average Selling Price
    increased quite substantially
    Q4 FY25

    Fundamental driver of gross profit margin.

    Industry KPIs

    6
    MetricValueDetails
    Inventory positionCHF 419.8 millionCHF
    Revenue by channelD2C: CHF 360.6 million; Wholesale: CHF 383.2 millionCHF
    Operating margin sg a50.9%% of net sales
    Store fleet door investment67 retail storesstores
    Tariff cost exposure recovery—
    Franchise product cycle performancePerformance running maintains strong forward progress

    Product announcements

    4
    ProductTypeDetails
    Cloudsurfer 3launch
    LightSpray Cloudmonster 3 Hyperlaunch
    Zendaya Co-created Collectionlaunch
    Cloudrunners 3launch

    Deals & partnerships

    7
    LoeweFashion collaborationFifth year

    Just launched their latest drop featuring the Cloudsolo.

    FKA twigsCollaboration on ballerina shoe

    Highly sought after ballerina shoe.

    ZendayaCo-created collection

    Shifting from a partnership to true growth creation, leading to the first fully co-created collection for Spring/Summer '26. An Academy Award-winning director is also involved.

    Iga SwiatekAthlete endorsement (Tennis)

    Winning in Wimbledon.

    Ben SheltonAthlete endorsement (Tennis)

    Taking the Masters 1000 in Toronto.

    Burna BoyCollaboration for Tennis Lifestyle brand

    Bringing him into the Tennis Lifestyle brand.

    Arturo CoelloAthlete endorsement (Paddle)

    Youngest world #1 in history, joined On in January.

    Risks & headwinds

    4
    Higher U.S. import tariffsOngoing

    20% tariff regime (prior to Supreme Court ruling)

    Mitigation: Fully absorbed by profitability expansion and operational efficiencies; gross margin guidance of 63%+ is based on this tariff regime, with potential upside if tariffs change.

    Currency environment2026

    Foreign exchange headwinds on Swiss franc heavy cost base

    Mitigation: Strong net sales growth and exceptional gross profit generation allow offsetting these headwinds.

    Growth rate management in APACOngoing

    Asia-Pacific now a CHF 0.5 billion business

    Mitigation: Need to be conscious on the speed of growth to maintain premiumness and ensure long-term multi-billion opportunity.

    Second half 2026 growthH2 2026

    First half of the year growing slightly higher than the full year

    Mitigation: Leaving some cushioning for the second half of the year in guidance, despite a strong order book.

    What to watch in Q1 FY26

    5

    LightSpray Commercial Reality

    Next quarter
    CurrentNew Busan facility opened, 30-fold capacity increase
    TargetSuccessful launch and adoption of LightSpray Cloudmonster 3 Hyper

    Why it matters

    LightSpray is a revolutionary manufacturing technology; its successful commercialization will drive product innovation, efficiency, and market differentiation.

    Now this is clearly the year very scaling. You've seen how we opened the Busan LightSpray Factory. That gives us a 30-fold increase in terms of capacity. So going from thousands of shoes to hundred thousands of shoes, and so it really leads to the democratization of this technology. Now also with the Cloudmonster 3 LightSpray coming along, so it's really broadening out.

    Q&A highlights

    7

    What are the expectations for growth across regions in 2026, specifically North America, and how are partners accepting new innovation?

    Management expects strong growth across all regions, driven by the strongest product pipeline ever, including LightSpray and new Cloudmonster/Cloudrunner launches. North America is a key region, and the brand's momentum is global, attracting a broader demographic, especially 15-35 year olds. The first half of 2026 is expected to grow slightly higher than the full year, with a strong order book for H2.

    “The On brand extremely hot in every part of the world. And I think if we look into 2026, our we have clearly the strongest product pipeline in terms of innovation and performance that we ever had.”

    asked by Jonathan Komp · answered by Martin Hoffmann

    2 min read6 chapters

    Detailed Narrative

    01

    Relentless Performance Innovation

    On's R&D team scaled by 1,000% in the past 5 years, now comprising over 400 experts in Zurich labs. Key innovations include the upcoming Cloudsurfer 3, which is 15% lighter, 20% softer, and provides 15% more energy, combining structural engineering with super foams. The LightSpray technology, which reduces 200 assembly steps to 1, generates 75% less CO2, and produces shoes weighing 170 grams, is scaling with a new facility in Busan, South Korea, increasing production capacity 30-fold.

    02

    Premium Inspiration and Cultural Relevance

    The brand's premium strategy is validated by strong demand for collaborations like Loewe, with the Cloudsolo selling at USD 750. On is co-creating culture through partnerships with Zendaya, FKA twigs, and athletes like Iga Swiatek and Ben Shelton. This cultural heat translates into commercial results, with 18 new stores opened in 2025, and Tokyo Ginza becoming a top 10 global store in just months. The company is also leveraging AI to transform its digital ecosystem for personalized customer service and operational efficiency.

    03

    Multi-Category Expansion and Apparel Growth

    Apparel business delivered 76% net sales growth at constant currency in 2025, with its share of sales climbing across all regions and channels, primarily driven by D2C. This expansion is capturing everyday hours with female-focused innovations and new sports like tennis and paddle. Tennis was the fastest-growing category, fueled by athlete success and off-court storytelling, with new partnerships like Arturo Coello in paddle.

    04

    Strong Financial Performance and Operational Health

    On crossed CHF 3 billion in net sales for the first time in 2025, growing 30% reported and 35.6% constant currency. The company achieved a record gross profit margin of 62.8% and an adjusted EBITDA margin of 18.8%, exceeding 2026 aspirations. Cash flow generation strengthened, leading to a cash position exceeding CHF 1 billion. This performance is attributed to premium positioning, disciplined full-price execution, and operational efficiencies.

    05

    Regional and Channel Momentum

    The D2C share increased globally to 41.8%, up 110 basis points, reflecting deepening direct connection with fans. Americas delivered CHF 434.3 million in net sales, growing 21.3% constant currency, with D2C driving close to 50% of sales. EMEA net sales reached CHF 183 million, growing 27.5% constant currency, with strong momentum in the German-speaking region and the U.K. Asia Pacific delivered exceptional growth, with net sales of CHF 126.5 million, up 85.1% constant currency, surpassing CHF 0.5 billion for the full year 2025.

    06

    Strategic Outlook and Future Investments

    2026 will be defined by commitment to premium growth, exciting brand moments, and a strong pipeline rooted in innovation. The company expects D2C to outperform wholesale, driven by innovation investments and retail expansion. Apparel is expected to meaningfully outpace overall growth, structurally improving profitability. Strategic investments in brand, technology, and innovation pipeline are self-funding through strong profitability and operational excellence.

    AI-generated summary of the company’s earnings call. Not investment advice.