Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes, included in Part I, Item 1, “Financial Statements,” within this Quarterly Report, and the audited consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” of our 2024 Annual Report, filed with the SEC on May 24, 2024, which is available free of charge on the SEC’s website at www.sec.gov and our website at ir.deckers.com*.*

Certain statements made in this section constitute “forward-looking statements,” which are subject to numerous risks and uncertainties. Our actual results of operations may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those set forth in the section titled “Cautionary Note Regarding Forward-Looking Statements” and Part II, Item 1A, “Risk Factors,” within this Quarterly Report.

OVERVIEW

We are a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. We market our products primarily under six proprietary brands: UGG, HOKA, Teva, Sanuk, Koolaburra, and AHNU. We believe our products are distinctive and appeal to a broad demographic. We sell our products through quality domestic and international retailers, international distributors, and directly to our global consumers through our DTC business, which is comprised of our Company-owned e-commerce websites and retail stores. We seek to differentiate our brands and products by offering diverse lines that emphasize fashion, performance, authenticity, functionality, quality, and comfort, and products tailored to a variety of activities, seasons, and demographic groups. Independent third-party contractors manufacture all of our products.

FINANCIAL HIGHLIGHTS

Consolidated financial performance highlights for the three months ended June 30, 2024, compared to the prior period, were as follows:

• Net sales increased 22.1% to $825,347.

**◦**Channel

▪Wholesale channel net sales increased 21.0% to $514,782.

▪DTC channel net sales increased 24.0% to $310,565.

**◦**Geography

▪Domestic net sales increased 23.0% to $515,856.

▪International net sales increased 20.8% to $309,491.

• Gross margin increased 560 basis points to 56.9%.

• Income from operations increased 87.8% to $132,807.

• Diluted earnings per share increased 87.2% to $4.52 per share.

RECENT DEVELOPMENTS

CEO Transition. On February 1, 2024, Dave Powers announced his intention to retire as CEO and President of our Company, effective August 1, 2024. Following August 1, 2024, we expect Mr. Powers to continue to serve as a member of our Board, if elected by our stockholders at our 2024 Annual Meeting of Stockholders to be held on September 9, 2024 (Annual Meeting). Following a planned succession process, our Board appointed our Chief Commercial Officer, Stefano Caroti, to succeed Mr. Powers as CEO and President, effective August 1, 2024. The promotion of Mr. Caroti represents the culmination of our Board’s active engagement in a planned multi-year succession process. Mr. Caroti will also serve as a member of our Board if elected at the Annual Meeting.

Proposed Stock Split. On July 9, 2024, subject to approval by our stockholders, our Board approved an Amendment to our Amended and Restated Certificate of Incorporation, which (i) effects a six-for-one forward stock split of our common stock and preferred stock, and (ii) increases the number of authorized shares of our common stock from 125,000 to 750,000, and the number of shares of preferred stock from 5,000 to 30,000 (collectively, the stock split). Effectiveness of the stock split is subject to the approval of our stockholders at the Annual Meeting, and a decision by our Board to move forward with implementing the stock split. Our financial results reflected in this Quarterly Report do not include any impact of the stock split.

Sanuk Brand Asset Sale. During October 2023, we announced that we intended to divest the Sanuk brand in alignment with effective resource allocation and the execution of our long-term objectives. Subsequent to June 30, 2024, we entered into an agreement pursuant to which the buyer agreed to purchase the Sanuk brand and certain related assets, which is expected to close in August 2024.

TRENDS AND UNCERTAINTIES IMPACTING OUR BUSINESS AND INDUSTRY

We expect our business and industry will continue to be impacted by several important trends and uncertainties, which have not changed since our 2024 Annual Report. Refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Annual Report for further discussion. Refer to Part I, Item 1A, “Risk Factors,” of our 2024 Annual Report for detailed information on the risks and uncertainties that may cause our actual results to differ materially from our expectations.

REPORTABLE OPERATING SEGMENT OVERVIEW

Our six reportable operating segments include the worldwide wholesale operations of the UGG brand, HOKA brand, Teva brand, Sanuk brand, and Other brands, as well as DTC. Information reported to the CODM, who is our CEO, President, and PEO, is organized into these reportable operating segments and is consistent with how the CODM evaluates our performance and allocates resources.

UGG Brand. The UGG brand is one of the most iconic and recognized footwear brands in our industry, which highlights our successful track record of building niche brands into lifestyle and fashion market leaders. With loyal consumers around the world, the UGG brand has proven to be a highly resilient line of premium footwear, apparel, and accessories with expanded product offerings that appeal to a growing global audience and a broad demographic.

HOKA Brand**.** The HOKA brand is an authentic premium line of year-round performance footwear, which offers enhanced cushioning and inherent stability with minimal weight. Originally designed for ultra-runners, the brand now appeals to world champions, taste makers, and everyday athletes. Expanded marketing and strategic marketplace presence have fueled both domestic and international sales growth of the HOKA brand, which has quickly become a leading brand within run and outdoor specialty wholesale accounts and is growing across its ecosystem of access points. The HOKA brand’s product line includes running, trail, hiking, fitness, and lifestyle footwear offerings, as well as select apparel and accessories.

Teva Brand**.** The Teva brand, born in the depths of the Grand Canyon, has long been a favored brand among outdoor adventurers across the globe. Today, building on its foundation as a leader in sport sandals and its authentic outdoor heritage, the Teva brand’s thoughtfully designed, and accessible products are built for a range of outdoor pursuits, connecting with a vibrant, diverse audience passionate about exploration. The Teva brand’s collection includes a variety of footwear options, from classic sandals and shoes to boots; all crafted for the demands of the outdoors.

Sanuk Brand**.** The Sanuk brand originated in Southern California surf culture and has emerged as a lifestyle brand with a presence in the relaxed casual shoe and sandal categories with a focus on innovation in comfort and sustainability. The Sanuk brand’s use of unexpected materials and unconventional construction, combined with its fun and playful branding, are key elements of the brand’s identity.

Other Brands. Other brands consist primarily of the Koolaburra, as well as the recently launched AHNU brand. The Koolaburra brand is a casual footwear fashion line that uses plush materials and is intended to target the value-oriented consumer in order to complement the UGG brand offering. The AHNU brand’s footwear products fuse high-performance technology with timeless style crafted for everyday wear.

Refer to the “Reportable Operating Segment Overview,” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Annual Report for further discussion of our outlook on consumer demand drivers for our UGG, HOKA, Teva, Sanuk, and Other brands products.

Direct-to-Consumer**.** Our DTC business encompasses all of our brands and is comprised of our e-commerce websites and retail stores, which are intertwined and interdependent in an omni-channel marketplace. Net sales from our e-commerce websites and retail stores are recorded in our DTC reportable operating segment, except for net sales from our partner retail stores, which are recorded in our brands’ respective wholesale reportable operating segments.

During the three months ended June 30, 2024, we opened nine new stores, which included six HOKA brand stores and three UGG brand stores, including a HOKA brand flagship store in New York City and a UGG brand flagship store in London, UK, respectively. As of June 30, 2024, we have a total of 172 global retail stores (including 32 HOKA brand retail stores and 140 UGG brand retail stores), which includes 89 concept stores and 83 outlet stores.

Refer to the “Reportable Operating Segment Overview” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Annual Report for further details on our DTC reportable operating segment, including retail store definitions.

USE OF NON-GAAP FINANCIAL MEASURES

We disclose financial measures calculated and presented in accordance with US GAAP; however, throughout this Quarterly Report we provide certain financial information on a non-GAAP basis (non-GAAP financial measures). We provide non-GAAP financial measures to provide information that may assist investors in understanding our results of operations and assessing our prospects for future performance, which consist of constant currency measures. We believe evaluating certain financial and operating measures on a constant currency basis is important as it excludes the impact of foreign currency exchange rate fluctuations that are not indicative of our core results of operations and are largely outside of our control. However, our non-GAAP financial measures are not intended to represent and should not be considered more meaningful measures than, or alternatives to, measures of financial or operating performance as determined in accordance with US GAAP.

We calculate our constant currency non-GAAP financial measures for current period financial information, such as total net sales using the foreign currency exchange rates that were in effect during the previous comparable period, excluding the effects of foreign currency exchange rate hedges and remeasurements in the condensed consolidated financial statements. We also report comparable DTC sales on a constant currency basis for DTC operations that were open throughout the current and prior reporting periods, and we may adjust prior reporting periods to conform to current year accounting policies. The information presented on a constant currency basis, as we present such information, may not necessarily be comparable to similarly titled information presented by other companies, and may not be appropriate measures for comparing our performance relative to other companies. Constant currency measures should not be considered in isolation as an alternative to US dollar measures that reflect current period foreign currency exchange rates or to other financial or operating measures presented in accordance with US GAAP.

SEASONALITY

Refer to Note 1, “General,” of our condensed consolidated financial statements in Part I, Item 1 within this Quarterly Report and to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Annual Report for detailed information on the seasonality of our business.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2024, Compared to Three Months Ended June 30, 2023. Results of operations were as follows:

			Three Months Ended June 30,
			2024												2023												Change
			Amount						%						Amount						%						Amount						%
Net sales			$	825,347					100.0		%				$	675,791					100.0		%				$	149,556					22.1		%
Cost of sales			355,347						43.1						329,367						48.7						(25,980)						(7.9)
Gross profit			470,000						56.9						346,424						51.3						123,576						35.7
Selling, general, and administrative expenses			337,193						40.9						275,688						40.8						(61,505)						(22.3)
Income from operations			132,807						16.0						70,736						10.5						62,071						87.8
Total other income, net			(16,346)						(2.1)						(10,628)						(1.5)						5,718						53.8
Income before income taxes			149,153						18.1						81,364						12.0						67,789						83.3
Income tax expense			33,528						4.1						17,812						2.6						(15,716)						(88.2)
Net income			115,625						14.0						63,552						9.4						52,073						81.9
Total other comprehensive loss, net of tax			(3,800)						(0.5)						(8,299)						(1.2)						4,499						54.2
Comprehensive income			$	111,825					13.5		%				$	55,253					8.2		%				$	56,572					102.4		%
Net income per share
Basic			$	4.54											$	2.43											$	2.11					86.8		%
Diluted			$	4.52											$	2.41											$	2.11					87.2		%

Net Sales. Net sales by location, and by brand and channel were as follows:

			Three Months Ended June 30,
			2024						2023						Change
			Amount						Amount						Amount						%
Net sales by location
Domestic			$	515,856					$	419,535					$	96,321					23.0		%
International			309,491						256,256						53,235						20.8
Total			$	825,347					$	675,791					$	149,556					22.1		%
Net sales by brand and channel
UGG brand
Wholesale			$	142,553					$	121,545					$	21,008					17.3		%
Direct-to-Consumer			80,398						73,975						6,423						8.7
Total			222,951						195,520						27,431						14.0
HOKA brand
Wholesale			332,732						260,847						71,885						27.6
Direct-to-Consumer			212,446						159,637						52,809						33.1
Total			545,178						420,484						124,694						29.7
Teva brand
Wholesale			31,359						35,132						(3,773)						(10.7)
Direct-to-Consumer			14,951						13,266						1,685						12.7
Total			46,310						48,398						(2,088)						(4.3)

			Three Months Ended June 30,
			2024						2023						Change
			Amount						Amount						Amount						%
Sanuk brand
Wholesale			4,433						6,470						(2,037)						(31.5)
Direct-to-Consumer			2,429						3,109						(680)						(21.9)
Total			6,862						9,579						(2,717)						(28.4)
Other brands
Wholesale			3,705						1,427						2,278						159.6
Direct-to-Consumer			341						383						(42)						(11.0)
Total			4,046						1,810						2,236						123.5
Total			$	825,347					$	675,791					$	149,556					22.1		%
Total Wholesale			$	514,782					$	425,421					$	89,361					21.0		%
Total Direct-to-Consumer			310,565						250,370						60,195						24.0
Total			$	825,347					$	675,791					$	149,556					22.1		%

Total net sales increased primarily due to higher global wholesale and DTC channel sales for the HOKA brand, as well as higher domestic wholesale and global DTC channel sales for the UGG brand.

On a constant currency basis, net sales increased by 23.0%, compared to the prior period. Further, we experienced an increase of 13.4% in the total volume of units sold to 12,700 from 11,200, compared to the prior period. Units sold represents all units related to the total net sales presented, inclusive of all categories such as footwear, apparel, accessories, home goods, and care kits. The prior period total volume of units sold for only footwear has been modified to conform to the current period presentation.

Drivers of significant changes in net sales, compared to the prior period, were as follows:

• Wholesale net sales of the HOKA brand increased due to higher global sales across the brand’s product assortment, driven by market share gains, refilling channel inventory, and benefits from select new points of distribution with key partners.

• DTC net sales increased primarily due to higher global sales for the HOKA and UGG brands, driven primarily by consumer acquisition and retention online as we continued to experience increased demand for both brands, as well as benefiting from a higher level of full-price selling, primarily for the UGG brand. Comparable DTC channel net sales for the 13 weeks ended June 30, 2024, increased by 21.9%, compared to the prior period.

• Wholesale net sales of the UGG brand increased primarily due to higher domestic sales, resulting from strong brand heat driving earlier demand and refilling of inventory levels for our partners, including adoption of year-round key product franchises.

• International net sales, which are included in the reportable operating segment net sales presented above, increased by 20.8% and represented 37.5% and 37.9% of total net sales for the three months ended June 30, 2024, and 2023, respectively. These changes were primarily driven by higher net sales for both channels of the HOKA brand, primarily in Europe and China.

Gross Profit. Gross margin increased to 56.9% from 51.3%, compared to the prior period, primarily due to favorable brand mix for the HOKA brand along with higher margin product driving a higher proportion of growth for both the HOKA and UGG brands, higher full-price selling, particularly for the UGG brand that was more promotional in the prior period, and favorable changes in freight costs.

Selling, General, and Administrative Expenses. The net increase in SG&A expenses, compared to the prior period, was primarily the result of the following:

• Increased payroll and related costs of approximately $24,900, primarily due to investments in talent for key functions for corporate and HOKA brand roles driving higher employee headcount and full-year costs for prior comparable period hiring.

• Increased variable advertising and promotion expenses of approximately $15,800, primarily due to higher promotional marketing expenses for the HOKA brand to drive global brand awareness and market share gains, highlight new product categories, and provide localized marketing.

• Increased other variable net selling expenses of approximately $8,800, primarily due to higher rent and occupancy, materials and supplies, credit card fees, and warehouse expenses.

• Increased other operating expenses of approximately $7,600, primarily due to higher infrastructure investments and related depreciation, and higher travel expenses, partially offset by lower legal expenses.

• Increased net foreign currency-related losses of approximately $4,400, primarily driven by unfavorable changes in Asian and Canadian exchange rates against the US dollar.

Income from Operations. Income (loss) from operations by reportable operating segment was as follows:

			Three Months Ended June 30,
			2024						2023						Change
			Amount						Amount						Amount						%
Income (loss) from operations
UGG brand wholesale			$	38,430					$	16,866					$	21,564					127.9		%
HOKA brand wholesale			124,694						86,524						38,170						44.1
Teva brand wholesale			6,789						9,237						(2,448)						(26.5)
Sanuk brand wholesale			1,603						759						844						111.2
Other brands wholesale			(1,557)						(2,041)						484						23.7
Direct-to-Consumer			106,410						75,462						30,948						41.0
Unallocated overhead costs			(143,562)						(116,071)						(27,491)						(23.7)
Total			$	132,807					$	70,736					$	62,071					87.8		%

The increase in total income from operations, compared to the prior period, was primarily due to higher net sales at higher gross margins, combined with relatively flat SG&A expenses as a percentage of net sales.

Drivers of significant net changes in total income from operations, compared to the prior period, were as follows:

• The increase in income from operations of HOKA brand wholesale was due to higher global net sales at higher gross margins, as well as slightly lower SG&A expenses as a percentage of net sales.

• The increase in income from operations of the DTC channel was due to higher global net sales for the HOKA and UGG brands at higher gross margins, as well as slightly lower SG&A expenses as a percentage of net sales in total.

• The increase in income from operations of UGG brand wholesale was primarily due to higher domestic net sales at higher gross margins, as well as lower SG&A expenses as a percentage of net sales.

• The increase in unallocated overhead costs was higher as a percentage of net sales, primarily due to higher payroll costs for key corporate roles to support growth of our brands, increased foreign currency-related losses, and higher other operating expenses.

Total Other Income, Net. The increase in total other income, net, compared to the prior period, was due to higher interest income from higher average invested cash balances and average interest rates.

Income Tax Expense. Income tax expense and our effective income tax rate were as follows:

			Three Months Ended June 30,
			2024						2023
Income tax expense			$	33,528					$	17,812
Effective income tax rate			22.5		%				21.9		%

The net increase in our effective income tax rate, compared to the prior period, was due to higher operating income, including changes in jurisdictional mix of worldwide income before income taxes, partially offset by net discrete tax benefits for stock-based compensation.

Net Income. The increase in net income, compared to the prior period, was primarily due to higher net sales and operating margins, as well as higher interest income. Net income per share increased, compared to the prior period, due to higher net income and lower weighted-average common shares outstanding driven by stock repurchases.

Total Other Comprehensive Loss, Net of Tax. The decrease in total other comprehensive loss, net of tax, compared to the prior period, was primarily due to lower foreign currency translation losses relating to changes in the net asset position against Asian foreign currency exchange rates.

LIQUIDITY

Our liquidity may be impacted by a number of factors, risks and uncertainties described in the section titled “Liquidity” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in Part I, Item 1A, “Risk Factors,” of our 2024 Annual Report.

Sources of Liquidity. We finance our working capital and operating requirements using a combination of cash and cash equivalents balances, including cash from our repatriation strategy, cash provided from ongoing operating activities and, to a lesser extent, available borrowing capacity under our revolving credit facilities. Refer to the “Cash Flows” section below for further discussion on cash flows from ongoing operating activities.

Cash and Cash Equivalents. As of June 30, 2024, our cash and cash equivalents are $1,438,397, the majority of which is held in highly rated money market funds and interest-bearing bank deposit accounts with established national and global financial institutions. We believe our cash and cash equivalents balances, cash provided by operating activities, and available borrowing capacity under our revolving credit facilities, will provide sufficient liquidity to enable us to meet our working capital requirements and contractual obligations for at least the next 12 months and will be sufficient to meet the long-term requirements of our business strategies and plans. However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.

Repatriation of Cash. Our cash repatriation strategy, and by extension, our liquidity, may be impacted by several additional considerations, which include future changes to or interpretations of global tax law and regulations, and our actual earnings in future periods. During the three months ended June 30, 2024, and 2023, no cash and cash equivalents were repatriated. As of June 30, 2024, and March 31, 2024, we have $343,082 and $263,820, respectively, of cash and cash equivalents held by foreign subsidiaries, a portion of which may be subject to additional foreign withholding taxes if it were to be repatriated. We continue to evaluate our cash repatriation strategy and currently anticipate repatriating current and future unremitted earnings of non-US subsidiaries to the extent they have been subject to US income tax if such cash is not required to fund ongoing foreign operations. Refer to Note 5, “Income Taxes,” of our consolidated financial statements in Part IV of our 2024 Annual Report for further information regarding our cash repatriation strategy.

Revolving Credit Facilities. Information about the revolving credit facilities available as of June 30, 2024, is as follows:

• Primary Credit Facility. During the three months ended June 30, 2024, we made no borrowings or repayments and there were no material changes to the terms, to the outstanding letters of credit, or to the borrowing availability under our unsecured revolving credit facility disclosed in our 2024 Annual Report.

• China Credit Facility. During the three months ended June 30, 2024, we made no borrowings or repayments and there were no material changes to the terms or to the outstanding bank guarantees under our credit facility in China disclosed in our 2024 Annual Report.

• Debt Covenants. As of June 30, 2024, we are in compliance with all financial covenants under our revolving credit facilities.

Refer to Note 6, “Revolving Credit Facilities,” of our consolidated financial statements in Part IV of our 2024 Annual Report for further information on the terms of our revolving credit facilities.

Material Cash Requirements. Our material cash requirements include uses for working capital, and payments to fulfill contractual obligations, capital expenditures, and stock repurchases. Our working capital requirements begin when we purchase raw and other materials and inventories and continue until we ultimately collect the resulting trade accounts receivable. Given the historical seasonality of our business, our working capital requirements fluctuate significantly throughout our fiscal year, and we utilize available cash to build inventory levels during certain quarters in our fiscal year to support higher selling seasons. While the impact of seasonality has been mitigated to some extent, we expect our working capital requirements will continue to fluctuate from period to period.

Contractual Obligations. Refer to the subsection titled “Leases” under Note 5, “Commitments and Contingencies,” of our condensed consolidated financial statements in Part I, Item 1 within this Quarterly Report for further information regarding our material contractual obligations incurred during the three months ended June 30, 2024, and through July 11, 2024.

Except for the above, there were no other material changes outside the ordinary course of business to the contractual obligations or capital expenditures disclosed in the sections titled “Contractual Obligations” and “Capital Expenditures” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2024 Annual Report.

Stock Repurchase Program. As of June 30, 2024, the aggregate remaining approved amount under our stock repurchase program is $789,737. Our stock repurchase program does not obligate us to acquire any amount of common stock and suspend at any time at our discretion.

Refer to Note 7, “Stockholders’ Equity,” of our condensed consolidated financial statements in Part I, Item 1 and to Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds,” within this Quarterly Report for further information regarding our stock repurchase program and capital allocation strategy.

CASH FLOWS

The following table summarizes the major components of our condensed consolidated statements of cash flows for the periods presented:

			Three Months Ended June 30,
			2024						2023						Change
			Amount						Amount						Amount						%
Net cash provided by operating activities			$	112,650					$	125,262					$	(12,612)					(10.1)		%
Net cash used in investing activities			(22,521)						(30,732)						8,211						26.7
Net cash used in financing activities			(151,861)						(25,619)						(126,242)						(492.8)
Effect of foreign currency exchange rates on cash and cash equivalents			(1,922)						(3,817)						1,895						49.6
Net change in cash and cash equivalents			$	(63,654)					$	65,094					$	(128,748)					(197.8)		%

Operating Activities. Our primary source of liquidity is net cash provided by operating activities, which is driven by our net income after non-cash adjustments and changes in working capital.

The decrease in net cash provided by operating activities during the three months ended June 30, 2024, compared to the prior period, was due to $70,111 of unfavorable changes in operating assets and liabilities partially offset by $57,499 of favorable net income after non-cash adjustments. The unfavorable changes in operating assets and liabilities were primarily due to increased purchases of inventory to support higher demand for our brands, increased accrual primarily for performance-based compensation related to the prior fiscal year, increased trade accounts receivable on higher net sales, partially offset by favorable changes due to timing of derivative cash settlements, tax refunds and payments, as well as receipt of goods and services relative to payments on trade accounts payable.

Investing Activities. The decrease in net cash used in investing activities during the three months ended June 30, 2024, compared to the prior period, was primarily due to lower capital expenditures for leasehold improvements for our warehouses and DCs.

Financing Activities. The increase in net cash used in financing activities during the three months ended June 30, 2024, compared to the prior period, was primarily due to a higher dollar value of stock repurchases.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Preparation of our condensed consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the amounts reported. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements, and other factors that we believe to be reasonable, but actual results could differ materially from these estimates. In addition, management has considered the potential impact of macroeconomic factors, including inflation, foreign currency exchange rate volatility, changes in interest rates, changes in commodity pricing, changes in consumer discretionary spending, and recessionary concerns, on our business and operations. Although the full impact of these factors is unknown, management believes it has made appropriate accounting estimates and assumptions based on the facts and circumstances available as of the reporting date. However, actual results could differ materially from these estimates and assumptions, which may result in material effects on our financial condition, results of operations and liquidity. Refer to the sections titled “Use of Estimates” and “Recent Accounting Pronouncements” within Note 1, “General,” of our condensed consolidated financial statements in Part I, Item 1 within this Quarterly Report, for additional information regarding applicable key estimates and assumptions, as well as the impact of recent accounting pronouncements.

There have been no material changes to the critical accounting policies and key estimates and assumptions disclosed in the section titled “Critical Accounting Policies and Estimates” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within our 2024 Annual Report.