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What changed in Traeger, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Traeger, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+418 added−423 removedSource: 10-K (2026-03-06) vs 10-K (2025-03-07)

Top changes in Traeger, Inc.'s 2025 10-K

418 paragraphs added · 423 removed · 300 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeManufacturing, Supply Chain, and Logistics We have developed an efficient and scalable global supply chain with a continued focus on improving products and services while reducing costs. The supply chain organization includes global planning, retail operations, third-party manufacturing and logistics providers, vertically integrated wood pellet manufacturing, program management, and customer experience teams.
Biggest changeThe supply chain organization includes global planning, retail operations, third-party manufacturing and logistics providers, vertically integrated wood pellet manufacturing, program management, and customer experience teams. Our internal supply chain management team oversees our global supply chain and includes personnel in the United States and China.
Using software, internet connectivity, and cloud technology, we reinvented the original Traeger to be an IoT device, featuring a variety of modern technologies, including: • WiFIRE technology – Utilizes cloud-computing, our Traeger app, and our cloud-connected grills to enable users to automate recipe steps and control and monitor their grill from anywhere in the world using their smartphone. • D2 Direct Drive – An automated control system that maintains grill temperature to +/-5 degrees of set temperature through fans and DC auger control. • Super Smoke Mode – A proprietary cooking mode that maximizes production of hardwood smoke to infuse flavors into food. • Pellet Sensor – A connected sensor that measures wood pellet levels and communicates with our Traeger app, enabling users to monitor fuel levels and receive alerts when fuel gets low. 1 Table of Contents • TurboTemp – A rapid startup system that brings the grill to cooking temperature and reacts quickly to temperature changes. • Smart Combustion – A proprietary technology that helps our grills maintain consistent cooking temperatures. • EZ Clean – A 2-in-1 grease and ash collection system.
Using software, internet connectivity, and cloud technology, we reinvented the original Traeger to be an IoT device, featuring a variety of modern technologies, including: 1 Table of Contents • WiFIRE technology – Utilizes cloud-computing, our Traeger app, and our cloud-connected grills to enable users to automate recipe steps and control and monitor their grill from anywhere in the world using their smartphone. • D2 Direct Drive – An automated control system that maintains grill temperature to +/-5 degrees of set temperature through fans and DC auger control. • Super Smoke Mode – A proprietary cooking mode that maximizes production of hardwood smoke to infuse flavors into food. • Pellet Sensor – A connected sensor that measures wood pellet levels and communicates with our Traeger app, enabling users to monitor fuel levels and receive alerts when fuel gets low. • TurboTemp – A rapid startup system that brings the grill to cooking temperature and reacts quickly to temperature changes. • Smart Combustion – A proprietary technology that helps our grills maintain consistent cooking temperatures. • EZ Clean – A 2-in-1 grease and ash collection system.
Drip trays funnel grease, fat, and oil for easy clean-up and to help prevent flareups. Our Integrated Platform Our integrated platform includes six types of products: wood pellet grills, gas griddles, grilling accessories, digital content, the Traeger app, and consumables. We integrate these products to optimize the cooking experience and produce valuable feedback loops with consumers.
Drip trays funnel grease, fat, and oil for easy clean-up and to help prevent flareups. Our Integrated Platform Our integrated platform includes six types of products: wood pellet grills, gas griddles, digital content, the Traeger app, consumables and grilling accessories. We integrate these products to optimize the cooking experience and produce valuable feedback loops with consumers.
These laws and regulations require us to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain and strictly comply with stringent air permit emission limits, and in certain cases utilize specific equipment or 7 Table of Contents technologies to control and measure emissions.
These laws and regulations require us to obtain pre- 7 Table of Contents approval for the construction or modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain and strictly comply with stringent air permit emission limits, and in certain cases utilize specific equipment or technologies to control and measure emissions.
“Risk Factors—Our business may fluctuate as a result of seasonality and changes in weather conditions.” Environmental Matters Certain of our operations, properties, and products are subject, and are likely to become increasingly subject in the future, to stringent and comprehensive federal, state, and local laws and regulations governing matters including environmental protection, occupational health and safety, and the release or discharge of materials into the environment, including air emissions and wastewater discharges.
“Risk Factors—Our business may fluctuate as a result of seasonality and changes in weather conditions.” Environmental Matters Certain of our operations, properties, and products are subject, and may become increasingly subject in the future, to stringent and comprehensive federal, state, and local laws and regulations governing matters including environmental protection, occupational health and safety, and the release or discharge of materials into the environment, including air emissions and wastewater discharges.
Certain jurisdictions have also adopted, or are considering adopting, various fees for GHG, including those embedded in the value chain for certain products. As a result of these developments, our operations could be subject to a series of regulatory, litigation, and financial risks associated with the production, transportation, and sale of our products.
Certain jurisdictions have also adopted, or are considering adopting, various fees for GHG emissions, including those embedded in the value chain for certain products. As a result of these developments, our operations could be subject to a series of regulatory, litigation, and financial risks associated with the production, transportation, and sale of our products.
Traeger Shop Class We currently offer “Shop Class: Private Table,” a series of shop classes that are taught online by community ambassadors and Traeger Pro team members and feature detailed prep-to-plate instruction. The small group format ensures that the class is personal and interactive.
Traeger Shop Class We offer “Shop Class: Private Table,” a series of shop classes that are taught online by community ambassadors and Traeger Pro team members and feature detailed prep-to-plate instruction. The small group format ensures that the class is personal and interactive.
We produce our wood pellets through a vertically integrated network of five wood pellet production facilities in the United States and a select number of contract manufacturers capable of meeting our specifications in the United States and Poland. This network includes an owned and operated facility in New York and leased facilities in Oregon, Georgia, and Texas.
We produce our wood pellets through a vertically integrated network of four wood pellet production facilities in the United States and a select number of contract manufacturers capable of meeting our specifications in the United States and Poland. This network includes an owned and operated facility in New York and leased facilities in Oregon, Georgia, and Texas.
We complement this retail channel with direct to consumer ( “ DTC”) sales through our website and Traeger app. Today, we estimate that 76 million households in the United States own a grill, representing the total addressable market.
We complement this retail channel with direct to consumer ( “ DTC”) sales through our website and Traeger app. Today, we estimate that 78 million households in the United States own a grill, representing the total addressable market.
We believe these intellectual property rights, combined with our innovation and distinctive product design, performance, and brand name and reputation contribute to our competitive position and success of our business. The original patent for the wood pellet grill, which was filed by Joe Traeger in 1986, expired in 2006.
We believe these intellectual property rights, combined with our innovation and distinctive product design, performance, and brand name and reputation contribute to our competitive position and success of our business. 5 Table of Contents The original patent for the wood pellet grill, which was filed by Joe Traeger in 1986, expired in 2006.
Compliance with changes in laws and regulations relating to climate change could increase our costs of operating and could require us to make significant financial expenditures that cannot be predicted with certainty at this time. For more information, see Part I, Item 1A.
Compliance with changes in laws and regulations, or interpretations of such laws and regulations, relating to climate change could increase our costs of operating and could require us to make significant financial expenditures that cannot be predicted with certainty at this time. For more information, see Part I, Item 1A.
With the purchase of their ticket, participants receive a list of supplies they’ll need to follow along in real-time, as well as a swag bag filled with goodies. Shop Classes are also offered in-person in select markets throughout the year.
With the purchase of their ticket, participants receive a list of supplies they’ll need to follow along in 2 Table of Contents real-time, as well as a swag bag filled with goodies. Shop Classes are also offered in-person in select markets throughout the year.
With approximately 2.7 million Traeger grills sold in the United States from 2020 to 2024, we estimate that our U.S. household penetration is only 3.6% of this total addressable market. As a result, we believe our potential market opportunity is massive and that our ability to grow within and beyond the outdoor grill market is unrivaled.
With approximately 2.7 million Traeger grills sold in the United States from 2020 to 2025, we estimate that our U.S. household penetration is only 3.4% of this total addressable market. As a result, we believe our potential market opportunity is massive and that our ability to grow within and beyond the outdoor grill market is unrivaled.
With federal approval, the individual states administer 8 Table of Contents some or all of the provisions of RCRA, sometimes in conjunction with their own more stringent requirements. While most wasted generated by our operations are exempt from regulation as hazardous wastes under RCRA, these wastes typically constitute “solid wastes” that are subject to less stringent non-hazardous waste requirements.
With federal approval, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own more stringent requirements. While most waste generated by our operations are exempt from regulation as hazardous wastes under RCRA, these wastes typically constitute “solid wastes” that are subject to less stringent non-hazardous waste requirements.
Waste Handling The Resource Conservation and Recovery Act, as amended (“RCRA”), and comparable state statutes and regulations promulgated thereunder, affect our operations by imposing requirements regarding the generation, transportation, treatment, storage, disposal, and cleanup of hazardous and non-hazardous wastes.
Waste Handling The Resource Conservation and Recovery Act, as amended (“RCRA”), and comparable state statutes and regulations promulgated thereunder, affect our operations by imposing requirements regarding the generation, transportation, treatment, 8 Table of Contents storage, disposal, and cleanup of hazardous and non-hazardous wastes.
Pop-And-Lock accessory rail, covers, drip trays, bucket liners, storage bins, and shelves), tools to aid in meal prep, cooking, and cleanup (including pellet storage systems, cleaning solutions, barbecue tools, and the MEATER smart thermometer), replacement parts, and apparel and merchandise (including t-shirts, hooded sweatshirts, and baseball hats, in various styles).
Pop-And-Lock accessory rail, covers, drip trays, bucket liners, storage bins, and shelves), tools to aid in meal prep, cooking, and cleanup (including pellet storage systems, cleaning solutions, and barbecue tools), replacement parts, and apparel and merchandise (including t-shirts, hooded sweatshirts, and baseball hats, in various styles).
Many of our employees live the Traeger lifestyle at home with their own grills and at our office, with its outdoor barbecue rooftop deck and test kitchen. As of December 31, 2024, we had approximately 666 employees, of which 665 were full-time. We also retain consultants, independent contractors, and temporary and part-time workers.
Many of our employees live the Traeger lifestyle at home with their own grills and at our office, with its outdoor barbecue rooftop deck and test kitchen. As of December 31, 2025, we had approximately 433 employees, all of which were full-time. We also retain consultants, independent contractors, and temporary and part-time workers.
Our accessories represented 26.5% and 31.6% of our revenue for the year ended December 31, 2024 and 2023, respectively. Marketing Following the launch of the original Traeger in 1987, a dedicated community began to form around the Traeger experience.
Our accessories represented 24.0% and 26.5% of our revenue for the year ended December 31, 2025 and 2024, respectively. Marketing Following the launch of the original Traeger in 1987, a dedicated community began to form around the Traeger experience.
Moreover, in certain cases, policymakers may consider the impact of GHG emissions (sometimes referred to as a “social cost of carbon”), alongside other environmental or social impacts, in determining the relevant costs or benefits of various actions, which may lead to regulatory or legislative initiatives increasing the cost of certain activities.
Moreover, in certain cases, policymakers may consider the impact of GHG emissions, alongside other environmental or social impacts, in determining the relevant costs or benefits of various actions, which may lead to regulatory or legislative initiatives increasing the cost of certain activities.
For example, there is increased scrutiny on various per- and polyfluoroalkyl substances (“PFAS”) at the federal and state level, and the EPA has designated certain PFAS—perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”)—as hazardous substances under CERCLA.
For example, there is increased scrutiny on various per- and polyfluoroalkyl substances (“PFAS”) at the federal and state level, and the EPA has designated certain PFAS as hazardous substances under CERCLA.
Although we may share a number of common values with other companies, the exact wording of our values is unique to Traeger. These values are the foundation upon which we innovate products, build community, share our brand, and build partnerships.
In our model, culture precedes strategy and process. Although we may share a number of common values with other companies, the exact wording of our values is unique to Traeger. These values are the foundation upon which we innovate products, build community, share our brand, and build partnerships.
These grills vary in size, price, construction, materials, and digital technologies. Our grills represented 53.8% and 49.4% of our revenue for the year ended December 31, 2024 and 2023, respectively.
These grills vary in size, price, construction, materials, and digital technologies. Our grills represented 53.3% and 53.8% of our revenue for the year ended December 31, 2025 and 2024, respectively.
The potential effects of GHG emission limits on our business are subject to significant uncertainties based on, among other things, the timing of the implementation of any new requirements, the required levels of emission reductions, and the nature of any market-based or tax-based mechanisms adopted to facilitate reductions.
The potential effects of GHG emission limits on our business are subject to significant uncertainties based on, among other things, the timing of the implementation of any new requirements, the required levels of emission reductions, and the nature of any market-based or tax-based mechanisms adopted to facilitate reductions, as well as changes in policymaker perspectives on such matters.
The wood pellet industry has received increased scrutiny from civil society groups and the media for environmental impacts associated with wood sourcing and pellet burning. To address these stakeholder concerns, we have committed to reducing the environmental impact of our wood pellet business.
The wood pellet industry has received scrutiny from certain civil society groups and the media for environmental impacts associated with wood sourcing and pellet burning. To address these stakeholder concerns, we aim to reduce the environmental impact of our wood pellet business.
As of December 31, 2024, our employees were located in 27 states and 6 countries, with 517 located in the United States. Our employees are divided across several core functions, including sales and marketing, supply chain management, product development, wood pellet manufacturing, and culinary and talent management.
As of December 31, 2025, our employees were located in 35 states and 5 countries, with 333 located in the United States. Our employees are divided across several core functions, including sales and marketing, supply chain management, product development, wood pellet manufacturing, and culinary and talent management.
Sustainability and ESG We are committed to seeking to reduce adverse environmental impacts in our operations, supply chain, and product lifecycles to the extent possible. To reinforce our commitment to our stakeholders, we have launched sustainability and ESG initiatives across our organization to address certain potential and/or actual environmental impacts.
Sustainability and Corporate Responsibility We aim to identify ways to reduce adverse environmental impacts in our operations, supply chain, and product lifecycles to the extent possible. We have launched sustainability and corporate responsibility initiatives across our organization to address certain potential and/or actual environmental impacts.
Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the imposition of investigatory and remedial obligations, and the issuance of orders enjoining some or all of our operations in affected areas. The trend in environmental regulation is towards increasingly stringent and broader requirements for activities that may affect the environment.
Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the imposition of investigatory and remedial obligations, and the issuance of orders enjoining some or all of our operations in affected areas.
For example, our Sustainable Wood Sourcing Policy requires that all upstream harvesting activities be conducted legally and aims to promote alignment with sustainable forestry best practices, such as by working to understand and document Traeger’s wood pellet supply chain to promote the sourcing of wood pellet materials from responsibly managed forests and/or recycled sources. 6 Table of Contents Our position in the value chain enables us to source our wood fiber as pre- and post-industrial byproduct from the lumber and furniture industries and generally does not involve the dedicated felling of virgin timber.
For example, our Sustainable Wood Sourcing Policy requires that all upstream harvesting activities be conducted legally and aims to promote alignment with 6 Table of Contents sustainable forestry best practices, such as by working to understand and document Traeger’s wood pellet supply chain to promote the sourcing of wood pellet materials from responsibly managed forests and/or recycled sources.
Our digital content and expanding collection of recipes provide users the opportunity to test their skills with these Traeger-branded flavor enhancers. Our consumables represented 19.7% and 19.0% of our revenue for the year ended December 31, 2024 and 2023, respectively. Our Accessories We offer a variety of grill accessories (including the P.A.L.
Our Consumables We offer a variety of Traeger-branded wood pellets, rubs, and sauces for use when cooking with our grills. Our digital content and expanding collection of recipes provide users the opportunity to test their skills with these Traeger-branded flavor enhancers. Our consumables represented 22.8% and 19.7% of our revenue for the year ended December 31, 2025 and 2024, respectively.
We regularly 4 Table of Contents review our existing manufacturers and direct and indirect suppliers globally, and evaluate new manufacturers and suppliers, to support scaling our manufacturing base and strategically position our operations to mitigate risk related to geopolitical and macroeconomic pressures as we grow.
Our supply chain management team coordinates the relationships and commercial terms between our manufacturers and the suppliers of raw material and components that we have sourced directly. 4 Table of Contents We regularly review our existing manufacturers and direct and indirect suppliers globally, and evaluate new manufacturers and suppliers, to support scaling our manufacturing base and strategically position our operations to mitigate risk related to geopolitical and macroeconomic pressures as we grow.
Our flagship wood pellet grills are internet of things ( “ IoT”) devices that allow owners to program, monitor, and control their grill through our Traeger app, which has been installed on more than 3.5 million mobile devices. We complement our innovative cooking technologies with an extensive digital library of original recipes and Traeger cooking classes.
Our flagship wood pellet grills are internet of things ( “ IoT”) devices that allow owners to program, monitor, and control their grill through our Traeger app, which engaged 2.8 million active users for the fiscal year ended December 31, 2025. We complement our innovative cooking technologies with an extensive digital library of original recipes and Traeger cooking classes.
The raw materials and components used in our grills and accessories are sourced either directly by us or on our behalf by our manufacturers from a variety of suppliers. Similarly, the raw materials for our hardwood pellets produced in the United States are sourced directly by us, and from local sources wherever possible.
Similarly, the raw materials for our hardwood pellets produced in the United States are sourced directly by us, and from local sources wherever possible.
This team in China also works to identify new manufacturing capacity as needed and manages the transfer of technology between direct and indirect suppliers to manage our supply chain risk.
Our operations in China are primarily focused on quality control, product engineering, and supply chain logistics and includes employees that monitor the production quality of our manufacturers and direct suppliers. This team in China also works to identify new manufacturing capacity as needed and manages the transfer of technology between direct and indirect suppliers to manage our supply chain risk.
Product Development Our Product team’s mission is to develop world-class innovation with flawless product commercialization and 4.8-star-or-higher consumer ratings to enhance the consumer cooking experience from beginning to end. These high standards are essential to our strategy of selling a premium product with mass market appeal.
These changes are intended to streamline our channel strategy and reduce overhead while maintaining consumer access to our products. Product Development Our Product team’s mission is to develop world-class innovation with flawless product commercialization and 4.8-star-or-higher consumer ratings to enhance the consumer cooking experience from beginning to end.
As of December 31, 2024, we had approximately 601 trademark registrations and 68 pending trademark applications in the United States and other countries. As of December 31, 2024, we had approximately 73 issued U.S. patents and 13 U.S. patent 5 Table of Contents applications pending and had approximately 200 issued foreign patents and 43 foreign patent applications pending.
As of December 31, 2025, we had approximately 637 trademark registrations and 71 pending trademark applications in the United States and other countries. As of December 31, 2025, we had approximately 85 issued U.S. patents and 17 U.S. patent applications pending and had approximately 254 issued foreign patents and 78 foreign patent applications pending.
Product innovation can also increase our pricing and encourage customers to replace their grills more often than the average grill owner. As of December 31, 2024, our Product team consisted of 61 members. Our team aims to build upon our core concepts of taste, versatility, ease of use, consistency, and community.
These high standards are essential to our strategy of selling a premium product with mass market appeal. Product innovation can also increase our pricing and encourage customers to replace their grills more often than the average grill owner. As of December 31, 2025, our Product team consisted of 66 members.
Since 2014, our team has re-envisioned the outdoor cooking archetype with digital experiences and has developed and leveraged our intellectual property and proprietary rights to help protect and enhance our business and competitive position.
Since 2014, our team has re-envisioned the outdoor cooking archetype with digital experiences and has developed and leveraged our intellectual property and proprietary rights to help protect and enhance our business and competitive position. 3 Table of Contents Human Capital and Culture We believe that the Traeger culture and people differentiate us from competitors by enabling us to sustain product innovation, engage our community, elevate our brand, and form strong partnerships over the long term.
The Traeger App Our Traeger app, which we launched in 2017, is a mobile software application available on iOS or Android devices.
The Traeger App Our Traeger app, which we launched in 2017, is a mobile software application available on iOS or Android devices. The Traeger app is free to download from the Apple App Store or Google Play, is free to use, and engaged 2.8 million active users for the fiscal year ended December 31, 2025.
None of our employees are currently covered by a collective bargaining agreement, and we have had no labor-related work stoppages.
None of our employees are currently covered by a collective bargaining agreement, and we have had no labor-related work stoppages. In 2025, we initiated a reduction in force as part of Project Gravity to streamline our organizational structure and reduce costs, and we are centralizing certain operations, including MEATER, into our Salt Lake City infrastructure.
We see opportunities to expand our integrated, connected cooking platform with new types of technologies and experiences. Together with the Traegerhood, we are disrupting home cooking. Overview of Our Products and Integrated, Connected Cooking Platform The Original In 1987, we invented the original wood pellet grill.
We see opportunities to expand our integrated, connected cooking platform with new types of technologies and experiences. Together with the Traegerhood, we are disrupting home cooking. Recent Developments-Project Gravity In May 2025, we launched “Project Gravity,” a multi-step strategic optimization plan to streamline our organizational structure and rebalance our cost base.
We have implemented a quality management system designed to promote delivery of consistent, high-quality wood pellets, especially as our production volumes have increased. We utilize multiple third-party logistics providers for a significant portion of our distribution and fulfillment operations, which include warehousing and shipping.
We have implemented a quality management system designed to promote delivery of consistent, high-quality wood pellets, especially as our production volumes have increased. In 2025, we began implementing consolidation initiatives within our wood pellet production network as part of Project Gravity, while continuing to emphasize quality management systems and supply continuity.
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The Traeger app is free to download from the Apple App Store or Google Play, is free to use, and has been installed on more than 3.5 million mobile devices. 2 Table of Contents Our Consumables We offer a variety of Traeger-branded wood pellets, rubs, and sauces for use when cooking with our grills.
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Actions include a reduction in force, centralization of our MEATER business into our Salt Lake City infrastructure, discontinuation of the Costco roadshow program, redirection of Traeger.com consumers to retail partners as part of our exit from the Traeger direct-to-consumer business, transition to a distributor model in certain European markets that currently operate under a direct model, and pellet mill consolidation.
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Our core retail products are available at more than 11,200 retail locations globally as of December 31, 2024. We have built relationships with well-known national retailers such as The Home Depot, Ace Hardware, and Costco.
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We recorded $24.9 million of total restructuring and other costs related to these actions in fiscal year 2025 and expect the program to be substantially completed by the end of fiscal year 2026. Overview of Our Products and Integrated, Connected Cooking Platform The Original In 1987, we invented the original wood pellet grill.
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We also work with a significant number of independent retailers that cater to local communities and specific categories, such as hardware, camping, outdoor, farm, ranch, and barbecue. Our DTC channel covers sales directly to customers through our website.
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Our Accessories We offer a variety of grill accessories (including the MEATER smart thermometers, P.A.L.
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Human Capital and Culture We believe that the Traeger culture and people differentiate us from competitors by enabling us to sustain product innovation, engage our community, elevate our brand, and form strong partnerships over the long term. We observe that many other cooking brands produce one compelling innovation and then merely add incremental features.
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Our core retail products are available through a broad network of retail partners across global markets.
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We changed the outdoor cooking landscape with the original wood pellet grill, and we did so again with the first cloud-connected offering in the category.
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Going forward, as part of Project Gravity, we are discontinuing the Costco roadshow program, redirecting Traeger.com consumers to our retail partners’ websites as part of our exit from the Traeger direct-to-consumer business, and transitioning to a distributor model in certain European markets that currently operate under a direct model.
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We believe our culture and people will permit us to continue the disruption in outdoor cooking and potentially expand it into other ancillary areas of the at-home cooking market. 3 Table of Contents Mission and Values In our model, culture precedes strategy and process.
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Our team aims to build upon our core concepts of taste, versatility, ease of use, consistency, and community.
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Choices about how we grow and operate the company stem from our core values, which help to attract and retain talented people from within and beyond our industry.
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We remain focused on maintaining a strong culture to support innovation and execution during this transition. Manufacturing, Supply Chain, and Logistics We have developed an efficient and scalable global supply chain with a focus on improving products and services while reducing costs.
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We hire for risk tolerance, intellectual curiosity, passion, humility, and a drive to do “big things.” We teach new hires the Traeger culture and strategy and then toss them into the proverbial deep end. We celebrate their successes and help them learn from their mistakes.
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Approximately 50% of our sales is driven by goods imported to the United States from China, and we continue to monitor trade policy and work on strategies to offset the impact of tariffs.
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Our people are essential to our success, and we expect headcount to grow for the foreseeable future as we focus on recruiting employees with experience to continue to bolster various functions related to our operations as a publicly traded company and to support our expected growth.
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Approximately 80% of our grills are manufactured in China, while substantially all of our consumables are manufactured in the United States. The raw materials and components used in our grills and accessories are sourced either directly by us or on our behalf by our manufacturers from a variety of suppliers.
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Our internal supply chain management team oversees our global supply chain and includes personnel in the United States and China. Our operations in China are dedicated to quality control, product engineering, and supply chain logistics and includes employees that monitor the production quality of our manufacturers and direct suppliers.
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We also are centralizing certain functions to drive efficiency and control costs. These actions may result in near-term changes to production flows and logistics, while we continue to utilize multiple third-party logistics providers for warehousing and shipping. We utilize multiple third-party logistics providers for a significant portion of our distribution and fulfillment operations, which include warehousing and shipping.
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Our supply chain management team coordinates the relationships and commercial terms between our manufacturers and the suppliers of raw material and components that we have sourced directly.
Added
Our position in the value chain enables us to source our wood fiber as pre- and post-industrial byproduct from the lumber and furniture industries and generally does not involve the dedicated felling of virgin timber.
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We are increasingly focused on sourcing wood fiber with sustainability chain-of-custody verification through the Forest Stewardship Council (“FSC”).
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The general trend in environmental regulation is towards increasingly stringent and broader requirements for activities that may affect the environment.
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Views and approaches on the appropriate value and use for a social cost of carbon vary and in some instances remain uncertain, but to the extent such a figure is adopted or increased it may result in more stringent GHG emission or forestry standards that may adversely impact our operations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe PIPL also requires data processors to rely on a data export mechanism and comply with certain requirements prior to the transfer of personal information outside of China, such as compliance with a security assessment (“Security Assessment”) or certification by an agency designated by the relevant authorities (“Certification”) or entering into standard form model contracts approved by the relevant authorities (“SCCs”) with the overseas recipient, unless an exemption under the Provisions for Promoting and Regulating Cross-Border Data Flows (“Provisions”) applies, such as the transfer being necessary for the performance of a contract which the individual is a party to or necessary for cross-border HR management or the number of individuals’ whose personal information is transferred is less than 100,000 since January 1st of the current year.
Biggest changeThe PIPL also requires data processors to rely on a data export mechanism and comply with certain requirements prior to the transfer of personal information outside of China, such as compliance with a security assessment (“Security Assessment”) or certification by an agency designated by the relevant authorities (“Certification”) or entering into standard form model contracts approved by the relevant authorities (“SCCs”) with the overseas recipient, unless an exemption under the Provisions for Promoting and Regulating Cross-Border Data Flows (“Provisions”) applies, such as the transfer being necessary for the performance of a contract which the individual is a party to or necessary for cross-border HR management or the number of individuals’ whose personal information is transferred is less than 100,000 since January 1st of the current year. 37 Table of Contents According to the Provisions published by the CAC on March 22, 2024, a data processor must apply for the Security Assessment organized by the CAC under any of the following circumstances and receive an approval from the relevant authorities before the information may be transferred outside of the PRC: (i) where a data processor or a CIIO provides important data overseas, (ii) where a CIIO transfers personal information overseas (unless an exemption applies), or (iii) where a personal information processor either transfers more than 1 million individuals’ personal information or more than 10,000 individuals’ sensitive personal information overseas since January 1st of the current year, in each case unless an exemption applies.
Any of these events or the impact on the availability of wood fiber could increase our operating costs or prevent us from selling our wood pellets in quantities that satisfy 23 Table of Contents customer demand and thereby could have a material adverse effect on our brand, reputation, business, financial condition, and results of operations.
Any of these events or the impact on the 23 Table of Contents availability of wood fiber could increase our operating costs or prevent us from selling our wood pellets in quantities that satisfy customer demand and thereby could have a material adverse effect on our brand, reputation, business, financial condition, and results of operations.
Congress, the U.S. federal courts, and the 33 Table of Contents United States Patent and Trademark Office, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain or license in the future.
Congress, the U.S. federal courts, and the United States Patent and Trademark Office, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain or license in 33 Table of Contents the future.
Any of these IT Systems could fail or experience a service interruption for a number of reasons, including human or technological error, malicious code embedded in open-source software, misconfigurations, “bugs,” or other vulnerabilities in commercial software that are integrated into our (or our suppliers’ or service providers’) IT Systems, products, or services, or disasters or our failure to properly maintain IT System redundancy or protect, repair, maintain, or upgrade our IT Systems.
Any of these IT Systems could fail or experience a service interruption for a number of reasons, including human or technological error, malicious code embedded in open-source software, misconfigurations, “bugs,” other vulnerabilities in commercial software that are integrated into our (or our suppliers’ or service providers’) IT Systems, products, or services, or disasters or our failure to properly maintain IT System redundancy or protect, repair, maintain, or upgrade our IT Systems.
A service interruption or shutdown could have a 34 Table of Contents materially adverse impact on our operating activities and could result in material financial, reputational, competitive, and business harm.
A service interruption or shutdown could have a materially adverse impact on our operating activities and could result in material financial, reputational, competitive, and 34 Table of Contents business harm.
We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners, and others, including personal data, as well as proprietary information belonging to our business such as trade secrets (collectively, “Confidential Information”).
We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners, and others, including personal information, as well as proprietary information belonging to our business such as trade secrets (collectively, “Confidential Information”).
We collect, process, store, and use data, including personal data, confidential information, or company data, which subjects us to governmental regulation and other legal obligations related to privacy and security, and our compliance with ever-evolving federal, state, and foreign laws relating to the handling of such data involves significant expenditure and resources, and any actual or perceived failure by us to comply with such obligations may result in significant liability, negative publicity, and/or an erosion of trust, which could materially adversely affect our business, results of operations, and financial conditions.
We collect, process, store, and use data, including personal information, confidential information, or company data, which subjects us to governmental regulation and other legal obligations related to privacy and security, and our compliance with ever-evolving federal, state, and foreign laws relating to the handling of such data involves significant expenditure and resources, and any actual or perceived failure by us to comply with such obligations may result in significant liability, negative publicity, and/or an erosion of trust, which could materially adversely affect our business, results of operations, and financial conditions.
As such, we and our vendors are subject to numerous federal, state, and international data privacy and security laws, rules, regulations, industry standards, and other requirements, including those that apply generally to the handling of information about individuals, and those that are specific to certain industries, sectors, contexts, or locations, governing the collection, use, disclosure, retention, security, transfer, storage, and other processing of personal data.
As such, we and our vendors are subject to numerous federal, state, and international data privacy and security laws, rules, regulations, industry standards, and other requirements, including those that apply generally to the handling of information about individuals, and those that are specific to certain industries, sectors, contexts, or locations, governing the collection, use, disclosure, retention, security, transfer, storage, and other processing of personal information.
A Provider may also change its fee structure, add fees associated with access to and use of its platform or app store, limit the use of personal data information and other data for advertising purposes, or restrict how users can share information on their platform or across other platforms.
A Provider may also change its fee structure, add fees associated with access to and use of its platform or app store, limit the use of personal information and other data for advertising purposes, or restrict how users can share information on their platform or across other platforms.
Threats to the confidentiality, integrity, and availability of our IT Systems and Confidential Information are increasingly diverse and sophisticated, including from a range of cybersecurity risks and threats, such as viruses and worms, ransomware attacks, social engineering/phishing attacks, denial-of-service attacks, physical or electronic break-ins, email scams in an attempt to acquire data or company assets, third-party or employee theft or misuse, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations.
Threats to the confidentiality, integrity, and availability of our IT Systems and Confidential Information are increasingly diverse and sophisticated, including from a range of cybersecurity risks and threats, such as viruses and worms, malware and ransomware attacks, social engineering/phishing attacks, denial-of-service attacks, physical or electronic break-ins, email scams in an attempt to acquire data or company assets, third-party or employee theft or misuse, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations.
Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management, including the following: 40 Table of Contents • amendments to certain provisions of our certificate of incorporation or amendments to our bylaws will generally require the approval of at least two-thirds of the voting power of our outstanding capital stock; • our staggered Board; • at any time when the parties to our Stockholders Agreement, dated as of July 28, 2021 and as amended on April 30, 2024 (the “Stockholders Agreement”), with AEA Investors (the “AEA Fund”), Ontario Teachers’ Pension Plan Board (“OTPP”), and Trilantic Capital Partners (“TCP”), beneficially own, in the aggregate, at least a majority of the voting power of our outstanding capital stock, our stockholders may take action by consent without a meeting, and at any time when the parties to our Stockholders Agreement beneficially own, in the aggregate, less than the majority of the voting power of our outstanding capital stock, our stockholders may not take action by written consent, but may only take action at a meeting of stockholders; • our certificate of incorporation does not provide for cumulative voting; • vacancies on our Board are able to be filled only by our Board and not by stockholders, subject to the rights granted pursuant to the Stockholders Agreement and the Management Stockholders Agreement, dated as of July 28, 2021 (the “Management Stockholders Agreement, and together with the Stockholders Agreement, the “Stockholders Agreements”), between the Company and Jeremy Andrus; • a special meeting of our stockholders may only be called by the chairperson of our Board, our Chief Executive Officer, or a majority of our Board; • our certificate of incorporation restricts the forum for certain litigation against us to Delaware or the federal courts, as applicable, unless we otherwise consent in writing; • our Board has the authority to issue shares of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures apply for stockholders (other than the parties to our Stockholders Agreements for nominations made pursuant to the terms of the Stockholders Agreements) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management, including the following: • amendments to certain provisions of our certificate of incorporation or amendments to our bylaws will generally require the approval of at least two-thirds of the voting power of our outstanding capital stock; • our staggered Board; • at any time when the parties to our Stockholders Agreement, dated as of July 28, 2021 and as amended on April 30, 2024 (the “Stockholders Agreement”), with AEA Investors (the “AEA Fund”), Ontario Teachers’ Pension Plan Board (“OTPP”), and Trilantic Capital Partners (“TCP”), beneficially own, in the aggregate, at least a majority of the voting power of our outstanding capital stock, our stockholders may take action by consent without a meeting, and at any time when the parties to our Stockholders Agreement beneficially own, in the aggregate, less than the majority of the voting power of our outstanding capital stock, our stockholders may not take action by written consent, but may only take action at a meeting of stockholders; • our certificate of incorporation does not provide for cumulative voting; • vacancies on our Board are able to be filled only by our Board and not by stockholders, subject to the rights granted pursuant to the Stockholders Agreement and the Management Stockholders Agreement, dated as of July 28, 2021 (the “Management Stockholders Agreement, and together with the Stockholders Agreement, the “Stockholders Agreements”), between the Company and Jeremy Andrus; • a special meeting of our stockholders may only be called by the chairperson of our Board, our Chief Executive Officer, or a majority of our Board; • our certificate of incorporation restricts the forum for certain litigation against us to Delaware or the federal courts, as applicable, unless we otherwise consent in writing; • our Board has the authority to issue shares of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures apply for stockholders (other than the parties to our Stockholders Agreements for nominations made pursuant to the terms of the Stockholders Agreements) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
The Regulations apply broadly to any network data processing activities (not only personal data processing activities) and reiterate and expand on the existing obligations on data processors under the Cybersecurity Law, Data Security Law, and the PIPL and introduce new network and data security obligations, such as a requirement to report any risks arising from network products and services that may endanger national security or public interest to the relevant authorities within 24 hours.
The Regulations apply broadly to any network data processing activities (not only personal information processing activities) and reiterate and expand on the existing obligations on data processors under the Cybersecurity Law, Data Security Law, and the PIPL and introduce new network and data security obligations, such as a requirement to report any risks arising from network products and services that may endanger national security or public interest to the relevant authorities within 24 hours.
Such standards require us to publish statements that describe how we handle personal data and choices individuals may have about the way we handle their personal data. If such information that we publish is considered untrue or inaccurate, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences.
Such standards require us to publish statements that describe how we handle personal information and choices individuals may have about the way we handle their personal information. If such information that we publish is considered untrue or inaccurate, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences.
As we expand our business, we will need significant cash from operations to purchase inventory, increase our product development, expand our manufacturer and supplier relationships, pay personnel, pay for the increased costs associated with operating as a public company, expand internationally, and further invest in our sales and marketing efforts.
As we expand our business, we will need significant cash from operations to purchase inventory, increase our product development, expand our manufacturer and supplier relationships, pay personnel, pay for the costs associated with operating as a public company, expand internationally, and further invest in our sales and marketing efforts.
We have also experienced increased demand for our products in the past, for example due to the impact that the COVID-19 pandemic had on consumer behavior as a result of various stay-at-home orders and restrictions on dining options and restaurant closures.
We have experienced increased demand for our products in the past, for example due to the impact that the COVID-19 pandemic had on consumer behavior as a result of various stay-at-home orders and restrictions on dining options and restaurant closures.
We may make fewer sales to our retailers for a variety of reasons, including, but not limited to: • failure to accurately identify the needs of our retailers; • a lack of acceptance of new products, consumables, accessories, or services; • failure to obtain shelf space or prominent digital placement from our retailers; • loss of business relationships, including due to brand or reputational harm; • breaches of contracts with retailers, or our failure to enter into or renew our contracts or purchase orders with major retailers; 15 Table of Contents • consolidation within the retail industry among retailers and retail chains; • reduced, delayed, or material changes to the business requirements or operations of our retailers; • failure to fulfil orders from our retailers in full or on a timely basis; • strikes or other work stoppages affecting sales and inventory of our major retailers; • increasing competition by our competitors or the competitors of our major retailers that do not offer or sell our products; • store closures, decreased foot traffic, recession, or other adverse effects resulting from public health crises; or • general failure or bankruptcy of any of our major retailers.
We may make fewer sales to our retailers for a variety of reasons, including, but not limited to: • failure to accurately identify the needs of our retailers; • a lack of acceptance of new products, consumables, accessories, or services; • failure to obtain shelf space or prominent digital placement from our retailers; • loss of business relationships, including due to brand or reputational harm; • breaches of contracts with retailers, or our failure to enter into or renew our contracts or purchase orders with major retailers; • consolidation within the retail industry among retailers and retail chains; • reduced, delayed, or material changes to the business requirements or operations of our retailers; • failure to fulfil orders from our retailers in full or on a timely basis; • strikes or other work stoppages affecting sales and inventory of our major retailers; • increasing competition by our competitors or the competitors of our major retailers that do not offer or sell our products; • store closures, decreased foot traffic, recession, or other adverse effects resulting from public health crises; or • general failure or bankruptcy of any of our major retailers.
Moreover, while we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of our company and/or products, such initiatives may be costly and may not have the desired effect.
Moreover, while we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the profile of our company and/or products, such initiatives may be costly and may not have the desired effect.
Many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations for AI. Additionally, existing laws and regulations may be interpreted in ways that would affect the operation or use of AI.
Many federal, state and foreign government bodies and agencies have enacted, introduced or are currently considering additional laws and regulations for AI. Additionally, existing laws and regulations may be interpreted in ways that would affect the operation or use of AI.
Our reliance on suppliers and manufacturers in foreign markets creates risks inherent in doing business in foreign jurisdictions, including: (a) the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to the importation and taxation of goods; (b) changes in the U.S. or international regulations requiring the enactment of more restrictive environmental regulations in markets where we manufacture our products, including China, Vietnam, and/or Taiwan; (c) weaker protection for intellectual property and other legal rights than in the United States, and practical difficulties in enforcing intellectual property and other rights outside of the United States; (d) compliance with U.S. and foreign laws relating to foreign operations and business activities, including the FCPA and the UK Bribery Act (which generally prohibit U.S. companies from making improper payments to govern officials and private counterparties for the purpose of obtaining or retaining business or securing an unfair business advantage) and regulations of the U.S.
Our reliance on suppliers and manufacturers in foreign markets creates risks inherent in doing business in foreign jurisdictions, including: (a) the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to the importation and taxation of goods; (b) changes in the U.S. or international regulations requiring the enactment of more restrictive environmental regulations in markets where we manufacture our products, including China, Vietnam, and/or Taiwan; (c) weaker protection for intellectual property and other 29 Table of Contents legal rights than in the United States, and practical difficulties in enforcing intellectual property and other rights outside of the United States; (d) compliance with U.S. and foreign laws relating to foreign operations and business activities, including the FCPA and the UK Bribery Act (which generally prohibit U.S. companies from making improper payments to govern officials and private counterparties for the purpose of obtaining or retaining business or securing an unfair business advantage) and regulations of the U.S.
The actions that will require prior written consent, subject to the terms set forth in the Stockholders Agreement, include: (i) change in control transactions, (ii) acquiring or disposing of assets or any business enterprise or division thereof for consideration in excess of $250.0 million in any single transaction or series of transactions, (iii) increasing or decreasing the size of our Board, (iv) terminating the employment of our chief executive officer or hiring a new chief executive officer, (v) initiating any liquidation, dissolution, bankruptcy, or other insolvency proceeding involving us or any of our significant 41 Table of Contents subsidiaries, and (vi) any transfer, issue, issuance, sale, or disposition of any shares of common stock, other equity securities, equity-linked securities, or securities that are convertible into equity securities of us or our subsidiaries to any person or entity that is a non-strategic financial investor in a private placement transaction or series of transactions.
The actions that will require prior written consent, subject to the terms set forth in the Stockholders Agreement, include: (i) change in control transactions, (ii) acquiring or disposing of assets or any business enterprise or division thereof for consideration in excess of $250.0 million in any single transaction or series of transactions, (iii) increasing or decreasing the size of our Board, (iv) terminating the employment of our chief executive officer or hiring a new chief executive officer, (v) initiating any liquidation, dissolution, bankruptcy, or other insolvency proceeding involving us or any of our significant subsidiaries, and (vi) any transfer, issue, issuance, sale, or disposition of any shares of common stock, other equity securities, equity-linked securities, or securities that are convertible into equity securities of us or our subsidiaries to any person or entity that is a non-strategic financial investor in a private placement transaction or series of transactions.
Pursuant to our certificate of incorporation we renounced, to the fullest extent permitted by law and in accordance with Section 122(17) of the Delaware General Corporation Law, all interest and expectancy that we otherwise would be entitled to have in, and all rights to be offered an opportunity to participate in, any opportunity that may be presented to the AEA Fund, OTPP, and TCP or their affiliates (other than us and our subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees, or other representatives (other than any 42 Table of Contents such person who is also our employee or an employee of our subsidiaries), or any director or stockholder who is not employed by the AEA Fund, OTPP, and TCP or their affiliates, and any director or stockholder who is not employed by us or our subsidiaries, therefore, have no duty to communicate or present corporate opportunities to us and have the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to recommend, assign, or otherwise transfer such corporate opportunity to persons other than us, including to any director or stockholder who is not employed by us or our subsidiaries.
Pursuant to our certificate of incorporation we renounced, to the fullest extent permitted by law and in accordance with Section 122(17) of the Delaware General Corporation Law, all interest and expectancy that we otherwise would be entitled to have in, and all rights to be offered an opportunity to participate in, any opportunity that may be presented to the AEA Fund, OTPP, and TCP or their affiliates (other than us and our subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees, or other representatives (other than any such person who is also our employee or an employee of our subsidiaries), or any director or stockholder who is not employed by the AEA Fund, OTPP, and TCP or their affiliates, and any director or stockholder who is not employed by us or our subsidiaries, therefore, have no duty to communicate or present corporate opportunities to us and have the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to recommend, assign, or otherwise transfer such corporate opportunity to persons other than us, including to any director or stockholder who is not employed by us or our subsidiaries.
Our First Lien Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in certain acts including, but not limited to, our ability to incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments, and engage in certain affiliate transactions.
Our First Lien Credit Agreement, as amended, contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in certain acts including, but not limited to, our ability to incur additional indebtedness or liens (with certain exceptions), make certain investments, engage in fundamental changes or transactions including changes of control, transfer or dispose of certain assets, make restricted payments (including dividends), engage in new lines of business, make certain prepayments, and engage in certain affiliate transactions.
If we experience significantly increased demand, or if we need to replace an existing manufacturer due to lack of performance or ESG considerations, we may be unable to supplement or replace manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins, and harm our ability to deliver our products on time.
If we experience significantly increased demand, or if we need to replace an existing manufacturer due to lack of performance or sustainability considerations, we may be unable to supplement or replace manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins, and harm our ability to deliver our products on time.
Such legislation may lead to increased costs for our company in sourcing materials for our products, and to the extent parties in our supply chain are seen to not meet certain standards of ESG performance, whether by customers, regulators, or otherwise, this may lead to a requirement to change suppliers, reputational impacts to our company, or (in certain cases) import eligibility for certain of our products.
Such legislation may lead to increased costs for our company in sourcing materials for our products, and to the extent parties in our supply chain are seen to not meet certain standards of sustainability performance, whether by customers, regulators, or otherwise, this may lead to a requirement to change suppliers, reputational impacts to our company, or (in certain cases) import eligibility for certain of our products.
Moreover, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal data secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. State consumer protection laws provide similar causes of action for unfair or deceptive practices.
Moreover, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. State consumer protection laws provide similar causes of action for unfair or deceptive practices.
The enactment of the CCPA has prompted a wave of new legislation in a number of U.S. states which imposes, or has the potential to impose, additional obligations on companies that collect, store, use, retain, disclose, transfer, and otherwise process confidential, sensitive, and personal data, and will continue to shape the data privacy environment nationally.
The enactment of the CCPA has prompted a wave of legislation in a number of U.S. states which imposes, or has the potential to impose, additional obligations on companies that collect, store, use, retain, disclose, transfer, and otherwise process confidential, sensitive, and personal information, and will continue to shape the data privacy environment nationally.
We are not aware of any existing restrictions or limitations on the use of our NOLs or other tax attributes under Section 382. However, we may undergo an ownership change in the future, including as a result of the combined effect of this and future offerings, which would result in an annual limitation under Section 382.
We are not aware of any existing restrictions or limitations on the use of our NOLs or other tax attributes under Section 382. However, we may undergo an ownership change in the future, including as a result of the combined effect of future offerings, which would result in an annual limitation under Section 382.
Any failure or perceived failure by us to comply with applicable privacy, security, and data protection laws, rules, regulations, and standards, or with other obligations to which we may be or may become subject, may result in proceedings, investigation, or actions against us by individuals, consumer rights groups governmental entities or regulators.
Any failure or perceived failure by us to comply with applicable privacy, security, and data protection laws, rules, regulations, and standards, or with other obligations to which we may be or may become subject, may result in proceedings, investigations, or actions against us by individuals, consumer rights groups governmental entities or regulators.
Our U.S. total addressable market (“TAM”) is estimated to be 76 million households in the United States, which is calculated based on an estimated number of households in the United States that have a grill, which is estimated based on internal and third-party market research, historical surveys, and interviews with market participants.
Our U.S. total addressable market (“TAM”) is estimated to be 78 million households in the United States, which is calculated based on an estimated number of households in the United States that have a grill, which is estimated based on internal and third-party market research, historical surveys, and interviews with market participants.
In addition, regulation in this area has evolved considerably over recent years and is likely to continue to do so, which may lead to additional costs and challenges associated with ensuring compliance with changing standards. Separately, various stakeholders consider ESG matters in their decision-making.
In addition, regulation in this area has evolved considerably over recent years and is likely to continue to do so, which may lead to additional costs and challenges associated with ensuring compliance with changing standards. Separately, various stakeholders consider sustainability matters in their decision-making.
Our ability to effectively manage and maintain our inventory and internal reports, and to ship products to customers and invoice them on a timely basis, depends significantly on our enterprise resource planning, warehouse management, and other IT Systems, including those operated by certain of our third-party partners.
Our ability to effectively manage and maintain our inventory and internal reports, and to ship products to customers and invoice them on a timely basis, depends significantly on our enterprise resource planning, warehouse management, and other IT Systems, including those operated or managed by certain of our third-party partners.
A limited number of stockholders hold a substantial portion of our outstanding common stock, and their interests may conflict with our interests and the interests of other stockholders. As of March 3, 2025, funds or entities affiliated with AEA Fund, OTPP, and TCP owned approximately 60% of the voting power of our common stock.
A limited number of stockholders hold a substantial portion of our outstanding common stock, and their interests may conflict with our interests and the interests of other stockholders. As of March 3, 2026, funds or entities affiliated with AEA Fund, OTPP, and TCP owned approximately 60% of the voting power of our common stock.
In addition, pursuant to the Stockholders Agreement between us and these investors, we agreed to nominate to our Board individuals designated by each of the AEA Fund, OTPP, and TCP, and each such investor has the right to designate directors for so long as they each beneficially own at least 5% of the aggregate number of shares of common stock outstanding immediately following our IPO.
In addition, pursuant to the Stockholders Agreement between us and these investors, we agreed to nominate to our Board individuals designated by each of the AEA Fund, OTPP, and TCP, and each such investor has the right to designate directors for so long as they each beneficially own at least 5% of the aggregate number of shares of 41 Table of Contents common stock outstanding immediately following our IPO.
We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we are not and will continue not to be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies or that have opted out of using such extended transition period, which may make comparison of our financial statements with those of other public companies more difficult.
Unless as otherwise disclosed, we have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we are not and will continue not to be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies or that have opted out of using such extended transition period, which may make comparison of our financial statements with those of other public companies more difficult.
If we are not able to overcome these competitive challenges, effectively market our current and future products, and otherwise compete effectively against our current or potential competitors, our prospects, financial condition, and results of operations could be harmed. 14 Table of Contents Use of social media and community ambassadors may materially and adversely affect our reputation or subject us to fines or other penalties.
If we are not able to overcome these competitive challenges, effectively market our current and future products, and otherwise compete effectively against our current or potential competitors, our prospects, financial condition, and results of operations could be harmed. Use of social media and community ambassadors may materially and adversely affect our reputation or subject us to fines or other penalties.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the full impact that future laws, regulations, standards, or market perception of their requirements may have on our use of AI or our business and may not always be able to anticipate how to respond to these laws or regulations.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the full impact that future laws, regulations, standards, or market perception of their 39 Table of Contents requirements may have on our use of AI or our business and may not always be able to anticipate how to respond to these laws or regulations.
While we have taken steps to manage such risks, such efforts can require us to incur significant costs and may not be effective, due in part to the unpredictability associated with the time horizons for certain climate-related projects. Additionally, to the extent such events increase, it may adversely impact the availability or cost of insurance.
While we have taken steps to manage 47 Table of Contents such risks, such efforts can require us to incur significant costs and may not be effective, due in part to the unpredictability associated with the time horizons for certain climate-related projects. Additionally, to the extent such events increase, it may adversely impact the availability or cost of insurance.
If our suppliers, manufacturers, or retailers fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed, and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.
If our suppliers, manufacturers, or retailers fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other 30 Table of Contents obligations, norms, or ethical standards, our reputation and brand image could be harmed, and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.
Any integration of AI by us or in third parties’ operations, products, or 39 Table of Contents services is expected to pose new or unknown intellectual property and cybersecurity risks and challenges. Additionally, if the content, analyses, or recommendations that AI applications assist in producing are deficient, inaccurate, or biased, our business and results of operations may be adversely affected.
Any integration of AI by us or in third parties’ operations, products, or services is expected to pose new or unknown intellectual property and cybersecurity risks and challenges. Additionally, if the content, analyses, or recommendations that AI applications assist in producing are deficient, inaccurate, or biased, our business and results of operations may be adversely affected.
As a controlled company, we may elect not to comply with certain corporate governance requirements, including the requirements that: • a majority of our Board consists of “independent directors,” as defined under the rules of such exchange; • our Board has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and • our Board has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
As a controlled company, we may elect not to comply with certain corporate governance requirements, including the requirements that: • a majority of our Board consists of “independent directors,” as defined under the rules of such exchange; • our Board has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and 44 Table of Contents • our Board has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
Regulation such as this may lead to increased operational, procurement, or other costs, which may in turn lead to a reduction in our business prospects and may also lead to risks to our reputation to the extent that we are determined to be using suppliers that do not meet standards of ESG conduct expected by our customers, investors, and other stakeholders.
Regulation such as this may lead to increased operational, procurement, or other costs, which may in turn lead to a reduction in our business prospects and may also lead to risks to our reputation to the extent that we are determined to be using suppliers that do not meet standards of sustainable or responsible conduct expected by our customers, investors, and other stakeholders.
The limited geographical scope of our distribution and fulfillment centers makes us vulnerable to natural disasters, weather-related disruptions, accidents, system failures, public health crises, or other unforeseen events that could delay or impair our ability to fulfill orders to retail channel customers and/or ship products to DTC customers, which could harm our sales.
The limited geographical scope of our distribution and 28 Table of Contents fulfillment centers makes us vulnerable to natural disasters, weather-related disruptions, accidents, system failures, public health crises, or other unforeseen events that could delay or impair our ability to fulfill orders to retail channel customers and/or ship products to DTC customers, which could harm our sales.
If the market for wood pellet grills does not develop, develops more slowly than expected, or becomes saturated with competitors, or if our products do not achieve market acceptance, our business, financial condition, and results of operations could be adversely affected. 17 Table of Contents Our estimated addressable market is subject to inherent challenges and uncertainties.
If the market for wood pellet grills does not develop, develops more slowly than expected, or becomes saturated with competitors, or if our products do not achieve market acceptance, our business, financial condition, and results of operations could be adversely affected. Our estimated addressable market is subject to inherent challenges and uncertainties.
The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws, interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws, interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent 31 Table of Contents with our corporate structure and intercompany arrangements.
It may require significant resources and management oversight to maintain and, if necessary, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and results of operations.
It may require 43 Table of Contents significant resources and management oversight to maintain and, if necessary, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and results of operations.
Although we are not presently aware of any material contamination on our properties or any material remediation liabilities, we cannot assure you that we will not be exposed to significant remediation obligations or liabilities in the future. Moreover, certain substances that have not historically been considered hazardous substances may subsequently be designated as such.
Although we are not presently aware of any material contamination on our properties or any material remediation liabilities, we cannot assure you that we will not be exposed to significant remediation obligations or liabilities in the future. Moreover, certain substances that have not historically been considered hazardous substances may subsequently be designated 25 Table of Contents as such.
For example, since the CCPA went into effect, comprehensive privacy statutes that share similarities with the CCPA are now in effect and enforceable in thirteen states, and will soon be enforceable in several other states as well.
For example, since the CCPA went into effect, comprehensive privacy statutes that share similarities with the CCPA are now in effect and enforceable in twenty states, and will soon be enforceable in several other states as well.
In addition, we could incur significant costs to correct any defects, 13 Table of Contents warranty claims, or other problems, including costs related to product recalls, and such costs may not be covered by insurance and could have a material adverse effect on our business, financial condition, and results of operations.
In addition, we could incur significant costs to correct any defects, warranty claims, or other problems, including costs related to product recalls, and such costs may not be covered by insurance and could have a material adverse effect on our business, financial condition, and results of operations.
Additionally, as we accept debit and credit cards for payment, we are subject to the Payment Card Industry Data Security Standard (“PCI-DSS”), issued by the Payment Card Industry Security Standards Council. PCI-DSS contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing, and transmission of cardholder data.
Additionally, as we accept debit and credit cards for 35 Table of Contents payment, we are subject to the Payment Card Industry Data Security Standard (“PCI-DSS”), issued by the Payment Card Industry Security Standards Council. PCI-DSS contains compliance guidelines with regard to our security surrounding the physical and electronic storage, processing, and transmission of cardholder data.
If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. We do not intend to pay dividends for the foreseeable future.
If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 45 Table of Contents We do not intend to pay dividends for the foreseeable future.
Although our products can be used year-round, unusually adverse weather conditions can negatively impact the timing of the sales of certain of our products, causing reduced sales and negatively impacting profitability when such conditions exist. Prolonged adverse weather conditions, or chronic changes in weather patterns, could significantly reduce our sales in one or more periods.
Although our products can be used year-round, unusually adverse weather 19 Table of Contents conditions can negatively impact the timing of the sales of certain of our products, causing reduced sales and negatively impacting profitability when such conditions exist. Prolonged adverse weather conditions, or chronic changes in weather patterns, could significantly reduce our sales in one or more periods.
Revenues and certain expenses in markets outside of the United States are recognized in local foreign currencies, and we are exposed to potential gains or losses from the translation and remeasurement of those amounts into U.S. dollars for consolidation into our financial statements.
Revenues and certain expenses in markets outside of the United States are recognized in 46 Table of Contents local foreign currencies, and we are exposed to potential gains or losses from the translation and remeasurement of those amounts into U.S. dollars for consolidation into our financial statements.
Any new or modified laws or regulations at any of these levels could have the effect of reducing forestry operations in areas where we procure our raw materials, and consequently may prevent us from purchasing raw materials in an economic manner, or at all.
Any new or modified laws or regulations at any of these levels could have the effect of reducing forestry operations in 26 Table of Contents areas where we procure our raw materials, and consequently may prevent us from purchasing raw materials in an economic manner, or at all.
These requirements, and their application, interpretation and amendment are constantly evolving and developing. In the United States, the FTC and many state regulators are interpreting and enforcing federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data.
These requirements, and their application, interpretation and amendment are constantly evolving and developing. In the United States, the FTC and many state regulators are interpreting and enforcing federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of personal information.
“Risk Factors.” Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.
Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required 43 Table of Contents new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations.
If we fail to timely and effectively obtain shipments of products from our manufacturers and deliver products to our customers, including our retailers, our business, and results of operations could be harmed. 28 Table of Contents Our business depends on our ability to source and distribute products in a timely manner.
If we fail to timely and effectively obtain shipments of products from our manufacturers and deliver products to our customers, including our retailers, our business, and results of operations could be harmed. Our business depends on our ability to source and distribute products in a timely manner.
As we increase the extent of our international operations, such foreign currency exchange rate fluctuations could make it more 46 Table of Contents difficult to detect underlying trends in our business and results of operations, such as our margins and cash flows.
As we increase the extent of our international operations, such foreign currency exchange rate fluctuations could make it more difficult to detect underlying trends in our business and results of operations, such as our margins and cash flows.
“Risk Factors—We are subject to risks related to sustainability and ESG issues.” The United States has also adopted legislation restricting the use of certain suppliers, as well as products mined, produced, or manufactured wholly or in part from certain regions, due to ESG considerations.
“Risk Factors—We are subject to risks related to sustainability and corporate responsibility issues.” The United States has also adopted legislation restricting the use of certain suppliers, as well as products mined, produced, or manufactured wholly or in part from certain regions, due to such considerations.
State laws are changing rapidly and there is discussion in Congress of a new federal data protection and privacy law to which we may become subject if it is enacted.
State laws are changing 36 Table of Contents rapidly and there is discussion in Congress of a new federal data protection and privacy law to which we may become subject if it is enacted.
State forestry laws, as well as land use regulations and zoning ordinances at the local level, are also used to manage forests in the United States, as well as other regions from which we may need to source raw materials in the 26 Table of Contents future.
State forestry laws, as well as land use regulations and zoning ordinances at the local level, are also used to manage forests in the United States, as well as other regions from which we may need to source raw materials in the future.
A cyberattack could lead to interruptions, delays, loss of critical data, unauthorized access to Confidential Information, and loss of customer confidence, which could have a material adverse effect on our reputation, business, financial condition, results or operations, growth, and future prospects.
A cyberattack or other incident could lead to interruptions, delays, loss of critical data, unauthorized access to Confidential Information, payment fraud, and loss of customer confidence, which could have a material adverse effect on our reputation, business, financial condition, results or operations, growth, and future prospects.
Regulatory authorities in the United States, European Union, and elsewhere are increasingly regulating hazardous materials and other substances, and those regulations could affect sales of our products. Legislation and regulations concerning hazardous materials and other substances can restrict the sale of products and/or increase the cost of producing them.
Regulatory authorities in the United States, European Union, and elsewhere regulate hazardous materials and other substances, and those regulations could affect sales of our products. Legislation and regulations concerning hazardous materials and other substances can restrict the sale of products and/or increase the cost of producing them.
Such developments could also result in the Company needing to relocate all or part of its manufacturing operations or halt sales and purchases of products containing PFAS. For example, in the United States, many states have enacted standards for PFAS contamination in drinking water sources and PFAS used in consumer products.
Such developments could also result in the Company needing to relocate all or part of its manufacturing operations or halt sales and purchases of products containing PFAS. For example, in the United States, many states have enacted standards for PFAS contamination in drinking water sources and PFAS used in certain categories of consumer products, including cookware and textiles.
The failure of any manufacturer or distributor to perform to our expectations could result in supply shortages or delays for certain products and harm our business. In addition, recent years have seen additional focus from stakeholders, including regulators and governments in certain jurisdictions, on ESG consideration in the supply chains of companies.
The failure of any manufacturer or distributor to perform to our expectations could result in supply shortages or delays for certain products and harm our business. In addition, recent years have seen additional focus from stakeholders, including regulators and governments in certain jurisdictions, on environmental and social considerations in the supply chains of companies.
The rapid evolution of AI, including government regulation of AI, will require significant resources to develop, test, and maintain our platform, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact and potential legal liability.
The rapid evolution of AI, including government regulation of AI, will require significant resources to develop, test, and maintain our platform, offerings, services, and features to help us implement AI in an ethical and compliant manner in order to minimize unintended, harmful impact and potential legal liability.
Expectations around company’s management of ESG matters continue to evolve rapidly, in many instances due to factors that are out of our control.
Expectations around company’s management of corporate responsibility matters continue to evolve rapidly, in many instances due to factors that are out of our control.
We also depend on a number of third party vendors in relation to the operation of our business, a number of which process data on our behalf.
We also depend on a number of third party vendors in relation to the operation of our business, a number of which process personal information on our behalf.
Approximately $111.3 million of these NOLs are eligible for indefinite carryforward, limited by certain taxable income. Due to cumulative losses, we have recorded a full valuation allowance against our net deferred tax assets as of December 31, 2024, 2023, and 2022, respectively.
Approximately $159.0 million of these NOLs are eligible for indefinite carryforward, limited by certain taxable income. Due to cumulative losses, we have recorded a full valuation allowance against our net deferred tax assets as of December 31, 2025, 2024, and 2023, respectively.
We are an emerging growth company, as defined in the JOBS Act, and we are taking advantage of and may continue to take advantage of, for as long as five years following the completion of our IPO, certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are an emerging growth company, as defined in the JOBS Act, and we are taking advantage of and may continue to take advantage of, until December 31, 2026, certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For example, there have been increasing allegations of greenwashing against companies making significant ESG 22 Table of Contents claims due to a variety of perceived deficiencies in actions, statements, or methodologies, including as stakeholder perceptions of sustainability continue to evolve.
For example, there have been increasing allegations of greenwashing against companies making sustainability claims due to a variety of perceived deficiencies in actions, statements, or methodologies, including as stakeholder perceptions of sustainability continue to evolve.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2024, we have net operating loss carryforwards (“NOLs”) of approximately $123.8 million for U.S. federal income tax purposes, which will be available to offset future taxable income.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2025, we have net operating loss carryforwards (“NOLs”) of approximately $162.3 million for U.S. federal income tax purposes, which will be available to offset future taxable income.
Additionally, we could incur significant costs and management distraction in pursuing claims to enforce our intellectual property rights through litigation and defending any alleged counterclaims.
Additionally, we could incur significant costs and management distraction in pursuing claims to enforce our intellectual property rights through litigation and defending any 18 Table of Contents alleged counterclaims.
Consequently, the impact on operating results was $0.3 million and $2.6 million for years ended December 31, 2024 and 2023, respectively. These costs were primarily due to product returns, recall charges, inventory-write offs, and expenses related to logistics, rework and legal fees.
Consequently, the impact on operating results was $0.3 million for the year ended December 31, 2024. These costs were primarily due to product returns, recall charges, inventory-write offs, and expenses related to logistics, rework and legal fees.
Our revenue growth may slow or our revenue may decline for a number of other reasons, including reduced demand for our products, increased competition, a decrease in the growth or reduction in size of our overall market, a challenging macroeconomic environment, or if we cannot capitalize on growth opportunities.
Our revenue may continue to decline for 10 Table of Contents a number of other reasons, including reduced demand for our products, increased competition, a decrease in the growth or reduction in size of our overall market, a challenging macroeconomic environment, or if we cannot capitalize on growth opportunities.
Governments in the United States and internationally have increased their focus on and regulation of a broad group of perfluoroalkyl and polyfluoroalkyl substances, collectively known as “PFAS,” which are utilized by the Company in some of its products.
Regulation of certain perfluoroalkyl and polyfluoroalkyl substances in the United States and internationally may affect our product lines. Governments in the United States and internationally have increased their focus on and regulation of a broad group of perfluoroalkyl and polyfluoroalkyl substances, collectively known as “PFAS,” which are utilized by the Company in some of its products.
The costs associated with advertising through search engines can also vary significantly from period to period and have generally increased over time.
The costs associated with advertising through search engines can also vary 12 Table of Contents significantly from period to period and have generally increased over time.
Our business faces increasing scrutiny related to ESG issues, including renewable resources, environmental stewardship (including deforestation), supply chain management, climate change, safety, human capital and talent management, workplace conduct, human rights, philanthropy, and support for local communities.
Our business faces scrutiny related to various sustainability and corporate responsibility issues, including renewable resources, environmental stewardship (including deforestation), supply chain management, climate change, safety, human capital and talent management, workplace conduct, human rights, philanthropy, and support for local communities.
The use of AI applications may result in cybersecurity incidents that implicate the personal data of end users of such applications. Any such cybersecurity incidents related to our use of AI applications could adversely affect our reputation, business, and results of operations.
The use or integration of AI applications may result in cybersecurity incidents that implicate the personal information of end users of such applications. Any such cybersecurity incidents related to our or our service providers' use or integration of AI applications could adversely affect our reputation, business, and results of operations.
For example, in the year ended December 31, 2024, our three largest retailers accounted for 24%, 18%, and 8% of our revenue, respectively, with no other customer accounting for greater than 10% of our revenue for the year.
For example, in the year ended December 31, 2025, our three largest retailers accounted for 29%, 14%, and 8% of our revenue, respectively, with no other customer accounting for greater than 10% of our revenue for the year.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+2 added−2 removed3 unchanged
Biggest changeKey elements of our cybersecurity risk management program include: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, and vendors.
Biggest changeKey elements of our cybersecurity risk management program include but not limited to the following: • risk assessments designed to help identify material risks from cybersecurity t to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors based on our assessments of their criticality to our operations and respective risk profile. 48 Table of Contents There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with, or effective in protecting our systems and information.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management program and shares common methodologies, reporting channels, and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Item 1C. Cybersecurity. We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).
Item 1C. Cybersecurity. We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).
We also have experienced data security, risk, and compliance professionals reporting to our Executive Vice President of Technology and Vice President of IT Infrastructure and Architecture. In addition to our in-house cybersecurity capabilities, we also engage with external assessors, consultants, auditors, or other third parties to assist with assessing, identifying, and managing cybersecurity risks.
We also have experienced data security, risk, and compliance professionals reporting to our Head of Technology and Director of IT Security and Compliance Technology. In addition to our in-house cybersecurity capabilities, we also engage with external assessors, consultants, auditors, or other third parties to assist with assessing, identifying, and managing cybersecurity risks.
In addition, management updates the Audit Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program.
The Audit Committee receives regular reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Our management team, including the Executive Vice President of Technology and Vice President of IT Infrastructure and Architecture, are responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Our management team, including the Head of Technology and Director of IT Security and Compliance Technology, are responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Our Executive Vice President of Technology and Vice President of IT Infrastructure and Architecture have extensive experience in the management of cybersecurity risk management programs, having each served in various leadership roles in information technology and information security for over 10 years.
Our Head of Technology and Director of IT Security and Compliance Technology have extensive experience in the management of cybersecurity risk management programs, having each served in various leadership roles in information technology and information security for over 10 years.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have 48 Table of Contents materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial conditions.
Board members receive presentations on cybersecurity topics from our Executive Vice President of Technology, internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies.
The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from our Head of Technology, internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies.
Removed
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with, or effective in protecting our systems and information.
Added
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Removed
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Audit Committee oversees management’s implementation of our cybersecurity risk management program. The Audit Committee receives regular reports from management on our cybersecurity risks.
Added
See “Risk Factors—Risks Related to Intellectual Property, Information Technology, and Data Privacy— If we or our third-party providers fail to protect confidential information and/or experience data security incidents, there may be damage to our brand and reputation, material financial penalties, and legal liability, which could materially adversely affect our business, results of operations, and financial condition .” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity including oversight of management’s implementation of our cybersecurity risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAddison, NY Molalla, OR Sweet Home, OR Menlo, GA Jasper, TX Raw Material Storage (sq. ft.) 5,000 12,000 6,500 5,400 8,000 Manufacturing Size (sq. ft.) 3,750 5,280 4,800 6,000 8,400 Warehousing Size (sq. ft.) 64,500 12,800 33,800 47,000 34,000 Average Production (tons of wood pellets per year) (1) 24,800 12,568 25,924 24,541 15,654 Maximum Production (tons of wood pellets per year) 54,338 19,924 59,772 39,848 19,924 Ownership Owned Leased Leased Leased Leased Lease End — 2027 2029 2026 2035 Average Headcount (2) 20 10 13 15 11 (1) Based on actual production for the fiscal year ended December 31, 2024.
Biggest changeThe table below provides an overview of our wood pellet production facilities as of December 31, 2025. 49 Table of Contents Addison, NY Sweet Home, OR Menlo, GA Jasper, TX Raw Material Storage (sq. ft.) 5,000 6,500 5,400 8,000 Manufacturing Size (sq. ft.) 3,750 10,000 6,000 8,400 Warehousing Size (sq. ft.) 64,500 57,800 47,000 34,000 Average Production (tons of wood pellets per year) (1) 22,994 27,001 23,350 15,659 Maximum Production (tons of wood pellets per year) 54,338 59,772 39,848 19,924 Ownership Owned Leased Leased Leased Lease End — 2029 2026 2035 Average Headcount (2) 18 14 16 11 (1) Based on actual production for the fiscal year ended December 31, 2025.
We produce our wood pellets at wood pellet production facilities in Addison, New York; Molalla, Oregon; Sweet Home, Oregon; Menlo, Georgia; and Jasper, Texas. We own the land and buildings at facilities in Addison, New York and lease the land and buildings at the other facilities.
We produce our wood pellets at wood pellet production facilities in Addison, New York; Sweet Home, Oregon; Menlo, Georgia; and Jasper, Texas. We own the land and buildings at facilities in Addison, New York and lease the land and buildings at the other facilities.
(2) Average headcount for the fiscal year ended December 31, 2024. 49 Table of Contents
(2) Average headcount for the fiscal year ended December 31, 2025.
Removed
The table below provides an overview of our wood pellet production facilities as of December 31, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of March 3, 2025, there were 20 holders of record of our common stock.
Biggest changeHolders As of March 3, 2026, there were 18 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+41 added−36 removed52 unchanged
Biggest changeYear-ended December 31, Change 2024 2023 Amount % Revenue $ 604,072 $ 605,882 $ (1,810) (0.3) % Cost of revenue 348,603 382,325 (33,722) (8.8) % Gross profit 255,469 223,557 31,912 14.3 % Operating expense: Sales and marketing 109,656 108,727 929 0.9 % General and administrative 113,483 129,800 (16,317) (12.6) % Amortization of intangible assets 35,274 35,554 (280) (0.8) % Change in fair value of contingent consideration — 4,698 (4,698) (100.0) % Restructuring costs — 225 (225) (100.0) % Total operating expense 258,413 279,004 (20,591) (7.4) % Loss from operations (2,944) (55,447) (52,503) (94.7) % Other income (expense): Interest expense (33,500) (31,275) 2,225 7.1 % Other income, net 480 4,305 (3,825) (88.9) % Total other expense (33,020) (26,970) 6,050 22.4 % Loss before provision (benefit) for income taxes (35,964) (82,417) (46,453) (56.4) % Provision (benefit) for income taxes (1,956) 1,985 (3,941) (198.5) % Net loss $ (34,008) $ (84,402) $ (50,394) (59.7) % 56 Table of Contents Comparison of the Year Ended December 31, 2024 and 2023 Revenue Year-ended December 31, Change 2024 2023 Amount % (dollars in thousands) Revenue: Grills $ 324,702 $ 299,346 $ 25,356 8.5 % Consumables 119,299 114,901 4,398 3.8 % Accessories 160,071 191,635 (31,564) (16.5) % Total Revenue $ 604,072 $ 605,882 $ (1,810) (0.3) % Revenue decreased by $1.8 million, or 0.3%, to $604.1 million for the year ended December 31, 2024 compared to $605.9 million for the year ended December 31, 2023.
Biggest changeYear-ended December 31, Change 2025 2024 Amount % Revenue $ 559,520 $ 604,072 $ (44,552) (7.4) % Cost of revenue 340,174 348,603 (8,429) (2.4) % Gross profit 219,346 255,469 (36,123) (14.1) % Operating expense: Sales and marketing 90,217 109,656 (19,439) (17.7) % General and administrative 95,031 113,483 (18,452) (16.3) % Amortization of intangible assets 35,260 35,274 (14) — % Goodwill impairment 74,725 — 74,725 * Restructuring and other costs 21,840 — 21,840 * Total operating expense 317,073 258,413 58,660 22.7 % Loss from operations (97,727) (2,944) 94,783 3219.5 % Other income (expense): Interest expense (31,350) (33,500) (2,150) (6.4) % Other income, net 9,755 480 9,275 1932.3 % Total other expense (21,595) (33,020) (11,425) (34.6) % Loss before benefit from income taxes (119,322) (35,964) 83,358 231.8 % Benefit from income taxes (4,141) (1,956) (2,185) 111.7 % Net loss $ (115,181) $ (34,008) $ 81,173 238.7 % * Not meaningful 56 Table of Contents Comparison of the Year Ended December 31, 2025 and 2024 Revenue Year-ended December 31, Change 2025 2024 Amount % (dollars in thousands) Revenue: Grills $ 298,026 $ 324,702 $ (26,676) (8.2) % Consumables 127,474 119,299 8,175 6.9 % Accessories 134,020 160,071 (26,051) (16.3) % Total Revenue $ 559,520 $ 604,072 $ (44,552) (7.4) % Revenue decreased by $44.6 million, or 7.4%, to $559.5 million for the year ended December 31, 2025 compared to $604.1 million for the year ended December 31, 2024.
Cost of revenue consists of product costs, including the costs of products from our third-party manufacturers, costs of components, direct and indirect manufacturing costs across all products, packaging, inbound freight and duties, warehousing and fulfillment, warranty costs, product quality testing and inspection costs, excess and obsolete inventory write-downs, cloud-hosting costs for our connected products, depreciation of tooling and manufacturing equipment, amortization of internal use software and patented technology, and certain employee-related expenses.
Cost of revenue consists of product costs, including the costs of products from our third-party manufacturers, costs of components, direct and indirect manufacturing costs across all products, packaging, inbound freight and duties, warehousing and fulfillment, warranty costs, product quality testing and inspection costs, excess and obsolete inventory write-downs, cloud-hosting costs for our WiFIRE connected products, depreciation of tooling and manufacturing equipment, amortization of internal use software and patented technology, and certain employee-related expenses.
If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, we perform a quantitative goodwill impairment test.
If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, we will perform a quantitative goodwill impairment test.
Goodwill 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 Impairment 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.
As part of the amendment, we were required to pay an upfront fee for the facility, along with a fixed interest rate on outstanding cash advances of approximately 2.6% and a floating interest rate based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement).
As part of the amendment, we are required to pay an upfront fee for the facility, along with a fixed interest rate on outstanding cash advances of approximately 2.6% and a floating interest rate based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement).
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 favorable anticipated gross margin impacts may not be realized, or may be offset by other unfavorable gross margin factors.
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.
A discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022 has been reported previously in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 8, 2024, under the heading “ Management's Discussion and Analysis of Financial Condition and Results of Operations.” Overview Traeger is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue.
A discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023 has been reported previously in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 7, 2025, under the heading “ Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview Traeger is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue.
The assets of Traeger SPE LLC (the “ SPE”) , substantively consisting of our accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities. There are no guarantees from parent entities above Traeger, Inc.
The assets of Traeger SPE LLC, substantively consisting of our accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities. There are no guarantees from parent entities above Traeger, Inc.
Higher sales also coincide with social events and national holidays, which occur during the same warm weather timeframe. Additionally, we have typically experienced higher sales volume of our accessories during the fourth quarter of the year, due in part to seasonal holiday demand. Gross Profit 53 Table of Contents Gross profit reflects revenue less cost of revenue.
Higher sales also coincide with social events and national holidays, which occur during the same warm weather timeframe. Additionally, we have typically experienced higher sales volume of our accessories during the fourth quarter of the year, due in part to seasonal holiday demand. Gross Profit Gross profit reflects revenue less cost of revenue.
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.
We believe there is significant uncertainty regarding how macroeconomic conditions, including 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.
Substantially all of the our goodwill was recognized in the purchase price allocations when the Company was acquired in 2017 and when Apption Labs was acquired in July 2021, with smaller incremental amounts recognized in other business combinations.
Substantially all of our goodwill was recognized in the purchase price allocations when our Company was acquired in 2017 and when Apption Labs was acquired in July 2021, with smaller incremental amounts recognized in subsequent business combinations.
The performance obligation for most of our sales transactions are considered complete 61 Table of Contents when control transfers, which is determined when products are shipped or delivered to the customer depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point-of-sale transactions.
The performance obligation for most of our sales transactions are considered complete when control transfers, which is determined when products are shipped or delivered to the customer depending on the terms of the contract. Sales are made on normal and customary short-term credit terms or upon delivery for point-of-sale transactions.
We recognize revenue, net of product returns, for our grills, consumables, and accessories generally at the time of delivery to retailers through our retail channel and to customers through our DTC channel.
We recognize revenue, net of product returns, for our grills, consumables, and accessories generally at the time of shipment to retailers through our retail channel and to customers through our DTC channel.
Dollar and the foreign currency contracts that we use to manage our exposure to foreign currency exchange rate risk related to our purchases and international operations. 55 Table of Contents Results of Operations The following tables summarize key components of our results of operations for the periods presented (dollars in thousands).
Dollar and the foreign currency contracts that we use to manage our exposure to foreign currency exchange rate risk related to our purchases and international operations. Results of Operations The following tables summarize key components of our results of operations for the periods presented (dollars in thousands).
General and Administrative 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, information and technology services, and insurance.
General and Administrative 54 Table of Contents 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, information and technology services, and insurance.
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.
However, our future working capital requirements will depend on many factors, including our rate of revenue growth and ability to achieve 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.
Credit Facilities On June 29, 2021, we refinanced our existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (the “ First Lien Credit Agreement”).
Credit Facilities On June 29, 2021, we refinanced our existing credit facilities and entered into a new first lien credit agreement, as borrower, with Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and other lenders party thereto as joint lead arrangers and joint bookrunners (as amended from time to time, the “ First Lien Credit Agreement”).
The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. As of December 31, 2024, the total principal amount outstanding on the First Lien Term Loan Facility was $403.6 million.
The First Lien Term Loan Facility requires periodic principal payments from December 2021 through June 2028, with any remaining unpaid principal and any accrued and unpaid interest due on the maturity date of June 29, 2028. As of December 31, 2025, the total principal amount outstanding on the First Lien Term Loan Facility was $403.3 million.
Pop-And-Lock accessory rails, grill covers, liners, tools, apparel, and other ancillary items. We sell our grills using an omnichannel distribution strategy that consists primarily of retail and DTC channels. Our retail channel covers brick-and-mortar retailers, e-commerce platforms, and multichannel retailers, who, in turn, sell our grills to their end customers.
Pop-And-Lock accessory rails, grill covers, liners, tools, apparel, and other ancillary items. We sell our grills using an omnichannel distribution strategy that consists primarily of retail and direct to consumer ( “ DTC”) channels. Our retail channel covers brick-and-mortar retailers, e-commerce platforms, and multichannel retailers, who, in turn, sell our grills to their end customers.
Research and development expense was $15.2 million, $11.5 million, and $10.8 million for the year ended December 31, 2024, 2023, and 2022, respectively. 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.
Research and development expense was $12.4 million, $15.2 million, and $11.5 million for the year ended December 31, 2025, 2024, and 2023, respectively. 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.
First Lien Credit Agreement The First Lien Credit Agreement provides for a $560.0 million First Lien Term Loan Facility (including a $50.0 million delayed draw term loan) and a $125.0 million Revolving Credit Facility. The First Lien Term Loan Facility accrues interest at a rate per annum that considers both fixed and floating components.
First Lien Credit Agreement The First Lien Credit Agreement originally provided for a $560.0 million First Lien Term Loan Facility (including a $50.0 million delayed draw term loan) and a $125.0 million Revolving Credit Facility. The First Lien Term Loan Facility accrues interest at a rate per annum that incorporates both fixed and floating components.
If our liquidity falls below this threshold, it may result in an increase in the required level of reserves, which would result in a reduction of our borrowing base under the Receivables Financing Agreement during such a liquidity shortfall.
The Receivables Financing Agreement also includes a liquidity threshold of $42.5 million and if our liquidity falls below this threshold, it may result in an increase in the required level of reserves, which would result in a reduction of the borrowing base under the Receivables Financing Agreement during such a liquidity shortfall.
Other income (expense), net consists of any realized and 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.
Other income, net consists of any realized and unrealized gains (losses) from our interest rate swap derivative contract subsequent to the dedesignation of the swap contract from a cash flow hedge, the benefit recognized associated with the employee retention tax credit, foreign currency realized and unrealized gains and losses resulting from exchange rate fluctuations on transactions denominated in a currency other than the U.S.
GAAP requires us to make estimates and assumptions that affect certain 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 revenue and expenses during the reporting period.
The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect certain 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 revenue and expenses during the reporting period.
As of December 31, 2024, we had no outstanding loan amounts under the Revolving Credit Facility and had drawn down $5.0 million under the Receivables Financing Agreement. As of December 31, 2024, the total principal amount outstanding under our First Lien Term Loan Facility (as defined below) was $403.6 million.
As of December 31, 2025, we had no outstanding loan amounts under the Revolving Credit Facility and the Receivables Financing Agreement. As of December 31, 2025, the total principal amount outstanding under our First Lien Term Loan Facility (as defined below) was $403.3 million.
We are required to pay fixed interest on outstanding cash advances of 2.5%, a floating interest based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%. Amendment No. 9 also implemented a new liquidity threshold at $42.5 million of liquidity.
We are required to pay fixed interest on outstanding cash advances of 2.5%, a floating interest based on the CP Rate or Adjusted Term SOFR (each as defined in the Receivables Financing Agreement), and an unused capacity charge that ranges from 0.25% to 0.5%.
We expect continued cost savings to improve operating results in the long term, but given the uncertainty of the macroeconomic environment in the near term, including as a result of tariffs, there can be no assurance regarding the outcome of our continuing efforts to help mitigate the effects of these conditions on our business.
We expect continued cost savings to improve operating results in the long term, but given the uncertainty of the macroeconomic environment in the near term, including as a result of tariffs, there can be no assurance regarding the outcome of our continuing efforts to help mitigate the effects of these conditions on our business. 53 Table of Contents We will continue to monitor and, if necessary, take additional action to mitigate the effects of the macroeconomic environment on our business.
As a percentage of revenue, general and administrative expense decreased to 18.8% for the year ended December 31, 2024 from 21.4% for the year ended December 31, 2023.
As a percentage of revenue, general and administrative expense decreased to 17.0% for the year ended December 31, 2025 from 18.8% for the year ended December 31, 2024.
For the annual impairment tests conducted in the fourth quarters of 2024 and 2023, we performed qualitative assessments of goodwill and determined that it was more likely than not that the fair value of goodwill was greater than its carrying value.
For the annual impairment test conducted in the fourth quarter of 2024, we performed a qualitative assessment of goodwill and determined that it was more likely than not that the fair value of goodwill was greater than its carrying value.
As of December 31, 2024, we had cash and cash equivalents of $15.0 million, $125.0 million borrowing capacity under our Revolving Credit Facility (as defined below), and up to $30.0 million borrowing capacity under our Receivables Financing Agreement (as defined below).
As of December 31, 2025, we had cash and cash equivalents of $19.6 million, $112.5 million borrowing capacity under our Revolving Credit Facility (as defined below), and up to $30.0 million borrowing capacity under our Receivables Financing Agreement (as defined below).
General and Administrative Year-ended December 31, Change 2024 2023 Amount % (dollars in thousands) General and administrative $ 113,483 $ 129,800 $ (16,317) (12.6) % As a percentage of revenue 18.8 % 21.4 % General and administrative expense decreased by $16.3 million, or 12.6%, to $113.5 million for the year ended December 31, 2024 compared to $129.8 million for the year ended December 31, 2023.
General and Administrative Year-ended December 31, Change 2025 2024 Amount % (dollars in thousands) General and administrative $ 95,031 $ 113,483 $ (18,452) (16.3) % As a percentage of revenue 17.0 % 18.8 % General and administrative expense decreased by $18.5 million, or 16.3%, to $95.0 million for the year ended December 31, 2025 compared to $113.5 million for the year ended December 31, 2024.
See Note 4 – Leases to the accompanying consolidated financial statements for additional information regarding our non-cancellable operating leases. We also have purchase obligations consisting of agreements to purchase goods and services entered into in the ordinary course of business. As of December 31, 2024, the future minimum value of our non-cancellable unconditional purchase obligations was $7.3 million.
See Note 4 – Leases to the accompanying consolidated financial statements for additional information regarding our non-cancellable operating leases. 61 Table of Contents We also have purchase obligations consisting of agreements to purchase goods and services entered into in the ordinary course of business.
This decrease was driven primarily by lower sales from our accessories, partially offset by higher sales from our grill and consumables. Revenue from our grills increased by $25.4 million, or 8.5%, to $324.7 million for the year ended December 31, 2024 compared to $299.3 million for the year ended December 31, 2023.
This decrease was primarily driven by lower sales from our grills and accessories, partially offset by higher sales from our consumables. Revenue from our grills decreased by $26.7 million, or 8.2%, to $298.0 million for the year ended December 31, 2025 compared to $324.7 million for the year ended December 31, 2024.
These costs are amortized on a straight-line basis over 2.5 to 25 year useful lives and, as a result, amortization expense on these assets is expected to remain stable over the coming years.
These costs are amortized on a straight-line basis over 5 to 25 year useful lives and, as a result, amortization expense on these assets is expected to remain stable over the coming years. Future business acquisitions may result in incremental amortization of intangible assets acquired in any such transactions.
Cash Flows The following table sets forth cash flow data for the periods indicated therein (in thousands): Year-ended December 31, 2024 2023 Net cash provided by operating activities $ 23,888 $ 64,042 Net cash used in investing activities (12,331) (17,378) Net cash used in financing activities (26,497) (68,298) Net decrease in cash, cash equivalents, and restricted cash $ (14,940) $ (21,634) Cash Flow from Operating Activities Cash flows related to operating activities are dependent on net loss, non-cash adjustments to net loss, and changes in working capital.
Cash Flows The following table sets forth cash flow data for the periods indicated therein (in thousands): Year-ended December 31, 2025 2024 Net cash provided by operating activities $ 20,520 $ 23,888 Net cash used in investing activities (7,332) (12,331) Net cash used in financing activities (8,545) (26,497) Net increase (decrease) in cash and cash equivalents $ 4,643 $ (14,940) 59 Table of Contents Cash Flow from Operating Activities Cash flows related to operating activities are dependent on net loss, non-cash adjustments to net loss, and changes in working capital.
Sales and Marketing 57 Table of Contents Year-ended December 31, Change 2024 2023 Amount % (dollars in thousands) Sales and marketing $ 109,656 $ 108,727 $ 929 0.9 % As a percentage of revenue 18.2 % 17.9 % Sales and marketing expense increased by $0.9 million, or 0.9%, to $109.7 million for the year ended December 31, 2024 compared to $108.7 million for the year ended December 31, 2023.
Sales and Marketing 57 Table of Contents Year-ended December 31, Change 2025 2024 Amount % (dollars in thousands) Sales and marketing $ 90,217 $ 109,656 $ (19,439) (17.7) % As a percentage of revenue 16.1 % 18.2 % Sales and marketing expense decreased by $19.4 million, or 17.7%, to $90.2 million for the year ended December 31, 2025 compared to $109.7 million for the year ended December 31, 2024.
We recorded a net loss of $34.0 million for the year ended December 31, 2024, compared to a net loss of $84.4 million for the year ended December 31, 2023. 52 Table of Contents Key Factors Affecting Our Financial Condition and Results of Operations 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.
Key Factors Affecting Our Financial Condition and Results of Operations 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.
Liquidity and Capital Resources 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. Market conditions can impact the viability of these institutions.
We have funded our operations through cash flows from operating activities, cash on hand, and borrowings under our credit facilities and receivables financing agreement. Market conditions can impact the viability of these institutions.
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.
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 52 Table of Contents quality.
Gross Profit Year-ended December 31, Change 2024 2023 Amount % (dollars in thousands) Gross profit $ 255,469 $ 223,557 $ 31,912 14.3 % Gross margin (Gross profit as a percentage of revenue) 42.3 % 36.9 % Gross profit increased by $31.9 million, or 14.3%, to $255.5 million for the year ended December 31, 2024 compared to $223.6 million for the year ended December 31, 2023.
Gross Profit Year-ended December 31, Change 2025 2024 Amount % (dollars in thousands) Gross profit $ 219,346 $ 255,469 $ (36,123) (14.1) % Gross margin (Gross profit as a percentage of revenue) 39.2 % 42.3 % Gross profit decreased by $36.1 million, or 14.1%, to $219.3 million for the year ended December 31, 2025 compared to $255.5 million for the year ended December 31, 2024.
Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, Traeger Pellet Grills Holdings LLC, and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages, and the equity interest of each of these respective entities.
As of December 31, 2025, we had no outstanding loan amounts under the Revolving Credit Facility. 60 Table of Contents Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, TPC Traeger Blocker, LP, Traeger Pellet Grills Holdings LLC and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages and the equity interest of each of these respective entities.
See Note 14 – Commitments and Contingencies to the accompanying consolidated financial statements for additional information regarding our purchase obligations. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements in conformity with U.S.
As of December 31, 2025, the future minimum value of our non-cancellable unconditional purchase obligations was $5.0 million. See Note 14 – Commitments and Contingencies to the accompanying consolidated financial statements for additional information regarding our purchase obligations. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP.
As of December 31, 2024, we were in compliance with the covenants under the Credit Facilities. Accounts Receivable Credit Facility On November 2, 2020, we entered into a receivables financing agreement, as amended, (the “ Receivables Financing Agreement”). Through the Receivables Financing Agreement, we participate in a trade receivables securitization program, administered on our behalf by MUFG Bank Ltd.
As of December 31, 2025, we were in compliance with the covenants under the Credit Facilities. Accounts Receivable Credit Facility On November 2, 2020, we entered into a receivables financing agreement (as amended, the “Receivables Financing Agreement”).
We will continue to monitor and, if necessary, take additional action to mitigate the effects of the macroeconomic environment on our business. Components of Results of Operations Revenue We derive substantially all of our revenue from the sale of grills, consumables, and accessories in North America, which includes the United States and Canada.
Components of Results of Operations Revenue We derive substantially all of our revenue from the sale of grills, consumables, and accessories in North America, which includes the United States and Canada.
Revenue from our accessories decreased by $31.6 million, or 16.5%, to $160.1 million for the year ended December 31, 2024 compared to $191.6 million for the year ended December 31, 2023. This decrease was driven primarily by lower sales of MEATER smart thermometers and high single-digit reduction in sales of Traeger-branded accessories.
Revenue from our accessories decreased by $26.1 million, or 16.3%, to $134.0 million for the year ended December 31, 2025 compared to $160.1 million for the year ended December 31, 2024. This decrease was driven primarily by lower sales of MEATER smart thermometers, partially offset by low-double digit increases in average selling prices and unit volumes in Traeger branded accessories.
See Note 12 – Notes Payable to the accompanying consolidated financial statements for additional information regarding our Credit Facilities. We have various lease agreements related to office space, warehouses, vehicles, and office equipment that expire at various dates through 2037. As of December 31, 2024, the future minimum rental payments under non-cancelable operating leases were $46.4 million.
We have various lease agreements related to office space, warehouses, vehicles, and office equipment that expire at various dates through 2037. As of December 31, 2025, the future minimum rental payments under non-cancelable operating leases were $39.3 million.
Total Other Expense Year-ended December 31, Change 2024 2023 Amount % (dollars in thousands) Interest expense $ (33,500) $ (31,275) $ 2,225 7.1 % Other income, net 480 4,305 (3,825) (88.9) % Total other expense $ (33,020) $ (26,970) $ 6,050 22.4 % As a percentage of revenue (5.5) % (4.5) % 58 Table of Contents Total other expense increased by $6.1 million, or 22.4%, to $33.0 million for the year ended December 31, 2024 compared to $27.0 million for the year ended December 31, 2023.
Total Other Expense Year-ended December 31, Change 2025 2024 Amount % (dollars in thousands) Interest expense $ (31,350) $ (33,500) $ (2,150) (6.4) % Other income, net 9,755 480 9,275 1,932.3 % Total other expense $ (21,595) $ (33,020) $ (11,425) (34.6) % As a percentage of revenue (3.9) % (5.5) % Total other expense decreased by $11.4 million, or 34.6%, to $21.6 million for the year ended December 31, 2025 compared to $33.0 million for the year ended December 31, 2024.
Significant negative industry or economic trends, disruptions to our businesses, significant unexpected or planned changes in use of the assets, divestitures, and market capitalization declines may result in additional impairments to goodwill and other long-lived assets. Stock-Based Compensation We award stock-based compensation to employees, directors and executives under the Traeger, Inc. 2021 Incentive Award Plan (the “2021 Plan”).
Significant negative industry or economic trends, disruptions to our businesses, significant unexpected or planned changes in use of the assets, divestitures, and market capitalization declines may result in impairments to the carrying value of our long-lived assets.
Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility. The Revolving Credit Facility expires on June 29, 2026 and no principal payments are due before such date.
Letters of credit may be issued under the Revolving Credit Facility in an amount not to exceed $15.0 million which, when issued, lower the overall borrowing capacity of the facility. The Amendment made several material modifications to the Revolving Credit Facility.
While negotiations regarding tariffs are ongoing, if the resulting environment of retaliatory tariffs or other practices of additional trade restrictions or barriers require us to increase prices for our products in the U.S., this could lead to decreased consumer demand for our products, which would negatively impact our results of operations, cash flows, and financial condition.
The resulting environment of tariffs and trade restrictions has required us to increase prices for our products in the U.S., which could lead to decreased consumer demand for our products and would negatively impact our results of operations, cash flows, and financial condition. For more information on risks to our business related to tariffs, please see Part I, Item 1A.
Our DTC channel covers sales directly to customers through our website and Traeger app, as well as certain country- and region-specific Traeger or distributor websites. Our consumables and accessories are available through the same channels as our grills. Over the last several years, we have made significant investments in our supply chain and manufacturing operations.
Our DTC channel covers sales directly to customers through our website and Traeger app, as well as certain country- and region-specific Traeger or distributor websites. Our consumables and accessories are available through the same channels as our grills. As part of Project Gravity, we are undertaking a broader channel optimization strategy that includes exiting the Traeger-operated DTC business.
As a percentage of revenue, sales and marketing expense increased to 18.2% for the year ended December 31, 2024 from 17.9% for the year ended December 31, 2023. The increase in sales and marketing expense was driven primarily by an increase in employee costs, travel related expenses, partially offset by lower advertising expenses.
As a percentage of revenue, sales and marketing expense decreased to 16.1% for the year ended December 31, 2025 from 18.2% for the year ended December 31, 2024. The decrease in sales and marketing expense was primarily driven by lower demand creation spending, as well as reductions in employee-related costs and professional fees as a result of Project Gravity.
The increase was driven primarily by mid single-digit increase in wood pellet sales, partially offset by low single-digit reduction in food consumable sales. Wood pellet sales increase was driven by mid single-digit increase in volume as a result of retail channel expansion, and low single-digit increase in average selling price due to strategic wholesale pricing initiatives with certain retail partners.
The wood pellet sales were driven by high-single digit increase in average selling price from our strategic alignment with certain wholesale partners. The food consumables increase in sales was primarily due to expansion in distribution.
The decrease in cash provided by operating activities during the year ended December 31, 2024 compared to the year ended December 31, 2023 is primarily due to a net increase in working capital balances, partially offset by a decrease in net loss, adjusted for non-cash items, as compared to the prior year period.
The decrease in cash provided by operating activities during the year ended December 31, 2025 compared to the year ended December 31, 2024 is primarily due to the cash payments related to Project Gravity initiatives and tariff related costs, along with the increase in net loss, increase in non-cash adjustments, and changes in net working capital.
Actual credits and their respective impacts on reported revenue could differ from our estimates and could materially affect our results of operations. Valuation of Goodwill and Acquired Intangible Assets Intangible Assets Finite-lived intangible assets are initially recorded at fair value and presented net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives.
Actual credits and their respective impacts on reported revenue could differ from our estimates and could materially affect our results of operations. Valuation of Goodwill 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.
As part of the amendment, the maximum borrowing capacity was decreased from $100.0 million to $75.0 million and allows for seasonal adjustments, at our discretion (with consent of the lenders under the Receivables Financing Agreement) to change the capacity anywhere between $30.0 million and $75.0 million.
The Receivables Financing Agreement allows for seasonal adjustments to the maximum borrowing capacity and further adjustments can be made up to two times annually at our discretion (with consent of the lenders under the Receivables Financing Agreement).
Under the quantitative goodwill impairment test, if our reporting unit’s carrying amount exceeds its fair value, we will record an impairment charge based on that difference. 62 Table of Contents To determine reporting unit fair value as part of the quantitative test, we use a weighting of fair values derived from the income approach and the market approach.
If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, we perform a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if our reporting unit’s carrying amount exceeds its fair value, we will record an impairment charge based on that difference.
The implementation of tariffs has the potential to disrupt existing supply chains and impose additional costs on businesses in our industry.
These developments, as well as any further changes in tariff rates, product coverage, or non-tariff trade barriers have disrupted and have the potential to further disrupt existing supply chains and impose additional costs on businesses in our industry.
Contractual Obligations As of December 31, 2024, significant contractual obligations related to debt were $403.6 million of principal borrowings and $111.4 million of related interest, which principal borrowings will become due on the maturity date of June 29, 2028. Projected interest costs on variable rate instruments are based on market rates as of December 31, 2024.
Any remaining unpaid principal and any accrued or unpaid interest will become due on the maturity date of June 29, 2028. The projected interest costs on variable rate instruments are based on market rates as of December 31, 2025. See Note 12 – Notes Payable to the accompanying consolidated financial statements for additional information regarding our Credit Facilities.
Our revenue decreased by 0.3% for the year ended December 31, 2024 as compared to the year ended December 31, 2023, and was $604.1 million for the year ended December 31, 2024, down from $605.9 million for the year ended December 31, 2023.
Our revenue decreased by 7.4% to $559.5 million for the year ended December 31, 2025, compared to $604.1 million for the year ended December 31, 2024. We recorded a net loss of $115.2 million for the year ended December 31, 2025, compared to a net loss of $34.0 million for the year ended December 31, 2024.
Future changes in the judgments, assumptions, and estimates that are used in the impairment testing for goodwill could result in significantly different estimates of fair value. We conduct annual goodwill impairment tests in the fourth quarter of each fiscal year or whenever an indicator of impairment exists.
Under the quantitative goodwill impairment test, if the reporting unit’s carrying amount exceeds its fair value, it will record an impairment charge based on that difference. We conduct annual goodwill impairment tests in the fourth quarter of each fiscal year or whenever an indicator of impairment exists.
The decrease in average selling price was primarily due to mix shift to lower priced grills, higher mix of direct import sales, and strategic pricing action on select grills. Revenue from our consumables increased by $4.4 million, or 3.8%, to $119.3 million for the year ended December 31, 2024 compared to $114.9 million for the year ended December 31, 2023.
Revenue from our consumables increased by $8.2 million, or 6.9%, to $127.5 million for the year ended December 31, 2025 compared to $119.3 million for the year ended December 31, 2024. The increase was primarily driven by a high-single digit increase in wood pellet and food consumable sales.
Through this arrangement, we have secured short-term capital requirements financing using outstanding accounts receivables balances as collateral, which have been contributed by us to a wholly owned subsidiary, the SPE. While we provide operational services to the SPE, the receivables are owned by the SPE once contributed 60 Table of Contents to it by us.
Through the Receivables Financing Agreement, we participate in a trade receivables securitization program, administered on our behalf by MUFG Bank Ltd., using outstanding accounts receivables balances as collateral, which have been contributed by us to our wholly owned subsidiary, Traeger SPE LLC (the "SPE").
Gross profit as a percentage of revenue increased to 42.3% for the year ended December 31, 2024 from 36.9% for the year ended December 31, 2023.
Gross profit as a percentage of revenue decreased to 39.2% for the year ended December 31, 2025 from 42.3% for the year ended December 31, 2024. The decrease in gross margin was primarily driven by tariff related costs and obsolescence adjustments, partially offset by supply chain efficiencies.
For example, the recently imposed tariffs on foreign goods, including a 20% tariffs on imported from China, 25% tariff on steel and aluminum imports, and Canada's announcement of a retaliatory tariff on certain U.S. goods could impact our gross margin. For more information on risks to our business related to tariffs, please see Part I, Item 1A.
For example, the recently implemented or announced and, in some cases, temporarily paused pending negotiations, tariffs on foreign goods, including a baseline 10% tariff on product imports from almost all countries and individualized higher tariffs on other countries, 50% tariff on steel and aluminum imports from nations other than the United Kingdom, which remains at 25% currently, and the announcement of a retaliatory tariff on certain U.S. goods by other nations could impact our gross margin.
We are the primary beneficiary and hold all equity interests of the SPE, thus we consolidate the SPE without any significant judgments. On November 8, 2023, we entered into Amendment No. 9 to the Receivables Financing Agreement in order to extend the expiration of the facility by one year to June 27, 2025.
While we provide operational services to the SPE, the receivables are owned by the SPE once contributed to it by us. We are the primary beneficiary and hold all equity interests of the SPE, thus we consolidate the SPE without any significant judgments. The maximum borrowing capacity under the Receivables Financing Agreement is between $30.0 million and $75.0 million.
The increase was driven primarily by unit volume growth in excess of 30%, partially offset by high double-digit reduction in average selling price. Higher unit volume was driven by the launch of our new grill offerings, effective promotional activity and strategic pricing action on select grills.
The decrease was primarily driven by a mid-single digit decline in average selling price and mid-single digit reduction in unit volume. The lower average selling price (“ASP”) reflected a mix shift to lower priced grills, while the decrease in unit volume was driven by the impact of pricing actions on demand, partially offset by higher orders of lower ASP grills.
Therefore, the quantitative impairment test was not performed and no impairment of goodwill was recorded in connection with the annual impairment tests. During 2022, as a result of sustained decreases in our publicly quoted share price, market capitalization, and lower than expected operating results, we conducted an interim impairment analysis of its goodwill and long-lived assets.
Therefore the quantitative impairment test was not performed and no impairment of goodwill was recorded in connection with the annual impairment test.
We were in compliance with the covenants under the Receivables Financing Agreement as of December 31, 2024. As of December 31, 2024, we had drawn down $5.0 million under this facility for general corporate and working capital purposes.
We were in compliance with the covenants under the Receivables Financing Agreement as of December 31, 2025. As of December 31, 2025, we had no outstanding loan amounts under the Receivables Financing Agreement. Contractual Obligations As of December 31, 2025, we had $403.3 million of principal borrowings and $72.8 million of projected interest associated with its outstanding debt obligations.
As a result of the interim goodwill impairment tests, we concluded that the carrying value of the single reporting unit exceeded its fair value and recorded $222.3 million of non-cash goodwill impairment charges for the fiscal year ended December 31, 2022.
Based on the quantitative impairment test of goodwill, we determined that the carrying value of the reporting unit was in excess of its fair value after considering a control premium and recorded a non-cash impairment charge of $74.7 million.
In addition, when we exceed the Covenant Trigger Amount (as defined in the First Lien Credit Agreement), we are subject to a financial covenant whereby we are required to maintain a Maximum First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) not to exceed 6.20 to 1.00.
All lenders under the Revolving Credit Facility are the beneficiaries of a First Lien Net Leverage Ratio (as defined in the First Lien Credit Agreement) test of 6.20 to 1.00, which is only applicable if our utilization of the Revolving Credit Facility in excess of a threshold set forth in the First Lien Credit Agreement.
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We have, however, seen instances of consumer sensitivity to higher price points.
Added
In May 2025, we commenced Project Gravity, a multi-step strategic optimization plan intended to streamline our organizational structure and rebalance our cost base, including a reduction in force, centralization of our MEATER business into our Salt Lake City infrastructure, discontinuation of the Costco roadshow program, exit from the Traeger direct to consumer business by redirecting Traeger.com consumers to retail partners, transition to a distributor model in certain European markets that operate under a direct model, and pellet mill consolidation.
Removed
Therefore, we have utilized promotional activity and strategic pricing action on select grills, which has primarily attributed to unit volume growth in excess of 20%, partially offset by high double-digit reduction in average selling price due to mix shift to lower priced grills, higher mix of direct import sales, and strategic pricing action on select grills for the year ended December 31, 2024 as compared to the prior year period.
Added
In connection with this shift, we have begun redirecting consumers from Traeger.com to our retail partners’ websites, aligning our distribution model more closely with our retail-focused strategy. However, we will continue to offer our MEATER smart thermometer accessories through the DTC channel, as this model remains well‑suited to the MEATER brand and consumer base.
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As a result, revenue from our grills increased by $25.4 million to $324.7 million for the year ended December 31, 2024 as compared to the prior year period. In February and March 2025, President Trump implemented and/or reinstated tariffs and import restrictions on products from various countries, some of which went into effect on March 4, 2025.
Added
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%.
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For example, we have partnered with certain retailers in direct import programs, executed long-term transportation contracts, and implemented operational efficiencies across our pellet mill operations. As a result, we have experienced an increase in gross margin to 42.3% for the year ended December 31, 2024 from 36.9% for the year ended December 31, 2023.
Added
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. 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.
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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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe do not hold or issue financial instruments for speculative or trading purposes. 63 Table of Contents Interest Rate Risk We had cash and cash equivalents of $15.0 million and $29.9 million as of December 31, 2024 and 2023, respectively. We hold cash and cash equivalents for working capital purposes.
Biggest changeOur market risk exposure is primarily a result of fluctuations in interest rates, foreign currency exchange risk, and commodity price risk. We do not hold or issue financial instruments for speculative or trading purposes. Interest Rate Risk We had cash and cash equivalents of $19.6 million and $15.0 million as of December 31, 2025 and 2024, respectively.
However, we believe that the exposure to foreign currency fluctuation from operating expenses is relatively minor at this time as the related costs do not constitute a significant portion of our total expenses. In addition, our manufacturers and suppliers may incur costs, including labor costs, in other currencies.
However, we believe that the exposure to 63 Table of Contents foreign currency fluctuation from operating expenses is relatively minor at this time as the related costs do not constitute a significant portion of our total expenses. In addition, our manufacturers and suppliers may incur costs, including labor costs, in other currencies.
While inflation has had a manageable impact on our financial position and results of 64 Table of Contents operations to date, a sustained high rate of inflation may have an adverse effect on our gross margin and operating expenses if the selling prices of our products do not increase with these increased costs.
While inflation has had a manageable impact on our financial position and results of operations to date, a sustained high rate of inflation may have an adverse effect on our gross margin and operating expenses if the selling prices of our products do not increase with these increased costs.
For periods where the net position is an asset balance, the balance is recorded within prepaid expenses and other current assets on our accompanying consolidated balance sheets, and for periods where the net position is a liability balance, the balance is recorded within other current liabilities on the accompanying consolidated balance sheets.
For periods where the net position is an asset balance, the balance is recorded within prepaid expenses and other current assets in our accompanying consolidated balance sheets, and for periods where the net position is a liability balance, the balance is recorded within other current liabilities in the accompanying consolidated balance sheets.
We had outstanding foreign currency contracts as of December 31, 2024 and 2023 but did not elect hedge accounting for any of these contracts.
We had outstanding foreign currency contracts as of December 31, 2025 and 2024 but did not elect hedge accounting for any of these contracts.
Based on the outstanding balance of the New Credit Facilities as of December 31, 2024, for every 100 basis point increase in the interest rates, we would incur approximately $4.0 million of additional annual interest expense.
Based on the outstanding balance of the Credit Facilities as of December 31, 2025, for every 100 basis point increase in the interest rates, we would incur approximately $4.0 million of additional annual interest expense.
At December 31, 2024, a 10% favorable or unfavorable exchange rate movement in the Chinese Renminbi in our portfolio of foreign currency contracts would have resulted in an incremental unrealized gain of approximately $4.2 million or unrealized loss of approximately $8.1 million, respectively.
At December 31, 2025, a 10% favorable or unfavorable exchange rate movement in the Chinese Renminbi in our portfolio of foreign currency contracts would have resulted in an incremental unrealized gain of approximately $4.1 million or unrealized loss of approximately $2.9 million, respectively.
These foreign currency contract positions resulted in a net loss of $4.0 million and $2.0 million for the year ended December 31, 2024 and 2023, respectively.
These foreign currency contract positions resulted in a net gain and loss of $0.7 million and $4.0 million for the year ended December 31, 2025 and 2024, respectively.
Changes in the net fair value of contracts are recorded in other income (expense), net in the accompanying consolidated statements of operations and comprehensive loss. At December 31, 2024 and 2023, the net liability and asset fair values of our foreign currency contract positions was $2.9 million and $0.1 million, respectively.
Changes in the net fair value of contracts are recorded in other income, net in the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2025 and 2024, the net asset and liability fair values of our foreign currency contract positions were $0.2 million and $2.9 million, respectively.
We do not have material exposure to market risk with respect to investments. We had $403.6 million and $403.8 million of outstanding debt as of December 31, 2024 and 2023, respectively. Certain amounts under our Credit Facilities accrue interest at a floating interest rate.
We hold cash and cash equivalents for working capital purposes. We do not have material exposure to market risk with respect to investments. We had $403.3 million and $403.6 million of outstanding debt as of December 31, 2025 and 2024, respectively. Certain amounts under our Credit Facilities accrue interest at a floating interest rate.
However, our business can be affected by sustained dramatic movements in steel prices, including as a result of the reinstatement of a 25% tariff on all steel imports under President Trump's executive order in February 2025. The tariff on steel imports will become effective March 12, 2025.
However, our business can be affected by sustained dramatic movements in steel prices, including as a result of the 50% tariff on all steel imports other than those from the United Kingdom, which are subject to a 25% tariff, put in place by the current administration.
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Our market risk exposure is primarily a result of fluctuations in interest rates, foreign currency exchange risk, and commodity price risk.

Other COOK 10-K year-over-year comparisons