HOME DEPOT, INC.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements of The Home Depot, Inc., together with its subsidiaries (the “Company,” “The Home Depot,” “Home Depot,” “we,” “our” or “us”), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2024 Form 10-K. During the six months ended August 3, 2025, there were no significant changes to our significant accounting policies as disclosed in the 2024 Form 10-K.

Receivables, net

The following table presents components of receivables, net:

Card receivables consist of payments due from financial institutions for the settlement of credit card and debit card transactions. Rebate receivables represent amounts due from vendors for volume and co-op advertising rebates. Customer receivables relate to credit extended directly to certain customers in the ordinary course of business. The valuation allowance related to our receivables was not material to our consolidated financial statements at August 3, 2025 or February 2, 2025.

Supplier Finance Program

We have a supplier finance program whereby participating suppliers may, at their sole discretion, elect to receive payment for one or more of our payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. The payment terms we negotiate with our suppliers are consistent, irrespective of whether a supplier participates in the program, and we are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program. We do not reimburse suppliers for any costs they incur for participation in the program, and we have not pledged any assets as security or provided any guarantees as part of the program. Our outstanding payment obligations under our supplier finance program were $598 million at both August 3, 2025 and February 2, 2025 and are recorded within accounts payable on our consolidated balance sheets, and the associated payments are included in operating activities within the consolidated statements of cash flows.

Income Taxes

On July 4, 2025, the legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the U.S., which includes a broad range of tax provisions, including the allowance to expense 100% of the cost of qualified property and immediate expensing of domestic research and experimental expenditures. While we continue to assess its implications, we do not expect the provisions of the OBBBA to have a material impact to our estimated fiscal 2025 effective tax rate. We expect a reduction in our fiscal 2025 cash tax payments due to the above mentioned provisions.

In fiscal 2024, the Internal Revenue Service provided automatic income tax relief to taxpayers in certain southeastern states, extending the timeline to make certain tax payments. As a result, our fourth quarter fiscal 2024 estimated federal tax payment was deferred and paid in the first quarter of fiscal 2025.

Recent Accounting Pronouncements

We did not adopt any new accounting pronouncements during the six months ended August 3, 2025 that had a material impact on our consolidated financial condition, results of operations, or cash flows. There have been no significant changes in accounting pronouncements not yet adopted as disclosed in the 2024 Form 10-K, and those not discussed in the 2024 Form 10-K are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.

2. SEGMENT REPORTING AND NET SALES

Segment Reporting

The Company defines its segments based on how internally reported financial information is regularly reviewed by the chief operating decision maker (“CODM”), our President and Chief Executive Officer, to analyze financial performance, make decisions, and allocate resources.

Primary Segment. We are engaged in retail operations and sell a wide assortment of building materials, home improvement products, lawn and garden products, décor products, and facilities maintenance, repair and operations products both in stores and online. We also provide a number of services, including home improvement installation services, and tool and equipment rental. We currently conduct these operations in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each of which represents an operating segment. For disclosure purposes, we aggregate these three geographic operating segments intoone reportable segment (the “Primary segment”) due to the similar nature of their operations and economic characteristics.

Other. As discussed in Note 10, in June 2024, we acquired SRS, a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor through its branches located throughout the U.S. SRS is organized asthree different lines of business: roofing and complementary building products, landscape, and pool. We have determined that each of these three lines of business represents an operating segment, none of which meets the thresholds prescribed under Topic 280 to be deemed a reportable segment. Therefore, results from our SRS operating segments are presented in “Other” beginning from the acquisition date of June 18, 2024.

Net sales presented in Other in the tables below relate to the sale of products by SRS, with roofing and related products accounting for approximately 62% and 63% of net sales in Other during the three and six months ended August 3, 2025, respectively, and approximately 65% during both the three and six months ended July 28, 2024.

Segment Information. Assets are reviewed by our CODM on a total company consolidated basis and not by segment. The accounting policies of our Primary segment are the same as those described in our summary of significant accounting policies.

The following table presents net sales, significant expenses, and operating income for our Primary segment:

The following tables present a reconciliation of certain Primary segment information to our consolidated totals:

(1)Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $52 million and $104 million for the three and six months ended August 3, 2025, respectively, in our Primary segment, and intangible asset amortization expense of $87 million and $174 million for the three and six months ended August 3, 2025, respectively, in Other.

(1)Includes depreciation and finance lease amortization in cost of sales. Also includes intangible asset amortization expense of $51 million and $103 million for the three and six months ended July 28, 2024, respectively, in our Primary segment, and intangible asset amortization expense of $39 million for both the three and six months ended July 28, 2024 in Other.

Net Sales

The following table presents our Primary segment major product lines and the related merchandising departments (and related services):

The following table presents net sales by major product line (and related services) within our Primary segment, as well as Other net sales:

(1) See above for further discussion of Other net sales.

Note: As disclosed in our Quarterly Report on Form 10-Q for the first quarter of fiscal 2025, we made changes that realigned certain product categories across our merchandising departments and major product lines within our Primary segment. As a result, prior-year amounts have been updated to conform with the current-year presentation. These changes had no impact on our consolidated net sales.

The following table presents net sales, classified by geography:

The following table presents net sales by products and services:

Deferred Revenue

For products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. As of August 3, 2025 and February 2, 2025, deferred revenue for products and services was $1.6 billion and $1.5 billion, respectively.

We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, which generally occurs withinsix months of gift card issuance. As of August 3, 2025 and February 2, 2025, our performance obligations for unredeemed gift cards were $1.0 billion and $1.1 billion, respectively. Gift card breakage income, which is our estimate of the portion of our outstanding gift card balance not expected to be redeemed, is recognized in net sales and was immaterial during the three and six months ended August 3, 2025 and July 28, 2024.

3. PROPERTY AND LEASES

Net Property and Equipment

Net property and equipment included accumulated depreciation and finance lease amortization of $30.6 billion as of August 3, 2025 and $29.1 billion as of February 2, 2025.

Leases

The following table presents certain consolidated balance sheet information related to operating and finance leases:

(1) Finance lease assets are recorded net of accumulated amortization of $1.5 billion as of August 3, 2025 and $1.4 billion as of February 2, 2025.

The following table presents supplemental non-cash information related to leases:

4. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table presents the changes in the carrying amount of our goodwill:

(1) Activity includes the preliminary determination of goodwill related to immaterial acquisitions completed during the six months ended August 3, 2025.

(2) Primarily reflects the net impact of foreign currency translation as well as immaterial measurement period adjustments related to acquisitions completed in the prior fiscal year.

(3) Amounts presented in the Other column represent goodwill activity within our SRS operating segments. See Note 2 for details regarding our segment considerations.

Intangible Assets

The following table presents information regarding our intangible assets:

Our intangible asset amortization expense was $139 million and $90 million during the second quarter of fiscal 2025 and fiscal 2024, respectively, and $278 million and $142 million during the first six months of fiscal 2025 and fiscal 2024, respectively.

The following table presents the estimated future amortization expense related to definite-lived intangible assets as of August 3, 2025:

5. DEBT AND DERIVATIVE INSTRUMENTS

Short-Term Debt

At the beginning of fiscal 2025, we had a commercial paper program that allowed for an aggregate of $7.0 billion in borrowings, and was supported by $7.0 billion of back-up credit facilities. These backup credit facilities consisted of afive-year $3.5 billion credit facility scheduled to expire in July 2027, a 364-day $2.0 billion credit facility scheduled to expire in May 2025, and a 364-day $1.5 billion credit facility scheduled to expire in July 2025.

In May 2025, we terminated allthree back-up credit facility agreements and simultaneously entered into a newfive-year $3.5 billion credit facility scheduled to expire in May 2030 and a new 364-day $3.5 billion credit facility scheduled to expire in May 2026.

In July 2025, we increased our commercial paper program by $4.0 billion in connection withthe anticipated financing of the acquisition of GMS (see Note 10). In July 2025, in connection with the increase in the commercial paper program, we also entered into a newthree-year $3.0 billion back-up credit facility scheduled to expire in July 2028, a new 364-day $1.0 billion back-up credit facility scheduled to expire in July 2026, and amended and restated our existing 364-day $3.5 billion credit facility to extend the maturity from May 2026 to July 2026. In the aggregate, as of August 3, 2025, our commercial paper program allows for borrowings up to $11.0 billion and is supported by $11.0 billion of back-up credit facilities.

During the first six months of fiscal 2025, all of our short term borrowings were under our commercial paper program, and the maximum amount outstanding during that period was $1.1 billion. At August 3, 2025, we hadno outstanding borrowings under our commercial paper program or back-up credit facilities. At February 2, 2025, we had $316 million of outstanding borrowings under our commercial paper program with a weighted-average interest rate of 4.4% andno outstanding borrowings under our back-up credit facilities.

Long-Term Debt

We did not have any new issuances of senior notes during the first six months of fiscal 2025. In April 2025, we repaid our $500 million 2.70% and $500 million 5.125% senior notes at maturity.

Derivative Instruments and Hedging Activities

We use derivative instruments as part of our normal business operations in the management of our exposure to fluctuations in foreign currency exchange rates and interest rates on certain debt. Our objective in managing these exposures is to decrease the volatility of cash flows affected by changes in the underlying rates and to minimize the risk of changes in the fair value of certain senior notes.

We had outstanding interest rate swap agreements with combined notional amounts of $5.4 billion at both August 3, 2025 and February 2, 2025. These agreements are accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. At August 3, 2025 and February 2, 2025, the fair values of these agreements totaled $599 million and $795 million, respectively, all of which are recognized in other long-term liabilities on our consolidated balance sheets. All of our interest rate swap agreements designated as fair value hedges meet the shortcut method requirements under GAAP. Accordingly, the changes in the fair values of these agreements offset the changes in the fair value of the hedged long-term debt. At August 3, 2025 and February 2, 2025, the carrying amount of our long-term debt, excluding current installments, subject to fair value hedges was $14.5 billion and $14.3 billion, respectively.

During the three and six months ended August 3, 2025, there was no new material hedging activity or material change to any other hedging arrangement disclosed in our 2024 Form 10-K, and all related activity was immaterial for the periods presented within this report.

Collateral. We generally enter into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. To further limit our credit risk, we enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain derivative instruments exceeds or falls below contractually established thresholds. The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $530 million and $668 million as of August 3, 2025 and February 2, 2025, respectively, which was recorded in other current assets on our consolidated balance sheets. We did not hold any cash collateral as of August 3, 2025 or February 2, 2025.

6. STOCKHOLDERS' EQUITY

Stock Rollforward

The following table presents a reconciliation of the number of shares of our common stock outstanding and cash dividends per share:

Share Repurchases

In August 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the previous authorization of $15.0 billion, which was approved in August 2022. The August 2023 authorization does not have a prescribed expiration date. As of August 3, 2025, approximately $11.7 billion of the $15.0 billion share repurchase authorization remained available. In March 2024, we paused share repurchases and have not resumed share repurchase activity as of August 3, 2025.

7. FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

•Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and

•Level 3: unobservable inputs for which little or no market data exists, therefore requiring management judgment to develop the Company’s own models with estimates and assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities that are measured at fair value on a recurring basis:

The fair values of our derivative instruments are determined using an income approach and Level 2 inputs, which primarily include the respective interest rate forward curves and discount rates. Our derivative instruments are discussed further in Note 5.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment. We did not have any material assets or liabilities that were measured and recognized at fair value on a nonrecurring basis during the three and six months ended August 3, 2025 or July 28, 2024.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, receivables, accounts payable, and short-term debt approximate fair value due to their short-term nature.

The following table presents the aggregate fair values and carrying values of our senior notes:

8. WEIGHTED AVERAGE COMMON SHARES

The following table presents the reconciliation of our basic to diluted weighted average common shares as well as the number of anti-dilutive securities excluded from diluted weighted average common shares:

(1) Represents the dilutive impact of stock-based awards.

9. CONTINGENCIES

We are involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

10. ACQUISITIONS

SRS Acquisition

On June 18, 2024, we completed the acquisition of SRS, a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor, for total purchase consideration of $18.0 billion. We primarily used a combination of proceeds from commercial paper borrowings, the issuance of long-term debt, as well as cash on hand to fund the acquisition. In fiscal 2024, we recorded a preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated acquisition date fair values. Measurement period adjustments recognized in fiscal 2025 were immaterial, and we finalized our purchase price allocation during the first quarter of fiscal 2025.

Pending GMS Acquisition

On June 29, 2025, we entered into a definitive agreement to acquire GMS, a leading distributor of specialty building products including drywall, ceilings, steel framing and other complementary products related to construction and remodeling projects in residential and commercial end markets across the U.S. and Canada. Under the terms of the merger agreement, we, through a wholly-owned subsidiary, made a cash tender offer to purchase all outstanding shares of GMS common stock for $110 per share, reflecting an expected total equity value of approximately $4.3 billion, and implying an expected total enterprise value (including net debt) of approximately $5.5 billion. The closing of the acquisition is subject to customary closing conditions, including the receipt of required regulatory approvals and the tender of a number of shares of GMS common stock representing a majority of the then-outstanding shares, and is expected to be completed in the second half of fiscal 2025. The acquisition is expected to be funded through a combination of cash onhand and borrowings under our commercial paper program.