Traeger, Inc.

Previous wording

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.

Current wording

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 I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K, as updated by Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q, and under “Cautionary Note Regarding Forward-Looking Statements,” 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.

Previous wording

Taken together, these Phase 1 and Phase 2 actions are expected to deliver approximately $58 million of annualized run-rate savings. We have also identified additional value capture opportunities within Phase 2 around SKU rationalization and pricing – including exiting lower-margin SKUs and simplifying our product architecture – which are expected to drive an incremental $6 million to $12 million of run-rate value, with the majority of that benefit realized in fiscal years 2027 and 2028. In total, Project Gravity is expected to deliver approximately $64 million to $70 million of run-rate savings.

Current wording

Taken together, these Phase 1 and Phase 2 actions are expected to deliver approximately $58 million of annualized run-rate savings. We have also identified additional value capture opportunities within Phase 2 around SKU rationalization and pricing – including exiting lower-margin SKUs and simplifying our product architecture – which are expected to drive an incremental $6 million to $12 million of run-rate value, with the majority of that benefit realized in fiscal years 2027 and 2028. In total, Project Gravity is expected to deliver approximately $64 million to $70 million of run-rate savings. We realized approximately $20 million of Project Gravity savings in fiscal year 2025 and estimate that we will realize approximately $30 million of savings in fiscal year 2026, with the remaining benefits expected to be realized in fiscal year 2027 and thereafter.

Previous wording

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 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.

Current wording

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 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.

Previous wording

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, 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.

Current wording

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.

Previous wording

Our revenue decreased by 17.4% and 25.8% to $120.2 million and $214.2 million for the three and six months ended June 30, 2026, respectively, as compared to $145.5 million and $288.8 million for the three and six months ended June 30, 2025, respectively. We recorded a net loss of $8.6 million and $5.6 million for the three and six months ended June 30, 2026, respectively, compared to a net loss of $7.4 million and $8.2 million for the three and six months ended June 30, 2025, respectively.

Current wording

Our revenue decreased by 40.4% and 30.2% for the three and nine months ended September 30, 2026, respectively, as compared to the three and nine months ended September 30, 2025, respectively, and was $74.7 million and $288.9 million for the three and nine months ended September 30, 2026, respectively, down from $125.4 million and $414.2 million for the three and nine months ended September 30, 2025, respectively. We recorded a net loss of $28.5 million and $34.2 million for the three and nine months ended September 30, 2026, respectively, compared to a net loss of $89.8 million and $98.0 million for the three and nine months ended September 30, 2025, respectively.

Previous wording

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 below, 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.

Current wording

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 below and in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K.

Previous wording

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.

Current wording

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. These conditions have negatively impacted consumer discretionary spending behavior, and contributed to a decline in our revenue for the three and nine months ended September 30, 2026.

Previous wording

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 proclamation 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 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 and expired by operation of law on July 24, 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 applied only to the named plaintiffs, and the tariffs remained in effect for all other importers pending appeal until they expired by operation of law on July 24, 2026. On March 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), the July 24, 2026 statutory expiration, and the pending structural excess capacity Section 301 investigations create uncertainty as to whether the administration can maint…

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Current wording

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 proclamation 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 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 in effect through November 10, 2026, which the U.S. Treasury Secretary has announced will be extended to January 10, 2027. 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 and expired by operation of law on July 24, 2026, and were not extended 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 applied only to the named plaintiffs, and the tariffs remained in effect for all other importers pending appeal until they expired by operation of law on July 24, 2026. On March 11 and March 12, 2026, the Office of the U.S. Trade

Previous wording

As of March 31, 2026, we recognized a loss recovery of $15.6 million related to expected tariff refunds submitted and accepted by U.S. Customs, which was recorded within prepaid expenses and other current assets. Of this amount, $12.4 million was recorded within cost of revenue and the remaining $3.2 million within inventory. During the three months ended June 30, 2026, we received $16.0 million of cash in connection with these refund requests, including $0.6 million of interest recorded within other income, net. As of June 30, 2026, the Company had submitted all refund requests for eligible IEEPA tariffs paid and has $0.2 million of refund requests outstanding and recorded within prepaid expenses and other current assets. The ultimate timing of additional cash receipts remains uncertain and subject to further legal and regulatory developments.

Current wording

During the three months ended March 31, 2026, we recognized a loss recovery of $15.6 million related to expected tariff refunds submitted and accepted by U.S. Customs, which was recorded within prepaid expenses and other current assets. Of this amount, $12.4 million was recorded within cost of revenue and the remaining $3.2 million within inventory. As of September 30, 2026, we received $16.2 million of cash in connection with these refund requests, including $0.6 million of interest recorded within other income, net. As of September 30, 2026, the Company had submitted all refund requests for eligible IEEPA tariffs paid and has $0.3 million of refund requests outstanding and recorded within prepaid expenses and other current assets. Because the government has appealed the refund order, refunds received could be subject to repayment if the order is reversed. Accordingly, no liability has been recorded, as a liability would not be recognized unless and until the government's appeal is upheld by the courts. The ultimate timing of additional refund requests and cash receipts remains uncertain and subject to further legal and regulatory developments.

Previous wording

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 for 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 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 imposed under Section 122 of the Trade Act of 1974 absent congressional extension and related litigation over amounts collected while it was in effect, increased and modified Section 232 tariffs on steel, aluminum, copper and derivative products, existing Section 301 tariffs on Chinese goods, new forced-labor-related Section 301 tariffs on covered imports 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 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.

Current wording

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 for 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 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 expiration on July 24, 2026 of the temporary 10% global tariff imposed under Section 122 of the Trade Act of 1974 and related litigation over amounts collected while it was in effect, increased and modified Section 232 tariffs on steel, aluminum, copper and derivative products, existing Section 301 tariffs on Chinese goods, new forced-labor-related Section 301 tariffs on covered imports 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 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.

Previous wording

Sales and marketing expense consists primarily of the costs associated with advertising and marketing of our products and employee-related expenses, including salaries, benefits, and stock-based compensation expense, as well as sales incentives and professional services. These costs can include print, internet and television advertising, travel-related expenses, direct customer acquisition costs, costs related to conferences and events, and broker commissions. We anticipate that sales and marketing expense as a percentage of revenue will fluctuate from period to period based on revenue for such period and the timing of the expansion of our sales and marketing functions, as these activities may vary in scope and scale over future periods.

Current wording

Sales and marketing expenses consist primarily of the costs associated with advertising and marketing of our products and employee-related expenses, including salaries, benefits, and stock-based compensation expense, as well as sales incentives and professional services. These costs can include print, internet and television advertising, travel-related expenses, direct customer acquisition costs, costs related to conferences and events, and broker commissions. We anticipate that sales and marketing expense as a percentage of revenue will fluctuate from period to period based on revenue for such period and the timing of the expansion of our sales and marketing functions, as these activities may vary in scope and scale over future periods.

Previous wording

General and administrative expense consists primarily of employee-related expenses and facilities for our executive, finance, accounting, legal, human resources, information technology and other administrative functions. General and administrative expense also includes fees for professional services, such as external legal, accounting, and information and technology services, and insurance.

Current wording

General and administrative expenses consist primarily of employee-related expenses and facilities for our executive, finance, accounting, legal, human resources, information technology and other administrative functions. General and administrative expense also includes fees for professional services, such as external legal, accounting, and information and technology services, and insurance.

Previous wording

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 $3.2 million and $3.4 million for the three months ended June 30, 2026 and 2025, respectively, and $5.5 million and $6.3 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

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 $2.6 million and $3.1 million for the three months ended September 30, 2026, and 2025, respectively, and $8.1 million and $9.4 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

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, as we continue to manage our investments to support our growth and develop new and enhance existing products, we expect to leverage these expenses over time as we grow our revenue. In addition, as a result of the cost-reduction actions implemented under Project

Current wording

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, as we continue to manage our investments to support our growth and develop new and enhance existing products, we expect to leverage these expenses over time as we grow our revenue. In addition, as a result of the cost-reduction actions implemented under Project Gravity, we anticipate a reduction in overall operating expenditures, including a decrease in general and administrative expenses.

Previous wording

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

Current wording

Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Goodwill is not amortized, but is tested for impairment at the reporting unit level annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. During the three months ended September 30, 2025, the Company performed a quantitative impairment test and determined that the carrying value of the reporting unit was in excess of its fair value and recorded a non-cash impairment charge of $74.7 million for the three and nine months ended September 30, 2025, which fully impaired the Company’s goodwill. The Company had no goodwill as of September 30, 2026 or December 31, 2025. For details associated with the Company’s interim goodwill impairment, see Note 7 –Goodwillto the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

As a result of these initiatives, we have recorded 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 June 30, 2026 and 2025.

Current wording

As a result of these initiatives, we have recorded 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 nine months ended September 30, 2026 and 2025.

Previous wording

Total other expense consists of interest expense and other income, net. Interest expense includes interest and other fees associated with our Credit Facilities, 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 contract 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.

Current wording

Total other expense consists of interest expense and other income, net. Interest expense includes interest and other fees associated with our Credit Facilities, Receivables Financing Agreement (each as defined below) the amortization of amounts recorded within accumulated other comprehensive income (loss) prior to the dedesignation of the interest rate swap derivative contract as a cash flow hedge. Other income, net 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, interest income, 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.

Previous wording

Revenue decreased by $25.3 million, or 17.4%, to $120.2 million for the three months ended June 30, 2026 compared to $145.5 million for the three months ended June 30, 2025. The decrease was driven by lower sales from grills, accessories, and consumables.

Current wording

Revenue decreased by $50.7 million, or 40.4%, to $74.7 million for the three months ended September 30, 2026 compared to $125.4 million for the three months ended September 30, 2025. The decrease was driven primarily by lower sales from grills, accessories, and consumables.

Previous wording

Revenue from our grills decreased by $12.6 million, or 17.0%, to $61.6 million for the three months ended June 30, 2026 compared to $74.2 million for the three months ended June 30, 2025. The decrease was primarily driven by a reduction in average selling price in excess of 20%, partially offset by a high-single digit increase in unit volume. Lower average selling price was due to a shift in product mix toward lower-priced grills, reflecting current year launches of lower-priced offerings compared to higher-priced launches in the prior year period, as well as channel and product line optimization actions taken under Project Gravity. The increase in unit volume was primarily driven by current year product launches.

Current wording

Revenue from our grills decreased by $36.8 million, or 48.1%, to $39.7 million for the three months ended September 30, 2026 compared to $76.6 million for the three months ended September 30, 2025. The decrease was primarily driven by a reduction in average selling price in excess of 30% and a decrease in unit volume in excess of 20%. The decrease in average selling price was primarily due to the current year launches of lower-priced offerings compared to higher-priced launches in the prior year period, and channel and product line optimization actions taken under Project Gravity. The decrease in unit volume was primarily attributable to comparisons against elevated retailer purchases in the third quarter of last year, as well as product and channel actions under Project Gravity.

Previous wording

Revenue from our consumables decreased by $3.6 million, or 9.9%, to $32.8 million for the three months ended June 30, 2026 compared to $36.4 million for the three months ended June 30, 2025. The decrease was driven by a high-single digit decrease in wood pellet sales and a reduction in food consumables sales in excess of 20%. The decrease in wood pellet sales was primarily driven by a high-single digit reduction in unit volume due to seasonal ordering shifts. The decrease in food consumable sales was primarily attributable to lower unit volume, reflecting prior year channel expansion.

Current wording

Revenue from our consumables decreased by $5.8 million, or 23.1%, to $19.4 million for the three months ended September 30, 2026 compared to $25.3 million for the three months ended September 30, 2025. The decrease was primarily driven by declines in wood pellet and food consumables sales, each is in excess of 20%. The decrease in wood pellet sales was primarily driven by a reduction in unit volume in excess of 20% due to seasonal ordering shifts and changes in retail channel dynamics. The decrease in food consumable sales was primarily attributable to lower unit volume in excess of 20%, reflecting prior year channel expansion load-in.

Previous wording

Revenue from our accessories decreased by $9.1 million, or 26.2%, to $25.8 million for the three months ended June 30, 2026 compared to $34.9 million for the three months ended June 30, 2025. The decrease was driven primarily by lower sales of MEATER smart thermometers due to continued competitive pressure and a decrease in Traeger branded accessories, primarily driven by a mid-double digit decrease in unit volumes, partially offset by a high-single digit increase in average selling price.

Current wording

Revenue from our accessories decreased by $8.0 million, or 34.1%, to $15.5 million for the three months ended September 30, 2026 compared to $23.5 million for the three months ended September 30, 2025. The decrease was driven primarily by lower sales of MEATER smart thermometers due to continued competitive pressure, as well as a mid-double digit decrease in unit volumes of Traeger branded accessories.

Previous wording

Gross profit decreased by $9.6 million, or 16.8%, to $47.4 million for the three months ended June 30, 2026 compared to $57.0 million for the three months ended June 30, 2025. Gross margin increased to 39.5% for the three months ended June 30, 2026 from 39.2% for the three months ended June 30, 2025. The increase in gross margin was driven primarily by the benefit from the IEEPA tariff refund, timing of trade spend, and higher mix of direct import sales, partially offset by product mix to lower priced offering.

Current wording

Gross profit decreased by $23.5 million, or 48.5%, to $25.0 million for the three months ended September 30, 2026 compared to $48.5 million for the three months ended September 30, 2025. Gross margin decreased to 33.5% for the three months ended September 30, 2026 from 38.7% for the three months ended September 30, 2025. The decrease in gross margin was driven primarily bythe timing of trade spend, deleverage of fixed warehousing expenses on lower revenue, and continued margin pressure in our MEATER business, partially offset by an IEEPA tariff refund benefit.

Previous wording

Sales and marketing expense decreased by $7.7 million, or 31.1%, to $17.1 million for the three months ended June 30, 2026 compared to $24.8 million for the three months ended June 30, 2025. As a percentage of revenue, sales and marketing expense decreased slightly to 14.2% for the three months ended June 30, 2026 from 17.0% for the three months ended June 30, 2025. The decrease in sales and marketing expense was primarily driven by lower employee-related costs and reduced demand creation spend, reflecting cost reduction actions associated with Project Gravity.

Current wording

Sales and marketing expense decreased by $5.7 million, or 28.5%, to $14.3 million for the three months ended September 30, 2026 compared to $20.0 million for the three months ended September 30, 2025. The decrease was primarily driven by lower employee-related costs and reduced demand creation spend, reflecting cost reduction actions associated with Project Gravity. As a percentage of revenue, sales and marketing expense increased to 19.1% for the three months ended September 30, 2026 from 15.9% for the three months ended September 30, 2025, as the decline in revenue outpaced the reduction in sales and marketing expense.

Previous wording

General and administrative expense decreased by $4.2 million, or 16.3%, to $21.8 million for the three months ended June 30, 2026 compared to $26.0 million for the three months ended June 30, 2025. As a percentage of revenue, general and administrative expense increased slightly to 18.1% for the three months ended June 30, 2026 from 17.9% for the three months ended June 30, 2025. The decrease in general and administrative expense was primarily driven by lower employee-related costs, reflecting cost reduction actions associated with Project Gravity, and professional service fees.

Current wording

General and administrative expense decreased by $2.2 million, or 10.0%, to $19.9 million for the three months ended September 30, 2026 compared to $22.2 million for the three months ended September 30, 2025. The decrease was primarily driven by lower employee-related costs, reflecting cost reduction actions associated with Project Gravity. As a percentage of revenue, general and administrative expense increased to 26.7% for the three months ended September 30, 2026 from 17.7% for the three months ended September 30, 2025, as the decline in revenue outpaced the reduction in general and administrative expense.

Previous wording

Restructuring and other costs decreased by $2.0 million, or 58.1%, to $1.5 million for the three months ended June 30, 2026 compared to $3.5 million for the three months ended June 30, 2025. The decrease in restructuring and other costs was primarily driven by lower severance and other personnel costs, as well as reduced consulting fees.

Current wording

Restructuring and other costs decreased by $4.5 million, or 72.0%, to $1.7 million for the three months ended September 30, 2026 compared to $6.2 million for the three months ended September 30, 2025. The decrease in restructuring and other costs was primarily driven by reduced consulting fees, as well as lower severance and other personnel costs.

Previous wording

Total other expense increased by $6.1 million, or 362.3%, to $7.8 million for the three months ended June 30, 2026 compared to $1.7 million for the three months ended June 30, 2025. This increase was primarily related to the benefit recognized in the comparable prior year period associated with the employee retention tax credit, unfavorable impacts from foreign currency rates in the current period, as well as lower realized gains on our interest rate swaps, which matured on February 28, 2026.

Current wording

Total other expense increased by $1.0 million, or 14.8%, to $7.8 million for the three months ended September 30, 2026 compared to $6.8 million for the three months ended September 30, 2025. This increase was primarily related to the benefit recognized in the comparable prior year period associated with the employee retention tax credit.

Previous wording

Revenue decreased by $74.5 million, or 25.8%, to $214.2 million for the six months ended June 30, 2026 compared to $288.8 million for the six months ended June 30, 2025. The decrease was driven by lower sales from grills, accessories and consumables.

Current wording

Revenue decreased by $125.3 million, or 30.2%, to $288.9 million for the nine months ended September 30, 2026 compared to $414.2 million for the nine months ended September 30, 2025. The decrease was driven primarily by lower sales from grills, accessories, and consumables.

Previous wording

Revenue from our grills decreased by $51.9 million, or 32.3%, to $109.0 million for the six months ended June 30, 2026 compared to $160.9 million for the six months ended June 30, 2025. The decrease was primarily driven by a mid-double digit reduction in unit volume and a high-double digit decrease in average selling price. The reduction in unit volume was driven by the prior year launch of the Woodridge series of grills, channel and product line optimization actions taken in connection with Project Gravity, and retail orders placed in advance of anticipated tariff increases. The decrease in average selling price was primarily driven by mix shift toward lower-priced grills and a higher mix of direct import sales.

Current wording

Revenue from our grills decreased by $88.8 million, or 37.4%, to $148.7 million for the nine months ended September 30, 2026 compared to $237.4 million for the nine months ended September 30, 2025. The decrease was primarily driven by a reduction in unit volume and average selling price, each is in excess of 20%. The reduction in unit volume was driven by the prior year launch of the Woodridge series of grills, channel and product line optimization actions taken in connection with Project Gravity in the current year, and prior year elevated retail orders placed in response to tariff uncertainty. The decrease in average selling price was primarily driven by mix shift toward lower-priced grills and a higher mix of direct import sales.

Previous wording

Revenue from our consumables decreased by $7.7 million, or 11.6%, to $58.9 million for the six months ended June 30, 2026 compared to $66.6 million for the six months ended June 30, 2025. The decrease was driven by a high-single digit decrease in wood pellet sales and a reduction in food consumables sales in excess of 20%. The decrease in wood pellet sales was primarily driven by a mid-single digit decrease in average selling price and a mid-single digit reduction in unit volume, primarily due to channel mix shifts and channel optimization actions taken in connection with Project Gravity. The reduction in food consumables sales was primarily due to lower unit volume, reflecting prior year channel expansion.

Current wording

Revenue from our consumables decreased by $13.6 million, or 14.8%, to $78.3 million for the nine months ended September 30, 2026 compared to $91.9 million for the nine months ended September 30, 2025. The decrease was driven by a low-double digit decrease in wood pellet sales and a reduction in food consumables sales in excess of 20%. The decrease in wood pellet sales was primarily driven by a high-single digit decrease in unit volume and mid-single digit decline in average selling price, primarily due to channel optimization actions taken in connection with Project Gravity. The reduction in food consumables sales was primarily due to lower unit volume, reflecting prior year channel expansion load-in.

Previous wording

Revenue from our accessories decreased by $14.9 million, or 24.3%, to $46.4 million for the six months ended June 30, 2026 compared to $61.3 million for the six months ended June 30, 2025. The decrease was driven primarily by lower sales of MEATER smart thermometers due to continued competitive pressure and a decrease in Traeger branded accessories, primarily driven by a mid-double digit decrease in unit volumes and a mid-double digit decrease in average selling price.

Current wording

Revenue from our accessories decreased by $22.9 million, or 27.0%, to $61.9 million for the nine months ended September 30, 2026 compared to $84.8 million for the nine months ended September 30, 2025. The decrease was driven primarily by lower sales of MEATER smart thermometers due to continued competitive pressure and a decrease in Traeger branded accessories, primarily driven by a low-double digit decrease in unit volumes and a low-single digit decrease in average selling price.

Previous wording

Gross profit decreased by $26.0 million, or 22.3%, to $90.4 million for the six months ended June 30, 2026 compared to $116.5 million for the six months ended June 30, 2025. Gross margin increased to 42.2% for the six months ended June 30, 2026 from 40.3% for the six months ended June 30, 2025. The increase in gross margin was driven primarily by the benefit from the IEEPA tariff refund, partially offset by product mix shift, deleverage on fixed promotional investments.

Current wording

Gross profit decreased by $49.6 million, or 30.0%, to $115.4 million for the nine months ended September 30, 2026 compared to $165.0 million for the nine months ended September 30, 2025. Gross margin increased to 40.0% for the nine months ended September 30, 2026 from 39.8% for the nine months ended September 30, 2025. The increase in gross margin was driven primarily by the benefit from the IEEPA tariff refund, partially offset by a product mix shift and deleverage on fixed promotional investments.

Previous wording

Sales and marketing expense decreased by $17.3 million, or 36.8%, to $29.7 million for the six months ended June 30, 2026 compared to $47.0 million for the six months ended June 30, 2025. As a percentage of revenue, sales and marketing expense decreased to 13.9% for the six months ended June 30, 2026 from 16.3% for the six months ended June 30, 2025. The decrease in sales and marketing expense was primarily driven by lower employee-related costs and reduced demand creation spend, reflecting cost reduction actions associated with Project Gravity.

Current wording

Sales and marketing expense decreased by $23.0 million, or 34.3%, to $44.0 million for the nine months ended September 30, 2026 compared to $67.0 million for the nine months ended September 30, 2025. As a percentage of revenue, sales and marketing expense decreased to 15.2% for the nine months ended September 30, 2026 from 16.2% for the nine months ended September 30, 2025. The decrease was primarily due to lower employee-related costs and reduced demand creation spend, reflecting cost reduction actions associated with Project Gravity.

Previous wording

General and administrative expense decreased by $9.8 million, or 19.3%, to $41.2 million for the six months ended June 30, 2026 compared to $51.1 million for the six months ended June 30, 2025. As a percentage of revenue, general and administrative expense increased to 19.2% for the six months ended June 30, 2026 from 17.7% for the six months ended June 30, 2025. The decrease in general and administrative expense was primarily driven by lower employee-related costs reflecting cost reduction actions associated with Project Gravity, reduced stock-based compensation expense, as well as lower professional service fees.

Current wording

General and administrative expense decreased by $12.1 million, or 16.5%, to $61.2 million for the nine months ended September 30, 2026 compared to $73.2 million for the nine months ended September 30, 2025. The decrease in general and administrative expense was driven primarily by lower employee-related costs reflecting cost reduction actions associated with Project Gravity, and reduced stock-based compensation expense. As a percentage of revenue, general and administrative expense increased to 21.2% for the nine months ended September 30, 2026 from 17.7% for the nine months ended September 30, 2025, as the decline in revenue outpaced the reduction in general and administrative expense.

Previous wording

Total other expense decreased by $3.4 million, or 45.2%, to $4.1 million for the six months ended June 30, 2026 compared to $7.5 million for the six months ended June 30, 2025. This decrease was primarily related to the incremental benefit recognized in the current year associated with the employee retention tax credit, partially offset by unfavorable foreign currency impacts and lower realized gains on our interest rate swaps following their maturity on February 28, 2026.

Current wording

Total other expense decreased by $2.4 million, or 16.7%, to $11.9 million for the nine months ended September 30, 2026 compared to $14.2 million for the nine months ended September 30, 2025. This decrease was primarily related to the incremental benefit recognized in the current year associated with the employee retention tax credit and interest income from the IEEPA tariff refunds, partially offset by unfavorable foreign currency impacts and lower realized gains on our interest rate swaps following their maturity on February 28, 2026.

Previous wording

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. 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.

Current wording

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. In the event of failure of any of our 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.

Previous wording

As of June 30, 2026, we had cash and cash equivalents of $59.7 million, $82.5 million borrowing capacity under our Revolving Credit Facility (as defined below) and $45.3 million borrowing capacity under our Receivables Financing Agreement (as defined below). As of June 30, 2026, we had no outstanding loan amounts under the Revolving Credit Facility or the Receivables Financing Agreement. As of June 30, 2026, the total principal amount outstanding under our First Lien Term Loan Facility was $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 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.

Current wording

As of September 30, 2026, we had cash and cash equivalents of $67.8 million, $82.5 million borrowing capacity under our Revolving Credit Facility (as defined below) and $16.3 million borrowing capacity under our Receivables Financing Agreement (as defined below). As of September 30, 2026, we had no outstanding loan amounts under the Revolving Credit Facility and Receivables Financing Agreement. As of September 30, 2026, the total principal amount outstanding under our First Lien Term Loan Facility was $403.1 million, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. Based on our current business plan and revenue prospects, we 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 the implementation of Project Gravity, our rate of revenue growth and 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. The Receivables Financing Agreement is scheduled to expire on August 6, 2027, the Extended Revolving Facility (as defined below) is scheduled to expire on December 29, 2027, and the First Lien Term Loan Facility matures on June 29, 2028.

Previous wording

Cash flows related to operating activities are dependent on net loss, non-cash adjustments to net loss, and changes in working capital. The increase in cash provided by operating activities during the six months ended June 30, 2026 compared to cash used in operating activities during the six months ended June 30, 2025 was primarily due to the 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, 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 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. Working capital also benefited from 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 the direct-to-consumer business and the Costco roadshow programs under Project Gravity.

Current wording

Cash flows related to operating activities are dependent on net loss, non-cash adjustments to net loss, and changes in working capital. The increase in net cash provided by operating activities during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 is primarily due to the receipts of the IEEPA tariff refunds of $16.2 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, 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 our exit from the direct-to-consumer business and the Costco roadshow programs under Project Gravity. Working capital also benefited from a decrease in inventories, reflecting deliberate rightsizing of inventory levels in support of our strategic realignment under Project Gravity, and a decrease in accrued expenses, reflecting lower operating cost levels resulting from cost savings actions taken under Project Gravity.

Previous wording

The decrease in cash used in investing activities during the six months ended June 30, 2026 compared to cash used in investing activities during the six months ended June 30, 2025 was primarily related to the decreased purchasing of tooling equipment.

Current wording

The decrease in cash used in investing activities during the nine months ended September 30, 2026 was primarily related to lower capital expenditures related to tooling equipment.

Previous wording

Net cash used in financing activities during the six months ended June 30, 2026 compared to net cash provided by financing activities during the six months ended June 30, 2025 was primarily driven by the absence of borrowings under the Receivables Financing Agreement (as defined below) in the current period, compared to net borrowings of $4.0 million in the prior year period for general corporate and working capital purposes.

Current wording

The decrease in cash used in financing activities during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily driven by the absence of borrowings under the Receivables Financing Agreement (as defined below) in the current period, compared to net repayments of $5.0 million in the prior year period for general corporate and working capital purposes.

Previous wording

On June 29, 2021, the Company refinanced its existing credit facilities and entered into the First Lien Credit Agreement. The First Lien Credit Agreement originally provided for a $560.0 million senior secured term loan facility (the “First Lien Term Loan Facility”), including 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”).

Current wording

On June 29, 2021, we refinanced our existing credit facilities and entered into the First Lien Credit Agreement. The First Lien Credit Agreement originally provided for a $560.0 million senior secured term loan facility (the “First Lien Term Loan Facility”), including 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”).