Polaris Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter sales reached $2,042.6 million, an 11% increase year-over-year compared to $1,841.6 million in Q3 2025.
• Reported diluted earnings per share (EPS) were $0.66, compared to a net loss of $0.28 per share in Q3 2025.
• Adjusted diluted EPS was $1.08, representing a 163% increase year-over-year compared to $0.41 in Q3 2025.
• Gross profit margin was 21.2%, an increase of 52 basis points from 20.6% in Q3 2025.
• Adjusted gross profit margin was 21.2%, up 53 basis points year-over-year.
• Net income attributable to Polaris was $38.4 million, compared to a net loss of $15.8 million in Q3 2025.
• Adjusted net income attributable to Polaris was $63.1 million, a 171% increase from $23.3 million in Q3 2025.
• Adjusted EBITDA was $180.0 million, with an adjusted EBITDA margin of 8.8%, up 118 basis points from 7.6% in Q3 2025.
• Total operating expenses were $375.5 million, a 1% decrease from $380 million in Q3 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $291.8 million, down from $562.3 million in the same period in 2025.
• Adjusted free cash flow for the nine months ended September 30, 2026, was $219.3 million, compared to $485.5 million in 2025.

Guidance and Future Outlook:

• The Company raised full-year 2026 adjusted sales guidance to a range of $7.55 billion to $7.60 billion, up from the prior range of $7.30 billion to $7.50 billion.
• The Company raised full-year 2026 adjusted EPS guidance to a range of $3.50 to $3.60, up from the prior range of $3.00 to $3.10.
• Approximately $1.09 of the raised 2026 adjusted EPS guidance is attributed to tariff refunds recorded in the second and third quarters of 2026.
• Management indicated this is the third time the full-year guidance has been raised in 2026.

Business Segments and Product Lines:

• Polaris Powersports: Sales were $1,822.1 million, an 18% increase year-over-year. Gross profit margin was 22.3%, up 5 basis points from 22.2% in Q3 2025. Sales growth was driven by higher ORV, commercial, and snowmobile shipment volumes and positive net price. PG&A sales increased 19%. North America ORV unit retail sales were up low-single digits, while the estimated North America industry ORV unit retail sales were flat.
• Marine: Sales were $133.4 million, a 29% increase year-over-year. Gross profit margin was 11.9%, up 43 basis points from 11.4% in Q3 2025. Growth was driven by favorable product mix and higher pontoon shipments.
• Aixam & Goupil: Sales were $68.0 million, a 12% decrease year-over-year. Gross profit margin was 27.5%, down 47 basis points from 28.0% in Q3 2025. Sales declined due to lower Aixam shipments, though PG&A sales increased 3%. Margin compression was driven by decreased leverage of fixed costs.
• Corporate: Sales were $19.1 million, compared to $117.7 million in Q3 2025 (not meaningful change). This segment includes results from previously divested businesses and related transition services.
• Geographic Performance: North America sales were $1,815 million (89% of total), up 14% year-over-year. International sales were $228 million (11% of total), down 11% year-over-year.
• Retail Sales: Third quarter market share gains were recorded in off-road vehicles (ORV) for the sixth straight quarter and in Marine. Polaris Utility ORV retail sales (excluding Youth) were up 6% versus last year; total ORV retail sales were up 2% (excluding Youth).

Market and Competitive Landscape:

• Polaris achieved market share gains in off-road vehicles and Marine.
• Estimated North America industry ORV unit retail sales were flat compared to the third quarter of 2025, while Polaris saw growth.
• The Company noted strength across all major product lines within Polaris Powersports and Marine.

Risks and Challenges:

• Gross profit margins were impacted by higher commodity and logistics costs and incremental tariffs, partially offset by positive net price and operational efficiencies.
• The Company faces risks related to supply chain disruptions, sourcing necessary parts, and manufacturing/delivery capabilities.
• Potential risks include economic conditions impacting consumer spending, credit market changes, product recalls, warranty expenses, and regulatory activity.
• The Company highlighted risks regarding the timing and finality of tariff relief, particularly in light of current presidential administration policies and retaliatory actions.
• Litigation-related expenses of $24.6 million were recorded in Q3 2026 for pending class action lawsuit settlements and active federal patent infringement matters.
• The Company recorded $1.6 million in restructuring costs and $1.8 million in losses on disposal groups related to the Indian Motorcycle separation.

Management Commentary and Tone:

• CEO Mike Speetzen stated the team delivered another strong quarter, reflecting progress in strengthening the business for sustainable, profitable growth.
• Management cited a disciplined approach to dealer inventory, focus on operational excellence, and pace of innovation as drivers for share gains and improved financial performance.
• The CEO expressed confidence in the long-term strategy and the ability to continue building momentum.

Other Key Points:

• The third quarter results included $10 million of tariff refunds, which benefited adjusted EPS by $0.13.
• The Company divested Indian Motorcycle, with results included in the Corporate segment and a loss on disposal groups recorded.
• Cash dividends to shareholders for the nine months ended September 30, 2026, totaled $116.3 million.
• The Company repurchased and retired common shares totaling $9.3 million for the nine months ended September 30, 2026.
• Non-GAAP measures used include adjusted sales, gross profit margin, EBITDA, and free cash flow, with reconciliations provided in the release.
• The Company did not provide reconciliations for guidance on adjusted sales or earnings per share due to the "unreasonable efforts" exception under Regulation S-K regarding restructuring and acquisition integration costs.