Margins rise but Polaris (NYSE: PII) posts Q1 2026 loss and higher debt
Filing Impact
Filing Sentiment
Form Type
10-Q
Polaris Inc. reported first-quarter 2026 sales of $1,658.7 million, up 8% from a year earlier, driven mainly by higher off-road vehicle shipments and better pricing. Gross profit rose to $334.8 million, lifting margin to 20.2% from 16.0% on stronger mix, pricing and lower operational costs despite higher tariffs.
The company still posted a net loss attributable to Polaris of $47.4 million, or $0.83 per diluted share, though this improved from a $66.8 million loss, or $1.17 per share, a year ago. Adjusted EBITDA nearly doubled to $102.8 million, helped by mix, pricing and volume, but results included a $31.6 million loss on disposal groups tied to the February 2026 sale of a majority interest in the Indian Motorcycle business and other assets held for sale.
Operating cash flow swung to an outflow of $320.2 million, reflecting heavy working capital use, while investing cash outflows increased on Indian Motorcycle-related payments and strategic investments. Polaris leaned on its credit facility, ending the quarter with $2,091.0 million of financing obligations, including $593.8 million drawn on the revolving loan and $468.8 million outstanding on the term loan. Product liability accruals increased to $442.3 million, partially offset by $223.9 million of expected insurance recoveries. Management highlighted ongoing tariff headwinds and noted no IEEPA tariff refunds have been recorded.
Positive
- None.
Negative
- None.
Insights
Polaris grows sales and margins but remains loss-making with higher leverage and cash outflows.
Polaris delivered 8% revenue growth to $1,658.7 million with a sharp gross margin improvement from 16.0% to 20.2%, reflecting stronger mix, pricing and operational efficiencies. Adjusted EBITDA almost doubled to $102.8 million, indicating better underlying profitability even after the Indian Motorcycle divestiture.
However, the company still reported a net loss of $47.4 million and a large operating cash outflow of $320.2 million, driven by working capital. Financing obligations climbed to $2,091.0 million as Polaris drew $593.8 million on its revolver, operating under relaxed covenant thresholds through June 30, 2026.
Risks remain from elevated product liability accruals of $442.3 million and ongoing tariff costs, while potential IEEPA tariff refunds are not yet reflected. Subsequent filings may clarify how quickly working capital normalizes and whether stronger margins translate into sustained positive free cash flow.
Key Figures
Sales: $1,658.7 million
Gross profit: $334.8 million
Net loss attributable to Polaris Inc.: $47.4 million
+5 more
8 metrics
Sales
$1,658.7 million
Three months ended March 31, 2026; up 8% year over year
Gross profit
$334.8 million
Q1 2026; gross margin 20.2% vs 16.0% in Q1 2025
Net loss attributable to Polaris Inc.
$47.4 million
Q1 2026; improved from $66.8 million loss in Q1 2025
Adjusted EBITDA
$102.8 million
Three months ended March 31, 2026; up from $52.7 million
Net cash from operating activities
$(320.2) million
Q1 2026; compared to $83.2 million provided in Q1 2025
Total financing obligations
$2,091.0 million
Carrying value as of March 31, 2026
Revolving loan facility borrowings
$593.8 million
Outstanding under $1.4 billion facility as of March 31, 2026
Product liability accrual
$442.3 million
Accrued probable payments as of March 31, 2026
Key Terms
Adjusted EBITDA, Covenant Relief Period, International Emergency Economic Powers Act, IEEPA tariffs, +2 more
6 terms
Adjusted EBITDA financial
"We reported first quarter adjusted EBITDA of $102.8 million, compared to 2025 first quarter adjusted EBITDA of $52.7 million."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Covenant Relief Period financial
"The Credit Facility Amendment completed in June 2025 modified the requirements related to the interest coverage ratio and leverage ratio during the Covenant Relief Period."
International Emergency Economic Powers Act regulatory
"In November 2025, the U.S. Supreme Court heard arguments in a case challenging tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”)."
A U.S. law that gives the president broad authority to control trade, financial transactions, and assets during a declared national emergency, such as by imposing sanctions, freezing property, or restricting exports and imports. For investors it matters because those powers can suddenly block deals, cut off access to markets or funds, and change the value of companies or securities much like an emergency brake that can stop or reroute economic activity overnight.
IEEPA tariffs regulatory
"No loss recovery was recorded in our consolidated financial statements during the period ended March 31, 2026 related to refunds for costs previously incurred under IEEPA tariffs."
Measures labeled as IEEPA tariffs are trade restrictions or charges imposed under the U.S. International Emergency Economic Powers Act, a law that lets the government respond to national emergencies with economic tools. For investors, these actions are like suddenly adding a toll to certain imports, exports or transactions: they can raise costs, disrupt supply chains, limit market access, and change a company’s revenue or risk profile overnight.
floorplan financing financial
"Most of the Company’s sales are financed by the customer under floorplan financing arrangements whereby the Company receives payment within a few days."
Floorplan financing is a short-term loan that dealers use to buy and display inventory — typically vehicles, heavy equipment, or big-ticket goods — where each item serves as collateral. Think of it as a rotating credit line a store uses to stock shelves: it preserves dealers’ cash and lets them offer more products, but it also creates interest, fees and repossession risk that can affect a dealer’s profitability and, therefore, investors’ assessments of creditworthiness and cash flow.
make-whole provisions financial
"All of the Company’s senior notes are governed by an indenture and are subject to customary covenants and make-whole provisions upon early redemption."
Earnings Snapshot
Revenue: $1,658.7 million
Q1 2026
Revenue
$1,658.7 million
+8% vs Q1 2025
Net loss attributable to Polaris Inc.
$47.4 million
-29% vs Q1 2025 loss
Adjusted EBITDA
$102.8 million
+95% vs Q1 2025
Gross margin
20.2%
+423 bps vs Q1 2025
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark one) | |||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number 1-11411
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
| (Registrant’s telephone number, including area code) | |||||||||||||||||
| N/A | |||||||||||||||||
| (Former name, former address and former fiscal year, if changed since last report) | |||||||||||||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of April 21, 2026, 56,886,167 shares of Common Stock, $.01 par value, of the registrant were outstanding.
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POLARIS INC.
FORM 10-Q
For Quarterly Period Ended March 31, 2026
| Page | |||||||||||
Part I FINANCIAL INFORMATION | |||||||||||
Item 1 – Financial Statements | 3 | ||||||||||
Consolidated Balance Sheets | 3 | ||||||||||
Consolidated Statements of Loss | 4 | ||||||||||
Consolidated Statements of Comprehensive Loss | 5 | ||||||||||
Consolidated Statements of Equity | 6 | ||||||||||
Consolidated Statements of Cash Flows | 7 | ||||||||||
Notes to Consolidated Financial Statements | 8 | ||||||||||
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 | ||||||||||
Results of Operations | 20 | ||||||||||
Liquidity and Capital Resources | 25 | ||||||||||
Critical Accounting Policies | 27 | ||||||||||
Note Regarding Forward-Looking Statements | 27 | ||||||||||
Item 3 – Quantitative and Qualitative Disclosures About Market Risk | 29 | ||||||||||
Item 4 – Controls and Procedures | 30 | ||||||||||
Part II OTHER INFORMATION | |||||||||||
Item 1 – Legal Proceedings | 30 | ||||||||||
Item 1A – Risk Factors | 31 | ||||||||||
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds | 31 | ||||||||||
Item 5 – Other Information | 31 | ||||||||||
Item 6 – Exhibits | 32 | ||||||||||
SIGNATURES | 33 | ||||||||||
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Part I FINANCIAL INFORMATION
Item 1 – FINANCIAL STATEMENTS
POLARIS INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
| March 31, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Trade receivables, net | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses and other | |||||||||||
| Income taxes receivable | |||||||||||
| Current assets held for sale | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Investment in finance affiliate | |||||||||||
| Deferred tax assets | |||||||||||
| Goodwill and other intangible assets, net | |||||||||||
| Operating lease assets | |||||||||||
| Other long-term assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current financing obligations | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued expenses | |||||||||||
| Other current liabilities | |||||||||||
| Current liabilities held for sale | |||||||||||
| Total current liabilities | |||||||||||
| Long-term financing obligations | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | $ | $ | |||||||||
| Deferred compensation | $ | $ | |||||||||
| Shareholders’ equity: | |||||||||||
Preferred stock $ | |||||||||||
Common stock $ | $ | $ | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss, net | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
| Noncontrolling interest | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
The accompanying footnotes are an integral part of these consolidated statements.
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POLARIS INC.
CONSOLIDATED STATEMENTS OF LOSS
(In millions, except per share data)
(Unaudited)
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Sales | $ | $ | |||||||||
| Cost of sales | |||||||||||
| Gross profit | |||||||||||
| Operating expenses: | |||||||||||
| Selling and marketing | |||||||||||
| Research and development | |||||||||||
| General and administrative | |||||||||||
| Loss on disposal groups | |||||||||||
| Total operating expenses | |||||||||||
| Income from financial services | |||||||||||
| Operating loss | ( | ( | |||||||||
| Non-operating expense: | |||||||||||
| Interest expense | |||||||||||
| Other (income) expense, net | ( | ||||||||||
| Loss before income taxes | ( | ( | |||||||||
| Benefit for income taxes | ( | ( | |||||||||
| Net loss | ( | ( | |||||||||
| Net income attributable to noncontrolling interest | ( | ( | |||||||||
| Net loss attributable to Polaris Inc. | $ | ( | $ | ( | |||||||
| Net loss per share attributable to Polaris Inc. common shareholders: | |||||||||||
| Basic | $ | ( | $ | ( | |||||||
| Diluted | $ | ( | $ | ( | |||||||
| Weighted average shares outstanding: | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
The accompanying footnotes are an integral part of these consolidated statements.
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POLARIS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In millions)
(Unaudited)
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Other comprehensive income (loss), net of tax: | |||||||||||
| Foreign currency translation adjustments | ( | ||||||||||
| Unrealized gain on derivative instruments | |||||||||||
| Retirement plan and other activity | ( | ( | |||||||||
| Comprehensive loss | ( | ( | |||||||||
| Comprehensive income attributable to noncontrolling interest | ( | ( | |||||||||
| Comprehensive loss attributable to Polaris Inc. | $ | ( | $ | ( | |||||||
The accompanying footnotes are an integral part of these consolidated statements.
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POLARIS INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
(Unaudited)
| Number of Shares | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Non Controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Employee stock compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Deferred compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Proceeds from stock issuances under employee plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends declared and paid (1) | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchase and retirement of common shares | ( | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance, March 31, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
| Number of Shares | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non Controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Employee stock compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Deferred compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Proceeds from stock issuances under employee plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends paid (1) | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Repurchase and retirement of common shares | ( | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Cash dividend to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
(1) Polaris Inc. declared and paid a dividend of $0.68 and $0.67 per share for the three-month periods ended March 31, 2026 and March 31, 2025, respectively.
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POLARIS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating Activities: | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash (used for) provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Noncash compensation | |||||||||||
| Noncash income from financial services | ( | ( | |||||||||
| Deferred income taxes | |||||||||||
| Loss on disposal groups | |||||||||||
| Other, net | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Trade receivables | ( | ( | |||||||||
| Inventories | ( | ||||||||||
| Accounts payable | |||||||||||
| Accrued expenses | ( | ( | |||||||||
| Income taxes payable/receivable | ( | ( | |||||||||
| Prepaid expenses and other, net | ( | ||||||||||
| Net cash (used for) provided by operating activities | ( | ||||||||||
| Investing Activities: | |||||||||||
| Purchase of property and equipment, net | ( | ( | |||||||||
| Distributions from (investment in) finance affiliate, net | |||||||||||
| Investments in other affiliates | ( | ||||||||||
| Sale of business | ( | ||||||||||
| Net cash used for investing activities | ( | ( | |||||||||
| Financing Activities: | |||||||||||
| Borrowings (repayments) under revolving loan facility, net | ( | ||||||||||
| Repayments under financing obligations | ( | ( | |||||||||
| Repurchase and retirement of common shares | ( | ( | |||||||||
| Cash dividends to shareholders | ( | ( | |||||||||
| Cash dividend to noncontrolling interest | ( | ||||||||||
| Proceeds from stock issuances under employee plans | |||||||||||
| Net cash provided by (used for) financing activities | ( | ||||||||||
| Impact of currency exchange rates on cash balances | ( | ||||||||||
| Net increase in cash, cash equivalents and restricted cash | |||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
| Supplemental Cash Flow Information: | |||||||||||
| Interest paid on financing obligations | $ | $ | |||||||||
| Income taxes paid | $ | $ | |||||||||
| Leased assets obtained for operating lease liabilities | $ | $ | |||||||||
| The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Other long-term assets | |||||||||||
| Total | $ | $ | |||||||||
The accompanying footnotes are an integral part of these consolidated statements.
7
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POLARIS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation and Significant Accounting Policies
Basis of presentation. The accompanying unaudited consolidated financial statements of Polaris Inc. (“Polaris” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and, therefore, do not include all information and disclosures of results of operations, financial position, and changes in cash flow in conformity with accounting principles generally accepted in the United States for complete financial statements. Accordingly, such statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 previously filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, equity, and cash flows for the periods presented. Due to the seasonality trends for certain products and certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year.
Fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company utilizes the market approach to measure fair value for its non-qualified deferred compensation assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
Non-qualified deferred compensation assets and liabilities
As of March 31, 2026 and December 31, 2025, the fair value of the Company’s non-qualified deferred compensation assets was $50.7 million and $53.5 million, respectively. As of March 31, 2026 and December 31, 2025, the fair value of the Company’s non-qualified deferred compensation liabilities was $50.7 million and $53.5 million, respectively. The fair value of these assets and liabilities was determined using Level 1 inputs.
Fair value of other financial instruments. The carrying values of the Company’s short-term financial instruments, including cash and cash equivalents, trade receivables, accounts payable and current financing obligations, approximate their fair values due to their short-term nature. As of March 31, 2026 and December 31, 2025, the fair value of the Company’s financing obligations was approximately $2,111.1 million and $1,575.9 million, respectively, and was determined primarily using Level 2 inputs by discounting projected cash flows based on quoted market rates at which similar amounts of debt could currently be borrowed. The carrying value of financing obligations was $2,091.0 million and $1,539.5 million as of March 31, 2026 and December 31, 2025, respectively.
Property and equipment. The Company recorded $58.6 million and $67.4 million of depreciation expense for the three months ended March 31, 2026 and 2025, respectively. A majority of the Company’s property and equipment is located in North America.
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| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| Additions charged to expense | |||||||||||
| Warranty claims paid, net | ( | ( | |||||||||
| Balance at end of period | $ | $ | |||||||||
New accounting pronouncements.
Apart from the item discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, there are no other new accounting pronouncements that are expected to have a significant impact on the Company’s consolidated financial statements or related disclosures.
Note 2. Supplemental Balance Sheet Information
| In millions | March 31, 2026 | December 31, 2025 | ||||||||||||
| Inventories | ||||||||||||||
| Raw materials and purchased components | $ | $ | ||||||||||||
| Service parts, garments and accessories | ||||||||||||||
| Finished goods | ||||||||||||||
| Less: reserves | ( | ( | ||||||||||||
| Inventories, net | $ | $ | ||||||||||||
| Property and equipment | ||||||||||||||
| Land, buildings and improvements | $ | $ | ||||||||||||
| Equipment and tooling | ||||||||||||||
| Less: accumulated depreciation | ( | ( | ||||||||||||
| Property and equipment, net | $ | $ | ||||||||||||
| Accrued expenses | ||||||||||||||
| Compensation | $ | $ | ||||||||||||
| Warranties | ||||||||||||||
| Sales promotions and incentives | ||||||||||||||
| Dealer holdback | ||||||||||||||
| Other accrued expenses | ||||||||||||||
| Total accrued expenses | $ | $ | ||||||||||||
| Other current liabilities | ||||||||||||||
| Current operating lease liabilities | $ | $ | ||||||||||||
| Income taxes payable | ||||||||||||||
| Total other current liabilities | $ | $ | ||||||||||||
| Other long-term liabilities | ||||||||||||||
| Long-term operating lease liabilities | $ | $ | ||||||||||||
| Long-term income taxes payable | ||||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Total other long-term liabilities | $ | $ | ||||||||||||
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Note 3. Revenue Recognition
The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or service to a customer. Revenue is measured based on the amount of consideration that the Company expects to be entitled to in exchange for the goods or services transferred. Sales, value add, and other taxes that are collected from a customer concurrent with revenue-producing activities are excluded from revenue. Revenue from goods and services transferred to customers at a point-in-time accounts for the majority of the Company’s revenue. Revenue from products or services transferred over time is discussed in the contract liabilities section below.
The following tables disaggregate the Company's revenue by major product type and geography (in millions):
| Three months ended March 31, 2026 | |||||||||||||||||||||||||||||
| Polaris Powersports | Marine | Aixam & Goupil | Corporate | Total | |||||||||||||||||||||||||
| Revenue by product type | |||||||||||||||||||||||||||||
| Wholegoods | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| PG&A | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Revenue by geography | |||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Canada | |||||||||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||||||||
| APLA | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Three months ended March 31, 2025 | |||||||||||||||||||||||||||||
| Polaris Powersports | Marine | Aixam & Goupil | Corporate | Total | |||||||||||||||||||||||||
| Revenue by product type | |||||||||||||||||||||||||||||
| Wholegoods | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| PG&A | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Revenue by geography | |||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Canada | |||||||||||||||||||||||||||||
| EMEA | |||||||||||||||||||||||||||||
| APLA | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
For the majority of wholegood vehicles, boats, and parts, garments, and accessories (“PG&A”), the Company transfers control and recognizes a sale when it ships the product from its manufacturing facility, distribution center, or vehicle holding center to the customer. The amount of consideration the Company receives and revenue it recognizes varies with changes in marketing incentives and rebates it offers to its customers. Payment terms vary by customer and most of the Company’s sales are financed by the customer under floorplan financing arrangements whereby the Company receives payment within a few days of shipment of the product.
When the right of return exists, the Company adjusts the consideration for the estimated effect of returns. The Company estimates expected returns based on historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer, and a projection of this experience into the future. The Company adjusts its estimate of revenue at the earlier of when the most likely amount of consideration it expects to receive changes or when the consideration becomes fixed.
Depending on the terms of the arrangement, the Company may also defer the recognition of a portion of the consideration received because it has to satisfy a future obligation. The Company uses an observable price to determine the stand-alone
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selling price for separate performance obligations. The Company has elected to recognize the cost for freight and shipping as an expense in cost of sales when control over vehicles, boats, or PG&A has transferred to the customer.
The Company sells separately-priced extended service contracts (“ESCs”) that extend mechanical coverages beyond the base limited warranty as well as prepaid maintenance agreements to vehicle owners. Including the base limited warranty, these separately-priced service contracts have a duration ranging from 12 months to 84 months. The Company typically receives payment at the inception of the contract and recognizes revenue over the term of the agreement in proportion to the costs expected to be incurred in satisfying the obligations under the contract.
Contract liabilities. Contract liabilities relate to deferred revenue recognized for cash consideration received at contract inception in advance of the Company's performance under the respective contract and generally relate to the sale of separately-priced ESCs. The Company finances its self-insured risks related to ESCs. The premiums for ESCs are primarily recognized in income over the term of the agreement in proportion to the costs expected to be incurred in satisfying obligations under the contract. Warranty costs are recognized as incurred.
The activity in the deferred revenue reserve for ESCs during the periods presented was as follows (in millions):
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| New contracts sold | |||||||||||
| Revenue recognized on existing contracts | ( | ( | |||||||||
| Balance at end of period | $ | $ | |||||||||
Note 4. Divestitures and Assets and Liabilities Held for Sale
On February 2, 2026, the Company completed the sale of a majority interest in the Indian Motorcycle business. Indian Motorcycle was a vertically integrated manufacturer and distributor of a full line of motorcycles that was previously included in the Company’s On Road reportable segment. In addition to charges recorded in 2025, the sale resulted in an incremental loss of $13.4 million which was included in loss on disposal groups in the consolidated statements of loss for the three months ended March 31, 2026.
The Company has agreed to provide certain transition services to the buyer following the sale, generally for a period up to eighteen months, depending on the nature of the service, pursuant to a transition services agreement (“TSA”). The TSA covers services such as logistics, information technology, engineering, finance, human resources and legal services. The fees to be paid for these services are generally intended to allow the Company to recover all of its costs and expenses incurred in providing such services. In connection with the closing of the transaction, the Company also entered into supply agreements, pursuant to which the Company has agreed to sell certain wholegoods, wholegood component parts and PG&A to the buyer. Fees paid under the supply agreements are intended to allow the Company to recover all of its related costs and expenses plus a markup. Depending on the nature of the services or goods provided under the TSA and supply agreements, the related income or reimbursements are recorded in sales, cost of sales, or other (income) expense, net in the consolidated statements of loss.
Related to the TSA and supply agreements, during the three months ended March 31, 2026, the Company recorded sales of $24.8 million and cost reimbursements of $15.3 million, of which $3.5 million was recorded in cost of sales and $11.8 million was recorded in other (income) expense, net in the consolidated statements of loss. Costs incurred under the TSA and supply agreements totaled $37.9 million during the three months ended March 31, 2026, of which $32.4 million was recorded in cost of sales and $5.5 million was recorded in operating expenses in the consolidated statements of loss.
Certain other PG&A assets met the criteria to be classified as held for sale as of March 31, 2026. Accordingly, the Company recorded the assets of the disposal group at fair value less cost to sell. For the three months ended March 31, 2026, the Company recorded total charges of $18.2 million related to the disposal group, which were included in loss on disposal
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groups in the consolidated statements of loss. The fair value of the assets and liabilities in the disposal group were measured based on an executed letter of intent, which is considered a Level 3 input in the fair value hierarchy.
The Company’s motorcycle manufacturing facility located in Vietnam was classified as held for sale as of March 31, 2026. The assets and liabilities of that manufacturing facility also represent a disposal group. The combined carrying amounts of major classes of assets and liabilities classified as held for sale were as follows (in millions):
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Trade receivables, net | ||||||||||||||
| Inventories, net | ||||||||||||||
| Prepaid expenses and other | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Deferred tax assets | ||||||||||||||
| Valuation allowance on disposal group held for sale | ( | ( | ||||||||||||
| Current assets held for sale | ||||||||||||||
| Accounts payable | ||||||||||||||
| Accrued expenses and other | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Current liabilities held for sale | $ | $ | ||||||||||||
Note 5. Share-Based Compensation
Total share-based compensation expenses were as follows (in millions):
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Option awards | $ | $ | |||||||||
| Other share-based awards | |||||||||||
| Total share-based compensation before tax | |||||||||||
| Tax benefit | |||||||||||
| Total share-based compensation expense included in net (loss) income | $ | $ | |||||||||
In addition to the above share-based compensation expenses, the Company sponsors a qualified non-leveraged employee stock ownership plan (“ESOP”). Shares allocated to eligible participants’ accounts vest at various percentage rates based on years of service and require no cash payments from the recipient.
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Note 6. Financing Agreements
The carrying value of financing obligations and the average related interest rates were as follows (in millions):
| Average interest rate as of March 31, 2026 | Maturity | March 31, 2026 | December 31, 2025 | ||||||||||||||||||||
| Senior notes due 2029 | March 2029 | ||||||||||||||||||||||
| Revolving loan facility | December 2029 | ||||||||||||||||||||||
| Term loan facility | December 2029 | ||||||||||||||||||||||
| Senior notes due 2031 | March 2031 | ||||||||||||||||||||||
| Finance lease obligations | Various through 2029 | ||||||||||||||||||||||
| Notes payable and other | Various through 2030 | ||||||||||||||||||||||
| Unamortized debt issuance costs and discounts | ( | ( | |||||||||||||||||||||
| Total financing obligations | $ | $ | |||||||||||||||||||||
| Less: Current financing obligations | |||||||||||||||||||||||
| Total long-term financing obligations | $ | $ | |||||||||||||||||||||
Debt issuance costs and discounts are recognized as a reduction in the carrying value of the related long-term debt in the consolidated balance sheets and are amortized to interest expense in the consolidated statements of loss over the expected remaining terms of the related debt.
As of March 31, 2026, the Company had open letters of credit totaling $57.1 million. The amounts are primarily related to inventory purchases and are reduced as the purchases are received.
Unsecured credit facility. The Company maintains an unsecured credit facility which consists of a term loan facility (the “Term Loan Facility”) and a revolving loan facility (the “Revolving Loan Facility”). An amendment was completed in December 2024 that reduced the Term Loan Facility to $500.0 million, of which $468.8 million was outstanding as of March 31, 2026, and extended the maturity date of the Term Loan Facility to December 2029. The Company is required to make principal payments under the Term Loan Facility totaling $25.0 million over the next 12 months. The amendment, completed in December 2024, also increased the Revolving Loan Facility to $1.4 billion, of which $593.8 million was outstanding as of March 31, 2026, and extended the maturity date to December 2029. In June 2025, the Company further amended the credit facility (the “Credit Facility Amendment”) to modify the financial covenants in the existing credit agreement for each quarter ending June 30, 2025 through and including June 30, 2026 (the “Covenant Relief Period”). During the Covenant Relief Period, the Credit Facility Amendment limits the Company from repurchasing shares and paying dividends other than regular quarterly dividends and certain other exceptions, and limits the amount of debt certain subsidiaries of the Company may incur. Interest under the Term Loan Facility and Revolving Loan Facility is charged at rates based on adjusted Term SOFR plus the applicable add-on percentage, as defined in the credit agreement.
The agreements governing the credit facility contain covenants that require the Company to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. The agreements require the Company to maintain an interest coverage ratio of not less than 3.00 to 1.00 and a leverage ratio of not more than 3.50 to 1.00 on a rolling four quarter basis. The interest coverage ratio is calculated as Adjusted EBITDA to interest expense for the then most-recently ended four fiscal quarters. The leverage ratio is calculated as consolidated funded indebtedness less cash and cash equivalents, capped at $300 million, to Adjusted EBITDA for the then most-recently ended four fiscal quarters. The Credit Facility Amendment completed in June 2025 modified the requirements related to the interest coverage ratio and leverage ratio during the Covenant Relief Period. During the Covenant Relief Period, the interest coverage ratio is 2.50 2.00 4.00 to 1.00 for the quarter ending June 30, 2025, 4.50 to 1.00 for the quarter ending September 30, 2025, and 5.50
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Senior notes. In November 2023, the Company issued $500 million aggregate principal amount of 6.95 % Senior Notes due 2029 (the “6.95 % Senior Notes”) in an underwritten public offering. The Company received approximately $492 million in net proceeds from the offering after deducting the underwriting discount and other fees and expenses. The 6.95 % Senior Notes bear interest at a rate of 6.95 % per year and mature in March 2029. In November 2025, the Company issued $500 million aggregate principal amount of 5.60 % Senior Notes due 2031 (the “5.60 % Senior Notes” and together with the 6.95 % Senior Notes, the “senior notes”) in an underwritten public offering. The Company received approximately $497 million in net proceeds from the offering after deducting the underwriting discount and other fees and expenses. The 5.60 % Senior Notes bear interest at a rate of 5.60 % and mature in March 2031. All of the Company’s senior notes are governed by an indenture and are subject to customary covenants and make-whole provisions upon early redemption.
Acquisition-related deferred payments. On July 2, 2018, pursuant to the Agreement and Plan of Merger dated May 29, 2018, the Company completed the acquisition of Boat Holdings, LLC, a privately held Delaware limited liability company, headquartered in Elkhart, Indiana that manufactures boats (“Boat Holdings”). As a component of the Boat Holdings merger agreement, the Company has committed to make a series of deferred payments to the former owners following the closing date of the merger through July 2030. The original discounted payable was for $76.7 million, of which $36.8 million was outstanding as of March 31, 2026. The outstanding balance is included in long-term financing obligations and current financing obligations in the consolidated balance sheets.
Note 7. Goodwill and Other Intangible Assets
Goodwill and other intangible assets, net of accumulated amortization, as of March 31, 2026 and December 31, 2025 were as follows (in millions):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Goodwill | $ | $ | |||||||||
| Other intangible assets, net | |||||||||||
| Total goodwill and other intangible assets, net | $ | $ | |||||||||
The changes in the carrying amount of goodwill by reportable segment for the three months ended March 31, 2026 and 2025 were as follows (in millions):
| Polaris Powersports | Marine | Aixam & Goupil | Total | ||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| No activity | |||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | |||||||||||||||||||
| Off Road | Marine | On Road | Total | ||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | |||||||||||||||||||
| Currency translation effect on foreign goodwill balances | |||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
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The components of other intangible assets were as follows (in millions):
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
| Weighted-average useful life (years) | Cost | Accumulated amortization | Net | Cost | Accumulated amortization | Net | |||||||||||||||||||||||
| Amortizable - dealer/customer related and other | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Non-amortizable - brand/trade names | — | — | |||||||||||||||||||||||||||
| Total other intangible assets, net | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||
Amortization expense for other intangible assets was $4.6 million and $6.0 million for the three months ended March 31, 2026 and 2025, respectively. Estimated future amortization expense for identifiable other intangible assets during the next five years is as follows (in millions):
| Remainder 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | ||||||||||||||||||||||||||||||
| Estimated amortization expense | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
The preceding expected amortization expense is an estimate and actual amounts could differ due to additional other intangible asset acquisitions, changes in foreign currency rates, or impairments of other intangible assets.
Note 8. Shareholders’ Equity
Share repurchase program. The Company did not repurchase shares of its common stock in open-market transactions under the share repurchase program during the three months ended March 31, 2026. As of March 31, 2026, the Board of Directors has authorized the Company to repurchase up to an additional $1.1 billion of the Company’s common stock.
Dividends. Cash dividends declared and paid per common share for the three months ended March 31, 2026 and 2025 were as follows:
| Three months ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash dividends declared and paid per common share | $ | $ | ||||||||||||
Net loss per share. Basic net loss per share was computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during each period, including shares earned under the Deferred Compensation Plan for Directors (“Director Plan”), the ESOP and deferred stock units under the 2024 Omnibus Incentive Plan (“Omnibus Plan”). Diluted net loss per share was computed under the treasury stock method and was calculated to compute the dilutive effect of outstanding stock options and certain share-based awards issued under the Omnibus Plan. As a result of the Company’s net loss during the three months ended March 31, 2026 and 2025, outstanding stock options and certain share-based awards were not included in the computation of diluted net loss per share because the effect would have been anti-dilutive. Reconciliations of these amounts are as follows (in millions):
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Weighted average number of common shares outstanding | |||||||||||
| Director Plan and deferred stock units | |||||||||||
| ESOP | |||||||||||
| Common shares outstanding—basic | |||||||||||
| Dilutive effect of restricted stock units | |||||||||||
| Dilutive effect of stock option awards | |||||||||||
| Common and potential common shares outstanding—diluted | |||||||||||
During the three months ended March 31, 2026, the number of options that were not included in the computation of diluted net loss per share because the option exercise price was greater than the market price, and therefore the effect would have
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been anti-dilutive, was 2.8 million compared to 3.2 million for the same period in 2025. As a result of the Company’s net loss during the three months ended March 31, 2026 and 2025, an additional 0.8 million and 0.2 million, respectively, of outstanding stock options and certain share-based awards under the Omnibus Plan were not included in the computation of diluted net loss per share because the effect would have been anti-dilutive.
Accumulated other comprehensive loss. Changes in the accumulated other comprehensive loss balance were as follows (in millions):
| Foreign Currency Translation | Cash Flow Hedging Derivatives | Retirement Plan Activity | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
| Balance as of December 31, 2025 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| Reclassification to the statement of income | ( | ( | ( | ||||||||||||||||||||
| Change in fair value | ( | ( | |||||||||||||||||||||
| Balance as of March 31, 2026 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Note 9. Financial Services Arrangements
Polaris Acceptance, a joint venture between the Company and Wells Fargo Commercial Distribution Finance Corporation, a direct subsidiary of Wells Fargo Bank, N.A., which is supported by a partnership agreement between their respective wholly owned subsidiaries, finances substantially all of the Company’s United States sales of off-road vehicles, snowmobiles, boats, and related PG&A, whereby the Company receives payment within a few days of shipment of the product. As of March 31, 2026, the total amount of receivables due from Polaris Acceptance was $22.9 million.
The Company’s subsidiary has a 50 percent equity interest in Polaris Acceptance. The Company’s allocable share of the income of Polaris Acceptance has been included as a component of income from financial services in the consolidated statements of loss. The partnership agreement is effective through February 2027.
The Company’s total investment in Polaris Acceptance was $133.8 million as of March 31, 2026 and is accounted for under the equity method and recorded in investment in finance affiliate in the consolidated balance sheets. As of March 31, 2026, the outstanding amount of net receivables financed for dealers under this arrangement was $1,795.6 million.
The Company has agreed to repurchase products repossessed by Polaris Acceptance up to an annual maximum of 15 percent of the aggregate average month-end outstanding Polaris Acceptance receivables during the prior calendar year. For calendar year 2026, the potential 15 percent aggregate repurchase obligation with respect to products repossessed by Polaris Acceptance is approximately $268.5 million.
Financing of the Company’s United States sales of boats was previously completed by a subsidiary of Huntington Bancshares Incorporated (“Huntington”) and the Company may still be required to repurchase products repossessed by Huntington up to a maximum of 100 percent of the aggregate outstanding Huntington receivables balance. The Company also has other financing arrangements related to its foreign subsidiaries in which it has agreed to repurchase repossessed products. As of March 31, 2026, these potential aggregate repurchase obligations were approximately $56.8 million.
The Company’s financial exposure under these repurchase agreements is limited to the difference between the amounts unpaid by the dealer or distributor with respect to the repossessed product plus costs of repossession and the amount received on the resale of the repossessed product. No material losses have been incurred under these agreements during the periods presented.
The Company has agreements with third-party finance companies to provide financing options to end consumers of the Company’s products. The Company has no material contingent liabilities for residual value or credit collection risk under these agreements. The Company’s income generated from these agreements has been included as a component of income from financial services in the consolidated statements of loss.
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Note 10. Commitments and Contingencies
Product liability. The Company is subject to product liability claims in the normal course of business. The Company purchases excess insurance coverage annually for product liability claims, which is subject to self-insured retention and aggregate limits. The estimated costs resulting from any losses are charged to operating expenses when it is probable a loss has been incurred and the amount of the loss is reasonably estimable. The Company utilizes actuarial analysis, which considers claims experience and historical trends, along with an analysis of current claims, to assist in determining the appropriate loss reserve levels. As of March 31, 2026 and December 31, 2025, the Company had an accrual of $442.3 million and $374.1 million, respectively, for the probable payment of pending claims related to product liability litigation associated with the Company’s products. This accrual is included as a component of accrued expenses in the consolidated balance sheets. Amounts due from insurance carriers, to the extent applicable, reduce our financial exposures to product liability claims and are included as a component of prepaid expenses and other in the consolidated balance sheets. As of March 31, 2026 and December 31, 2025, the Company recorded $223.9 million and $182.5 million, respectively, for probable insurance recoveries related to product liability accruals.
Litigation. The Company is subject to lawsuits and claims arising in the normal course of business, including matters related to intellectual property, commercial matters, employment, warranty, product liability claims and putative class actions. Additional details about certain of the pending class actions and putative class actions are provided in Part II, Item 1 – Legal Proceedings.
In the opinion of management, it is presently unlikely that any legal proceedings pending against or involving the Company will have a material adverse effect on the Company’s financial position, results of operations, or cash flows. However, in many of these matters, it is inherently difficult to determine whether a loss is probable or reasonably possible or to estimate the size or range of the possible loss given the variety of potential outcomes of actual and potential claims, including legal proceedings resulting in verdicts that exceed policy limits for a given year or seeking punitive damages for certain policy years for which we may not be insured, the uncertainty of future rulings, possible class certification, the behavior or incentives of adverse parties, and other factors outside of the control of the Company. Accordingly, the Company’s loss reserve may change from time to time, and actual losses could exceed the amounts accrued by an amount that could be material to the Company’s consolidated financial position, results of operations, or cash flows in any particular reporting period.
Note 11. Segment Reporting
In the first quarter of 2026, the Company began management of its portfolio of businesses under a new basis following the divestiture of the Indian Motorcycle business. All historical results were reclassified for comparability, including the divested Indian Motorcycle business, which is included in corporate and corporate costs and other.
The Company’s reportable segments are based on the Company’s method of internal reporting and are comprised of various product offerings that serve multiple end markets. These results are not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented. The internal reporting of these operating segments is based, in part, on the reporting and review process used by the Company’s chief operating decision maker (“CODM”), its Chief Executive Officer. The Company primarily uses gross profit, a measure that is determined in accordance with U.S. GAAP, to evaluate segment profitability and make decisions about resource allocation. The Company’s CODM does not utilize segment asset information to evaluate performance and make resource allocation decisions, and thus such disclosures are not provided. The Company has six operating segments: 1) Off-Road Vehicles (“ORV”), 2) Seasonal, 3) Commercial, 4) Government/Defense, 5) Marine, and 6) Aixam & Goupil, and three reportable segments: 1) Polaris Powersports, 2) Marine, and 3) Aixam & Goupil.
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The Polaris Powersports reportable segment includes the aggregated results of the Company’s ORV, Seasonal, Commercial, and Government/Defense operating segments. The Marine and Aixam & Goupil reportable segments include the results for those respective operating segments. Corporate and corporate costs and other includes revenues and costs of previously divested businesses including Indian Motorcycle, income and costs related to TSA and supply agreements, and costs that are not allocated to reportable segments, including certain manufacturing costs, the impacts of certain foreign currency transactions, and certain incentive compensation costs and related adjustments.
The Company has determined its significant segment expense categories based on amounts regularly provided to the Company’s CODM to evaluate segment profitability and drive strategic decision making. Reportable segment sales and significant reportable segment expense categories and amounts included in the Company’s measure of segment profit or loss, gross profit, were as follows (in millions):
| For the Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| Polaris Powersports | Marine | Aixam & Goupil | Total | ||||||||||||||||||||
| Reportable segment sales | $ | $ | $ | $ | |||||||||||||||||||
| Reconciliation of consolidated sales | |||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Consolidated sales | |||||||||||||||||||||||
| Purchased materials, logistics and labor | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Warranty | |||||||||||||||||||||||
| Reportable segment gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Corporate costs and other - gross profit | |||||||||||||||||||||||
| Total gross profit | $ | ||||||||||||||||||||||
| For the Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| Polaris Powersports | Marine | Aixam & Goupil | Total | ||||||||||||||||||||
| Reportable segment sales | $ | $ | $ | $ | |||||||||||||||||||
| Reconciliation of consolidated sales | |||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Consolidated sales | |||||||||||||||||||||||
| Purchased materials, logistics and labor | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Warranty | |||||||||||||||||||||||
| Reportable segment gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Corporate costs and other - gross profit | |||||||||||||||||||||||
| Total gross profit | $ | ||||||||||||||||||||||
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Item 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion pertains to the results of operations and financial position of Polaris Inc., a Delaware corporation, for the three-month period ended March 31, 2026 compared to the three-month period ended March 31, 2025. The terms “Polaris,” the “Company,” “we,” “us,” and “our” as used herein refer to the business and operations of Polaris Inc., its subsidiaries and its predecessors, which began doing business in 1954. We design, engineer, manufacture and market powersports vehicles which include: off-road vehicles (“ORV”), including all-terrain vehicles (“ATV”) and side-by-side vehicles; military and commercial ORVs; snowmobiles; moto-roadsters; quadricycles; and boats. We also design and manufacture or source parts, garments and accessories (“PG&A”), which includes aftermarket accessories and apparel. Due to the seasonal trends for certain products and certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year. Unless otherwise noted, all “quarter” comparisons are from the first quarter of 2026 to the first quarter of 2025. Estimates related to industry retail sales are unaudited and based on internally-generated management estimates, including estimates based on extrapolations from third-party surveys of the industries in which we compete, and are subject to change.
Overview
First quarter sales totaled $1,658.7 million, an increase of eight percent from last year’s first quarter sales of $1,535.8 million. The increase in sales for the quarter was primarily driven by increased shipments and higher net pricing, partially offset by reduced motorcycle shipments as a result of the Indian Motorcycle divestiture on February 2, 2026.
Our gross profit of $334.8 million increased 37 percent from $245.0 million in the comparable prior year first quarter. Gross profit, as a percentage of sales, increased primarily as a result of favorable product mix, higher net pricing, favorable operational costs and lower finance interest, partially offset by incremental tariff charges.
Net loss attributable to Polaris was $47.4 million, or $0.83 net loss per diluted share, compared to 2025 first quarter net loss attributable to Polaris of $66.8 million, or $1.17 net loss per diluted share. The improvement for the quarter was primarily driven by favorable product mix, higher net pricing and increased shipments, partially offset by higher general and administrative expenses, the loss recorded as a result of the sale of the Indian Motorcycle business, impairment charges recorded for certain assets classified as held for sale, and incremental tariff charges. We reported first quarter adjusted EBITDA of $102.8 million, compared to 2025 first quarter adjusted EBITDA of $52.7 million. For information on how we define and calculate Adjusted EBITDA, and a reconciliation from net loss to adjusted EBITDA, see “Non-GAAP Financial Measures”.
Global Economic Conditions
We continue to monitor macroeconomic trends and uncertainties and changes in international trade relations and trade policy, including those related to tariffs. The U.S. government has implemented a general tariff on all imports from countries not exempted under certain trade reciprocity criteria and elevated tariffs have been imposed on imports from major trading partners. Impacted countries have and may impose retaliatory tariffs, and such actions could give rise to an escalation of other trade measures by the countries subjected to such tariffs. In November 2025, the U.S. Supreme Court heard arguments in a case challenging tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), and in February 2026, the Court issued a ruling that IEEPA does not authorize the imposition of tariffs. The Court only ruled on IEEPA tariffs and did not invalidate any other tariffs, nor did the Court address whether or how the U.S. government might issue refunds of IEEPA tariffs. As a result of this ruling, the U.S. Court of International Trade issued an order directing the U.S. Customs and Border Protection (“CBP”) agency to formalize a process for refunds. On April 20, 2026, the CBP launched an online portal that can be used to submit IEEPA tariff refunds requests. All requests will be reviewed by the CBP to determine validity prior to the issuance of refunds. Although the ruling has been issued, its implications for trade policy and related administrative actions remain uncertain. A number of tariff-related matters continue to be challenged that could impact the continued utilization of certain tariffs and the manner in which tariff costs or potential recoveries are calculated. Adverse rulings, or the replacement or implementation of new tariffs or trade restrictions, may have a material adverse impact on our results of operations, including our profitability. The tariff policy environment is rapidly evolving and there is no guarantee that additional or increased tariffs will not be imposed.
We currently procure components from countries subject to such tariffs. As a result of the current tariffs, we anticipate increased supply chain challenges, commodity cost volatility, economic uncertainty, and economic pressures on customers and consumers as a result of the challenges of high inflation combined with the effects of increased tariffs. To mitigate the impact of tariffs on our supply chain and manufacturing, we continue to evaluate sourcing alternatives, negotiate with suppliers, and work to increase the percentage of shipments qualified under favorable trade agreements. Incremental tariffs and changed trade policies had a notable impact on our financial results for the three months ended March 31, 2026, and
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could continue to adversely impact our results in the future. No loss recovery was recorded in our consolidated financial statements during the period ended March 31, 2026 related to refunds for costs previously incurred under IEEPA tariffs. We will continue to evaluate the impact of tariffs on our operations and profitability.
Consolidated Results of Operations
The consolidated results of operations were as follows:
| Three months ended March 31, | |||||||||||||||||
| ($ in millions except percentages and share data) | 2026 | 2025 | Change 2026 vs. 2025 | ||||||||||||||
| Sales | $ | 1,658.7 | $ | 1,535.8 | 8 | % | |||||||||||
| Cost of sales | $ | 1,323.9 | $ | 1,290.8 | 3 | % | |||||||||||
| Gross profit | $ | 334.8 | $ | 245.0 | 37 | % | |||||||||||
| Percentage of sales | 20.2 | % | 16.0 | % | +423 bps | ||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling and marketing | $ | 113.6 | $ | 117.6 | (3) | % | |||||||||||
| Research and development | 82.3 | 82.9 | (1) | % | |||||||||||||
| General and administrative | 162.5 | 102.7 | 58 | % | |||||||||||||
| Loss on disposal groups | 31.6 | — | NM | ||||||||||||||
| Total operating expenses | $ | 390.0 | $ | 303.2 | 29 | % | |||||||||||
| Percentage of sales | 23.5 | % | 19.7 | % | +377 bps | ||||||||||||
| Income from financial services | $ | 16.1 | $ | 22.1 | (27) | % | |||||||||||
| Operating loss | $ | (39.1) | $ | (36.1) | 8 | % | |||||||||||
| Non-operating expense: | |||||||||||||||||
| Interest expense | $ | 30.4 | $ | 34.1 | (11) | % | |||||||||||
| Other (income) expense, net | $ | (11.8) | $ | 0.9 | NM | ||||||||||||
| Loss before income taxes | $ | (57.7) | $ | (71.1) | (19) | % | |||||||||||
| Benefit for income taxes | $ | (10.5) | $ | (4.4) | 139 | % | |||||||||||
| Effective income tax rate | 18.1 | % | 6.1 | % | NM | ||||||||||||
| Net loss | $ | (47.2) | $ | (66.7) | (29) | % | |||||||||||
| Net income attributable to noncontrolling interest | (0.2) | (0.1) | 100 | % | |||||||||||||
| Net loss attributable to Polaris Inc. | $ | (47.4) | $ | (66.8) | (29) | % | |||||||||||
| Percentage of sales | (2.9) | % | (4.3) | % | +149 bps | ||||||||||||
| Adjusted EBITDA | $ | 102.8 | $ | 52.7 | 95 | % | |||||||||||
| Adjusted EBITDA Margin | 6.2 | % | 3.4 | % | +277 bps | ||||||||||||
| Diluted net loss per share attributable to Polaris Inc. shareholders | $ | (0.83) | $ | (1.17) | (29) | % | |||||||||||
| Weighted average diluted shares outstanding | 57.4 | 56.9 | 1 | % | |||||||||||||
| NM = not meaningful | |||||||||||||||||
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Sales:
The increase in sales for the quarter was primarily driven by increased shipments and higher net pricing, partially offset by reduced motorcycle shipments as a result of the Indian Motorcycle divestiture on February 2, 2026.
The components of the consolidated sales change were as follows:
| Percent change in total Company sales compared to corresponding period of the prior year | |||||
| Three months ended | |||||
| March 31, 2026 | |||||
| Volume | 8 | % | |||
| Product mix and price | 4 | ||||
| Currency | 2 | ||||
| Divestiture | (6) | ||||
| 8 | % | ||||
Sales by geographic region were as follows:
| Three months ended March 31, | |||||||||||||||||||||||||||||
| ($ in millions) | 2026 | Percent of Total Sales | 2025 | Percent of Total Sales | Percent Change 2026 vs. 2025 | ||||||||||||||||||||||||
| United States | $ | 1,334.3 | 80 | % | $ | 1,192.7 | 78 | % | 12 | % | |||||||||||||||||||
| Canada | 91.4 | 6 | % | 97.6 | 6 | % | (6) | % | |||||||||||||||||||||
| Other countries | 233.0 | 14 | % | 245.5 | 16 | % | (5) | % | |||||||||||||||||||||
| Total sales | $ | 1,658.7 | 100 | % | $ | 1,535.8 | 100 | % | 8 | % | |||||||||||||||||||
Sales in the United States increased during the quarter primarily as a result of increased ORV shipments and PG&A sales, partially offset by reduced motorcycle shipments as a result of the Indian Motorcycle divestiture.
Sales in Canada decreased during the quarter primarily due to reduced snowmobile and motorcycle shipments, partially offset by increased ORV shipments. Currency rate movements had a favorable impact of four percentage points on quarter-to-date sales.
Sales in other countries decreased during the quarter primarily due to reduced motorcycle shipments in Europe, partially offset by increased ORV shipments. Currency rate movements had a favorable impact of nine percentage points on quarter-to-date sales.
Cost of Sales:
The following table reflects our cost of sales in dollars and as a percentage of sales:
| Three months ended March 31, | |||||||||||||||||||||||||||||
| ($ in millions) | 2026 | Percent of Total Cost of Sales | 2025 | Percent of Total Cost of Sales | Percent Change 2026 vs. 2025 | ||||||||||||||||||||||||
| Purchased materials and logistics | $ | 1,090.7 | 82 | % | $ | 1,066.6 | 83 | % | 2 | % | |||||||||||||||||||
| Labor costs | 157.3 | 12 | % | 137.9 | 11 | % | 14 | % | |||||||||||||||||||||
| Depreciation and amortization | 45.5 | 4 | % | 56.8 | 4 | % | (20) | % | |||||||||||||||||||||
| Warranty | 30.4 | 2 | % | 29.5 | 2 | % | 3 | % | |||||||||||||||||||||
| Total cost of sales | $ | 1,323.9 | 100 | % | $ | 1,290.8 | 100 | % | 3 | % | |||||||||||||||||||
| Percentage of sales | 79.8 | % | 84.0 | % | -423 bps | ||||||||||||||||||||||||
Cost of sales increased during the quarter primarily due to increased sales volumes driving higher purchased materials and increased labor costs, as well as incremental tariff charges. These increases were partially offset by reduced depreciation and amortization expense.
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Gross Profit:
Gross profit for the quarter, as a percentage of sales, increased primarily as a result of favorable product mix, higher net pricing, favorable operational costs and lower finance interest, partially offset by incremental tariff charges.
Operating Expenses:
Operating expenses, in absolute dollars and as a percentage of sales, increased for the quarter primarily due to higher general and administrative expenses, the loss recorded as a result of the sale of the Indian Motorcycle business, and impairment and other charges recorded for certain assets classified as held for sale.
Income from Financial Services:
Income from financial services decreased for the quarter, primarily due to lower retail credit income and lower wholesale financing income from Polaris Acceptance due to reduced dealer inventory levels and interest rates.
Interest Expense:
Interest expense decreased for the quarter primarily as a result lower average debt levels.
Other (income) expense, net:
Other income increased during the quarter primarily as a result of incremental income received under transition services agreements following the Indian Motorcycle divestiture. Other (income) expense is also impacted by currency exchange rate movements and the corresponding effects on currency transactions related to our international subsidiaries.
Benefit for income taxes:
The income tax benefit for the quarter was $10.5 million or 18.1% of the loss before income taxes, compared to an income tax benefit of $4.4 million or 6.1% of the loss before income taxes for the first quarter of 2025. The tax provision benefit for the quarter was primarily the result of the pretax loss generated, including tax benefits related to impairment charges recorded, partially offset by unfavorable adjustments related to share-based compensation.
Adjusted EBITDA:
Adjusted EBITDA, in absolute dollars and as a percentage of sales, increased during the quarter primarily as a result of favorable product mix, higher net pricing and increased shipments, partially offset by higher general and administrative expenses.
Weighted average diluted shares outstanding:
Weighted average diluted shares outstanding increased for the quarter, primarily due to share issuances within and between the comparable quarterly periods.
Cash Dividends:
We paid a regular cash dividend of $0.68 per common share on March 16, 2026 to holders of record at the close of business on March 2, 2026.
Segment Results of Operations
In the first quarter of 2026, the Company began management of its portfolio of businesses under a new basis following the divestiture of the Indian Motorcycle business. All historical results were reclassified for comparability, including the results of the divested Indian Motorcycle business, which is included in corporate and corporate costs and other.
The summary that follows provides a discussion of the results of operations of each of our three reportable segments, Polaris Powersports, Marine, and Aixam & Goupil. Each of these reportable segments is comprised of various product offerings that serve multiple end markets. We evaluate performance based on sales and gross profit. Corporate and corporate costs and other includes revenues and costs of previously divested businesses including Indian Motorcycle, income and costs related to TSA and supply agreements, and costs that are not allocated to reportable segments, including certain manufacturing costs, the impacts of certain foreign currency transactions, and certain incentive compensation costs and related adjustments.
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Our sales and gross profit by reportable segment, which includes the respective PG&A, as well as amounts related to corporate and other activities, were as follows:
| Three months ended March 31, | |||||||||||||||||||||||||||||
| ($ in millions) | 2026 | Percent of Sales | 2025 | Percent of Sales | Percent Change 2026 vs. 2025 | ||||||||||||||||||||||||
| Polaris Powersports | $ | 1,419.2 | 86 | % | $ | 1,239.7 | 81 | % | 14 | % | |||||||||||||||||||
| Marine | 125.3 | 7 | % | 115.4 | 7 | % | 9 | % | |||||||||||||||||||||
| Aixam & Goupil | 66.7 | 4 | % | 61.1 | 4 | % | 9 | % | |||||||||||||||||||||
| Corporate | 47.5 | 3 | % | 119.6 | 8 | % | (60) | % | |||||||||||||||||||||
| Total sales | $ | 1,658.7 | 100 | % | $ | 1,535.8 | 100 | % | 8 | % | |||||||||||||||||||
| Three months ended March 31, | |||||||||||||||||||||||||||||
| ($ in millions) | 2026 | Percent of Sales | 2025 | Percent of Sales | Percent Change 2026 vs. 2025 | ||||||||||||||||||||||||
| Polaris Powersports | $ | 296.0 | 20.9 | % | $ | 206.3 | 16.6 | % | 43 | % | |||||||||||||||||||
| Marine | 16.3 | 13.0 | % | 14.3 | 12.4 | % | 14 | % | |||||||||||||||||||||
| Aixam & Goupil | 19.1 | 28.6 | % | 15.7 | 25.7 | % | 22 | % | |||||||||||||||||||||
| Corporate costs and other | 3.4 | 8.7 | (61) | % | |||||||||||||||||||||||||
| Total gross profit | $ | 334.8 | $ | 245.0 | 37 | % | |||||||||||||||||||||||
| Percentage of sales | 20.2% | 16.0% | +423 bps | ||||||||||||||||||||||||||
Polaris Powersports:
Polaris Powersports sales, inclusive of PG&A sales, increased for the quarter, primarily as a result of increased ORV shipments in the United States and higher PG&A sales. The average per unit sales price for the Polaris Powersports reportable segment increased approximately five percent for the quarter primarily as a result of product mix and higher net pricing.
Sales to customers outside of North America increased seven percent for the quarter primarily as a result of higher utility ORV shipments.
Gross profit, as a percentage of sales, increased during the quarter primarily as a result of favorable product mix, higher net pricing, favorable operating costs and lower finance interest, partially offset by incremental tariff charges.
Additional information on our end markets for the quarter:
•Polaris North America utility unit retail sales up high-single digits percent
•Polaris North America recreation excluding youth unit retail sales down high-single digits percent
•Total Polaris North America ORV excluding youth unit retail sales up low-single digits percent
•Estimated North America industry ORV excluding youth unit retail sales up low-single digits percent
•Total Polaris North America ORV excluding youth dealer inventories flat
•Polaris North America snowmobile unit retail sales for the 2025-2026 season ending March 31, 2026 up mid-twenties percent
•Estimated North America industry snowmobile unit retail sales for the 2025-2026 season ending March 31, 2026 up low-single digits percent
•Total Polaris North America snowmobile dealer inventories down approximately 57 percent
Marine:
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Marine sales increased during the quarter primarily due to increased shipments and favorable product mix. The average per unit sales price for the Marine reportable segment increased approximately 10 percent for the quarter, primarily due to product mix and higher net pricing.
Gross profit, as a percentage of sales, increased for the quarter primarily as a result of favorable product mix and higher net pricing, partially offset by incremental tariff charges.
Additional information on our end markets for the quarter:
•Polaris U.S pontoon unit retail sales down low-double digits percent
•Estimated U.S. industry pontoon unit retail sales down low-double digits percent
•Polaris U.S deck boat unit retail sales down low-thirties percent
•Estimated U.S. industry deck boat unit retail sales down mid-twenties percent
Aixam & Goupil
Aixam & Goupil sales, inclusive of PG&A sales, increased for the quarter primarily as a result of increased Goupil shipments and PG&A sales.
Gross profit, as a percentage of sales, increased during the quarter primarily as a result of product mix.
Corporate
Corporate includes revenues and costs of previously divested businesses including Indian Motorcycle, income and costs related to transition services and supply agreements, and costs that are not allocated to reportable segments, including certain manufacturing costs, the impacts of certain foreign currency transactions, and certain incentive compensation costs and related adjustments. Corporate sales and gross profit decreased for the quarter as a result of the Indian Motorcycle divestiture on February 2, 2026.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net loss, excluding interest expense, income tax expense, depreciation and amortization, and certain other non-cash, non-recurring, or non-operating items impacting net loss from time to time. For example, costs associated with certain corporate restructuring activities, such as acquisitions and divestitures, are included as non-GAAP adjustments. We use the non-GAAP financial measure of Adjusted EBITDA Margin, which is defined as Adjusted EBITDA divided by adjusted net sales. We believe that Adjusted EBITDA and Adjusted EBITDA Margin help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude from Adjusted EBITDA and Adjusted EBITDA Margin.
We believe that these measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics used by our management for financial and operational decision making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance through the eyes of management, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
Adjusted EBITDA has limitations and should not be considered in isolation from, as a substitute for, or more meaningful than, net loss as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance. Our presentation of Adjusted EBITDA and Adjusted EBITDA Margin should not be construed as an inference that our results will be unaffected by unusual or non-recurring items.
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The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to Adjusted EBITDA for each of the periods presented:
| Three months ended March 31, | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Sales | $ | 1,658.7 | $ | 1,535.8 | |||||||
Product wind downs (3) | — | 0.5 | |||||||||
| Adjusted sales | $ | 1,658.7 | $ | 1,536.3 | |||||||
| Net loss | $ | (47.2) | $ | (66.7) | |||||||
| Benefit for income taxes | (10.5) | (4.4) | |||||||||
| Interest expense | 30.4 | 34.1 | |||||||||
| Depreciation | 58.6 | 67.4 | |||||||||
Intangible amortization (1) | 4.6 | 6.0 | |||||||||
Restructuring (2) | 9.2 | 4.0 | |||||||||
Product wind downs (3) | — | 8.9 | |||||||||
Class action litigation expenses (4) | 1.4 | 3.4 | |||||||||
Investment impairment (5) | 2.2 | — | |||||||||
Distressed supplier support payments (6) | 22.5 | — | |||||||||
Loss on disposal groups (7) | 31.6 | — | |||||||||
| Adjusted EBITDA | $ | 102.8 | $ | 52.7 | |||||||
| Adjusted EBITDA Margin | 6.2 | % | 3.4 | % | |||||||
(1) Represents amortization expense for intangible assets acquired through business combinations and asset acquisitions
(2) Represents adjustments for corporate restructuring
(3) Represents adjustments related to product wind downs
(4) Represents adjustments for certain class action litigation-related expenses
(5) Represents impairment charges related to a strategic investment held by the Company
(6) Represents charges attributable to payments made in support of a distressed supplier
(7) Represents the loss associated with the Company’s divestiture of the Indian Motorcycle business, as well as impairment and other charges recorded to report certain held for sale assets at fair value less an amount of estimated transaction costs
Liquidity and Capital Resources
Our primary sources of liquidity have been cash provided by operating and financing activities, including funds as needed from our credit facility and issuances of long-term debt. Our primary uses of funds have been for new product development, capital investments, cash dividends to shareholders, repurchases and retirements of common stock, and acquisitions. The seasonality of production and shipments cause working capital requirements to fluctuate during the year and from year to year.
We believe that existing cash balances and cash flows to be generated from operating activities, borrowing capacity under our credit facility and from future issuances or borrowings of long-term debt, will be sufficient to fund operations, new product development, capital investments, cash dividends to shareholders, and repurchases and retirements of common stock for at least the next 12 months and for the foreseeable future thereafter.
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Cash Flows
The following table summarizes the cash flows from operating, investing and financing activities:
| ($ in millions) | Three months ended March 31, | ||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Total cash provided by (used for): | |||||||||||||||||
| Operating activities | $ | (320.2) | $ | 83.2 | $ | (403.4) | |||||||||||
| Investing activities | (121.6) | (28.3) | (93.3) | ||||||||||||||
| Financing activities | 506.6 | (56.9) | 563.5 | ||||||||||||||
Operating Activities:
The decrease in net cash from operating activities was primarily the result of working capital additions in the three months ended March 31, 2026, partially offset by a reduction in net loss. Net loss was $47.2 million for the three months ended March 31, 2026, compared to a net loss of $66.7 million in the prior year comparable period.
Investing Activities:
The primary sources and uses of cash were for the purchase of property, equipment and tooling for continued capacity and capability at our manufacturing, distribution, and product development facilities, and distributions from and contributions to Polaris Acceptance. Net cash used for investing activities increased primarily due to incremental cash payments to facilitate the sale of the Indian Motorcycle business and strategic investments made during the quarter, partially offset by reduced property, equipment and tooling purchases.
Financing Activities:
Net cash provided by financing activities was $506.6 million for the three months ended March 31, 2026, compared to net cash used for financing activities of $56.9 million for the comparable period in 2025. This change was primarily the result of net borrowings under the revolving loan facility in the three months ended March 31, 2026 compared to net repayments under the revolving loan facility during the comparable period in 2025. Net borrowings totaled $551.9 million for the three months ended March 31, 2026, compared to $18.3 million of net repayments for the comparable period in 2025.
Financing Arrangements:
We are also party to an unsecured credit facility, which includes a $1.4 billion variable interest rate Revolving Loan Facility that matures in December 2029, under which we have unsecured borrowings. As of March 31, 2026, there were borrowings of $593.8 million outstanding under the Revolving Loan Facility. Our credit facility also includes a Term Loan Facility, pursuant to which $468.8 million was outstanding as of March 31, 2026. We are required to make principal payments under the Term Loan Facility totaling $25 million over the next 12 months. We amended the agreement governing the credit facility (the “Credit Facility Amendment”) in June 2025 to modify the financial covenants in the existing credit agreement for each quarter ending June 30, 2025 through and including June 30, 2026 (the “Covenant Relief Period”). During the Covenant Relief Period, the Credit Facility Amendment limits us from repurchasing shares and paying dividends other than regular quarterly dividends and certain other exceptions, and limits the amount of debt certain of our subsidiaries may incur. For the credit facility, interest is charged at rates based on adjusted Term SOFR plus the applicable add-on percentage, as defined in the credit agreement. As of March 31, 2026, we had $797.0 million of availability on the Revolving Loan Facility.
The credit agreement contain covenants that require us to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. The agreements require us to maintain an interest coverage ratio of not less than 3.00 to 1.00 and a leverage ratio of not more than 3.50 to 1.00 on a rolling four quarter basis. The interest coverage ratio is calculated as Adjusted EBITDA to interest expense for the then most-recently ended four fiscal quarters. The leverage ratio is calculated as consolidated funded indebtedness less cash and cash equivalents, capped at $300 million, to Adjusted EBITDA for the then most-recently ended four fiscal quarters. The Credit Facility Amendment modified the requirements related to the interest coverage ratio and leverage ratio during the Covenant Relief Period. During the Covenant Relief Period, the interest coverage ratio is 2.50 to 1.00 for the quarters ending June 30, 2025, September 30, 2025 and December 31, 2025, and 2.00 to 1.00 for the quarters ending March 31, 2026 and June 30, 2026. During the Covenant Relief Period, the leverage ratio is 4.00 to 1.00 for the quarter ending June 30, 2025, 4.50 to 1.00 for the quarter ending September 30, 2025, and 5.50 to 1.00 for the quarters ending December 31, 2025, March 31, 2026 and June 30, 2026.
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In November 2023, we issued $500 million aggregate principal amount of 6.95% Senior Notes due 2029 (the “6.95% Senior Notes”) in an underwritten public offering. We received approximately $492 million in net proceeds from the offering after deducting the underwriting discount and other fees and expenses. The 6.95% Senior Notes bear interest at a rate of 6.95% per year and mature in March 2029. In November 2025, the Company issued $500 million aggregate principal amount of 5.60% Senior Notes due 2031 (the “5.60% Senior Notes” and together with the 6.95% Senior Notes, the “senior notes”) in an underwritten public offering. The Company received approximately $497 million in net proceeds from the offering after deducting the underwriting discount and other fees and expenses. The 5.60% Senior Notes bear interest at a rate of 5.60% and mature in March 2031. All of our senior notes are governed by an indenture and are subject to customary covenants and make-whole provisions upon early termination.
On July 2, 2018, pursuant to the Agreement and Plan of Merger dated May 29, 2018, the Company completed the acquisition of Boat Holdings, LLC, a privately held Delaware limited liability company, headquartered in Elkhart, Indiana which manufactures boats (“Boat Holdings”). As a component of the Boat Holdings merger agreement, we have committed to make a series of deferred payments to the former owners through July 2030. The original discounted payable was for $76.7 million, of which $36.8 million was outstanding as of March 31, 2026.
As of March 31, 2026, we were in compliance with all debt covenants and our debt to total capital ratio was 74 percent. Additionally, as of March 31, 2026, we had letters of credit outstanding of $57.1 million, primarily related to purchase obligations for raw materials.
Share Repurchases:
We did not repurchase shares of our common stock in open-market transactions under our share repurchase program during the first three months of 2026. As of March 31, 2026, up to an additional $1.1 billion of our common stock remains available for repurchase under our share repurchase program.
Wholesale Customer Financing Arrangements:
We have arrangements with certain finance companies to provide secured floor plan financing for our dealers. These arrangements provide liquidity by financing dealer purchases of our products without the use of our working capital. A majority of the worldwide sales of ORVs, snowmobiles, boats and related PG&A are financed under similar arrangements whereby we receive payment within a few days of shipment of the product. We participate in the cost of dealer financing up to certain limits.
Under these arrangements, we have agreed to repurchase products repossessed by these finance companies. As of March 31, 2026, the potential aggregate repurchase obligations were approximately $325.3 million. Our financial exposure under these repurchase agreements is limited to the difference between the amounts unpaid by the dealer with respect to the repossessed product plus costs of repossession and the amount received on the resale of the repossessed product. No material losses have been incurred under these agreements during the periods presented.
Retail Customer Financing Arrangements:
We have agreements with third-party finance companies to provide financing options to end consumers of our products. We have no material contingent liabilities for residual value or credit collection risk under these agreements.
Critical Accounting Policies
See our most recent Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of our critical accounting policies. There have been no material changes to our critical accounting policies discussed in such report.
Note Regarding Forward-Looking Statements
This report contains not only historical information, but also “forward-looking statements” intended to qualify for the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These “forward-looking statements” can generally be identified as such because the context of the statement will include words such as we or our management “believes,” “anticipates,” “expects,” “estimates” or words of similar import. Similarly, statements that describe our future plans, objectives or goals, such as future sales, future cash flows and capital requirements, operational initiatives, supply chain, tariff mitigation strategy, currency fluctuations, interest rates, and commodity costs, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements, are also forward-looking. Forward-looking statements may also be made from time to time in oral presentations,
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including telephone conferences and/or webcasts open to the public.
Potential risks and uncertainties include such factors as the Company’s ability to successfully implement its manufacturing operations strategy and supply chain initiatives; the Company’s ability to successfully source necessary parts and materials on a timely basis; the ability of the Company to manufacture and deliver products to dealers to meet demand, including as a result of supply chain disruptions; the Company’s ability to identify and meet optimal dealer inventory levels; the Company’s ability to accurately forecast and sustain consumer demand; the Company’s ability to mitigate increasing input costs through pricing or other measures; product offerings, promotional activities and pricing strategies by competitors that may make our products less attractive to consumers; the Company’s ability to strategically invest in innovation and new products, including as compared to our competitors; economic conditions that impact consumer spending or consumer credit, including recessionary conditions and changes in interest rates; disruptions in manufacturing facilities; product recalls and/or warranty expenses; product rework costs; freight and tariff costs (including tariff relief or ability to mitigate tariffs, particularly in light of the policies of the current presidential administration and retaliatory actions in response thereto); the Company’s ability to derive the expected benefits from the Indian Motorcycle separation including the separation being accretive, within the expected timeline or at all; environmental and product safety regulatory activity; effects of weather on the Company’s supply chain, manufacturing operations and consumer demand; commodity costs; changes to international trade policies and agreements; uninsured product liability and class action claims (including claims seeking punitive damages) and other litigation expenses incurred due to the nature of the Company’s business; impact of changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; uncertainty in the consumer retail and wholesale credit markets; performance of affiliate partners; changes in tax policy; relationships with dealers and suppliers; and the general global economic, social and political environment.
The risks and uncertainties discussed in this report are not exclusive and other factors that we may consider immaterial or do not anticipate may emerge as significant risks and uncertainties.
Any forward-looking statements made in this report or otherwise speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements. We advise you, however, to consult any further disclosures made on related subjects in future Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that are filed with or furnished to the Securities and Exchange Commission.
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Item 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for a complete discussion on the Company’s market risk. There have been no material changes in market risk from those disclosed in the Company’s Form 10-K for the year ended December 31, 2025. Refer below for further discussion on commodity cost risk, foreign currency exchange rate risk, and interest rate risk.
Inflation:
We are subject to market risk from fluctuating market prices of certain purchased commodities and raw materials, including steel, aluminum, copper, petroleum-based resins, certain rare earth metals and diesel fuel. In addition, we are a purchaser of components and parts containing various commodities, including steel, aluminum, rubber and others, which are integrated into our products. While such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations. Further, the ultimate cost of certain commodities, raw materials, components and parts can fluctuate based on changes in international trade relations and trade policy, including those related to tariffs. We generally buy commodities and components based upon market prices that are established with the vendor as part of the purchase process. We enter into commodity hedging contracts in order to manage fluctuating market prices of certain commodities such as steel and diesel fuel. Based on our current outlook for commodity prices, excluding the impact of tariffs and related items, we expect total commodities to have a negative impact on our gross profit margins for full-year 2026 when compared to 2025.
Foreign Exchange Rates:
The changing relationships of the U.S. dollar to foreign currencies can have a material impact on our financial results.
Euro: We have operations in the Eurozone through wholly owned subsidiaries and distributors. We also purchase components from certain suppliers directly for our U.S. operations in transactions denominated in Euros. Fluctuations in the Euro to U.S. dollar exchange rate impacts sales, cost of sales and net income or loss.
Canadian Dollar: We operate in Canada through a wholly owned subsidiary. The relationship of the U.S. dollar in relation to the Canadian dollar impacts sales, cost of sales and net income or loss.
Other currencies: We operate in various countries, principally in Europe, Mexico and Australia, through wholly owned subsidiaries. We also sell to certain distributors in other countries and purchase components from certain suppliers directly for our U.S. operations in transactions denominated in these foreign currencies. The relationship of the U.S. dollar in relation to these other currencies impacts sales, cost of sales and net income or loss.
We actively manage our exposure to fluctuating foreign currency exchange rates by entering into foreign exchange hedging contracts. During the quarter ended March 31, 2026, after consideration of the existing foreign currency hedging contracts, foreign currencies had a positive impact on net loss compared to 2025. We expect currencies to have a positive impact on full-year net income or loss in 2026 compared to 2025.
The assets and liabilities in all of our international entities are translated at the foreign exchange rate in effect at the balance sheet date. Translation gains and losses are reflected as a component of accumulated other comprehensive loss, net in the shareholders’ equity section of the consolidated balance sheets. Revenues and expenses in all of our international entities are translated at the average foreign exchange rate in effect for each month of the year. Certain assets and liabilities related to intercompany positions reported on our consolidated balance sheets that are denominated in a currency other than the entity’s functional currency are translated at the foreign exchange rates at the balance sheet date and the associated gains and losses are included in net income or loss.
Interest Rates:
We are a party to an unsecured credit facility with various lenders consisting of a $1.4 billion Revolving Loan Facility and a $500.0 million Term Loan Facility. Interest accrues on the revolving loan and term loans at variable rates based on adjusted Term SOFR plus the applicable add-on percentage, as defined in the credit agreement. As of March 31, 2026, there was $593.8 million outstanding on the Revolving Loan Facility and $468.8 million outstanding on the Term Loan Facility. We previously entered into interest rate swaps in order to manage our exposure to fixed and variable interest rates associated with our debt. Those interest rate swap contracts expired during the three months ended March 31, 2026. We expect interest rates to have a positive impact on full-year net income or loss in 2026 compared to 2025.
Our senior notes bear interest at fixed rates. We are subject to changes in the fair value of fixed-rate borrowings as a result of potential changes in prevailing interest rates. Changes in the fair value of fixed-rate borrowings have no impact on the amount of interest incurred, cash flows or our financial position.
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Item 4 – CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.
Changes in Internal Controls
There have been no changes in the Company’s internal control over financial reporting during the latest fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Part II OTHER INFORMATION
Item 1 – LEGAL PROCEEDINGS
We are involved in a number of legal proceedings incidental to our business, none of which is presently expected to have a material effect on our financial position, results of operations or cash flows, or the financial results of our business.
As of the date of the filing of this Quarterly Report on Form 10-Q, we are party to certain class action and putative class action lawsuits brought by the same plaintiff’s counsel and largely repeating the same allegations regarding various state consumer protection laws focused on rollover protection structures’ certifications for various Polaris off-road vehicles sold in California. The first case brought in federal court in California related to this matter—Guzman/Albright—was first reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The district court granted summary judgment against both plaintiffs’ claims, which the plaintiffs appealed. The Ninth Circuit issued two rulings in September 2022 that reversed the district court’s summary judgment rulings and remanded the case to the district court with instructions to dismiss one plaintiff’s claims without prejudice. The plaintiff whose claims were dismissed without prejudice refiled the putative class action in California State Court under the name Albright. In June 2023, the Albright court granted the parties’ stipulation to stay that case pending a decision on class certification in federal court in the Guzman case. On September 27, 2023, the district court in Guzman entered an order granting in part and denying in part plaintiff’s motion for class certification. The district court certified a California class for plaintiff’s claim seeking money damages under the California Consumers Legal Remedies Act but denied class certification on plaintiff’s claim seeking injunctive relief under Fed. R. Civ. P. 23(b)(2). On October 11, 2023, Polaris filed a petition to appeal the portion of the district court’s order granting class certification. On December 14, 2023, the Ninth Circuit denied Polaris’s petition. On January 16, 2026, the state court in Albright entered an order setting a hearing for March 24, 2026 to review the stay of proceedings in that case. On March 19, 2026, the state court in Albright entered an order that continued the stay, and re-scheduled the status conference for May 20, 2026, to review the stay of proceedings in that case. Plaintiff’s counsel’s related case—Hellman/Berlanga—was first reported in the Company’s quarterly report for the period ended June 30, 2021. Since then, the Hellman plaintiff has been dismissed and, in May 2023, the remaining plaintiff in the Berlanga case filed a motion for class certification, which we opposed. On July 16, 2024, the federal district court entered an order granting in part and denying in part plaintiff’s motion for class certification. The federal district court certified a California class for plaintiff’s claim seeking money damages but denied class certification on plaintiff’s claim seeking injunctive relief. On July 17, 2024, the federal district court ordered that the Guzman case and the Berlanga case be consolidated for all purposes. On February 27, 2025, the federal district court vacated the pretrial deadlines and the May 5, 2025 trial date. The court will issue a new schedule and trial date upon its rulings on the pending summary judgment and class decertification motions.
With respect to each of the aforementioned class action and putative class action lawsuits, we are unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.
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Item 1A – RISK FACTORS
Please consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes or additions to our risk factors discussed in such report which could materially affect the Company’s business, financial condition, or future results.
Item 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The table below sets forth the information with respect to purchases made by or on behalf of Polaris of its own stock during the first quarter of the fiscal year ended December 31, 2026.
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (1) | |||||||||||||||||||
| January 1 — 31, 2026 | — | $ | — | — | $ | 1,109,330,034 | |||||||||||||||||
| February 1 — 28, 2026 | — | $ | — | — | $ | 1,109,330,034 | |||||||||||||||||
| March 1 — 31, 2026 | — | $ | — | — | $ | 1,109,330,034 | |||||||||||||||||
| Total | — | $ | — | — | |||||||||||||||||||
(1) In October 2023, the Company’s Board of Directors authorized the purchase of up to an additional $1.0 billion of the Company’s outstanding common stock, in addition to the amount still outstanding on its April 2021 share repurchase program. As of March 31, 2026, the Company was authorized to repurchase up to an additional $1.1 billion of the Company’s common stock. The share repurchase program does not have an expiration date.
Item 5 – OTHER INFORMATION
Trading Arrangements
During the fiscal quarter ended March 31, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as each term is defined in Item 408 of Regulation S-K).
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Item 6 – EXHIBITS
Exhibit Number | Description | |||||||
3.a | Certificate of Incorporation of Polaris Inc. effective April 28, 2023, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed May 1, 2023. | |||||||
3.b | Bylaws of Polaris Inc., effective April 28, 2023, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed May 1, 2023. | |||||||
10.a | Form of Restricted Stock Award Agreement (2026) made under the Polaris Inc. 2024 Omnibus Incentive Plan. | |||||||
10.b | Employment Offer Letter dated April 25, 2022 by and between the Company and Benjamin D. Duke. | |||||||
31.a | Certification of Chief Executive Officer required by Exchange Act Rule 13a-14(a). | |||||||
31.b | Certification of Chief Financial Officer required by Exchange Act Rule 13a-14(a). | |||||||
32.a | Certification furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
32.b | Certification furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101 | The following financial information from Polaris Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2026, filed with the SEC on April 28, 2026, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, (ii) the Consolidated Statements of Loss for the three month periods ended March 31, 2026 and 2025, (iii) the Consolidated Statements of Comprehensive Loss for the three month periods ended March 31, 2026 and 2025, (iv) the Consolidated Statements of Equity for the three month periods ended March 31, 2026 and 2025, (v) the Consolidated Statements of Cash Flows for the three month periods ended March 31, 2026 and 2025, and (vi) Notes to Consolidated Financial Statements. | |||||||
| 104 | The cover page from the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2026 formatted in iXBRL. | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| POLARIS INC. (Registrant) | |||||||||||
| Date: | April 28, 2026 | /s/ MICHAEL T. SPEETZEN | |||||||||
| Michael T. Speetzen Chief Executive Officer (Principal Executive Officer) | |||||||||||
| Date: | April 28, 2026 | /s/ ROBERT P. MACK | |||||||||
| Robert P. Mack Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||||||
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FAQ
How did Polaris (PII) perform financially in Q1 2026?
Polaris grew Q1 2026 sales to $1,658.7 million, up 8% year over year, with gross profit rising 37% to $334.8 million. Net loss narrowed to $47.4 million, helped by improved mix, higher pricing and increased shipments despite tariff and divestiture-related charges.
What happened to Polaris’ profitability and margins in Q1 2026?
Polaris’ gross margin improved to 20.2% from 16.0%, driven by favorable product mix, higher net pricing and lower operational costs. Adjusted EBITDA increased to $102.8 million from $52.7 million, although the company still posted a net loss of $47.4 million for the quarter.
How did the Indian Motorcycle divestiture impact Polaris’ Q1 2026 results?
The February 2026 sale of a majority interest in Indian Motorcycle reduced motorcycle shipments and led to a $31.6 million loss on disposal groups. Polaris also recorded income and costs under transition services and supply agreements tied to the buyer, affecting sales and other income lines.
What is Polaris’ debt and liquidity position as of March 31, 2026?
Polaris held total financing obligations of $2,091.0 million, including $593.8 million drawn on a $1.4 billion revolving credit facility and $468.8 million on its term loan. It also has $1.0 billion of senior notes outstanding and reported $282.0 million in cash and cash equivalents.
How did operating cash flow trend for Polaris in Q1 2026?
Operating cash flow swung to an outflow of $320.2 million in Q1 2026 from an inflow of $83.2 million a year earlier. The decline was mainly due to working capital additions, including higher inventories, lower accrued expenses, and changes in taxes and prepaid items.
What are the key risk factors highlighted by Polaris in this quarter?
Polaris emphasized tariff-related uncertainties, rising product liability accruals of $442.3 million, commodity and supply chain pressures, and ongoing class action litigation. It noted that no refunds for prior IEEPA tariffs were recorded and that adverse tariff or legal outcomes could impact future profitability.
Did Polaris repurchase shares or change its dividend in Q1 2026?
Polaris did not repurchase any shares under its authorized program during Q1 2026, leaving $1.1 billion available. The company paid a regular quarterly cash dividend of $0.68 per share on March 16, 2026, slightly higher than the $0.67 per share paid in the prior-year quarter.