COOK 10-K & 10-Q changes, risk factors and insider trading

We have incurred operating losses in the past and may continue to incur net losses in the future. For the year ended December 31, 2024,2025, we had a net loss of $34.0$115.2 million. As of December 31, 2024,2025, we had an accumulated deficit of $688.9$804.1 million. We expect our operating expenses to increasefluctuate inas thea longpercentage termof revenue as we continue to manage our salesinvestments in innovation and marketingenhance efforts,our product offerings. While we intend to leverage these expenses over time to achieve profitability and expand ourrevenue operatingopportunities, and retail infrastructure, add content and software features to our platform, expand into new geographies, develop new products, and incur legal, accounting, and other expenses related to operating as a public company. Thesethese efforts and additional expenses may be more costly than we expect, and we cannot guarantee that we will be able to increase our revenue to offset our operating expenses. Our revenue growth may slowcontinue or our revenue mayto decline for a number of other reasons, including reduced demand for our products, increased competition, a decrease in the growth or reduction in size of our overall market, a challenging macroeconomic environment, or if we cannot capitalize on growth opportunities. For example, during the year ended December 31, 2024,2025, our total revenue decreased by 0.3%7.4% compared to the year ended December 31, 2023.2024. If our revenue does not grow at a greater rate than our operating expenses, we will not be able to achieve and maintain profitability.

Our historical growth rates may not be sustainable or indicative of future growth and we expect our growth rate to slow.growth.

We have experienced significant growth since our change of ownership in 2013. Our historicalhistorical, long-term rate of growth may not be sustainable or indicative of our future rate of growth.growth, including in the near term. We have also experienced increased demand for our products in the past, for example due to the impact that the COVID-19 pandemic had on consumer behavior as a result of various stay-at-home orders and restrictions on dining options and restaurant closures. Since 2022, we have experienced a relative downturn in consumer demand as compared to demand during the pandemic and a shift towards experiences, services, and leisure and away from big-ticket home-related products such as grills. We cannot predict if or when consumer behavior and demand will change. We believe that our revenue, as well as our ability to improve or maintain margins and profitability, will depend upon, among other factors, our ability to address the challenges, risks, and difficulties described elsewhere in this report and the extent to which our various products grow and contribute to our results of operations. We cannot provide assurance that we will be able to successfully manage any such challenges or risks to our future growth. In addition, our number of customers and markets may not continue to grow or may decline due to a variety of possible risks, including increased competition and the maturation of our business. Any of these factors could cause our revenue growth to decline and may adversely affect our margins and profitability. Failure to continue our revenue growth or improve margins would have a material adverse effect on our business, financial condition, and results of operations. You should not rely on our historical rate of revenue growth as an indication of our future performance.

We may be unable to effectively manage our futurebusiness growththrough effectively,periods of strategic realignment, which could make it more difficult to execute our business strategy.

There have been significant changes and proposed changes in recent years to U.S. trade policies, tariffs, and treaties affecting imports. For example, the U.S. has announced and implemented additional tariffs on certain imports from China under multiple authorities. On February 20, 2026, the Supreme Court ruled that the President cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs, invalidating certain tariffs that had been imposed under IEEPA. In response to this ruling, within hours of the decision, the President signed a proclamation imposing a new 10% global tariff under Section 122 of the Trade Act of 1974, effective MarchFebruary 4,24, 2025,2026, and subsequently increased these tariffs to 15% on February 21, 2026. Section 122 tariffs are subject to a 150-day statutory limit unless extended by Congress. In addition, the Office of the U.S. implementedTrade aRepresentative 25%has announced it will initiate new Section 301 investigations into trading partners' unfair practices, which could result in additional tarifftariffs. Section 301 tariffs on imports from Canada and Mexico and a 20% additional tariff on imports from China. On March 6, 2025, the Trump Administration announced that MexicanChinese goods coveredalso byremain thein U.S.-Mexico-Canada Agreement would not be subject to the additional 25% tariff until April 2, 2025.effect. The U.S. also reinstatedcontinues theto 25%maintain tariffs on steel import tariff and reinstated and increased the aluminum import tariff to 25%,aluminum, as well as increased tariffs and import restrictions on products imported from various other countries. The steel and aluminum import tariffs will go into effect on March 12, 2025. These new tariffs on aluminum and steel include derivative tariffs that have impacted and will continue to impact a broad range of downstream productsproducts, and,which ifhave theyand remainmay incontinue place in their current form, such tariffs could thereforeto adversely impact our business.

In response to the tariffs announced by the U.S., China and other countries have imposed or proposed additional tariffs on certain exports from the United States. There is currentsubstantial uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffstariffs. This uncertainty has been heightened by the February 2026 Supreme Court ruling invalidating IEEPA tariffs, which has resulted in changes to the tariff structure and wealternative tariff mechanisms being implemented. The administration has stated that combining Section 122, Section 232, and Section 301 tariffs will result in virtually unchanged tariff revenue in 2026, signaling its intent to maintain similar tariff levels through alternative legal authorities. We cannot predict whether, and to what extent, U.S. trade policies will change in the future, including as a result of changes by the new U.S. presidential administration.future. A significant proportion of our products, including our grills, are manufactured in China, Vietnam, Taiwan, and other regions outside of the United States. Approximately 80% of our grills are manufactured in China. Accordingly, such U.S. policy changes have made it and may continue to make it difficult or more expensive for us to obtain certain downstream products manufactured outside the United States, which could affect our revenue and profitability. Any of these factors could depress economic activity and restrict our access to suppliers or customers, and could have a material adverse effect on our business, financial condition, and results of operations and affect our strategy in China, Vietnam, Taiwan, and elsewhere around the world.

In order to maintain and increase revenue, we must produce high-quality products at acceptable costs. If we are unable to maintain the quality and performance of our products at acceptable costs, our brand, the market acceptance of our products, and our results of operations would suffer. As we periodically update our product lines and introduce changes to manufacturing processes or incorporate new materials and technologies, we may encounter unanticipated issues with product quality and product consistency or production and supply delays. For example, in 2017, we introduced products that incorporate smart features, including our WiFIRE technology, a cloud-based Wi-Fi controller, that connects our grills to our Traeger app, enabling users to automate recipe steps and control and monitor their grill remotely. In 2019, we also introduced D2 Direct Drive, an integrated, software-driven system that maintains grill temperature through variable speed fans and DC auger control. In 2022, we introduced Smart Combustion technology which helps our grills maintain consistent cooking temperatures and a 2-in-1 EZ Clean grease and ash collection system. While we engage in product testing in an effort to identify and address any product quality issues before we introduce products to market, unanticipated product quality or performance issues may be identified after a product has been introduced and sold. From time to time, we execute “over-the-air” updates to address such issues and to update products and introduce product enhancements. As we continue to introduce new products and product enhancements, we expect the costs associated with such products and enhancements will continue to increase.

We face the risk of exposure to product liability or other claims, including class action lawsuits, in the event our products are, or are alleged to be, defective or have resulted in harm to persons, including death, or to property as a result of product malfunction, fires, explosions, or other causes. For example, we are aware of several situations in which our grills were investigated as the cause of a fire. Our grills may cause fires if not properly used or maintained, including fires caused by buildup of fats or grease, or if there are quality, manufacturing, or design defects. Although we label our grills to warn of such risks, our sales could be reduced if our grills are considered dangerous to use or if they are implicated in causing personal injury, death, or property damage. Additionally, we may experience food safety or food-borne illness incidents with our rubs or sauces. We have in the past and may in the future incur significant liabilities if product liability lawsuits or regulatory enforcement actions against us are successful. Any losses not covered by insurance could have a material adverse effect on our business, financial condition, and results of operations. For example, in August 2024, we received an offer of compromise to reach an out-of-court settlement for a product liability mattermatter. A formal settlement agreement was finalized in February 2025 and asthe ofmatter Decemberwas 31,paid 2024,in weMarch accrued2025 $15.0 million that will be covered bythrough our insurance policies.policies in the amount of $15.0 million. For more information, see Note 14 – Commitments and Contingencies to the accompanying consolidated financial statements.

We generally provide a minimum three-year limited warranty on our grills. The occurrence of any material defects in our grills could result in an increase in returns or make us liable for damages and warranty claims in excess of our current reserves, which could result in an adverse effect on our business prospects, liquidity, financial condition, and cash flows if returns or warranty claims were to materially exceed anticipated levels. In addition, we could incur significant costs to correct any defects, warranty claims, or other problems, including costs related to product recalls, and such costs may not be covered by insurance and could have a material adverse effect on our business, financial condition, and results of operations. Any negative publicity related to the perceived quality and safety of our products could affect our brand image, decrease consumer confidence and demand, and adversely affect our financial condition and results of operations. Also, while our warranty is limited to part replacement and returns, warranty claims may result in litigation, the occurrence of which could have an adverse effect on our business, financial condition, and results of operations. For example, on December 14, 2023, we announced a voluntary recall of our Flatrock flat top grill. Consequently, the impact on operating results was $0.3 million and $2.6 million for yearsthe year ended December 31, 2024 and 2023, respectively.2024. These costs were primarily due to product returns, recall charges, inventory-write offs, and expenses related to logistics, rework and legal fees. The occurrence of real or perceived defects in any of our products, now or in the future, could result in additional negative publicity, regulatory investigations, recalls, or lawsuits filed against us.

Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices or in less preferred distribution channels, which could impair our brand image and harm our margins. In addition, if we underestimate the demand for our products, our manufacturers may not be able to produce products to meet our requirements, and this could result in delays in the shipment of our products, lost sales, and damage to our reputation and retailer and distributor relationships. For example, late in the first quarter of 2020, we reduced inventory purchase orders as a precautionary measure against the unknown impact of the COVID-19 pandemic on the economy and our business and to improve financial flexibility. These actions, coupled with the overall strong demand during 2020, ultimately contributed to lower than expected inventory levels throughout the second half of 2020 and, in turn, resulted in inventory constraints in the second half of 2020 continuing into early 2021.

Such difficulty in forecasting demand, which we have encountered and may continue to encounter, also makes it difficult to estimate our future results of operations and financial condition from period to period. A failure to accurately predict the level of demand for our products could adversely impact our profitability or cause us not to achieve our expected financial results. In connection with Project Gravity and our channel optimization initiatives, we may experience changes in demand signals, lead times, and order behavior from distributors and retailers, which, combined with pellet mill consolidation and operational centralization, could increase the risk of excess or obsolete inventory, stockouts, or higher costs to rebalance inventory across our network.

We are subject to the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act, and possibly other anti-bribery laws in countries in which we conduct activities. These laws generally prohibit companies and their employees and agents from corruptly promising, authorizing, offering, or providing, directly or indirectly, improper payments of anything of value to government officials, political parties, and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any improper advantage. Certain laws, including the U.K. Bribery Act, also prohibit soliciting or receiving bribes or improper payments. In addition, U.S. public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls. We operate a global business and may have direct or indirect interactions with officials and employees of government agencies or state-owned or government controlled entities. In addition, in many foreign countries, including countries in which we may conduct business, it may be a local custom that businesses engage in practices that are prohibited by the FCPA or other applicable laws and regulations. We have implemented a compliance program designed to promote compliance with these laws. However, we cannot ensure that our compliance program will be effective or that our employees, contractors, and agents, and companies to which we outsource certain of our business operations, have not taken, or will not take, actions in violation of our compliance program and applicable law, for which we may take actions in violation of our policies or applicable law. We face significant risks if we or any of our directors, officers, employees, agents, or other partners or representatives fail to comply with anti-corruption laws, and governmental authorities in the United States and elsewhere could seek to impose substantial civil and/or criminal fines and penalties, which could have a material adverse effect on our business, reputation, results of operations, and financial condition. In addition, responding to any internal investigation or government enforcement action may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.

We are subject to risks related to sustainability and ESGcorporate responsibility issues.

Our business faces increasing scrutiny related to ESGvarious sustainability and corporate responsibility issues, including renewable resources, environmental stewardship (including deforestation), supply chain management, climate change, safety, human capital and talent management, workplace conduct, human rights, philanthropy, and support for local communities. If we fail to meet applicable standards or expectations with respect to these issues across all of our services and in all of our operations and activities, including the expectations we set for ourselves, our reputation and brand image could be damaged, and our business, financial condition, and results of operations could be adversely impacted.

Moreover, while we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of our company and/or products, such initiatives may be costly and may not have the desired effect. Expectations around company’s management of ESGcorporate responsibility matters continue to evolve rapidly, in many instances due to factors that are out of our control. As with other companies, our approach to such matters has evolved over time, and we expect it will continue to evolve, but we cannot guarantee that our approach will ultimately align with any particular stakeholder’s preferences or expectations. For example, we may not ultimately complete certain goals or initiatives, either on the timelines originally anticipated or at all, due to technical, cost, or other factors, regardless of whether it is in our control to do so. Moreover, actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous, subject to misinterpretation, or not in keeping with best or market practice. If we fail to, or are perceived to fail to, comply with or advance certain ESG initiatives (including the timeline and manner in which we complete such initiatives), we may be subject to various adverse impacts, including reputational damage and potential stakeholder engagement and/or litigation, even if such initiatives are currently voluntary. For example, there have been increasing allegations of greenwashing against companies making significant ESG claims due to a variety of perceived deficiencies in actions, statements, or methodologies, including as stakeholder perceptions of sustainability continue to evolve.

We may also be required to increase our disclosure of ESG-relatedsustainability-related information over coming years, whether due to increased stakeholder demand or regulatory requirements. For example, several jurisdictions—such as the EU, and the State of California—have adopted or are considering adopting requirements for certain companies to undertake additional disclosure or actions regarding climate or other ESGsustainability matters.matters, Inincluding addition, developing ESG-focused regulation in relation toregarding supply chains, particularly in the EU, may require us to conduct additionalchain diligence procedures and collectsustainable further information in relation to the ESG performance of the entities in our supply chain. In particular, the EU enacted its Deforestation Regulation in June 2023, which, from December 30, 2025, will prevent certain wood products being placed on the EU market or exported from the EU without confirmatory statements that certain ESG-related due diligence procedures had been carried out with respect to the product and that such due diligence had confirmed that the product had not been connected with deforestation, along with other relevant information. The EU’s Corporate Sustainability Due Diligence Directive, adopted in 2024, will also subject in-scope companies to certain ESG due diligence requirements, with companies entering into scope from 2027 on a phased basis.sourcing. Regulation such as this may lead to increased operational, procurement, or other costs, which may in turn lead to a reduction in our business prospects and may also lead to risks to our reputation to the extent that we are determined to be using suppliers that do not meet standards of ESGsustainable or responsible conduct expected by our customers, investors, and other stakeholders. In addition, regulation in this area has evolved considerably over recent years and is likely to continue to do so, which may lead to additional costs and challenges associated with ensuring compliance with changing standards.

However, regulator and other stakeholder perceptions of ESGsustainability matters are not uniform, and there are efforts by some regulators and other stakeholders to reduce companies’ efforts on certain ESG-relatedsustainability-related matters. Both advocates and opponents to certain ESGsustainability matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. ToAny the extent we are subjectfailure to address such activism,stakeholder itexpectations may requireresult usin toincreased incurcosts, costsreputational damage (including through various ratings), litigation or otherwiseother adverselystakeholder impactengagement, or other adverse impacts to our business. ThisFor andexample, otherthere have been increasing allegations of greenwashing against companies making sustainability claims due to a variety of perceived deficiencies in actions, statements, or methodologies, including as stakeholder expectationsperceptions willof likelysustainability leadcontinue to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor.evolve. Additionally, many of our suppliers or other stakeholders may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.

Certain environmental laws, including the CERCLA, and analogous state laws, impose strict as well as joint and several liability upon statutorily defined parties without regard to comparative fault. Under these laws, we may be required to remediate contaminated properties currently or formerly operated by us, or facilities of third parties that received waste generated by our wood pellet production operations. Such remediation obligations may be imposed regardless of whether such contamination resulted in whole or in part from the conduct of others and whether such contamination resulted from actions (by us or third parties) that complied with all applicable laws in effect at the time of those actions. Our facilities are located on sites that have been used for manufacturing activities for an extended period of time, which increases the possibility of contamination being present. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health, and safety impacts of our operations, including accidental spills or releases in the course of our operations or those of a third party. Although we are not presently aware of any material contamination on our properties or any material remediation liabilities, we cannot assure you that we will not be exposed to significant remediation obligations or liabilities in the future. Moreover, certain substances that have not historically been considered hazardous substances may subsequently be designated as such. For example, there is increased scrutiny on various per- and polyfluoroalkyl substances (“PFAS”) at the federal and state level, and the EPA has designated certain PFAS—PFOA and PFOS—as hazardous substances under CERCLA.

Many nations have agreed to limit emissions of greenhouse gases pursuant to the United Nations Framework Convention on Climate Change, also known (“UNFCCC”) and subsequent agreements. For example, in December 2015, the United States and 194 other countries adopted the Paris Agreement, committing to work towards addressing climate change and agreeing to a monitoring and review process for greenhouse gas emissions. However,While the United States withdrewhas subsequently initiated the process of withdrawing from various international agreements, including the UNFCCC and, effective January 2026, the Paris Agreement inthe Novemberadoption 2020,of legislation or regulatory programs at the federal level, or other government action to reduce emissions of greenhouse gases, could require us to incur increased operating costs, such as costs to purchase and followingoperate theemissions Unitedcontrol States officially rejoining the Paris Agreement in February 2021, the U.S. presidential administration signed executive orders in January 2025 again initiating the process for the United Statessystems, to withdrawacquire fromemissions theallowances, Parisor Agreement.to comply with new regulatory or reporting requirements.

Moreover, many U.S. states, either individually or through multi-state regional initiatives, have begun to address greenhouse gas emissions, primarily through the planned development of greenhouse gas emission inventories and/or regional greenhouse gas cap-and-trade programs. Certain states where our wood pellet facilities are located, including New York, have implemented climate change regulations and committed to reducing greenhouse gases. For example, in December 2025, New York hasadopted implementedregulations therequiring Climatecertain Leadership and Community Protection Act, which aimsfacilities to reducemake greenhousedisclosures gasregarding emissionsGHG 40% below 1990 levels by 2030 and 85% below 1990 levels by 2050.emissions. Such regulations may increase the cost of operating such facilities or otherwise restrict the operations of such facilities, which could have an adverse impact on our business and operations.

Commercial forestry is regulated by complex regulatory frameworks at each of the federal, state, and local levels. Among other federal laws, the Clean Water Act and Endangered Species Act have been applied to commercial forestry operations through agency regulations and court decisions, as well as through the delegation to states to implement and monitor compliance with such laws. State forestry laws, as well as land use regulations and zoning ordinances at the local level, are also used to manage forests in the United States, as well as other regions from which we may need to source raw materials in the future. Any new or modified laws or regulations at any of these levels could have the effect of reducing forestry operations in areas where we procure our raw materials, and consequently may prevent us from purchasing raw materials in an economic manner, or at all. In addition, future regulation of, or litigation concerning, the use of timberlands, the protection of threatened or endangered species or their habitats, the promotion of forest biodiversity, and the response to and prevention of wildfires, as well as litigation, campaigns, or other measures advanced by environmental activist groups, could also reduce the availability of the raw materials required for our operations and the production of our wood pellets. For example, the United States has adopted a goal to conserve at least 30% of the country’s land and water by 2030, which may include certain forested areas. Similar or more stringent regulations of forestry and wood products has also been enacted in other jurisdictions relevant to our operations.

In particular, the EU has enacted its Deforestation Regulation in June 2023, from 30 December 2025,Regulation, which will prevent wood products being placed on the EU market absent certain diligence exercises and findings.findings Seeonce Partthe I,regulation Itembecomes 1A. “Risk Factors—We are subjectapplicable to risksin-scope relatedcompanies, which is currently due to sustainabilityoccur andstarting ESGfrom issues.”30 December 2026. Such requirements may adversely impact our business by requiring us to amend our processes to source wood pellets that we sell on the EU market, increasing the cost of wood pellets to us and our customers, reducing demand, and adversely impacting our revenue and results of operations.

Regulatory authorities in the United States, European Union, and elsewhere are increasingly regulatingregulate hazardous materials and other substances, and those regulations could affect sales of our products.

Governments in the United States and internationally have increased their focus on and regulation of a broad group of perfluoroalkyl and polyfluoroalkyl substances, collectively known as “PFAS,” which are utilized by the Company in some of its products. PFAS include several categories and classes of durable chemicals and materials with properties that include water and fire resistance, as well as electrical insulating properties. Developments in these and other global chemical regulatory trends (including relating to PFAS) may require additional actions by the Company, including investigation, remediation, and compliance obligations, or may result in additional litigation and enforcement actions and related costs. Such developments could also result in the Company needing to relocate all or part of its manufacturing operations or halt sales and purchases of products containing PFAS. For example, in the United States, many states have enacted standards for PFAS contamination in drinking water sources and PFAS used in certain categories of consumer products.products, including cookware and textiles. In addition, in April 2024, the EPA finalized a rule to regulate certain PFAS—PFOA and PFOS—as contaminants under the federal Safe Drinking Water Act. In Europe, in FebruaryJanuary 2023, the European Chemicals Agency released a proposal for broad restrictions on PFAS pursuant to EU Regulation (EC) No. 1907/2006, Registration, Evaluation, Authorisation and Restriction of Chemicals.Chemicals; the European Chemicals Agency released an updated proposal in August 2025. If the revised proposal is implemented without change, the proposed restriction couldwould largelysignificantly eliminatecurtail the production, use, and sale of PFAS in Europe in mostmany applications and manufactured articles. Finally, EPA and several states have implemented various reporting requirements for products which contain PFAS. In addition to creating a regulatory obligation, the information that is reported in response to those requirements may be used by third parties in future enforcement and litigation proceedings. The Company continues to review, control, and plan for the potential elimination of PFAS in its products. The Company’s PFAS plan involve risks, including the actual timing, costs, and financial impact of such plan; the Company’s ability to complete such plan on the anticipated timing or at all; potential governmental or regulatory actions relating to the Company’s continued PFAS use; the Company’s ability to identify and manufacture acceptable substitutes for PFAS, and the possibility that such substitutes will not achieve the anticipated or desired commercial or operational results; potential litigation relating to the Company’s PFAS plans or handling or use of PFAS; and the possibility that the Company’s PFAS plan will involve greater costs than anticipated, or otherwise have negative impacts on the Company’s relationships with its customers and other counterparties.

In addition, recent years have seen additional focus from stakeholders, including regulators and governments in certain jurisdictions, on ESGenvironmental considerationand social considerations in the supply chains of companies. Emerging legislation, including the EU'sEU’s Deforestation Regulation and Corporate Sustainability Due Diligence Directive, may introduce additional requirements for us or our customers and require us to collect additional information from our suppliers and other third parties. See Part I, Item 1A. “Risk Factors—We are subject to risks related to sustainability and ESGcorporate responsibility issues.” The United States has also adopted legislation restricting the use of certain suppliers, as well as products mined, produced, or manufactured wholly or in part from certain regions, due to ESGsuch considerations. Such legislation may lead to increased costs for our company in sourcing materials for our products, and to the extent parties in our supply chain are seen to not meet certain standards of ESGsustainability performance, whether by customers, regulators, or otherwise, this may lead to a requirement to change suppliers, reputational impacts to our company, or (in certain cases) import eligibility for certain of our products.

If we experience significantly increased demand, or if we need to replace an existing manufacturer due to lack of performance or ESGsustainability considerations, we may be unable to supplement or replace manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins, and harm our ability to deliver our products on time. For certain of our products, it may take a significant amount of time to identify and qualify a manufacturer that has the capability and resources to produce our products to our specifications in sufficient volume and satisfy our service and quality control standards. Accordingly, a loss of any of our significant manufacturers, suppliers, or distributors could have an adverse effect on our business, financial condition, and results of operations.

The price and availability of raw materials and key components used to manufacture our products, including electronic components, such as integrated circuits, processors and system on chips, components built into our unique specifications or that are single sourced, as well as manufacturing equipment, tooling, and wood fibers, may fluctuate significantly. In addition, the cost of labor at our third-party manufacturers could increase significantly. For example, manufacturers in China have experienced increased costs in recent years due to shortages of labor and fluctuations of the Chinese yuan in relation to the U.S. dollar. Additionally, the cost of logistics and transportation fluctuates in large part due to the price of oil, global demand, and other geopolitical factors. Any fluctuations in the cost and availability of any of our raw materials or other sourcing or transportation costs related to our raw materials or products could harm our gross margins (as was the case in 2021 due to increased freight rates and logistics costs) and our ability to meet customer demand. For example, disruptions to or increases in the cost of local, regional, domestic, or international transportation services for our products and other forms of infrastructure, such as electricity, due to shortages of vessels, barges, railcars, or trucks, weather-related problems, flooding, droughts, accidents, mechanical difficulties, bankruptcy, strikes, lockouts, bottlenecks, or other events could increase our costs, temporarily impair our ability to deliver products to our customers on time or at all and might, in certain circumstances, constitute a force majeure event under our customer contracts, permitting our customers to suspend taking delivery of and paying for our products or resulting in a charge to us for our customers’ lost profits as a result of our failure to timely deliver our products. Relatedly, some of our contracts with our large retail customers subject us to financial penalties if we fail to ship an order that is on time or in full. If we are unable to successfully mitigate a significant portion of these product cost increases, fluctuations, or delays, our results of operations could be harmed.

We primarily rely on cash flow generated from our sales to fund our current operations and our growth initiatives. As we expand our business, we will need significant cash from operations to purchase inventory, increase our product development, expand our manufacturer and supplier relationships, pay personnel, pay for the increased costs associated with operating as a public company, expand internationally, and further invest in our sales and marketing efforts. If our business does not generate sufficient cash flow from operations to fund these activities and sufficient funds are not otherwise available from our current or future credit facility, we may need additional equity or debt financing. If such financing is not available to us on satisfactory terms, our ability to operate and expand our business or to respond to competitive pressures could be harmed. Moreover, if we raise additional capital by issuing equity securities or securities convertible into equity securities, the ownership of our existing stockholders may be diluted. The holders of new securities may also have rights, preferences, or privileges which are senior to those of existing holders of common stock. In addition, any indebtedness we incur may subject us to covenants that restrict our operations and will require interest and principal payments that could create additional cash demands and financial risk for us.

As of December 31, 2024,2025, we have net operating loss carryforwards (“NOLs”) of approximately $123.8$162.3 million for U.S. federal income tax purposes, which will be available to offset future taxable income. Approximately $111.3$159.0 million of these NOLs are eligible for indefinite carryforward, limited by certain taxable income. Due to cumulative losses, we have recorded a full valuation allowance against our net deferred tax assets as of December 31, 2025, 2024, 2023, and 2022,2023, respectively. Utilization of our NOLs and certain other tax attributes depends on many factors, including our future income, which cannot be assured. Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), generally imposes an annual limitation on the amount of taxable income that may be offset by NOLs and certain other tax attributes when a corporation has undergone an “ownership change” (generally, if the percentage of its stock owned by its “5-percent shareholders,” as defined in Section 382, increases by more than 50 percentage points (by value) over a three-year period). We are not aware of any existing restrictions or limitations on the use of our NOLs or other tax attributes under Section 382. However, we may undergo an ownership change in the future, including as a result of the combined effect of this and future offerings, which would result in an annual limitation under Section 382. The limitations arising from any ownership change may prevent utilization of our NOLs and certain other tax attributes.

We arecontinue expandingto advance our international operationsdistributor model and staffare enhancing our resources to better support ourthese growthdealer intoinitiatives thein international markets. Our corporate structure and associated transfer pricing policies anticipate future growth into the international markets. The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws, interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions, which are generally required to be computed on an arm’s-length basis pursuant to intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.

New income, sales, use, value-added, or other tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. Those enactments could harm our domestic and international business operations, and our business and financial performance. Further, existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us. These events could require us or our customers to pay additional tax amounts on a prospective or retroactive basis, as well as require us or our customers to pay fines and/or penalties and interest for past amounts deemed to be due. If we raise our prices to offset the costs of these changes, existing and potential future customers may elect not to purchase our products in the future. Additionally, new, changed, modified, or newly interpreted or applied tax laws could increase our customers’ and our compliance, operating, and other costs, as well as the costs of our products. Further, these events could decrease the capital we have available to operate our business. Any or all of these events could harm our business and financial performance. For example, various legislative and regulatory actions and proposals, such as in the United States, the Organization for Economic Co-operation and Development (the “OECD”), and the EU, have increasingly focused on future tax reform and contemplate changes to long-standing tax principles, which could adversely affect our liquidity and results of operations. The OECD has introduced a framework to implement a global minimum tax of 15% for companies with revenues of at least EUR 750,000,000 (“Pillar Two”). While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have enacted legislation, and other countries are in the process of introducing draft legislation to implement Pillar Two. Where enacted, many aspects of Pillar Two will be effective in 2025 with additional components becoming effective beginning in 2026. On June 28, 2025, however, the G7, seven countries which include the United States, released a joint Statement on Global Minimum Tax, announcing an understanding regarding a proposed “side-by-side” solution that would exempt U.S. multinational businesses from some of the Pillar 2 rules (including the 15% global minimum tax). On January 6, 2026, the OECD released a “side-by-side” package that generally establishes an exemption for U.S. multinationals from the 15% global minimum tax. However, implementation of the package depends on domestic legislation and regulation in OECD member countries and is subject to subsequent review. Any minimum tax may have a negative impact on our financial condition, results of operations and cash flows. While we do not currently have revenues above that threshold, with continued growth it may reach that level in future years. Accordingly, we will continue to monitor and evaluate the potential consequences of Pillar Two on our longer-term financial position.

As of December 31, 2024,2025, we had cash and cash equivalents of $15.0$19.6 million, $125.0$112.5 million borrowing capacity under the Revolving Credit Facility, and up to $30.0 million borrowing capacity under the Receivables Financing Agreement. As of December 31, 2024,2025, we had no outstanding loan amounts under the Revolving Credit Facility and had drawn down $5.0 million under the Receivables Financing Agreement. As of December 31, 2024,2025, the total principal amount outstanding under our First Lien Term Loan Facility was $403.6$403.3 million. Our substantial indebtedness could have important consequences to the holders of our common stock, including the following:

We sell our grills 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, who, in turn, sell our grills to their end customers. Our retailers include Ace Hardware, Amazon, Costco, The Home Depot, and Best Buy, among others, as well as a significant number of independent retailers that cater to local communities and specific categories, such as hardware, camping, outdoor, farm, ranch, barbecue, and other categories. Our DTC channel covers sales directly to customers through our website and Traeger app, as well as certain country- and region-specific Traeger or distributor websites. Our consumables and accessories are available through the same channels as our grills. As part of Project Gravity, we are undertaking a broader channel optimization strategy that includes exiting the Traeger-operated DTC business. In connection with this shift, we have begun redirecting consumers from Traeger.com to our retail partners’ websites, aligning our distribution model more closely with our retail-focused strategy. However, we will continue to offer our MEATER smart thermometer accessories through the DTC channel, as this model remains well‑suited to the MEATER brand and consumer base.

Our revenue decreased by 0.3%7.4% to $559.5 million for the year ended December 31, 2024 as2025, compared to the year ended December 31, 2023, and was $604.1 million for the year ended December 31, 2024,2024. downWe fromrecorded $605.9a net loss of $115.2 million for the year ended December 31, 2023.2025, Wecompared recordedto a net loss of $34.0 million for the year ended December 31, 2024, compared to a net loss of $84.4 million for the year ended December 31, 2023.2024.

Continuing global economic uncertainty, terrorism and conflicts, political conditions, and fiscal challenges in the United States and abroad could result in adverse macroeconomic conditions, including inflation, slower growth, or recession. We believe there is significant uncertainty regarding how macroeconomic conditions, including as a result of tariffs, sustained high levels of inflation and higher interest rates, will impact consumer demand for durable goods. While some of these conditions have negatively impacted consumer discretionary spending behavior, we continue to see demand for our products. We have, however, seen instances of consumer sensitivity to higher price points. Therefore, we have utilized promotional activity and strategic pricing action on select grills, which has primarily attributed to unit volume growth in excess of 20%, partially offset by high double-digit reduction in average selling price due to mix shift to lower priced grills, higher mix of direct import sales, and strategic pricing action on select grills for the year ended December 31, 2024 as compared to the prior year period. As a result, revenue from our grills increased by $25.4 million to $324.7 million for the year ended December 31, 2024 as compared to the prior year period.

In response to these macroeconomic conditions, we have taken actions to identify and execute on cost savings initiatives, while simultaneously seeking to maintain product quality and reliability across the supply chain. For example, as part of Project Gravity, our previously announced multi-step strategic optimization plan, we have partneredconducted witha certain retailersreduction in direct import programs, executed long-term transportation contracts,force and implementedare operational efficiencies acrosscentralizing our MEATER business into our Salt Lake City infrastructure to reduce overhead and drive organizational efficiency. Additionally, we are pursuing streamlining and channel optimization initiatives including discontinuing the Costco roadshow program, redirecting Traeger.com consumers to our retail partners' websites as part of an exit from the Traeger direct-to-consumer business, transitioning to a distributor model in European markets that currently operate under a direct model, and pellet mill operations.consolidation. As a result, weWe have experiencedalso antaken increaseproactive in gross marginsteps to 42.3%mitigate fortariff-related therisks yearby endedincreasing Decemberproduct 31,prices 2024and fromnegotiating 36.9%cost forsavings thewith yearour ended December 31, 2023.manufacturers. We expect continued cost savings to improve operating results in the long term, but given the uncertainty of the macroeconomic environment in the near term, including as a result of tariffs, there can be no assurance regarding the outcome of our continuing efforts to help mitigate the effects of these conditions on our business. We will continue to monitor and, if necessary, take additional action to mitigate the effects of the macroeconomic environment on our business.

We derive substantially all of our revenue from the sale of grills, consumables, and accessories in North America, which includes the United States and Canada. We recognize revenue, net of product returns, for our grills, consumables, and accessories generally at the time of deliveryshipment to retailers through our retail channel and to customers through our DTC channel. Estimated product returns are recorded as a reduction of revenue at the time of recognition and are calculated based on product returns history, observable changes in return behavior, and expected returns based on sales volume and mix. We also have certain contractual programs that can give rise to elements of variable consideration, such as volume incentive rebates, with estimated amounts of credits recorded as a reduction to revenue.

Gross profit reflects revenue less cost of revenue. Cost of revenue consists of product costs, including the costs of products from our third-party manufacturers, costs of components, direct and indirect manufacturing costs across all products, packaging, inbound freight and duties, warehousing and fulfillment, warranty costs, product quality testing and inspection costs, excess and obsolete inventory write-downs, cloud-hosting costs for our WiFIRE connected products, depreciation of tooling and manufacturing equipment, amortization of internal use software and patented technology, and certain employee-related expenses.

We calculate gross margin as gross profit divided by revenue. Several factors can impact gross margin, particularly sales channel mix and product mix. For instance, gross margin on sales through our direct import program with certain retail partners is generally higher than that of our core retail channels. If our direct import program grows or its sales outpace those of our core retail channels, and if we are able to realize greater economies of scale and freight cost savings, we would expect a favorable impact to overall gross margin over time. Additionally, gross margin on sales of certain of our products is higher than for others. If revenue from sales of wood pellets increased as a percentage of total revenue, we would expect to see an increase in overall gross margin. These potentially favorable anticipated gross margin impacts may not be realized, or may be offset by other unfavorable gross margin factors. Additionally, any new products that we develop, or external factors beyond our control, such as duties and tariffs and costs of doing business in certain geographies, may also impact gross margin. For example, the recently imposedimplemented or announced and, in some cases, temporarily paused pending negotiations, tariffs on foreign goods, including a 20%baseline 10% tariff on product imports from almost all countries and individualized higher tariffs on importedother fromcountries, China, 25%50% tariff on steel and aluminum imports,imports from nations other than the United Kingdom, which remains at 25% currently, and Canada'sthe announcement of a retaliatory tariff on certain U.S. goods by other nations could impact our gross margin. For more information on risks to our business related to tariffs, please see Part I, Item 1A. “Risk Factors – United States trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business.”

We continue to expect our general and administrative expenses, including our research and development expenses and external legal and accounting expenses, to vary as a percentage of revenue from period to period. However, asAs we continue to manage our investments to support our growth and develop newinnovation and enhance existingour products,product offerings, we expect to leverage these expenses over time to achieve profitability and expand revenue opportunities. In addition, as a result of the cost-reduction actions implemented under Project Gravity, we growanticipate oura revenue.reduction in overall operating expenditures, including a decrease in general and administrative expenses.

Restructuring and Other Costs

Total other expense consists of interest expense and other income (expense),income, net. Interest expense includes interest and other fees associated with our Credit Facilities, Receivables Financing Agreement (each as defined below) as well as the amortization of amounts recorded within accumulated other comprehensive income prior to the dedesignation of the interest rate swap derivative contracts as a cash flow hedge. Other income (expense),income, net consists of any realized and unrealized gains (losses) from our interest rate swap derivative contract subsequent to the dedesignation of the swap contract from a cash flow hedge, the benefit recognized associated with the employee retention tax credit, foreign currency realized and unrealized gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the U.S. Dollar and the foreign currency contracts that we use to manage our exposure to foreign currency exchange rate risk related to our purchases and international operations.

Revenue decreased by $1.8$44.6 million, or 0.3%,7.4%, to $559.5 million for the year ended December 31, 2025 compared to $604.1 million for the year ended December 31, 2024 compared to $605.9 million for the year ended December 31, 2023.2024. This decrease was primarily driven primarily by lower sales from our grills and accessories, partially offset by higher sales from our grill and consumables.

Revenue from our consumables increased by $4.4$8.2 million, or 3.8%,6.9%, to $127.5 million for the year ended December 31, 2025 compared to $119.3 million for the year ended December 31, 2024 compared to $114.9 million for the year ended December 31, 2023.2024. The increase was primarily driven primarily by mida single-digithigh-single digit increase in wood pellet sales, partially offset by low single-digit reduction inand food consumable sales. WoodThe wood pellet sales increase waswere driven by midhigh-single single-digit increase in volume as a result of retail channel expansion, and low single-digitdigit increase in average selling price duefrom toour strategic wholesale pricing initiativesalignment with certain retailwholesale partners. FoodThe food consumables low single-digit reductionincrease in sales was primarily due to lower average selling price with shift to lower priced sauce offerings, partially offset by low double-digit increaseexpansion in volume as a result of retail channel expansion.distribution.

Revenue from our accessories decreased by $31.6$26.1 million, or 16.5%,16.3%, to $134.0 million for the year ended December 31, 2025 compared to $160.1 million for the year ended December 31, 2024 compared to $191.6 million for the year ended December 31, 2023.2024. This decrease was driven primarily by lower sales of MEATER smart thermometersthermometers, partially offset by low-double digit increases in average selling prices and highunit single-digit reductionvolumes in salesTraeger of Traeger-brandedbranded accessories.

Gross profit increaseddecreased by $31.9$36.1 million, or 14.3%,14.1%, to $219.3 million for the year ended December 31, 2025 compared to $255.5 million for the year ended December 31, 2024 compared to $223.6 million for the year ended December 31, 2023.2024. Gross profit as a percentage of revenue increaseddecreased to 39.2% for the year ended December 31, 2025 from 42.3% for the year ended December 31, 2024 from 36.9% for the year ended December 31, 2023.2024. The increasedecrease in gross margin was primarily driven primarily by favorabilitytariff fromrelated freight, logistics,costs and otherobsolescence adjustments, partially offset by supply chain costs, lower warranty costs associated with the recall of the Flatrock flat top grill in the comparable prior year period, as well as favorability due to changes in foreign exchange rates.efficiencies.

Sales and marketing expense increaseddecreased by $0.9$19.4 million, or 0.9%,17.7%, to $90.2 million for the year ended December 31, 2025 compared to $109.7 million for the year ended December 31, 2024 compared to $108.7 million for the year ended December 31, 2023.2024. As a percentage of revenue, sales and marketing expense increaseddecreased to 16.1% for the year ended December 31, 2025 from 18.2% for the year ended December 31, 2024 from 17.9% for the year ended December 31, 2023.2024. The increasedecrease in sales and marketing expense was driven primarily by an increase in employee costs, travel related expenses, partially offsetdriven by lower advertisingdemand expenses.creation spending, as well as reductions in employee-related costs and professional fees as a result of Project Gravity.

General and administrative expense decreased by $16.3$18.5 million, or 12.6%,16.3%, to $95.0 million for the year ended December 31, 2025 compared to $113.5 million for the year ended December 31, 2024 compared to $129.8 million for the year ended December 31, 2023.2024. As a percentage of revenue, general and administrative expense decreased to 17.0% for the year ended December 31, 2025 from 18.8% for the year ended December 31, 2024 from 21.4% for the year ended December 31, 2023.2024. The decrease in general and administrative expense was primarily driven primarily by a decreasereduction of $11.2 million in stock-based compensation expense offollowing $24.3a million,change primarilyin duecompensation structure from equity awards to thecash cancellationbonuses, oflower thelegal unearned CEO PSUs and IPO PSUs in the prior year comparable period,costs, as well as lossesdecreases onin theprofessional disposalfees and employee-related costs as a result of property,Project plant, and equipment in the comparable prior year period, partially offset by increased employee and occupancy costs.Gravity.

As of December 31, 2024,2025, we had cash and cash equivalents of $15.0$19.6 million, $125.0$112.5 million borrowing capacity under our Revolving Credit Facility (as defined below), and up to $30.0 million borrowing capacity under our Receivables Financing Agreement (as defined below). As of December 31, 2024,2025, we had no outstanding loan amounts under the Revolving Credit Facility and had drawn down $5.0 million under the Receivables Financing Agreement. As of December 31, 2024,2025, the total principal amount outstanding under our First Lien Term Loan Facility (as defined below) was $403.6$403.3 million. Based on our current business plan and revenue prospects, we continue to believe that our existing cash and cash equivalents, availability under our Revolving Credit Facility and Receivables Financing Agreement, and our anticipated cash flows from operating activities will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next twelve months from the date of this Annual Report on Form 10-K. However, our future working capital requirements will depend on many factors, including our rate of revenue growth and ability to achieve profitability, the timing and size of future acquisitions, and the timing of introductions of new products and investments in our supply chain and implementation of technologies.

Cash flows related to operating activities are dependent on net loss, non-cash adjustments to net loss, and changes in working capital. The decrease in cash provided by operating activities during the year ended December 31, 20242025 compared to the year ended December 31, 20232024 is primarily due to athe netcash payments related to Project Gravity initiatives and tariff related costs, along with the increase in working capital balances, partially offset by a decrease in net loss, adjusted for non-cash items, as compared to the prior year period. The net increase in workingnon-cash capitaladjustments, balancesand was primarily due to the increasechanges in inventorynet balancesworking in the current year period compared to the reduction of high inventory levels at the beginning of the prior year period as a result of strategic inventory management initiatives, as well as increases in accounts payable and accrued expenses in the current year period due to the seasonality and timing of our payments.capital.

The decrease in cash used in investing activities during the year ended December 31, 20242025 was primarily related to thelower priorexpenditures yearon improvementinternal‑use software, reduced purchases of tooling equipment, and lower costs forassociated ourwith newwood corporatepellet headquarters,production partially offset by proceeds received from the prior year sale of property, plant,machinery and equipment.

The decrease in cash used in financing activities during the year ended December 31, 20242025 was primarily drivenattributable byto the decrease inlower net borrowings onunder our RevolvingReceivables CreditFinancing FacilityAgreement andas paymentcompared into the prior yearyear. periodThese associatedfunds withwere theused acquisitionto datesupport fairgeneral valuecorporate ofand contingentworking consideration.capital purposes.

On June 29, 2021, we refinanced our existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (as amended from time to time, the “First Lien Credit Agreement”). The First Lien Credit Agreement provides for a senior secured term loan facility (the “First Lien Term Loan Facility”), and a revolving credit facility (the “Revolving Credit Facility” and, together with the First Lien Term Loan Facility, the “Credit Facilities”). We entered into an agency transfer agreement on April 30, 2024, pursuant to which Morgan Stanley Senior Funding, Inc. succeeded Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent for the Credit Facilities. Our obligations under the First Lien Credit Agreement are substantively unchanged.

The First Lien Credit Agreement providesoriginally provided for a $560.0 million First Lien Term Loan Facility (including a $50.0 million delayed draw term loan) and a $125.0 million Revolving Credit Facility.

The First Lien Term Loan Facility accrues interest at a rate per annum that considersincorporates both fixed and floating components. The fixed component ranges from 3.00% to 3.25% per annum based on our Public Debt Rating (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR (as defined in the First Lien Credit Agreement) for the relevant interest period. The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. As of December 31, 2024,2025, the total principal amount outstanding on the First Lien Term Loan Facility was $403.6$403.3 million.

Loans under the Revolving Credit Facility accrue interest at a rate per annum that considers both fixed and floating components. The fixed component ranges from 2.75% to 3.25% per annum based on our most recently determined First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). The floating component is based on the Term SOFR for the relevant interest period. The Revolving Credit Facility also has a variable commitment fee, which is based on our most recently determined First Lien Net Leverage Ratio and ranges from 0.25% to 0.50% per annum on undrawn amounts. Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility. The Revolving Credit Facility expires on June 29, 2026 and no principal payments are due before such date. As of December 31, 2024, we had no outstanding loan amounts under the Revolving Credit Facility.

Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, TPC Traeger Blocker, LP, Traeger Pellet Grills Holdings LLC,LLC and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages,mortgages and the equity interest of each of these respective entities. The assets of Traeger SPE LLC (the “SPE”) ,LLC, substantively consisting of our accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities. There are no guarantees from parent entities above Traeger, Inc.

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit our ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments and engage in certain affiliate transactions. InPursuant addition,to whenthe Amendment, we exceedhave agreed to certain additional negative covenant restrictions for the Covenantbenefit Trigger Amount (as defined inof the Firstlenders Lienunder the Extended Revolving Facility. All lenders under the Revolving Credit Agreement), weFacility are subjectthe tobeneficiaries of a financial covenant whereby we are required to maintain a Maximum First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) nottest to exceedof 6.20 to 1.00.1.00, which is only applicable if our utilization of the Revolving Credit Facility in excess of a threshold set forth in the First Lien Credit Agreement. The lenders under the Extended Revolving Facility are the beneficiaries of a 6.20 to 1.00 First Lien Net Leverage Ratio covenant with a reduced trigger threshold for testing, as set forth in the Amendment, and a minimum liquidity covenant requiring the maintenance of liquidity of at least $15.0 million, which is tested monthly. As of December 31, 2024,2025, we were in compliance with the covenants under the Credit Facilities.

On November 2, 2020, we entered into a receivables financing agreement,agreement (as amended, (the “Receivables Financing Agreement”). Through the Receivables Financing Agreement, we participate in a trade receivables securitization program, administered on our behalf by MUFG Bank Ltd. Through this arrangement, we have secured short-term capital requirements financingLtd., using outstanding accounts receivables balances as collateral, which have been contributed by us to aour wholly owned subsidiary, Traeger SPE LLC (the SPE."SPE"). While we provide operational services to the SPE, the receivables are owned by the SPE once contributed to it by us. We are the primary beneficiary and hold all equity interests of the SPE, thus we consolidate the SPE without any significant judgments.

OnThe Novembermaximum 8,borrowing 2023,capacity we entered into Amendment No. 9 tounder the Receivables Financing Agreement inis orderbetween $30.0 million and $75.0 million. The Receivables Financing Agreement allows for seasonal adjustments to extend the expiration of the facility by one year to June 27, 2025. As part of the amendment, the maximum borrowing capacity wasand decreasedfurther fromadjustments $100.0can millionbe made up to $75.0two milliontimes and allows for seasonal adjustments,annually at our discretion (with consent of the lenders under the Receivables Financing Agreement) to change the capacity anywhere between $30.0 million and $75.0 million.. We are required to pay fixed interest on outstanding cash advances of 2.5%, a floating interest based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%. AmendmentThe No.Receivables 9Financing Agreement also implementedincludes a new liquidity threshold atof $42.5 million ofand liquidity. Ifif our liquidity falls below this threshold, it may result in an increase in the required level of reserves, which would result in a reduction of ourthe borrowing base under the Receivables Financing Agreement during such a liquidity shortfall.

On August 6, 2024, we entered into Amendment No. 10 to the Receivables Financing Agreement in order to extend the expiration of the facility to August 6, 2027. As part of the amendment, we wereare required to pay an upfront fee for the facility, along with a fixed interest rate on outstanding cash advances of approximately 2.6% and a floating interest rate based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement). We were in compliance with the covenants under the Receivables Financing Agreement as of December 31, 2024.2025.

As of December 31, 2024,2025, we had drawnno downoutstanding $5.0loan millionamounts under thisthe facilityReceivables forFinancing general corporate and working capital purposes.Agreement.

As of December 31, 2024,2025, significantwe contractualhad obligations related to debt were $403.6$403.3 million of principal borrowings and $111.4$72.8 million of relatedprojected interest,interest whichassociated with its outstanding debt obligations. Any remaining unpaid principal borrowingsand any accrued or unpaid interest will become due on the maturity date of June 29, 2028. ProjectedThe projected interest costs on variable rate instruments are based on market rates as of December 31, 2024.2025. See Note 12 – Notes Payable to the accompanying consolidated financial statements for additional information regarding our Credit Facilities.

Valuation of Goodwill and Acquired Intangible Assets

There have been significant changes and proposed changes in recent years to U.S. trade policies, tariffs, and treaties affecting imports. For example, the U.S. has announced and implemented additional tariffs on certain imports from China under multiple authorities. On February 20, 2026, the Supreme Court ruled that the President cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs, invalidating certain tariffs that had been imposed under IEEPA. In response to this ruling, the President signed a proclamation imposing a new 10% global tariff under Section 122 of the Trade Act of 1974, effective February 24, 2026. Section 122 tariffs are subject to a 150-day statutory limit (currentlyand setexpired toby expireoperation of law on July 24, 2026)2026, unlessabsent extendedextension by Congress. The legality of the Section 122 tariffs is itself the subject of ongoing litigation; on March 5, 2026, twenty-four states filed a lawsuit in the U.S. Court of International Trade challenging the President's authority to impose global tariffs under Section 122, and a separate legal challenge was filed by impacted businesses on March 9, 2026. On May 7, 2026, the U.S. Court of International Trade ruled that the Section 122 tariffs are unlawful. The court's injunction currently appliesapplied only to the specific plaintiffs, and the tariffs remainremained in effect for all other importers while the administration pursuespursued an appeal.appeal until they expired by operation of law on July 24, 2026. In addition, the Office of the U.S. Trade Representative has initiated new Section 301 investigations targeting structural excess capacity in manufacturing sectors and forced labor practices. TheseThe forced labor investigations resulted in additional Section 301 tariffs of 10% or 12.5% on imports from 60 economies, subject to certain product exemptions, effective July 24, 2026, and the structural excess capacity investigations could result in additional country-specific tariffs similar in scope to those previously imposed under IEEPA. Section 301 tariffs on Chinese goods also remain in effect.

The U.S. also continues to maintain tariffs on steelsteel, aluminum and aluminum,copper, as well as increased tariffs and import restrictions on products imported from various other countries. These tariffs on aluminumaluminum, steel and steelcopper include derivative tariffs that have impacted and will continue to impact a broad range of downstream products, which have and may continue to adversely impact our business.

On March 4, 2026, the U.S. Court of International Trade ruledordered thatU.S. allCustoms importersand whoBorder paidProtection to liquidate or reliquidate affected entries without regard to IEEPA tariffs are entitled to refunds.duties. U.S. Customs and Border Protection launched Phase 1 of its CustomsConsolidated AutomatedAdministration and Processing forof Entries (CAPE) refund system on April 20, 2026, with refunds on accepted CAPE Declarations generally expected to be processed within 60 to 90 days. All requests will be reviewed by U.S. Customs and Border Protection to determine validity prior to the issuance of refunds, and the administrationgovernment has indicatedappealed itthe mayU.S. seekCourt toof reduceInternational totalTrade refund liability using alternative authorities.order. Accordingly, the timing and ultimate amount of any refunds we receive remain uncertain.

In response to the tariffs announced by the U.S., China and other countries have imposed or proposed additional tariffs on certain exports from the United States. There is substantial uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs. This uncertainty has been heightened by the February 2026 Supreme Court ruling invalidating IEEPA tariffs and the May 2026 U.S. Court of International Trade ruling striking down the Section 122 tariffs, which together have resulted in changes to the tariff structure and cast doubt on the administration's current legal authority to maintain broad-based global tariffs. The administration has stated that combining Section 122, Section 232, and Section 301 tariffs will result in virtually unchanged tariff revenue in 2026, signaling its intent to maintain similar tariff levels through alternative legal authorities. However, the Section 122 tariffs areexpired setby tooperation expireof law on July 24, 20262026, (unlessabsent extendedextension by Congress),Congress, and thewhile newUSTR has finalized forced-labor-related Section 301 tariffs effective July 24, 2026, its structural excess capacity Section 301 investigations mayremain not conclude in time to replace them,pending, creating additional uncertainty as to the tariff rates that will apply to our imports in the second half of 2026 and beyond. We cannot predict whether, and to what extent, U.S. trade policies will change in the future. A significant proportion of our products, including our grills, are manufactured in China, Vietnam, Taiwan, and other regions outside of the United States. Approximately 80% of our grills are manufactured in China. Accordingly, such U.S. policy changes have made it and may continue to make it difficult or more expensive for us to obtain certain downstream products manufactured outside the United States, which could affect our revenue and profitability. Any of these factors could depress economic activity and restrict our access to suppliers or customers, and could have a material adverse effect on our business, financial condition, and results of operations and affect our strategy in China, Vietnam, Taiwan, and elsewhere around the world.

The following discussion and analysis of financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Annual Report on Form 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. As a result of many important factors, such as those set forth in Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q, and Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements. For convenience of presentation, some of the numbers have been rounded in the text below.

Traeger is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue. Our grills are versatile and easy to use, empowering cooks of all skill sets to create delicious meals with a wood-fired flavor that cannot be replicated with gas, charcoal, or electric grills. Grills are at the core of our platform and are complemented by Traeger wood pellets, rubs, sauces,sauces and accessories.

Our revenue is primarily generated through the sale of our wood pellet grills, consumables and accessories. We currently offer nineten series of grills – Westwood, Woodridge, Ironwood, Timberline, Pro (with and without WiFIRE), Flatrock, and FlatrockIrontop – as well as a selection of smaller, portable grills within our Portable Series and a special Club Lineup through targeted channels. Our grills are available in a number of different sizes and can be upgraded through a variety of accessories. A growing number of our grills feature WiFIRE technology, which allows users to monitor and adjust their grills remotely using our Traeger app. Our consumables include our wood pellets, which are made from natural, virgin hardwood and are available in a variety of flavors, as well as rubs and sauces. Our accessories include MEATER smart thermometers, P.A.L. Pop-And-Lock accessory rails, grill covers, liners, tools, apparel and other ancillary items.

As part of Project Gravity, we largely exited our Traeger-operated DTC business by redirecting consumers from Traeger.com to our retail partners’ websites, aligning our distribution model with our retail-focused strategy. We now sell our grills, consumables and accessories primarily through retail channels, including brick-and-mortar retailers, e-commerce platforms, and multichannel retailers, who, in turn, sell our grills to their end customers. Our retailers include Ace Hardware, Amazon, Costco, The Home Depot, Walmart and Walmart,Lowes, among others, as well as a significant number of independent retailers that cater to local communities and specific categories, such as hardware, camping, outdoor, farm, ranch, barbecue and other categories. We continue to offer our MEATER smart thermometers accessories through both retail and DTC channels, as this model remains well‑suited to the MEATER brand and its consumer base.

Over the last several years, we have made significant investments in our supply chain and manufacturing operations. Our supply chain includes third party manufacturers for our grills and accessories and pellet production facilities for our wood pellets that we own or lease. We work closely with our manufacturers to evolve on design, manufacturing process and product quality. Our grills are currently manufactured in China and Vietnam, our wood pellets are produced at facilities located in New York, Oregon, Georgia, Virginia, and Texas, and our MEATER smart thermometer accessories are currently manufactured in Taiwan. We have entered into manufacturing agreements covering the supply of substantially all of our grills and accessories, pursuant to which we make purchases on a purchase order basis. We rely on several third-party suppliers for the components used in our grills, including integrated circuits, processors, and system on chips.

RevenueOur revenue decreased by 34.3%17.4% and 25.8% to $94.1$120.2 million and $214.2 million for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to $143.3$145.5 million and $288.8 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively. We recorded a net incomeloss of $2.9$8.6 million and $5.6 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to a net loss of $0.8$7.4 million and $8.2 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

We believe that our financial condition and results of operations have been, and will continue to be, affected by a number of factors that present significant opportunities for us but also pose risks and challenges, including those belowbelow, Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q, and in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K.

Continuing global economic uncertainty, terrorism and conflicts, such as the war in the Middle East, political conditions, and fiscal challenges in the United States and abroad could result in adverse macroeconomic conditions, including inflation, slower growth, or recession. We believe there is significant uncertainty regarding how macroeconomic conditions, including as a result of tariffs, sustained high levels of inflation and higher interest rates, will impact consumer demand for durable goods. While some of these conditions have negatively impacted consumer discretionary spending behavior, we continue to see demand for our products.

Since the beginning of 2025, President Trump implemented and/or reinstated tariffs and import restrictions on products from various countries. In early 2025, the U.S. imposed tariffs on certain Chinese goods and "“reciprocal"” tariffs under the International Emergency Economic Powers Act (“IEEPA”) that escalated to as high as 125%. The U.S. also increased Section 232 tariffs on steel and aluminum to 50% in June 2025 and significantly expanded coverage to derivative products in August 2025. On April 2, 2026, President Trump signed a new Section 232 proclamationsproclamation restructuring the metals tariffs so that the 50% rate applies to the full customs value of certain imported steel, aluminum, and copper products (rather than only the metal content), with certain derivative products subject to a 25% tariff on the full customs value.value and certain other derivative products subject to lower or no Section 232 tariffs. In November 2025, the U.S. and China reached an agreement that reduced certain tariffs on Chinese goods to 10%, with the agreement extended through November 2026. However, on February 20, 2026, the Supreme Court ruled that the President cannot use IEEPA to impose tariffs, invalidating certain tariffs that had been imposed under IEEPA. In response to this ruling, President Trump signed a proclamation imposing a new 10% global tariff under Section 122 of the Trade Act of 1974, effective February 24, 2026. Section 122 tariffs are subject to a 150-day statutory limit unlessand extendedexpired by Congressoperation andof are set to expirelaw on July 24, 2026.2026, absent extension by Congress. Multiple legal challenges to the Section 122 tariffs have been filed, and on May 7, 2026, the U.S. Court of International Trade ruled that the Section 122 tariffs are unlawful; however, the court's injunction appliesapplied only to the named plaintiffs, and the tariffs remainremained in effect for all other importers pending appeal.appeal until they expired by operation of law on July 24, 2026. On March 11,11 and March 12, 2026, the Office of the U.S. Trade Representative formally launched new Section 301 investigations into trading partners' unfair practices, which could result in additional tariffs. On July 23, 2026, the Office of the U.S. Trade Representative announced final action in the forced labor Section 301 investigations, imposing additional tariffs of 10% or 12.5% on imports from 60 economies, subject to certain product exemptions, effective July 24, 2026. The structural excess capacity Section 301 investigations remain pending. The administration has stated that combining Section 122, Section 232, and Section 301 tariffs will result in virtually unchanged tariff revenue in 2026, signaling its intent to maintain similar tariff levels through alternative legal authorities. However, the May 7 ruling striking down the Section 122 tariffs (if upheld on appeal) and, the July 24, 2026 statutory expirationexpiration, and the pending structural excess capacity Section 301 investigations create uncertainty as to whether the administration can maintain current tariff levels in the second half of 2026. On March 4, 2026, the U.S. Court of International Trade ruledordered thatU.S. allCustoms importersto wholiquidate paidor reliquidate affected entries without regard to IEEPA tariffs are entitled to refunds.duties. U.S. Customs and Border Protection (“U.S. Customs”) launched Phase 1 of its CustomsConsolidated AutomatedAdministration and Processing forof Entries refund system on April 20, 2026, with refunds on accepted CAPE Declarations expected to be processed within 60 to 90 days. All requests will be reviewed by U.S. Customs to determine validity prior to the issuance of refunds and the administrationgovernment has indicated it may seek to reduce total refund liability using alternative authorities. We have submitted refund requests throughappealed the U.S. Customs portal for all eligible IEEPA tariffs paid, and the majorityCourt of ourInternational requests have been accepted by U.S. Customs. As a result, the Company recognized a loss recovery of $15.6 million tariffTrade refund within prepaid expenses and other current assets as of March 31, 2026. For the three months ended March 31, 2026, $12.4 million of this tariff refund was recorded within cost of revenue and the remaining $3.2 million was included within inventory. The ultimate timing of cash receipt remains uncertain and subject to further legal and regulatory developments.order.

These developments, as well as any further changes in tariff rates, product coverage, or non-tariff trade barriers have disrupted and have the potential to further disrupt existing supply chains and impose additional costs on businesses in our industry. The resulting environment of tariffs and trade restrictions has required us to increase prices for our products in the U.S., which could lead to decreased consumer demand for our products and would negatively impact our results of operations, cash flows, and financial condition. For more information on risks to our business related to tariffs, please see Part II, Item 1A. “Risk Factors – United States trade policies, tariffs, antidumping and countervailing duty proceedings, and related uncertainties may have a material adverse effect on our business” included in of this Quarterly Report on Form 10-Q.

Although we experience demand for our products throughout the year, we believe there can be certain seasonal fluctuations in our revenue. We have typically experienced moderately higher levels of sales of our grills in the first and second quarters of the year as our retailers purchase inventory in advance of warmer weather, when demand for outdoor cooking products is the highest across our key markets. Higher sales also coincide with social events and national holidays, which occur during the same warm weather timeframe. Additionally, we have typically experienced higher sales volume of our accessories during the fourth quarter of the year, due in part to seasonal holiday demand.

We calculate gross margin as gross profit divided by revenue. Gross margin on sales through our direct import program with certain retail partners is generally higher than that of our core retail channels. If our direct import program grows or its sales outpace those of our core retail channels, and if we are able to realize greater economies of scale and freight cost savings, we would expect a favorable impact to overall gross margin over time. Additionally, gross margin onfor sales of certain of our products is higher than for others. If revenue from sales of wood pellets increased as a percentage of total revenue, we would expect to see an increase in overall gross margin. These potentially favorable anticipated gross margin impacts may not be realized, or may be offset by other unfavorable gross margin factors. Additionally, any new products that we develop, or external factors beyond our control, such as duties and tariffs and costs of doing business in certain geographies, may also impact gross margin. For example, the evolving U.S. tariff regime—including the July 24, 2026 expiration of the temporary 10% global tariff currently imposed under Section 122 of the Trade Act of 1974 followingabsent thecongressional U.S.extension Supremeand Court’srelated Februarylitigation 2026over rulingamounts invalidatingcollected thewhile priorit IEEPAwas reciprocalin tariffs, theeffect, increased and modified Section 232 tariffs on steel, aluminum, and copper and their derivative products, the existing Section 301 tariffs on Chinese goods, andnew any newforced-labor-related Section 301 tariffs thaton maycovered resultimports from 60 economies effective July 24, 2026, and potential additional Section 301 tariffs arising from the still-developing excess-capacity investigations launched in March 2026—could impact our gross margin, as could any retaliatory tariffs or other trade measures imposed on U.S. goods by other nations. For more information on risks to our business related to tariffs, please see Part II, Item 1A. “United States trade policies, tariffs, antidumping and countervailing duty proceedings, and related uncertainties may have a material adverse effect on our business” included in this Quarterly Report on Form 10-Q.

In addition, general and administrative expense includes research and development expenses incurred to develop and improve our future products and processes, which primarily consist of employee and facilities-related expenses, including salaries, benefits and stock-based compensation expense, as well as fees for professional services, costs related to prototype tooling and materials, and software platform costs. Research and development expense was $2.3$3.2 million and $2.9$3.4 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $5.5 million and $6.3 million for the six months ended June 30, 2026 and 2025, respectively.

Amortization of intangible assets primarily consists of amortization of identified finite-lived customer relationships, distributor relationships, non-compete arrangements and trademark assets that were allocated a considerable portion of the purchase price from the corporate reorganization and acquisition of our businessCompany in 2017, as well as the July 2021 acquisition of Apption Labs Limited and its subsidiaries (collectively, “Apption Labs”) pursuant to a share purchase agreement (the “Share Purchase Agreement”).agreement. These costs are amortized on a straight-line basis over 5 to 25 year useful lives and, as a result, amortization expense on these assets is expected to remain stable over the coming years. Future business acquisitions may result in incremental amortization of intangible assets acquired in any such transactions.

Restructuring and Other Costs

As a result of these initiatives, we have recorded $3.2 million of expenses,expenses primarily related to consulting fees and severance and other personnel costs, within restructuring and other costs in the accompanying consolidated statements of operations and comprehensive loss for the three and six months ended MarchJune 31,30, 2026.2026 and 2025.

Total Other Income (Expense)

Total other income (expense) consists of interest expense and other income, net. Interest expense includes interest and other fees associated with our Credit Facilities andFacilities, Receivables Financing Agreement (each as defined below), as well as interest income in connection with the employee retention tax credit and the amortization of amounts recorded within accumulated other comprehensive income (loss) prior to the dedesignation of the interest rate swap derivative contractscontract as a cash flow hedge. Other income, net also consists of the benefit recognized associated with the employee retention tax credit, any unrealized gains (losses) from our interest rate swap derivative contract subsequent to the dedesignation of the swap contract from a cash flow hedge, foreign currency realized and unrealized gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the U.S. Dollar and from the foreign currency contracts that we use to manage our exposure to foreign currency exchange rate risk related to our purchases and international operations.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Revenue decreased by $49.2$25.3 million, or 34.3%,17.4%, to $94.1$120.2 million for the three months ended MarchJune 31,30, 2026 compared to $143.3$145.5 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by lower sales offrom grills, accessories, and consumables.

Revenue from our grills decreased by $39.3$12.6 million, or 45.4%,17.0%, to $47.4$61.6 million for the three months ended MarchJune 31,30, 2026 compared to $86.7$74.2 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by unit volumea reduction in average selling price in excess of 30%20%, andpartially offset by a high-doublehigh-single digit decreaseincrease in unit volume. Lower average selling price.price Thewas reductiondue to a shift in unitproduct volumemix wastoward drivenlower-priced bygrills, reflecting current year launches of lower-priced offerings compared to higher-priced launches in the prior year launch of the Woodridge series of grills and retail orders placed in advance of anticipated tariff increases,period, as well as channel and product line optimization actions taken under Project Gravity. The declineincrease in averageunit selling pricevolume was primarily duedriven toby mixcurrent shiftyear toproduct lower priced grills.launches.

Revenue from our consumables decreased by $4.2$3.6 million, or 13.7%,9.9%, to $26.1$32.8 million for the three months ended MarchJune 31,30, 2026 compared to $30.3$36.4 million for the three months ended MarchJune 31,30, 2025. The decrease was driven by a low-doublehigh-single digit declinedecrease in wood pellet sales and a declinereduction in food consumables sales in excess of 20%. The declinedecrease in wood pellet sales was primarily driven by a low-doublehigh-single digit reduction in unit volume due to seasonal ordering shifts. The decrease in average selling price due to channel mix shifts and timing of trade spend, partially offset by a mid-single digit unit volume increase driven by channel expansion. The decline in food consumablesconsumable sales was primarily drivenattributable by an average selling price decrease in excess of 20% fromto lower priced rub offerings and low-single digit decreases in unit volumevolume, drivenreflecting byprior seasonalyear orderingchannel shifts.expansion.

Revenue from our accessories decreased by $5.7$9.1 million, or 21.8%,26.2%, to $20.6$25.8 million for the three months ended MarchJune 31,30, 2026 compared to $26.3$34.9 million for the three months ended MarchJune 31,30, 2025. The decrease was driven primarily by alower reductionsales inof MEATER smart thermometers sales due to continued competitive pressure.pressure Theand declinea decrease in Traeger branded accessories wasaccessories, primarily driven by a low-doublemid-double digit decrease in averageunit selling price,volumes, partially offset by a mid-singlehigh-single digit increase in unitaverage volumes.selling price.

Gross profit decreased by $16.4$9.6 million, or 27.7%,16.8%, to $43.0$47.4 million for the three months ended MarchJune 31,30, 2026 compared to $59.5$57.0 million for the three months ended MarchJune 31,30, 2025. Gross margin increased to 45.7%39.5% for the three months ended MarchJune 31,30, 2026 from 41.5%39.2% for the three months ended MarchJune 31,30, 2025. The increase in gross margin was driven primarily by the benefit from the IEEPA tariff refund, partially offset by timing of trade spend, lowerand higher mix of direct import sales, tariff-relatedpartially costs,offset andby fixedproduct costmix deleverage.to lower priced offering.

Sales and marketing expense decreased by $9.6$7.7 million, or 43.1%,31.1%, to $12.6$17.1 million for the three months ended MarchJune 31,30, 2026 compared to $22.2$24.8 million for the three months ended MarchJune 31,30, 2025. As a percentage of revenue, sales and marketing expense decreased slightly to 13.4%14.2% for the three months ended MarchJune 31,30, 2026 from 15.5%17.0% for the three months ended MarchJune 31,30, 2025. The decrease in sales and marketing expense was primarily driven by lower employee-related costs, including travelcosts and entertainment, as well as lowerreduced demand creation costs and professional service fees, in each casespend, reflecting cost reduction actions associated with Project Gravity.

General and administrative expense decreased by $5.6$4.2 million, or 22.4%,16.3%, to $19.4$21.8 million for the three months ended MarchJune 31,30, 2026 compared to $25.0$26.0 million for the three months ended MarchJune 31,30, 2025. As a percentage of revenue, general and administrative expense increased slightly to 20.6%18.1% for the three months ended MarchJune 31,30, 2026 from 17.5%17.9% for the three months ended MarchJune 31,30, 2025. The decrease in general and administrative expense was primarily driven by a decrease in stock-based compensation expense of $3.4 million, as well as lower employee-related costs, includingreflecting travelcost reduction actions associated with Project Gravity, and entertainment,professional asservice a result of Project Gravity.fees.

Restructuring and other costs weredecreased $3.2by $2.0 million, or 58.1%, to $1.5 million for the three months ended MarchJune 31,30, 2026 withcompared noto such$3.5 costsmillion incurred duringfor the three months ended MarchJune 31,30, 2025. TheseThe decrease in restructuring and other costs are related to Project Gravity whichwas primarily consistdriven ofby consulting fees associated with execution of initiatives under this project, as well aslower severance and other personnel costs.costs, as well as reduced consulting fees.

Total Other Income (Expense)

Total other incomeexpense increased by $9.5$6.1 million, or 163.5%,362.3%, to $3.7$7.8 million for the three months ended MarchJune 31,30, 2026 compared to total other expense of $5.8$1.7 million for the three months ended MarchJune 31,30, 2025. This changeincrease was primarily duerelated to $11.6 million of totalthe benefit recognized fromin the comparable prior year period associated with the employee retention tax credit, partially offset by unfavorable impacts from foreign currency exchange rates andin foreignthe currencycurrent contracts,period, andas well as lower realized gains on our interest rate swaps, which matured on February 28, 2026.

Historically, our cash requirements have principally been for working capital purposes, capital expenditures, and debt service payments. We have funded our operations through cash flows from operating activities, cash on hand, and borrowings under our credit facilities and receivables financing agreement. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $33.7$59.7 million, $112.5$82.5 million borrowing capacity under our Revolving Credit Facility (as defined below) and $38.2$45.3 million borrowing capacity under our Receivables Financing Agreement (as defined below). As of MarchJune 31,30, 2026, we had no outstanding loan amounts under the Revolving Credit Facility or the Receivables Financing Agreement. As of MarchJune 31,30, 2026, the total principal amount outstanding under our First Lien Term Loan Facility (as defined below) was $403.3$403.2 million. Based on our current business plan and revenue prospects, we continue to believe that our existing cash and cash equivalents, availability under our Revolving Credit Facility and Receivables Financing Agreement, and our anticipated cash flows from operating activities will be sufficient to meet our working capital and operating resource expenditure requirements for at least the next twelve months from the date of this Quarterly Report on Form 10-Q. However, our future working capital requirements will depend on many factors, including our rate of revenue growth and ability to achieve profitability, the timing and size of future acquisitions, and the timing of introductions of new products and investments in our supply chain and implementation of technologies.

Cash flows related to operating activities are dependent on net income (loss),loss, non-cash adjustments to net income (loss),loss, and changes in working capital. The increase in cash provided by operating activities during the threesix months ended MarchJune 31,30, 2026 compared to cash used in operating activities during the threesix months ended MarchJune 31,30, 2025 iswas primarily due to changesthe receipts of the IEEPA tariff refunds of $16.0 million and the receipts of employee retention tax credits of $11.6 million, which drove a decrease in net loss, as well as the net cash provided by working capital, partially offset by an increase in net income, adjusted for non-cash items, as compared to the prior year period. The current period change in working capital was primarily driven by a decrease in accounts receivable, reflecting the collection of prior period balances against a lower volume of new sales activity following the Company's exit from direct-to-consumer business and the Costco roadshow programs under Project Gravity. Working capital benefited from decreases in accrued expenses, reflecting lower operating cost levels resulting from cost savings actions taken under Project Gravity, and a decrease in inventories, reflecting deliberate rightsizing of inventory levels in support of the Company's strategic realignment under Project Gravity,Gravity. partiallyWorking offsetcapital byalso anbenefited increasefrom a decrease in prepaidaccounts receivable, reflecting the collection of prior period balances against a lower volume of new sales activity following the Company's exit from the direct-to-consumer business and other current assets related to the IEEPACostco tariffroadshow refunds.programs under Project Gravity.

The increasedecrease in cash used in investing activities during the threesix months ended MarchJune 31,30, 2026 compared to cash used in investing activities during the six months ended June 30, 2025 was primarily related to the increaseddecreased purchasing of fixturestooling as compared to the prior year period.equipment.

The change inNet cash flowused fromin financing activities during the threesix months ended MarchJune 31,30, 2026 compared to net cash provided by financing activities during the six months ended June 30, 2025 was primarily driven by our improved liquidity position resulting from disciplined cost management actions taken under Project Gravity, which eliminated the needabsence toof borrowborrowings under the Receivables Financing Agreement (as defined below), in the current period, compared to net borrowings of $20.0$4.0 million in the prior year period for general corporate and working capital purposes.

On June 29, 2021, wethe Company refinanced ourits existing credit facilities and entered into a newthe First Lien Credit Agreement. The First Lien Credit Agreement providesoriginally provided for a $560.0 million senior secured term loan facility (the “First Lien Term Loan Facility”), which originally includedincluding a $50.0 million delayed draw term loan, and a $125.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the First Lien Term Loan Facility, the “Credit Facilities”).

The First Lien Term Loan Facility accrues interest at Term SOFR plus a fixed spread ranging from 3.00% to 3.25% per annum based on our Public Debt Rating (as defined in the First Lien Credit Agreement). The First Lien Term Loan Facility requires quarterly principal payments from December 2021 through June 2028, with any remaining unpaid principal and accrued interest due on the maturity date of June 29, 2028. As of MarchJune 31,30, 2026 and December 31, 2025, the total principal amount outstanding on the First Lien Term Loan Facility was $403.2 million and $403.3 million.million, respectively.

On August 5, 2025, we amended the First Lien Credit Agreement (the “Amendment”) to reduce the overall size of the Revolving Credit Facility from $125.0 million to $112.5 million and split it into two tranches: a $30.0 million tranche expiringwhich expired on June 29, 2026 and a $82.5 million tranche expiring on December 29, 2027 (the “Extended Revolving Facility”). Loans under the Extended Revolving Credit Facility accrue interest at Term SOFR plus a fixed spread ranging from 2.75% to 3.25% per annum, with a commitment fee of 0.25% to 0.50% per annum on undrawn amounts, each based on the Company'sour First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement). Letters of credit may be issued under the Extended Revolving Credit Facility in an amount not to exceed $11.4 million which, when issued, lower the overall borrowing capacity of the facility. No payment of outstanding principal amounts under either tranche is due prior to the respective expiration date of each tranche. As of MarchJune 31,30, 2026 and December 31, 2025, the Companywe had no outstanding loan amounts under the Extended Revolving Credit Facility.

The First Lien Credit Agreement contains certain affirmative and negative covenants that limit our ability to, among other things, incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments and engage in certain affiliate transactions. All lenders under the Revolving Credit Facility are the beneficiaries of a First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) test of 6.20 to 1.00, which is only applicable if the Company’sour utilization of the Revolving Credit Facility in excess of a threshold set forth in the First Lien Credit Agreement. Pursuant to the Amendment, we agreed to certain additional negative covenant restrictions for the benefit of the lenders under the Extended Revolving Facility. The lenders under the Extended Revolving Facility are the beneficiaries of a 6.20 to 1.00 First Lien Net Leverage Ratio covenant with a lower trigger threshold for testing, as set forth in the Amendment, and a minimum liquidity covenant requiring the maintenance of liquidity of at least $15.0 million, which is tested monthly. As of MarchJune 31,30, 2026, we were in compliance with the covenants under the Credit Facilities.

On August 6, 2024, we entered into Amendment No. 10 to the Receivables Financing Agreement in order to extend the expiration of the facility to August 6, 2027. As part of the amendment, we were required to pay an upfront fee for the facility, along with a fixed interest rate on outstanding cash advances of approximately 2.6% and a floating interest rate based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement). We were in compliance with the covenants under the Receivables Financing Agreement as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026 and December 31, 2025, wethe Company had no outstanding loan amounts under the Receivables Financing Agreement.Agreement