Fox Factory (FOXF) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 2025 rose 4.8% year-over-year to $376.4 million, driven by growth in AAG and PVG, while SSG declined due to inventory reductions and industry challenges.

• Adjusted EBITDA increased 6% year-over-year to $44.4 million, with margin improvement despite ongoing investments and macro headwinds.

• Net loss for Q3 was $0.6 million ($0.02 per diluted share), compared to net income of $4.8 million ($0.11 per share) last year, mainly due to higher expenses and tax impacts.

• A $25 million cost reduction program is on track, with phase two planned for 2026 to further enhance efficiency and free cash flow.

• A $262.1 million non-cash goodwill impairment in 2025 led to a nine-month net loss of $257.7 million.

Financial highlights

• Q3 2025 gross margin improved to 30.4% from 29.9% year-over-year, reflecting favorable product mix.

• Adjusted EBITDA margin for Q3 was 11.8%, up 10 basis points year-over-year.

• Operating expenses increased to $99.4 million (26.4% of sales), mainly due to investments in launches, restructuring, and R&D.

• Adjusted net income for Q3 was $9.9 million ($0.23 per share), down from $14.8 million ($0.35 per share) year-over-year.

• For the first nine months, net sales reached $1.11 billion, up 6.3% year-over-year, but net loss was $257.7 million due to goodwill impairment.

Outlook and guidance

• Q4 2025 net sales expected between $340 million and $370 million; adjusted EPS revised to $0.05–$0.25.

• Full-year 2025 net sales guidance updated to $1.445–$1.475 billion; adjusted EPS to $0.92–$1.12.

• FY2026 expected to be challenging due to macroeconomic headwinds, with continued focus on cost management and margin improvement.

• Full-year adjusted tax rate expected at 15–18%; $50 million in tariff expense anticipated, with half offset by countermeasures.

• Liquidity remains strong, with sufficient cash, operating cash flow, and credit availability to fund operations for the next 12 months and beyond.