Chewy, Inc.

1. Description of Business

Chewy, Inc. and its wholly-owned subsidiaries (collectively “Chewy” or the “Company”) is primarily an e-commerce business geared toward pet products and services. Chewy serves its customers through its retail websites, and its mobile applications and focuses on delivering exceptional customer service, competitive prices, outstanding convenience (including Chewy’s Autoship subscription program, fast shipping, and hassle-free returns), and a large selection of high-quality pet food, treats and supplies, and pet healthcare products and services.

As of December 3, 2025, BC Partners Advisors LP (“BC Partners”) and its affiliates, La Caisse de dépôt et placement du Québec, affiliates of GIC Special Investments Pte Ltd, affiliates of StepStone Group LP and funds advised by Longview Asset Management, LLC (collectively, the “Sponsors”) control a majority of the voting power of our outstanding common stock. As a result, we are considered a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange.

On October 30, 2023 (the “Closing Date”), the Company entered into certain transactions (the “Transactions”) with affiliates of BC Partners pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). The Transactions resulted in such affiliates restructuring their ownership interests in the Company and Chewy Pharmacy KY, LLC (“Chewy Pharmacy KY”) becoming an indirect wholly-owned subsidiary of the Company.

On the Closing Date, affiliates of BC Partners transferred $1.9 billion to the Company to be used to fund: (i) tax obligations of its affiliates that were inherited by the Company as a result of the Transactions and (ii) expenses incurred by the Company in connection with the Transactions. The Merger Agreement requires affiliates of BC Partners to indemnify the Company for certain tax liabilities and includes customary indemnifications related to the Transactions. For additional information, see Note 10 - Income Taxes and Note 12 - Certain Relationships and Related Party Transactions.

SmartPak Acquisition

On October 28, 2025, the Company entered into a definitive agreement to acquire SmartPak Equine, LLC (“SmartPak”), a leading provider of equine health and nutrition products. This acquisition is expected to further strengthen the Company’s equine product offerings. The Company expects this acquisition to close in fiscal year 2025, subject to the satisfaction of certain regulatory approvals and other customary closing conditions.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The Company’s accompanying unaudited condensed consolidated financial statements and related notes include the accounts of Chewy, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The unaudited condensed consolidated financial statements and notes thereto of Chewy, Inc. have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) accounting standards codification (“ASC”).

All adjustments necessary for a fair statement of the financial information, which are of a normal and recurring nature, have been made for the interim periods reported. Results of operations for the quarterly period ended November 2, 2025 are not necessarily indicative of the results for the entire fiscal year. The unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q for the quarterly period ended November 2, 2025 should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2025 (“10-K Report”).

Fiscal Year

The Company has a 52- or 53-week fiscal year ending each year on the Sunday that is closest to January 31 of that year. The Company’s 2025 fiscal year ends on February 1, 2026 and is a 52-week year. The Company’s 2024 fiscal year ended February 2, 2025 and was a 53-week year.

Significant Accounting Policies

There have been no changes to the significant accounting policies disclosed in Note 2 of the “Notes to Consolidated Financial Statements” included in the 10-K Report.

Use of Estimates

GAAP requires management to make certain estimates, judgments, and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates these estimates and judgments. Actual results could differ from those estimates.

Key estimates relate primarily to determining the net realizable value and demand for inventory, useful lives associated with property and equipment and intangible assets, valuation allowances with respect to deferred tax assets, contingencies, self-insurance accruals, evaluation of sales tax positions, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.

Accrued Expenses and Other Current Liabilities

The following table presents the components of accrued expenses and other current liabilities (in millions):

Stockholders’ Equity

Share Repurchases

The total cost of repurchased shares of common stock in excess of par value, including the cost of commissions and excise taxes, is recorded to additional paid-in capital. The total cost for share repurchases executed and unpaid, as well as the cost of unpaid commissions and excise taxes, are included in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets.

Share Repurchase Program

On May 24, 2024, the Company’s Board of Directors authorized the Company to repurchase up to $500 million of its Class A common stock, par value $0.01 per share (the “Class A common stock”), and/or Class B common stock, par value $0.01 per share (the “Class B common stock” and together with the Class A common stock, the “common stock”), pursuant to a share repurchase program (the “Repurchase Program”). Under the Repurchase Program, the Company may repurchase shares of common stock on a discretionary basis from time to time through open market repurchases, in privately negotiated transactions, through repurchases made in compliance with Rule 10b-18 and/or Rule 10b5-1 under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or other means. The actual timing and amount of any share repurchases remains subject to a variety of factors, including stock price, trading volume, market conditions, compliance with applicable legal requirements, and other general business considerations. The Repurchase Program does not require the Company to repurchase any specific dollar amount or to acquire any specific number of shares of common stock. The Repurchase Program has no expiration date and may be modified, suspended, or terminated at any time.

June 2024 Stock Repurchase Agreement

On June 26, 2024, the Company entered into an agreement (the “June 2024 Stock Repurchase Agreement”) with Buddy Chester Sub LLC (the “Seller”), an entity affiliated with the Sponsors, to repurchase an aggregate of 17,550,000 shares of Class A common stock at a price per share of $28.49, resulting in an aggregate repurchase price of $500 million (the “June 2024 Stock Repurchase”). The June 2024 Stock Repurchase Agreement contains customary representations, warranties, and covenants of the parties.

September 2024 Secondary Offering and Concurrent Stock Repurchase

On September 19, 2024, the Company entered into an underwriting agreement (the “September 2024 Underwriting Agreement”) with the Seller and Morgan Stanley & Co, LLC (“Morgan Stanley”), relating to the offer and sale by the Seller of 16,666,667 shares of Class A common stock at a price to the public of $30.00 per share (the “September 2024 Secondary Offering”). In addition, the Seller granted Morgan Stanley a 30-day option to purchase up to an additional 2,500,000 shares of Class A common stock, which Morgan Stanley exercised with respect to 1,250,000 shares of Class A common stock (the “September 2024 Option Shares Offering”). The Company did not sell any shares of Class A common stock and did not receive any proceeds in connection with either of the September 2024 Secondary Offering or the September 2024 Option Shares Offering. Additionally, on September 18, 2024, the Company entered into an agreement (the “September 2024 Concurrent Stock Repurchase Agreement”) with the Seller, to repurchase $300 million of shares of Class A common stock from the Seller at a price per share of $29.40, resulting in the repurchase of an aggregate of 10,204,081 shares of Class A common stock (the “September 2024 Concurrent Stock Repurchase”). The September 2024 Concurrent Stock Repurchase Agreement contains customary representations, warranties, and covenants of the parties.

The September 2024 Secondary Offering and September 2024 Concurrent Stock Repurchase closed on September 23, 2024. The September 2024 Option Shares Offering closed on October 15, 2024.

June 2025 Secondary Offering and Concurrent Stock Repurchase

On June 23, 2025, the Company entered into an underwriting agreement with the Seller and J.P. Morgan Securities LLC (“JP Morgan”), relating to the offer and sale by the Seller of 23,952,096 shares of Class A common stock at a price to the public of $41.95 per share (the “June 2025 Secondary Offering”). In addition, the Seller granted JP Morgan a 30-day option to purchase up to an additional 3,592,815 shares of Class A common stock, which JP Morgan exercised on June 24, 2025 with respect to 3,592,814 shares of Class A common stock (the “June 2025 Option Shares Offering”). The Company did not sell any shares of Class A common stock and did not receive any proceeds in connection with either of the June 2025 Secondary Offering or the June 2025 Option Shares Offering. Additionally, on June 20, 2025, the Company entered into an agreement (the “June 2025 Concurrent Stock Repurchase Agreement”) with the Seller, to repurchase $100 million of shares of Class A common stock from the Seller at a price per share equal to the per share purchase price paid by JP Morgan in the June 2025 Secondary Offering, resulting in the repurchase of an aggregate of 2,395,210 shares of Class A common stock at a price per share of $41.75 (the “June 2025 Concurrent Stock Repurchase”). The June 2025 Concurrent Stock Repurchase Agreement contains customary representations, warranties, and covenants of the parties.

The June 2025 Secondary Offering, June 2025 Option Shares Offering, and June 2025 Concurrent Stock Repurchase closed on June 25, 2025.

Share Repurchase Activity

During the thirty-nine weeks ended November 2, 2025,2,767,453 and 2,395,210 shares of Class A common stock were repurchased and subsequently cancelled and retired pursuant to the Repurchase Program and June 2025 Concurrent Stock Repurchase, for a total cost of $101.8 million and $100.0 million, respectively, excluding the cost of commissions and excise taxes. The authorized value of shares available to be repurchased under the Repurchase Program excludes the cost of commissions and excise taxes and as of November 2, 2025, the remaining value of shares of common stock that were authorized to be repurchased under the Repurchase Program was $304.9 million.

As of February 2, 2025, the total unpaid cost of share repurchases was $5.6 million, which included $5.1 million for excise taxes. During the thirty-nine weeks ended November 2, 2025, the Company paid $5.7 million for excise taxes, accrued repurchases, and commissions.

During the thirty-nine weeks ended October 27, 2024,2,930,257,17,550,000, and 10,204,081 shares of Class A common stock were repurchased and subsequently cancelled and retired pursuant to the Repurchase Program, June 2024 Stock Repurchase, and September 2024 Concurrent Stock Repurchase for a total cost of $75.2 million, $500.0 million, and $300.0 million, respectively, excluding the cost of commissions and excise taxes.

Conversion of Class B Common Stock

On June 26, 2024, Buddy Chester Sub LLC converted 17,550,000 shares of Class B common stock into Class A common stock contemporaneously with the execution and delivery of the June 2024 Stock Repurchase Agreement.

On June 27, 2024, Buddy Chester Sub LLC converted 5,328,543 shares of Class B common stock into Class A common stock and sold such Class A common stock.

On July 1, 2024, Buddy Chester Sub LLC converted 1,338,262 shares of the Class B common stock into Class A common stock and sold such Class A common stock.

On September 23, 2024, Buddy Chester Sub LLC converted 26,870,748 shares of Class B common stock into Class A common stock contemporaneously with the closing of the September 2024 Secondary Offering and the September 2024 Concurrent Stock Repurchase.

On October 15, 2024, in connection with the September 2024 Option Shares Offering, Buddy Chester Sub LLC converted 1,250,000 shares of Class B common stock into Class A common stock and sold these shares to Morgan Stanley.

On June 25, 2025, Buddy Chester Sub LLC converted 29,940,120 shares of Class B common stock into Class A common stock contemporaneously with the closing of the June 2025 Secondary Offering, June 2025 Option Shares Offering, and June 2025 Concurrent Stock Repurchase.

On October 9, 2025, Buddy Chester Sub LLC converted 13,280,212 shares of Class B common stock into Class A common stock and sold such Class A common stock.

The Company generates interest income from its cash and cash equivalents and marketable securities and incurs interest expense in relation to its borrowing facilities, finance leases, and uncertain tax positions. The following table provides additional information about the Company’s interest income (expense), net (in millions):

The Company made interest cash payments of $1.8 million and $2.2 million during the thirty-nine weeks ended November 2, 2025 and October 27, 2024, respectively.

The Company’s other income (expense), net consists of: (i) changes in the fair value of equity warrants, investments, and tax indemnification receivables, (ii) foreign currency transaction gains and losses, and (iii) allowances for credit losses. The following table provides additional information about the Company’s other income (expense), net (in millions):

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued this ASU to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update became effective with the Company’s Fiscal Year 2024 annual reporting period and with the Company’s Fiscal Year 2025 interim reporting periods. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements and resulted in additional segment disclosures within Note 8 – Segment Information.

Recently Issued Accounting Pronouncements

ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. In December 2023, the FASB issued this ASU to update income tax disclosure requirements, primarily related to the income tax rate reconciliation and income taxes paid information. This update is effective beginning with the Company’s 2025 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. In November 2024, the FASB issued this ASU to improve disclosures regarding the types of expenses included in commonly presented expense captions. This update is effective beginning with the Company’s 2027 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. In September 2025, the FASB issued this ASU to modernize the accounting for internal-use software costs, primarily by simplifying the requirements to capitalize software development costs. This update is effective beginning with the Company’s 2028 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. In December 2025, the FASB issued this ASU to establish authoritative guidance on the accounting for government grants received by business entities. This update is effective beginning with the Company’s 2029 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

3. Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1-Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2-Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3-Valuations based on unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Cash equivalents are carried at cost, which approximates fair value and are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

Marketable securities are carried at fair value and are classified within Level 1 because they are valued using quoted market prices. Specific to marketable fixed income securities, the Company didnot record any gross unrealized gains and losses as fair value approximates amortized cost. The Company didnot record any credit losses during the thirteen and thirty-nine weeks ended November 2, 2025. Further, as of November 2, 2025, the Company didnot record an allowance for credit losses related to its fixed income securities.

Vested equity warrants and equity investments in public companies that have readily determinable fair values are carried at fair value and are classified as marketable securities within Level 1 because they are valued using quoted market prices.

Unvested equity warrants are classified within Level 3 of the fair value hierarchy as they are valued based on observable and unobservable inputs reflecting the Company’s assumptions, consistent with reasonably available assumptions made by other market participants. The Company utilized certain valuation techniques, such as the Black-Scholes option-pricing model and the Monte Carlo simulation model, to determine the fair value of unvested equity warrants. The application of these models requires the use of a number of complex assumptions based on unobservable inputs, including the expected term, expected equity volatility, discounts for lack of marketability, cash flow projections, and probability with respect to vesting requirements. Equity warrants are transferred from Level 3 to Level 1 of the fair value hierarchy upon vesting as they are no longer valued based on unobservable inputs.

The following table includes a summary of financial instruments measured at fair value as of November 2, 2025 (in millions):

The following table includes a summary of financial instruments measured at fair value as of February 2, 2025 (in millions):

The following table summarizes the change in fair value for financial instruments using unobservable Level 3 inputs (in millions):

As of February 2, 2025, the deferred credit subject to vesting and performance requirements recognized within other long-term liabilities in exchange for the equity warrants was $4.5 million. Level 3 significant unobservable inputs used in the fair value measurement of unvested equity warrants included probability of vesting and equity volatility, and reflected a weighted average of 0% and 56% as of November 2, 2025, respectively.

4. Property and Equipment, net

The following is a summary of property and equipment, net (in millions):

Internal-use software includes labor and license costs associated with software development for internal use and is amortized using the straight-line method over the estimated useful life of the software. The following is a summary of internal-use software, net (in millions):

Construction in progress is stated at cost, which includes the cost of construction and other directly attributable costs. No provision for depreciation is made on construction in progress until the relevant assets are completed and put into use.

For the thirteen weeks ended November 2, 2025 and October 27, 2024, the Company recorded depreciation expense on property and equipment of $22.2 million and $18.5 million, respectively, and amortization expense related to internal-use software costs of $10.5 million and $9.5 million, respectively. For the thirty-nine weeks ended November 2, 2025 and October 27, 2024, the Company recorded depreciation expense on property and equipment of $63.6 million and $54.7 million, respectively, and amortization expense related to internal-use software costs of $31.0 million and $27.8 million, respectively. The aforementioned depreciation and amortization expenses were included within selling, general and administrative expenses in the condensed consolidated statements of operations.

5. Commitments and Contingencies

Legal Matters

Various legal claims arise from time to time in the normal course of business. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. The Company does not believe that the ultimate resolution of any matters to which it is presently a party will have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

6. Debt

ABL Credit Facility

The Company has a senior secured asset-based credit facility ( the “ABL Credit Facility”), which matures on April 1, 2030 following an amendment entered into on April 1, 2025, and provides for non-amortizing revolving loans in an aggregate principal amount of up to $800 million, subject to a borrowing base comprised of, among other things, inventory and sales receivables (subject to certain reserves). The ABL Credit Facility provides the right to request incremental commitments and add incremental asset-based revolving loan facilities in an aggregate principal amount up to the sum of (i) $250 million, (ii) the amount of permanent reductions of commitments thereunder and (iii) if greater than zero, the amount by which the borrowing base as of the date of incurrence exceeds the commitments thereunder, subject to customary conditions.

Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to either a base rate or a term Secured Overnight Financing Rate (“SOFR”) (with no credit spread adjustment) at the Company’s option, plus a margin determined based on the Company's average excess availability, which is either (i)0.25%,0.50%, or 0.75% for borrowings at the base rate, or (ii)1.25%,1.50%, or 1.75% for SOFR borrowings. The Company is required to pay a commitment fee of 0.25% per annum with respect to the undrawn portion of the commitments, which is generally based on average daily usage of the facility. The ABL Credit Facility contains customary affirmative and negative covenants, all of which the Company is in compliance with. Based on the Company’s borrowing base as of November 2, 2025, which is reduced by standby letters of credit, the Company had $783.1 million of borrowing capacity under the ABL Credit Facility. As of November 2, 2025 and February 2, 2025, the Company didnot have any outstanding borrowings under the ABL Credit Facility, respectively.

7. Leases

The Company leases all of its fulfillment and customer service centers and corporate offices under non-cancelable operating lease agreements. The terms of the Company’s real estate leases generally range from 5 to 15 years and typically allow for the leases to be renewed for up tothree additional five-year terms. Fulfillment and customer service center, veterinary clinic, and corporate office leases expire at various dates through 2038, excluding renewal options. The Company also leases certain equipment under operating and finance leases. The terms of equipment leases generally range from 3 to 5 years and do not contain renewal options. These leases expire at various dates through 2025.

The Company’s finance leases as of November 2, 2025 and February 2, 2025 were not material and were included in property and equipment, net, on the Company’s condensed consolidated balance sheets.

The table below presents the operating lease-related assets and liabilities recorded on the condensed consolidated balance sheets (in millions):

For the thirty-nine weeks ended November 2, 2025 and October 27, 2024, assets acquired in exchange for new operating lease liabilities were $49.0 million and $8.0 million, respectively. Lease expense primarily relates to operating lease costs and were included within selling, general and administrative expenses in the condensed consolidated statements of operations. Lease expense for the thirteen weeks ended November 2, 2025 and October 27, 2024 was $29.0 million and $27.3 million, respectively. Lease expense for the thirty-nine weeks ended November 2, 2025 and October 27, 2024 was $83.2 million and $80.4 million, respectively.

Cash flows used in operating activities related to operating leases were approximately $82.3 million and $78.9 million for the thirty-nine weeks ended November 2, 2025 and October 27, 2024, respectively.

8. Segment Information

The Company operates inone operating segment andone reportable segment organized around the sale of pet products and services, as the Chief Operating Decision Maker (“CODM”) reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The CODM utilizes gross profit and net income as the measures of segment profit.

The following table presents information about the Company’s measures of segment profit and significant segment expenses regularly provided to the CODM (in millions):

The CODM does not regularly review asset information by reportable segment, and therefore the Company does not report asset information by reportable segment.

9. Share-Based Compensation

2024 Omnibus Incentive Plan

In July 2024, the Company’s stockholders approved the Chewy, Inc. 2024 Omnibus Incentive Plan (the “2024 Plan”) replacing the Chewy, Inc. 2022 Omnibus Incentive Plan (the “2022 Plan”). The 2024 Plan became effective on July 11, 2024 and the maximum number of shares of Class A common stock that may be covered by awards granted under the 2024 Plan may not exceed the aggregate total of (i)80.0 million shares plus (ii) the number of shares remaining available for new awards under the 2022 Plan as of the effective date, up to 3.1 million shares. Following the effective date, any shares subject to an award under the 2022 Plan or the 2024 Plan that expires or are canceled, forfeited, or terminated without the issuance of the full number of shares to which the award related will again be available for issuance under the 2024 Plan. No awards may be granted under the 2024 Plan after July 2034. The 2024 Plan provides for grants of: (i) options, including incentive stock options and non-qualified stock options, (ii) restricted stock units, (iii) other share-based awards, including share appreciation rights, phantom stock, restricted shares, performance shares, deferred share units, and share-denominated performance units, (iv) cash awards, (v) substitute awards, and (vi) dividend equivalents (collectively, the “awards”). The awards may be granted to (i) the Company’s employees, consultants, and non-employee directors, (ii) employees of the Company’s affiliates and subsidiaries, and (iii) consultants of the Company’s affiliates.

Service-Based Awards

The Company granted restricted stock units with service-based vesting conditions (“RSUs”) which vested subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for RSUs on a straight-line basis over the requisite service period and accounted for forfeitures as they occur.

Service-Based Awards Activity

The following table summarizes the activity related to the Company’s RSUs for the thirty-nine weeks ended November 2, 2025 (in millions, except for weighted-average grant date fair value):

The following table summarizes the weighted average grant-date fair value of RSUs granted and total fair value of RSUs vested for the periods presented:

As of November 2, 2025, total unrecognized compensation expense related to unvested RSUs was $550.0 million and is expected to be recognized over a weighted-average expected performance period of 2.7 years.

The fair value for RSUs is established based on the market price of the Company’s Class A common stock on the date of grant.

Service and Performance-Based Awards

The Company granted restricted stock units which vested upon satisfaction of both service-based vesting conditions and company performance-based vesting conditions (“PRSUs”), subject to the employee’s continued employment with the Company through the applicable vesting date. The Company recorded share-based compensation expense for PRSUs over the requisite service period and accounted for forfeitures as they occur.

Service and Performance-Based Awards Activity

The following table summarizes the activity related to the Company’s PRSUs for the thirty-nine weeks ended November 2, 2025 (in millions, except for weighted-average grant date fair value):

The following table summarizes the weighted average grant-date fair value of PRSUs granted and total fair value of PRSUs vested for the periods presented:

As of November 2, 2025, total unrecognized compensation expense related to unvested PRSUs was $37.7 million and is expected to be recognized over a weighted-average expected performance period of 1.9 years.

The fair value for PRSUs with a Company performance-based vesting condition is established based on the market price of Class A common stock on the date of grant.

As of November 2, 2025, there were 75.1 million additional shares of Class A common stock reserved for future issuance under the 2024 Plan.

Share-Based Compensation Expense

Share-based compensation expense is included within selling, general and administrative expenses in the condensed consolidated statements of operations. The Company recognized share-based compensation expense as follows (in millions):

10. Income Taxes

Income Tax Provision

Chewy is subject to taxation in the U.S. and various state, local, and foreign jurisdictions. The Company recorded an income tax provision during the thirteen and thirty-nine weeks ended November 2, 2025 of $10.1 million and $37.6 million, respectively. The Company’s effective tax rate for the thirty-nine weeks ended November 2, 2025 was lower than the U.S federal statutory rate, primarily due to federal and state research and development credits and tax benefits from share-based compensation, partially offset by state income taxes. The Company recorded an income tax provision during the thirteen weeks ended October 27, 2024 of $25.6 million and an income tax benefit during the thirty-nine weeks ended October 27, 2024 of $215.5 million.

Deferred Tax Assets and Valuation Allowances

The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence. The realizability of the Company’s net deferred tax assets is dependent on its ability to generate sufficient future taxable income prior to the expiration of tax attributes to support the utilization of these assets. During the thirty-nine weeks ended October 27, 2024, based on all available evidence, the Company determined that it was appropriate to release the valuation allowance on the Company’s U.S. federal and certain state deferred tax assets resulting in a $275.7 million tax benefit. As of November 2, 2025 and February 2, 2025, the Company maintained a full valuation allowance of $21.8 million against its foreign net deferred tax assets and certain U.S. state deferred tax assets.

One Big Beautiful Bill Act

In July 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The Company continues to evaluate the impact of the OBBBA, and will reflect the impact on the consolidated financial statements included in the Company’s Form 10-K for the fiscal year ending February 1, 2026.

Tax Payments and Refunds

During the thirty-nine weeks ended November 2, 2025 and October 27, 2024, the Company paid $12.4 million and $21.8 million, net of refunds received, for federal, state, and foreign income taxes other than those assumed in connection with the Transactions, respectively.

In connection with the Transactions, the Company assumed $1.9 billion in income taxes which were fully indemnified by affiliates of BC Partners. During the thirty-nine weeks ended November 2, 2025, the Company paid $9.1 million, net of refunds received, for federal and state income taxes in connection with the Transactions. During the thirty-nine weeks ended October 27, 2024, the Company paid $95.0 million, net of refunds received, for federal and state income taxes in connection with the Transactions. For more information, see Note 1 - Description of Business and Note 12 - Certain Relationships and Related Party Transactions.

In the aggregate, the Company paid $21.5 million and $116.8 million, net of refunds received, for federal, state, and foreign income taxes during the thirty-nine weeks ended November 2, 2025, and October 27, 2024, respectively.

11. Earnings per Share

Basic and diluted earnings per share attributable to the Company’s common stockholders are presented using the two-class method required for participating securities. Under the two-class method, net income attributable to the Company’s common stockholders is determined by allocating undistributed earnings between common stock and participating securities. Undistributed earnings for the periods presented are calculated as net income less distributed earnings. Undistributed earnings are allocated proportionally to the Company’s common Class A and Class B stockholders as both classes are entitled to share equally, on a per share basis, in dividends and other distributions. Basic and diluted earnings per share are calculated by dividing net income attributable to the Company’s common stockholders by the weighted-average shares outstanding during the period.

The following table sets forth basic and diluted earnings per share attributable to the Company’s common stockholders for the periods presented (in millions, except per share data):

12. Certain Relationships and Related Party Transactions

As of November 2, 2025 and February 2, 2025, the Company had a receivable from affiliates of BC Partners of $23.4 million and $21.7 million, respectively, with respect to the indemnification for certain tax liabilities in connection with the Transactions, which is only collectible upon the realization of certain tax liabilities and was included in other non-current assets on the Company’s condensed consolidated balance sheets. For more information, see Note 1 - Description of Business and Note 10 - Income Taxes.