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Item 2. Management’s Discussion and Analysis

2026-04-16 compared with 2025-10-16 · 119 added, 321 removed, 183 unchanged (71% of the section changed)

ITEM 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management's discussion and analysis of certain significant factors which have affected our financial position and operating results during the periods included in the accompanying condensed consolidated financial statements and should be read in conjunction with the condensed consolidated financial statements.

Dollar amounts are stated in millions except for share and per share amounts and where otherwise noted.

All historical common stock share and per share information in this quarterly report on Form 10-Q have been retroactively adjusted to reflect the two-for-one stock split effective at the close of business on May 21, 2025.

Percentage and dollar change calculations, which are based on non-rounded dollar values, may not be able to be recalculated using the dollar values in this document due to the rounding of those dollar values.

Percentages, values, and dollar change calculations, which are based on non-rounded dollar values, may not be able to be recalculated or footed using the dollar values in this document due to the rounding of those dollar values.

References to daily sales rate (DSR) change may reflect either growth (positive) or contraction (negative) for the applicable period.

Prior to June 30, 2025, we disclosed the number of in-market locations which comprised the total number of branch and Onsite locations.

As our focus shifts from metrics primarily addressing development of capabilities to metrics addressing customer sites served by our selling locations, we intend to disclose only the number of branch locations.

Fastenal is a global leader in the wholesale distribution of industrial and construction supplies.

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Our largest end market is manufacturing.

Sales to these customers include products for both original equipment manufacturing (OEM), where our products are consumed in the final products of our customers, and manufacturing, repair, and operations (MRO), where our products are consumed to support the facilities and ongoing operations of our customers.

Sales to these customers include products for both direct materials, where our products are consumed in the final products of our customers, and indirect materials, where our products are consumed to support the facilities and ongoing operations of our customers.

We also service general and commercial contractors in non-residential end markets as well as farmers, truckers, railroads, oil exploration companies, oil production and refinement companies, mining companies, federal, state, and local government entities, schools, warehouse and storage, data centers, and certain retail trades.

Geographically, our branch locations and customers are primarily in North America, though we continue to grow our non-North American presence as well.

Geographically, our selling locations and customers are primarily located in North America, though we continue to grow our non-North American presence as well.

Our motto is Growth Through Customer Service ® and our tagline is Where Industry Meets Innovation ™ .

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We are actively monitoring economic conditions in the U.S.

and internationally, including the potential ramifications of evolving trade policies, changes in interest rates, foreign currency exchange rate fluctuations, inflationary pressures, and the risk of a global or regional economic recession.

and internationally, including evolving trade policies, changes in interest rates, foreign currency exchange rate fluctuations, inflationary pressures, and the risk of a global or regional economic recession.

In response to these factors, we have implemented various strategies designed to mitigate certain adverse effects of changing inflationary conditions and supply chain challenges, while continuing to maintain market price competitiveness and price/cost neutrality.

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However, the ultimate impact of ongoing macroeconomic conditions, including recent tariff-related developments, remains uncertain and cannot be predicted at this time.

On February 20, 2026, the United States Supreme Court issued a decision invalidating the broad-based tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

Significant uncertainty exists regarding the timing and amount of any potential tariff refunds.

We will continue to assess these developments as additional information becomes available.

Executive Overview

The following table presents a performance summary of our results of operations for the nine- and three-month periods ended September 30, 2025 and 2024 .

Nine-month Period Three-month Period

2025 2024 Change 2025 2024 Change

The following table presents a performance summary of our results of operations for the three-month periods ended March 31, 2026 and 2025 .

Three-month Period

2026 2025 Change

Net sales $ 2,201.7 1,959.4 12.4 %

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Note – Daily sales are defined as the total net sales for the period divided by the number of business days (in the U.S.) in the period.

The table below summarizes our absolute and full time equivalent (FTE;

based on 40 hours per week) employee headcount, number of branch locations, number of $50k+ customer sites, and weighted Fastenal Managed Inventory (FMI) devices at the end of the periods presented and the percentage change compared to the end of the prior periods.

During the last twelve months, we increased our total full-time equivalent (FTE;

based on 40 hours per week) employee headcount by 424.

Our total FTE selling personnel increased by 214 to support growth and sales initiatives to target customer acquisition.

We had an increase in our distribution and transportation FTE personnel of 14 to support increased product throughput at our distribution facilities.

We had an increase in our remaining FTE personnel of 196, which related primarily to personnel investments in information technology (IT), finance, and supply chain support.

The table below summarizes our absolute and FTE employee headcount at the end of the periods presented and the percentage change compared to the end of the prior periods.

Selling personnel - absolute employee headcount 17,235 17,166 0.4 % 16,995 1.4 %

17,196 17,192 0.0 % 16,669 3.2 % 16,620 3.5 %

Selling personnel - FTE employee headcount 15,450 15,439 0.1 % 15,236 1.4 %

15,414 15,660 -1.6 % 15,014 2.7 % 15,035 2.5 %

Total personnel - absolute employee headcount 24,675 24,489 0.8 % 24,181 2.0 %

Total personnel - FTE employee headcount 21,763 21,602 0.7 % 21,339 2.0 %

Number of branch locations 1,590 1,596 -0.4 % 1,597 -0.4 % 1,597 -0.4 %

Number of $50k+ customer sites 2,771 2,683 3.3 % 2,330 18.9 % 2,401 15.4 %

Weighted FMI devices (MEU installed count) 133,910 132,174 1.3 % 126,957 5.5 % 123,193 8.7 %

(1) In the fourth quarter of 2024, we realigned certain employees as a result of a routine review of our organizational structure.

While there was no change to total absolute or total FTE headcount, it produced minor shifts between headcount categories.

Historical numbers have been adjusted to reflect this realignment.

During the last twelve months, we increased our total FTE employee headcount by 674.

Our total FTE selling and sales support personnel increased by 3 79 to support growth and sales initiatives to target customer acquisition.

We had an increase in our distribution and transportat ion FTE personnel of 106 to support increased product throughput at our distribution facilities.

W e had an increase in our remaining FTE personnel of 189, which related primarily to personnel investments in IT, quality control, and strategy and communications.

THIRD QUARTER OF 2025 VERSUS THIRD QUARTER OF 2024

FIRST QUARTER OF 2026 VERSUS FIRST QUARTER OF 2025

Results of Operations

The following table sets forth condensed consolidated statements of income information (as a percentage of net sales) for the periods ended September 30:

The following table sets forth condensed consolidated statements of income information (as a percentage of net sales) for the periods ended March 31:

Three-month Period

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Income before income taxes 20.4 % 20.1 %

Note – Amounts may not foot due to rounding difference.

The table below sets forth net sales and daily sales for the periods ended September 30, and changes in such sales from the prior period to the more recent period:

The table below sets forth net sales and daily sales for the periods ended March 31, and changes in such sales from the prior period to the more recent period:

Three-month Period

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Daily sales impact of currency fluctuations 0.6 % -0.5 %

Net sales increased $223.2, or 11.7%, in the third quarter of 2025 when compared to the third quarter of 2024.

Both periods had the same number of selling days.

Even though industrial production was still sluggish in the third quarter of 2025, t he performance reflects the contribution from improved customer contract signings since the first quarter of 2024.

Chang es in foreign exchange rates positively affected sales in the third quarter of 2025 by approximately 10 basis points and negatively affected sales in the third quarter of 2024 by approximately 10 basis points.

We experienced an increase in unit sales in the third quarter of 2025.

This was due to growth in the number of customer sites spending $10k or more per month with Fastenal and, to a lesser degree, growth in average monthly sales per customer site across all customer spend categories.

The im pact of product pricing on net sal es in the third quarter of 2025 was an increase of 240 to 270 basis point s, in contrast to the third quarter of 2024, when the impact of product pricing was not material.

From a product standpoint, we have three categories:

fasteners, including fasteners used in OEM and MRO, safety supplies, and other product lines, the latter of which includes eight smaller product categories, such as tools, janitorial supplies, and cutting tools.

Industrial production was still sluggish in the third quarter of 2025;

however, the performance of our fastener product line outperformed our non-fastener product lines.

The fastener category experienced improved growth in the third quarter of 2025, as compared to the third quarter of 2024, driven by easier comparisons, increased contribution from large customer signings, better product availability in our distribution centers, and pricing actions implemented in the second and third quarters of 2025.

We achieved growth in our safety category reflecting the lower volatility of PPE demand, which tends to be utilized in more MRO than OEM applications, growth of our vending installed base, and success with data center customers.

Other product lines experienced higher growth from MRO-oriented lines, such as janitorial, and from OEM-oriented lines, such as welding/

abrasives, despite continued soft manufacturing demand.

The DSR change when compared to the same period in the prior year and the percent of sales in the period were as follows:

Net sales increased $242.2, or 12.4%, in the first quarter of 2026 when compared to the first quarter of 2025 (both periods had the same number of selling days.) Sales performance reflects the contribution from improved customer contract signings since the first quarter of 2024, as well as a slight improvement in industrial production in the first quarter of 2026.

Foreign e xchange rates positively affected sales in the first quarter of 2026 by approximately 60 basis points, compared to a negative impact in the first quarter of 2025 of approximately 50 basis points.

The impact of product pricing on net sales in the first quarter of 2026 was an increase of approximately 350 basis points, compared to being immaterial in the first quarter of 2025.

From a product portfolio standpoint, we classify our offerings into four primary categories:

fasteners, safety supplies, cutting tools and other product lines.

'Other product lines' encompasses seven smaller product segments, including tools and janitorial supplies.

Beginning in the fourth quarter of 2025, we expanded our reporting to provide a more comprehensive view of direct (original equipment manufacturing/production) and indirect (maintenance, repair, and operations/facilities maintenance) business across product categories.

Direct materials generally include products incorporated into finished goods or that directly support customers' production processes, while indirect materials support customers' facility operations, maintenance, and safety needs .

During the first quarter of 202 6, direct materials slightly outpaced indirect materials, reflecting greater contribution from fastener sales and continued strength with manufacturing customers.

The DS R change when compared to the same period in the prior year and the percent of sales in the period were as follows:

Three-month Period % of Sales

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2026 2025 2026 2025

OEM fasteners 15.9 % -3.1 % 19.8 % 19.0 %

MRO fasteners 12.0 % -5.3 % 11.2 % 11.2 %

Total fasteners 14.4 % -4.0 % 31.0 % 30.2 %

Safety supplies 9.8 % 6.8 % 22.1 % 22.5 %

Other product lines 10.7 % 3.7 % 46.9 % 47.3 %

Total non-fasteners 10.4 % 4.7 % 69.0 % 69.8 %

Direct fasteners/hardware 13.8 % 3.5 % 21.0 % 20.7 %

Direct cutting tools and abrasives 11.3 % 4.6 % 5.1 % 5.2 %

Direct non-fasteners/hardware 12.7 % 9.1 % 12.7 % 12.8 %

Total direct materials 13.1 % 5.4 % 38.8 % 38.7 %

Indirect fasteners/hardware 17.3 % 1.1 % 10.0 % 9.7 %

Indirect safety 11.3 % 6.9 % 20.8 % 21.3 %

Indirect non-fasteners/hardware and non-safety 11.7 % 6.1 % 30.4 % 30.3 %

Total indirect materials 12.4 % 5.5 % 61.1 % 61.3 %

From an end market standpoint, we have four categories:

heavy manufacturing, other manufacturing, non-residential construction, and other, the latter of which includes reseller, government/education, transportation, warehousing and storage, and data centers.

Our manufacturing end markets outperformed primarily due to the relative strength we are experiencing with key account customers with significant managed spend where our service model and technology are particularly impactful.

This disproportionately benefits manufacturing customers.

The non-residential construction end market experienced growth for the second time in twelve consecutive quarters.

Other end market sales were favorably impacted by growth with education and healthcare, transportation, and data center customers.

These were partially offset by declining sales with resellers, although at a lower decline than we've historically seen.

Our manufacturing end markets growth was mainly due to the relative strength we are experiencing with key account customers with significant managed spend, where our service model and technology are particularly impactful.

The non-residential construction end market experienced growth for the fourth time in fourteen consecutive quarters.

Other end market sales were favorably impacted by growth with transportation and warehousing customers.

The D SR change when compared to the same period in the prior year and the percent of sales in the period were as follows:

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From a customer standpoint, we have two categories:

contracts, which include national multi-site, local and regional, and government customers with significant revenue potential, and non-contracts, which include all other customers.

Sales with our contract customers continue to outperform as we realize incremental sales from implementing strong customer signings that we have achieved since the first quarter of 2024, which was partially offset by subdued business activity.

Non-contract customers tend to be smaller and utilize fewer of our tools and capabilities, providing fewer avenues for share gains and therefore more closely reflect overall business trends, which remain sluggish.

The DSR change when compared to the same period in the prior y ear and the percent of sales in the period were as follows:

1) contracts, which include national multi-site, local and regional, and government customers with significant revenue potential, and 2) non-contracts.

Sales with our contract customers continue to outperform as we realize incremental sales from implementing customer signings that we have achieved since the first quarter of 2024.

Non-contract customers tend to be smaller and utilize fewer of our tools and capabilities, providing fewer avenues for share gains and therefore more closely reflect overall business trends.

The DSR change when compared to the same period in the prior year and the percent of sales in the period were as follows:

Three-month Period % of Sales

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Supplemental Data

Prior to 2025, our disclosed metrics primarily addressed development of capabilities, including branch openings, geographic expansion, growth of national accounts, growth of non-fastener products, FMI installations, and Onsite signings, to name a few.

The data provided in the chart below measures the number of customer sites that are served throughout our in-market network, categorizing them by monthly customer spend categories and end market, and the sales and average sales per site.

We believe this supplemental information may be useful to investors in evaluating Fastenal's business trends and whether and to what degree we are being successful.

Historical end market sales have been updated in the table below to categorize by customer site and may not be able to be recalculated due to the rounding of those dollar values.

Customer Sites and Sales Segmentation

We engage customers in the local market by delivering services and solutions within or near the customer's business (Sites).

Sites represent distinct customer locations where we maintain inventory tailored to local demand, supported by our regional distribution networks.

Our strategy prioritizes customer Sites with monthly sales potential of $50,000 or more.

Segmentation by spend level provides insight into the scale and potential of customer relationships served through our network.

The following table summarizes customer Sites averaged by monthly spend band and related monthly sales metrics.

Three-month Period

2026 Three-month Period

Customer Sites (#) (1) (2)

Sales per Customer Site (3)

Customer Sites (#) (1) (2)

Sales per Customer Site (3)

Sites (#) (1) (2)

Sales per Site (3)

Sites (#) (1) (2)

Sales per Site (3)

Manufacturing

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13,407 1,570.0 39,034 12,951 1,388.7 35,742

28,936 100.8 1,161 31,245 103.6 1,105

Other sales (5)

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6,112 417.2 22,753 5,667 346.7 20,393

50,368 110.1 729 56,424 113.5 671

Other sales (5)

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19,519 1,987.2 33,936 18,618 1,735.4 31,070

79,304 210.9 886 87,669 217.1 825

Other sales (5)

72,926 214.5 980 82,426 224.0 906

Total 98,823 $2,133.3 $7,149 106,276 $1,910.2 $5,929

(1) Customer sites represent the number of customer locations served by our in-market network.

Individual customers with multiple locations across multiple in-market locations will have multiple customer sites.

(2) Customer sites are an average of the number of customer sites calculated each month.

(3) Monthly sales per customer site totals do not include the sales from other sales lines, as there is no customer site count associated with it.

This column is not rounded to the millions and represents the exact dollar amount.

(4) $50k+ customer sites are disclosed as a representation of Onsite-like customers and are also a subset of $10k+ customer sites.

(5) Other sales represent impacts to sales that are not tied to a specific site or in-market location.

This includes certain service fees, cash sales, direct product sales, etc.

Grand total 92,445 $2,201.7 $7,939 101,044 $1,959.4 $6,422

(1) Sites represent the number of customer locations served by our network.

Individual customers with multiple locations will have multiple customer Sites.

(2) Sites numbers reflect the monthly average of active Site counts.

(3) Monthly sales per Site totals are not rounded to the millions and represents the exact dollar amount.

(4) $50k+ Sites are disclosed as a representation of Onsite-like customers and are also a subset of $10k+ and $5k+ Sites.

(5) Other sales represent sales to Sites under $5k+ per month and sales that are not tied to a specific Site.

This includes certain service fees, cash sales, direct material sales, etc.

Digital Technology

FMI Technology comprises our FASTStock℠ (scanned stocking locations), FASTBin ® (infrared, RFID, and scaled bins), and FASTVend ® (vending devices) offerings.

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We do not include FASTStock in this measurement because scanned stocking locations can take many forms, such as bins, shelves, cabinets, pallets, etc., that cannot be converted into a standardized MEU.

We signed 6,950 weighted FASTBin and FASTVend devices in the first quarter of 2026.

Ou r goal for weighted FASTBin and FASTVend device signings in 2026 remains between 28,000 and 30,000 MEUs.

The second statistic is sales through FMI Technology, which combines the sales through FASTStock, FASTBin, and FASTVend.

A portion of the growth in sales experienced by FMI, particularly FASTStock and FASTBin, reflects the migration of products from less efficient non-digital stocking locations to more efficient, digital stocking locations.

We signed 7,050 weighted FASTBin and FASTVend devices in the third quarter of 2025.

Our goal for weighted FASTBin and FASTVend device signings in 2025 remains between 25,000 to 26,000 MEUs.

The table below summarizes signings and installations of our FMI devices and sales through our FMI devices, eBusiness (1) tools, and Digital Footprint (2) .

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(3) Weighted FASTBin/FASTVend signings and installations reflects the percent change compared to the same period in the prior year.

Our gross prof it, as a percentage of net sales, increased to 45.3% in the third quarter of 2025 from 44.9% in the third quarter of 2024.

The fastener expansion project, other supplier-focused initiatives, and improvements in customer and supplier incentives contributed to the gross profit percentage increase in the third quarter of 2025.

The aforementioned positive effects on our gross profit percentage were partially offset by a couple of variables.

First, c ustomer mix diluted our gross profit percentage.

This reflects relatively stronger growth from large customers, including Onsite-like customers, which tend to have a lower gross profit percentage tha n our business as a whole.

Second, we experienced higher organizational/overhead costs, primarily due to certain working capital being relieved from inventory generating higher period costs.

Price/cost had a neutral impact on our gross profit percentage.

Gross prof it, as a percentage of net sales, decreased to 44.6% in the first quarter of 2026 from 45.1% in the first quarter of 2025, driven primarily by unfavorable price/cost of approximately 50 basis points, and smaller headwinds from transportation and certain customer rebates.

Customer mix remained a structural headwind to gross margin, as growth skewed toward larger customers that carry lower gross margins but remain positive to operating margin due to strong fixed-cost leverage.

Our fastener expansion project benefits continued to provide a meaningful offset, mitigating some underlying gross margin pressure;

these benefits will anniversary early in the second quarter of 2026.

SG&A Expenses

Our SG&A expenses, as a percentage of net sales, were unchanged at 24.6% in the third quarter of 2025 from 24.6% in the third quarter of 2024.

Th e percentage change in employee- related, occupancy-related, and all other SG&A expenses compared to the same period in the preceding year, is outlined in the table below.

SG&A expenses, as a percentage of net sales, were 24.3% in the first quarter of 2026 versus 25.0% in the first quarter of 2025.

The approximate change as a percentage of net sales in employee-related, occupancy-related, and all other SG&A expenses compared to the same period in the preceding year, is outlined in the table below.

Approximate Percentage of Total SG&A Expenses Three-month Period

Employee-related expenses 70% to 75% 12.9 %

Occupancy-related expenses 15% to 20% 5.3 %

All other SG&A expenses 10% to 15% 10.9 %

Employee-related expenses 70% to 75% 0 bps

Occupancy-related expenses 15% to 20% -30 bps

All other SG&A expenses 10% to 15% -40 bps

Employee-related expenses include:

(1) payroll (which includes cash compensation, stock option expense, and profit sharing), (2) health care, (3) personnel development, and (4) social taxes.

In the third quarter of 2025, our employee-relate d expenses increased when com pared to the third quarter of 2024.

We experienced an increase in employee base pay, although at a rate below the growth in sales, due to higher average FTE during the period, and, to a lesser degree, higher average wages during the period.

Bonuses and commissions and profit sharing increased at a rate greater than sales as a result of improved business activity and financial performance versus the year-ago period.

In the first quarter of 2026, our employee-relate d expenses remained stable as a percentage of net sales when com pared to the first quarter of 2025 .

We realized about 60 basis points of leverage from improved FTE productivity.

Bonuses and commissions increased 55 ba sis points as a result of improved business activity and financial performance versus the same period in the prior year.

The table below summarizes our FTE headcount at the end of the periods presented and the percentage change compared to the end of the prior periods:

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Total personnel 21,763 21,602 0.7 % 21,339 2.0 %

In the fourth quarter of 2024, we realigned certain employees as a result of a routine review of our organizational structure.

While there was no change to total absolute or total FTE headcount, it produced minor shifts between headcount categories.

Historical numbers have been adjusted to reflect this realignment.

Of our Selling personnel, 80%-85% are attached to a specific in-market location.

Of our Selling personnel, 80%-85% are attached to a specific location.

Organizational support personnel consists of:

(1) Sales Support personnel (37% to 42% of category), which includes sourcing, purchasing, supply chain, product development, etc.;

(2) information technology (IT) personnel (35% to 40% of category);

(2) IT personnel (34% to 39% of category);

and (3) Administrative Support personnel (22% to 27% of category), which includes human resources, Fastenal School of Business, accounting and finance, senior management, etc.

Occupancy-related expenses include:

(1) building rent and depreciation, (2) building utility costs, (3) equipment related to our branches and distribution locations, and (4) industrial vending equipment and bins utilized as part of FMI services (we consider this hardware to be a logical extension of our in-market operations and classify the depreciation and repair costs as occupancy expenses).

In the third quarter of 2025, our occupancy-related expenses increased when compared to the third quarter of 2024.

This was driven by general inflation in branch rental costs and, to a lesser degree, higher depreciation from an increase in the installed base of FMI hardware.

(1) building rent and depreciation, (2) building utility costs, (3) equipment related to our selling and distribution locations, and (4) industrial vending equipment and bins utilized as part of FMI services (we consider this hardware to be a logical extension of our in-market operations and classify the depreciation and repair costs as occupancy expenses).

In the first quarter of 2026, our occupancy-related expenses improved 30 basis points as a percentage of net sales when compared to the first quarter of 2025, driven mainly by fixed cost leverage.

All other SG&A expenses include:

(1) selling-related transportation, (2) IT expenses, (3) general corporate expenses, which consist of legal expenses, general insurance expenses, travel and marketing expenses, etc., and (4) sales of property and equipment.

Combined, all other SG&A expenses increased in the third quarter of 2025 when compared to the third quarter of 2024.

Selling-related transportation costs were higher, reflecting higher lease costs, which were only partially offset by lower fuel expense.

We had relatively smaller increases in IT, realized losses on currency conversion, sales-related travel expense, and bad debt expense, which were partially offset by reductions in general insurance expense and increases in joint marketing efforts with our suppliers.

Combined, all other SG&A expenses improved 40 basis points as a percentage of net sales in the first quarter of 2026 when compared to the first quarter of 2025.

The improvement was mainly driven by reductions in expense related to currency revaluation of certain assets and increases in joint marketing efforts with our suppliers.

Operating Income

Our operating income, as a percentage of net sales, increased to 20.7% in the third quarter of 2025 from 20.3% in the third quarter of 2024.

We had lower interest income earned during the third quarter of 2025 and lower interest expense in the third quarter of 2025.

The decrease in interest income relative to interest expense resulted in net interest expense of $0.9 in the third quarter of 2025, which compared to net interest expense of $0.5 in the third quarter of 2024.

We recorded income tax expense of $105.1 in the third quarter of 2025, or 23.9% of in com e before income taxes.

Income tax expense was $ 89.5 in the third quarter of 2024, or 23.1% of income before income taxes.

Our tax rate in the third quarter of 2025 was below our expected ongoing tax rate due to a decrease in our liability for unrecognized tax benefits in the third quarter of 2025, and the tax benefits associated with the exercise of stock options during the period.

These reductions were partially offset by the return to provision adjustments processed in the third quarter of 2025.

We believe our ongoing tax rate, absent any discrete tax items or broader changes to tax law, will be approximately 24.5%.

On July 4, 2025, the U.S.

enacted the One Big Beautiful Bill Act (OBBBA).

The impact of the OBBBA enactment is immaterial to our Condensed Consolidated Financial Statements.

Our net income during the third quarter of 2025 was $333.5, an increase of 12.6% compared to the third quarter of 2024.

Our diluted net income per share was $0.29 in the third quarter of 2025, compared to $0.26 in the third quarter of 2024.

Operating income, as a percentage of net sales, increased to 20.3% in the first quarter of 2026 from 20.1% in the first quarter of 2025.

Net interest income was $0.8 in the first quarter of 2026, compared to net interest expense of $0.8 in the first quarter of 2025, reflecting lower debt balances and higher interest income.

We recorded income tax expense of $ 108.6 in the first quarter of 2026, or 24.2% of in com e before income taxes.

Income tax expense was $ 94.4 in the first quarter of 2025, or 24.0% of income before income tax es.

We believe our ongoing tax rate, absent any discrete tax items or broader changes to tax law, will be approximatel y 24.6%.

Net income was $ 339.8 in the first quarter of 2026, an increase of 13.8% compared to the first quarter of 2025.

Diluted net income per share was $ 0.30 compared to $0.26 in the first quarter of 2025.

Liquidity and Capital Resources

Cash flow activity was as follows for the periods ended September 30:

Cash flow activity was as follows for the periods ended March 31:

Three-month Period

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Net cash used in financing activities $ 288.3 235.5 22.4 %

(1) Five-year average includes 2020 to 2024.

(1) Five-year average includes first quarter average for 2021 to 2025.

Net Cash Provided by Operating Activities

Net cash provided by operating activities increased $90.0 in the third quarter of 2025 when compared to the third quarter of 2024.

The increase in operating cash flow, as a percent of net income, primarily reflects a reduction in estimated income tax payments relating to the reinstatement of bonus depreciation in 2025 and working capital being a modest source of cash in the third quarter of 2025, as opposed to a use of cash in the third quarter of 2024.

The dollar and percentage change in accounts receivable, net, inventories, and accounts payable as of September 30, 2025 when compared to September 30, 2024 were as follows:

September 30 Twelve-month Dollar Change Twelve-month Percentage Change

Net cash provided by operating activities increased $116.2 in the first quarter of 2026 when compared to the first quarter of 2025.

This increase in operating cash flow compared to last year, as a percent of net income, primarily reflects a focused effort to optimize inventory levels.

The dollar and percentage change in accounts receivable, net, inventories, and accounts payable as of March 31, 2026 when compared to March 31, 2025 were as follows:

March 31 Twelve-month Dollar Change Twelve-month Percentage Change

2026 2025 2026 2026

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Inventories 1,692.5 1,673.9 18.6 1.1 %

Trade working capital $ 3,070.1 2,760.1 $ 309.9 11.2 %

Accounts payable (363.2) (341.1) (22.1) 6.5 %

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Net sales in last three months $ 2,201.7 1,959.4 $ 242.2 12.4 %

Note - Amounts may not foot due to rounding differences.

The increase in our accounts receivable balance in the third quarter of 2025 was primarily attributable to growth in sales with our customers, including relative growth with larger customers that tend to carry longer payment terms.

The increase in our inventory balance in the third quarter of 2025 was primarily attributable to two factors.

First, we added inventory to support projected growth in our business.

Second, and to a lesser extent, tariffs and general inflation have led to increased inventory valuation.

The increase in our accounts payable balance in the third quarter of 2025 was primarily attributable to an increase in our product purchases as reflected in the growth in inventories.

The increase in our accounts receivable balance in the first quarter of 2026 was mainly attributable to growth in sales with our customers, including relative growth with larger customers that tend to carry longer payment terms.

The slight increase in our inventory balance in the first quarter of 2026 reflects disciplined inventory manag ement and optimization during the period.

The increase in our accounts payable balance in the first quarter of 2026 was mainly attributable to an increase in inventory spending to support growth which was partially offset by timing associated with capital expenditures and general insurance payment activity.

Net Cash Used in Investing Activities

Net cash used in investi ng activities decreased $1.1 in the third quarter of 2025 when compared to the third quarter of 2024.

This was primarily related to an increase in spending for FMI hardware to support growth in our installed base, facility construction and upgrades, IT, and vehicles that was partially offset by an increase in proceeds from sales of vehicles and property.

Net cash used in investi ng activities increased $3.8 in the first quarter of 2026 when compared to the first quarter of 2025.

This was mainly related to an increase in spending for facility construction and upgrades, IT, and vehicles.

Our capital spending typically falls into five categories:

(1) purchases related to FMI hardware, (2) purchases of property and equipment related to expansion of and enhancements to distribution centers, owned or leased branch properties, and other company facilities, (3) spending on software and hardware for our information processing systems, (4) the addition of fleet vehicles, and (5) the addition of manufacturing equipment.

Proceeds from the sales of property and equipment, typically for the planned disposition of pick-up trucks as well as distribution vehicles and trailers in the normal course of business, are netted against these purchases and additions.

During the third quarter of 2025, our net capital expenditures (purchases of property and equipment, net of proceeds from sales of property and equipment) were $54.7, which was a slight decrease from $55.8 in the third quarter of 2024.

Proceeds from the sales of property and equipment, typically for the planned disposition of pick-up trucks as well as distribution vehicles and trailers in the normal course of business, are netted

against these purchases and additions.

During the first quarter of 2026, our net capital expenditures (purchases of property and equipment, net of proceeds from sales of property and equipment) were $57.6, which was a slight increase from $ 53.8 in the first quarter of 2025.

Cash requirements for capital expenditures were satisfied from cash generated from operations, available cash and cash equivalents, our borrowing capacity, and the proceeds of disposals.

For 2025, we expect our net capital expenditures to be within a range of $235.0 to $255.0, an increase from $214.1 in 2024.

For 2026, we continue to expect our net capital expenditures to be within a range of $310.0 to $330.0, an increase from $230.6 in 2025.

The expected growth on a year-to-year basis reflects three items.

First, we had higher distribution center spending as we completed construction of our replacement Utah hub facility in the third quarter of 2025, began construction on a replacement Atlanta hub facility, and improved our picking capacity and efficiency across our hub network.

Second, we expect greater outlays for FMI hardware.

First, we expect increased spending to replace our Atlanta hub facility and improve our picking capacity and efficiency across our hub network.

Second, we expect increased trucking spend.

Third, we expect elevated IT spending as projects that were expected in 2025 experienced delays and are expected to continue throughout 2026.

Net Cash Used in Financing Activities

Net cash used in financin g activities increased $70.2 in the third quarter of 2025 when compared to the third quarter of 2024.

In the third quarter of 2025, we ha d higher average borrowings outstanding and were using capital to reduce those balances.

In contrast, during the third quarter of 2024, we had lower average borrowings and a smaller proportion of those balances were part of a facility that was eligible for repayment.

As a result, we used significantly more capital to reduce debt balances in the third quarter of 2025 relative to the third quarter of 2024.

We also increased capital returned to shareholders through dividends in the period.

During the third quarter of 2025, we returned $ 252.5 to our shareholders in the form of dividends, compared to the third quart er of 2024 when we returned $223.4 to our shareholders in the form of dividends.

We did not repurchase any of our common stock in either period.

Net cash used in financin g activities increased $52.8 in the first quarter of 2026 when compared to the first quarter of 2025.

In the first quarter of 2026, we had lower average borrowings and a smaller proportion of those balances were part of a facility that was eligible for repayment.

In contrast, during the first quarter of 2025, we had higher average borrowings outstanding and were using capital to reduce those balances.

As a result, we used significantly less capital to reduce debt balances in the first quarter of 2026 relative to the first quarter of 2025.

We also increased capital returned to shareholders through dividends and share repurchases in the period.

During the first quarter of 2026, we retu rned $295.7, or 87.0% of net income, to our shareholders in the form of dividends ($275.6) and share repurchases ($20.1), compared to the first quarter of 2025 when we returned $246.7, or 82.6% of net income, to our shareholders in the form of dividends.

Our five-year average returned to our shareholders as a percentage of net income is 73.6%.

During the first quarter of 2026, we purchased 425,000 shares of our common stock at an average price of approximately $47.27 per share.

We did not purchase any shares of our common stock in the first quarter of 2025.

We have authority to purchase up to 11,975,000 shares of our common stock under the July 12, 2022 authorization.

This authorization does not have an expiration date.

Total debt on our balance sheet was $195.0 at the end of the third quarter of 2025, or 4.8% of total capital (the sum of stockholders' equity and total debt).

This compares to $240.0, or 6.3% of total capital, at the end of the third quarter of 2024.

The reduction in debt at the end of the third quarter of 2025 versus the prior period reflects strong generation of net cash provided by operating activities over the last 12 months in excess of what was necessary to finance net capital expenditures, payment of dividends, and other investing and financing cash needs.

Our material cash requirements for known contractual ob ligations include capital exp enditures, debt, and lease obligations, each of which are discussed in more detail earlier in this report in the Notes to Condensed Consolidated Financial Statements and in our 2025 annual report on Form 10-K.

An overview of our cash dividends paid or declared in 2026 and 2025 is contained in Note 3 of the Notes to Condensed Consolidated Financial Statements.

NINE MONTHS ENDED SEPTEMBER 30, 2025 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2024

Results of Operations

The following table sets forth condensed consolidated statements of income information (as a percentage of net sales) for the periods ended September 30:

Nine-month Period

Net sales 100.0 % 100.0 %

Gross profit 45.2 % 45.2 %

SG&A expenses 24.6 % 24.8 %

Operating income 20.6 % 20.4 %

Net interest 0.0 % 0.0 %

Income before income taxes 20.6 % 20.3 %

Note – Amounts may not foot due to rounding differences.

The table below sets forth net sales and daily sales for the periods ended September 30, and changes in such sales from the prior period to the more recent period:

Nine-month Period

Net sales $ 6,173.1 5,721.5

Percentage change 7.9 % 2.4 %

Business days 191 192

Daily sales $ 32.3 29.8

Percentage change 8.5 % 1.9 %

Daily sales impact of currency fluctuations -0.1 % -0.1 %

Net sales increased $451.6, or 7.9%, in the first nine months of 2025 when compared to the first nine months of 2024.

The effect from adverse weather in the first nine months of 2025 was not material compared to the first nine months of 2024, when the effect of adverse weather was a reduction in sales by 10 to 30 basis points.

Changes in foreign exchange rates negatively affected sales by approximately 10 basis points in the first nine months of 2025 and 2024.

We experienced an increase in unit sales in the first nine months of 2025 when compared to the first nine months of 2024.

This was primarily due to growth with large customers, both those operating out of Onsite locations that have been opened in the last two years and, to a lesser degree, those being serviced from traditional branch operations.

The impact of product pricing on net sales in the first nine months of 2025 w as an increase of 130 to 160 basis points, compared to the first nine months of 2024, which experienced a decline of 10 to 40 basis points.

The increase reflects pricing actions implemented in the second and third quarters of 2025 to address additional tariffs enacted beginning in February 2025.

From a product standpoint, we have three categories:

With industrial production still sluggish in the first nine months of 2025, the performance of our fastener product line continued to lag our non-fastener product lines.

The fastener category experienced improved growth in the first nine months of 2025 driven by easier comparisons, increased contribution from large customer signings, better product availability in our distribution centers, and pricing actions implemented in the second and third quarters of 2025.

Other product lines experienced higher growth from MRO-oriented lines, such as janitorial and material handling, rather than from OEM-oriented lines, such as cutting tools and welding/abrasives, reflecting continued soft manufacturing demand.

The DSR change when compared to the same period in the prior year and the percent of sales in the period were as follows:

Nine-month Period

2025 2024 2025 2024

OEM fasteners 9.4 % -3.1 % 19.5 % 19.4 %

MRO fasteners 3.9 % -5.0 % 11.1 % 11.5 %

Total fasteners 7.3 % -3.8 % 30.6 % 30.9 %

Safety supplies 9.2 % 7.4 % 22.1 % 22.0 %

Other product lines 8.8 % 3.5 % 47.3 % 47.1 %

Total non-fasteners 9.0 % 4.7 % 69.4 % 69.1 %

From an end market standpoint, we have four categories:

Our manufacturing end markets are outperforming primarily due to the relative strength we are experiencing with key account customers with significant managed spend where our service model and technology is particularly impactful.

This disproportionately benefits manufacturing customers.

Other end market sales are improving primarily as a result of strength with transportation, education and healthcare, and data center customers due to market share gains and product mix.

The DSR change when compared to the same period in the prior year and the percent of sales in the period were as follows:

Nine-month Period

2025 2024 2025 2024

Heavy manufacturing 8.2 % 1.7 % 43.1 % 43.2 %

Other manufacturing 11.4 % 4.2 % 32.9 % 32.0 %

Total manufacturing 9.6 % 2.8 % 76.0 % 75.2 %

Non-residential construction 2.4 % -5.2 % 8.1 % 8.6 %

Other end markets 6.2 % 1.7 % 15.9 % 16.2 %

Total non-manufacturing 4.9 % -0.8 % 24.0 % 24.8 %

From a customer standpoint, we have two categories:

contracts, which include national multi-site, local and regional, and government customers with significant revenue potential, and non-contracts, which include all other customers.

The DSR change when compared to the same period in the prior y ear and the percent of sales in the period were as follows:

Nine-month Period

2025 2024 2025 2024

Contract sales 11.0 % 6.8 % 73.4 % 71.3 %

Non-contract sales 2.0 % -8.6 % 26.6 % 28.7 %

We signed 19,925 weighted FASTBin and FASTVend devices in the first nine months of 2025.

The table below summarizes signings and installations of our FMI devices and sales through our FMI devices, eBusiness (1) tools, and Digital Footprint (2) .

Nine-month Period

2025 2024 DSR

Weighted FASTBin/FASTVend signings (MEUs) 19,925 21,194 -6.0 %

Signings per day 104 110

Weighted FASTBin/FASTVend installations (MEUs;

end of period) 133,910 123,193 8.7 %

FASTStock sales $ 777.2 728.9 7.2 %

% of sales 12.4 % 12.6 %

FASTBin/FASTVend sales $ 1,988.8 1,710.7 16.9 %

% of sales 31.8 % 29.5 %

FMI sales $ 2,766.0 2,439.6 14.0 %

FMI daily sales $ 14.5 12.7

% of sales 44.3 % 42.1 %

eBusiness sales $ 1,868.3 1,686.1 11.4 %

% of sales 29.9 % 29.1 %

eBusiness and FMI sales overlap $ 817.8 658.4 24.9 %

% of sales 13.1 % 11.4 %

Digital Footprint sales $ 3,816.5 3,467.3 10.6 %

% of sales 61.1 % 59.9 %

(1) Our eBusiness includes eProcurement activities, which are integrated transactions, including electronic data interchange (EDI), and eCommerce (transactional website sales).

(2) Digital Footprint is a combination of our sales through FMI (FASTStock, FASTBin, and FASTVend) plus that portion of our eBusiness sales that does not represent billings of FMI services.

(3) Weighted FASTBin/FASTVend signings and installations reflects the percent change compared to the same period in the prior year.

Our gross profit, as a percentage of net sales, was 45.2% in the first nine months of 2025 and the first nine months of 2024.

T he fastener expansion project, other supplier-focused initiatives, slightly favorable price/cost, and improvements in customer and supplier incentives increased our gross profit percentage in the first nine months of 2025.

The aforementioned positive effects on our gross profit percentage were offset by a number of variables.

First, customer and product mix diluted our gross profit percentage.

This reflects relatively stronger growth from large customers, including Onsite-like customers, and non-fastener products, each of which tend to have a lower gross profit percentage than our business as a whole.

Second, we experienced higher freight costs.

Third, we experienced higher organizational/overhead costs, primarily due to certain working capital being relieved from inventory generating higher period costs.

SG&A Expenses

Our SG&A expenses, as a percentage of net sales, were 24.6% in the first nine months of 2025 down from 24.8% in the first nine months of 2024.

Efforts to control growth in operating expenses in the first nine months of 2025 produced a 7.2% expansion of total SG&A expenses in the period.

Growth in net sales was above growth in SG&A expenses, resulting in our leveraging of costs in the first nine months of 2025.

The percentage change in employee-related, occupancy-related, and all other SG&A expenses compared to the same period in the preceding year, is outlined in the table below.

Approximate Percentage of Total SG&A Expenses Nine-month Period

Employee-related expenses 70% to 75% 8.5 %

Occupancy-related expenses 15% to 20% 4.9 %

All other SG&A expenses 10% to 15% 2.8 %

In the first nine months of 2025, our employee-related expenses increased when compared to the first nine months of 2024.

Bonus and commission expense grew faster than the increase in net sales, as a result of improved sales and profit growth versus the prior year period.

We experienced an increase in employee base pay due to higher average FTE and average wages during the period.

Additionally, healthcare costs increased.

The table below summarizes our FTE headcount at the end of the periods presented and the percentage change compared to the end of the prior period:

Selling personnel (2)

15,414 15,014 2.7 %

Distribution/Transportation personnel 3,057 2,997 2.0 %

Manufacturing personnel 973 936 4.0 %

Organizational support personnel (3)

2,124 2,011 5.6 %

Total personnel 21,568 20,958 2.9 %

In the fourth quarter of 2024, we realigned certain employees as a result of a routine review of our organizational structure.

While there was no change to total absolute or total FTE headcount, it produced minor shifts between headcount categories.

Historical numbers have been adjusted to reflect this realignment.

Of our Selling personnel, 80%-85% are attached to a specific in-market location.

Organizational support personnel consists of:

(1) Sales Support personnel (37% to 42% of category), which includes sourcing, purchasing, supply chain, product development, etc.;

(2) IT personnel (35% to 40% of category);

and (3) Administrative Support personnel (22% to 27% of category), which includes human resources, Fastenal School of Business, accounting and finance, senior management, etc.

In the first nine months of 2025, our occupancy-related expense s increased wh en compared to the first nine months of 2024.

We had moderate increases in branch costs related to inflation, as well as non-branch expenses from incremental depreciation and other costs associated with hub investments and upgrades.

FMI FASTBin depreciation and expense increased, reflecting higher installations.

Combined, all other SG&A expenses increased in the first nine months of 2025 when compared to the first nine months of 2024.

This reflects a number of items.

Selling-related transportation costs were higher, reflecting higher lease costs, which were only partially offset by lower fuel expense.

We had relatively smaller increases in IT, sales-related travel expense, bad debt expense, and realized losses on currency conversion, which were partially offset by increases in joint marketing efforts with our suppliers and reductions in general insurance expense.

Operating Income

Our operating income, as a percentage of net sales, increased to 20.6% in the first nine months of 2025 from 20.4% in the first nine months of 2024.

We had slightly higher interest income in the first nine months of 2025 and lower interest expense in the first nine months of 2025 .

Th e increase i n interest income relative to interest expense resulted in net interest expense of $1.0 in the first nine months of 2025, compared to net interest expense of $1.4 in the first nine months of 2024.

We recorded income tax expense of $306.0 in the first nine months of 2025, or 24.1% of income before income taxes.

Income tax expense was $275.3 in the first nine months of 2024, or 23.7% of income before income taxes.

Our tax rate in the first nine months of 2025 was below our expected ongoing tax rate due to the tax benefits associated with the exercise of stock options during the period, and a decrease in our liability for unrecognized tax benefits in the third quarter of 2025.

These reductions were partially offset by the return to provision adjustments processed in the third quarter of 2025.

We believe our ongoing tax rate, absent any discrete tax items or broader changes to tax law, will be approximately 24.5%.

Our net income during the first nine months of 2025 was $964.4, an increase of 8.5% compared to the first nine months of 2024.

Our diluted net income per share was $0.84 in the first nine months of 2025, compared to $0.77 in the first nine months of 2024.

Liquidity and Capital Resources

Cash flow activity was as follows for the periods ended September 30:

Nine-month Period

Five-Year Average (1)

2025 2024 Change

Net cash provided by operating activities $ 927.8 890.5 4.2 %

% of net income 100.8 % 96.2 % 100.2 %

Net cash used in investing activities $ 173.1 157.0 10.3 %

% of net income 19.6 % 17.9 % 17.7 %

Net cash used in financing activities $ 732.7 663.6 10.4 %

(1) Five-year average includes 2020 to 2024.

Net Cash Provided by Operating Activities

Net cash provided by op erating activities increased $37.3 in the first nine months of 2025 when compared to the first nine months of 2024 .

The decrease in operating cash flow, as a percent of net income, primarily reflects our operating assets and liabilities being a more significant use of cash, which was only partially offset by a reduction in estimated income tax payments in the first nine months of 2025 than in the first nine months of 2024.

Net Cash Used in Investing Activities

Net cash used in investing activities increased $16.1 in the first nine months of 2025 when compared to the first nine months of 2024.

During the first nine months of 2025, our net capital expenditures were $172.8, which was an increase from $156.7 in the first nine months of 2024.

This was primarily related to an increase in spending on FMI hardware to support growth in our installed base, facility construction and upgrades, IT, and vehicles.

Net Cash Used in Financing Activities

Net cash used in financing activities increased $69.1 in the first nine months of 2025 when compared to the first nine months of 2024.

This was primarily due to reducing our net indebtedness less in the first nine months of 2025 than we did in the first nine months of 2024.

This was partly offset by an increase in capital returned to shareholders through dividends in the period.

During the first nine months of 2025, we ret urned $751.6 to o ur shareholders in the f orm of dividends, compared to the first nine months of 2024 when we returned $669.9 to our shareholders in the form of dividends.

We did not repurchase any of our common stock in either period.

Critical Accounting Policies and Estimates – A discussion of our critical accounting policies and estimates is contained in our 2025 annual report on Form 10-K.

9 unchanged sentences

Consequently, no forward-looking statement can be guaranteed and actual results may vary materially.

Factors that could cause our actual results to differ from those discussed in the forward-looking statements include, but are not limited to, economic downturns, weakness in the manufacturing or commercial construction industries or any of our end markets, competitive pressure on selling prices, changes in our current mix of products, customers, or geographic locations, changes in our average branch size, changes in our purchasing patterns, changes in customer needs, changes in fuel or commodity prices, inclement weather, changes in foreign currency exchange rates, difficulty in adapting our business model to different foreign business environments and the challenges of operating in foreign business environments, failure to accurately predict the market potential of our business strategies, the introduction or expansion of new business strategies, weak acceptance or adoption of our FMI offering, increased competition in FMI, difficulty in maintaining installation quality as our FMI business expands, the leasing to customers of a significant number of additional FMI devices, the failure to meet our goals and expectations regarding branch openings, branch closings, or expansion of our FMI offering, the failure to realize expected benefits from the completion of our strategic rationalization, changes in the implementation objectives of our business strategies, challenges in developing and expanding our digital capabilities, difficulty in hiring, relocating, training, or retaining qualified personnel, difficulty in controlling SG&A expenses, including FTE growth, difficulty in collecting receivables or accurately predicting future inventory needs, dramatic changes in sales trends, changes in supplier production lead times, short-term inefficiencies in our supply chain may not normalize or result in certain warehousing customer growth, changes in our cash position or our need to make capital expenditures, credit market volatility, changes in tax law or the impact of any such changes on future tax rates, changes in tariffs or the impact of any such changes on our financial results, changes in the availability or price of commercial real estate, changes in the nature, price, or availability of distribution, supply chain, or other technology (including software licensed from third parties) and services related to that technology, cyber-security incidents, potential liability and reputational damage that can arise if our products are defective, difficulties measuring the contribution of price increases on sales growth, acts of war, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission, including our most recent annual and quarterly reports.

Factors that could cause our actual results to differ from those discussed in the forward-looking statements include, but are not limited to, economic downturns, weakness in the manufacturing or commercial construction industries or any of our end markets, competitive pressure on selling prices, changes in our current mix of products, customers, or geographic locations, changes in our average branch size, changes in our purchasing patterns, changes in customer needs, changes in fuel or commodity prices, inclement weather, changes in foreign currency exchange rates, difficulty in adapting our business model to different foreign business environments and the challenges of operating in foreign business environments, failure to accurately predict the market potential of our business strategies, the introduction or expansion of new business strategies, weak acceptance or adoption of our FMI offering, increased competition in FMI, difficulty in maintaining installation quality as our FMI business expands, the leasing to customers of a significant number of additional FMI devices, the failure to meet our goals and expectations regarding branch openings, branch closings, or expansion of our FMI offering, the failure to realize expected benefits from the completion of our strategic rationalization, changes in the implementation objectives of our business strategies, challenges in developing and expanding our digital capabilities, difficulty in hiring, relocating, training, or retaining qualified personnel, difficulty in controlling SG&A expenses, including FTE growth, difficulty in collecting receivables or accurately predicting future inventory needs, dramatic changes in sales trends, changes in supplier production lead times, short-term inefficiencies in our supply chain may not normalize or result in certain warehousing customer growth, changes in our cash position or our need to make capital expenditures, credit market volatility, changes in tax law or the impact of any such changes on future tax rates, changes in tariffs or the impact of any such changes on our financial results including any changes resulting from the recent U.S.

Supreme Court decision affecting tariffs imposed under the IEEPA, changes in the availability or price of commercial real estate, changes in the nature, price, or availability of distribution, supply chain, or other technology (including software licensed from third parties) and services related to that technology, cyber-security incidents, potential liability and reputational damage that can arise if our products are defective, difficulties measuring the contribution of price increases on sales growth, acts of war, and other risks and uncertainties detailed in our filings with the Securities and Exchange Commission, including our most recent annual and quarterly reports.

Each forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any such statement to reflect events or circumstances arising after such date.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis