PROCTER & GAMBLE Co 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including without limitation, in the following sections: “Management's Discussion and Analysis,” “Risk Factors” and "Notes 4 and 9 to the Consolidated Financial Statements." These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, except to the extent required by law. Risks and uncertainties to which our forward-looking statements are subject include, without limitation: (1) the ability to successfully manage global financial risks, including foreign currency fluctuations, changes in global interest rates and rate differentials, currency exchange, or pricing controls and tariffs; (2) the ability to successfully manage local, regional or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow the Company to effect the expected share repurchases and dividend payments; (3) the ability to successfully manage uncertainties related to changing political and geopolitical conditions and potential implications such as exchange rate fluctuations, market contraction, boycotts, variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; (4) the ability to manage disruptions in credit markets or to our banking partners or changes to our credit rating; (5) the ability to maintain key manufacturing and supply arrangements (including execution of supply chain optimizations and sole supplier and sole manufacturing plant arrangements) and to manage disruption of business due to various factors, including ones outside of our control, such as natural disasters, acts of war or terrorism or disease outbreaks; (6) the ability to successfully manage cost fluctuations and pressures, including prices of commodities and raw materials and costs of labor, transportation, energy, pensions and healthcare; (7) the ability to compete with our local and global competitors in new and existing sales channels, including by successfully responding to competitive factors such as prices, promotional incentives and trade terms for products; (8) the ability to manage and maintain key customer relationships; (9) the ability to protect our reputation and brand equity by successfully managing real or perceived issues, including concerns about safety, quality, ingredients, efficacy, packaging content, supply chain practices, social or environmental practices or similar matters that may arise; (10) the ability to successfully manage the financial, legal, reputational and operational risk associated with third-party relationships, such as our suppliers, contract manufacturers, distributors, contractors and external business partners; (11) the ability to rely on and Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 15 maintain key company and third-party information and operational technology systems, networks and services and maintain the security and functionality of such systems, networks and services and the data contained therein; (12) the ability to successfully manage the demand, supply and operational challenges, as well as governmental responses or mandates, associated with a disease outbreak, including epidemics, pandemics or similar widespread public health concerns; (13) the ability to stay on the leading edge of innovation, obtain necessary intellectual property protections and successfully respond to changing consumer habits, evolving digital marketing and selling platform requirements and technological advances attained by, and patents granted to, competitors; (14) the ability to successfully manage our ongoing acquisition, divestiture and joint venture activities, in each case to achieve the Company’s overall business strategy and financial objectives, without impacting the delivery of base business objectives; (15) the ability to successfully achieve productivity improvements and cost savings and manage ongoing organizational changes while successfully identifying, developing and retaining key employees, including in key growth markets where the availability of skilled or experienced employees may be limited; (16) the ability to successfully manage current and expanding regulatory and legal requirements and matters (including, without limitation, those laws, regulations, policies and related interpretations involving product liability, product and packaging composition, manufacturing processes, intellectual property, labor and employment, antitrust, privacy, cybersecurity, data protection and data transfers, artificial intelligence, tax, the environment, due diligence, risk oversight, accounting and financial reporting) and to resolve new and pending matters within current estimates; (17) the ability to manage changes in applicable tax laws and regulations; and (18) the ability to continue delivering progress towards our environmental sustainability ambitions. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from those projected herein is included in the section titled "Economic Conditions and Uncertainties" and the section titled "Risk Factors" (Part II, Item 1A) of this Form 10-Q. Purpose, Approach and Non-GAAP Measures The purpose of Management's Discussion and Analysis (MD&A) is to provide an understanding of Procter & Gamble's financial condition, results of operations and cash flows by focusing on changes in certain key measures from year to year. The MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and accompanying Notes. The MD&A is organized in the following sections: • Overview • Recent Developments • Summary of Results – Six Months Ended December 31, 2025 • Economic Conditions and Uncertainties • Results of Operations – Three and Six Months Ended December 31, 2025 • Segment Results – Three and Six Months Ended December 31, 2025 • Liquidity and Capital Resources • Measures Not Defined by U.S. GAAP Throughout the MD&A we refer to measures used by management to evaluate performance, including unit volume growth, net sales, net earnings, diluted net earnings per common share (diluted EPS) and operating cash flow. We also refer to a number of financial measures that are not defined under U.S. GAAP, consisting of organic sales growth, Core earnings per share (Core EPS), adjusted free cash flow and adjusted free cash flow productivity. The explanation at the end of the MD&A provides the definition of these non-GAAP measures, details on the use and the derivation of these measures, as well as reconciliations to the most directly comparable U.S. GAAP measure. Management also uses certain market share and market consumption estimates to evaluate performance relative to competition despite some limitations on the availability and comparability of share and consumption information. References to market share and consumption in the MD&A are based on a combination of vendor-purchased traditional brick-and-mortar and online data in key markets as well as internal estimates. All market share references represent the percentage of sales of our products in dollar terms on a constant currency basis relative to all product sales in the category. The Company measures quarter and fiscal year to date market share through the most recent period for which market share data is available, which typically reflects a lag time of one or two months as compared to the end of the reporting period. Management also uses unit volume growth to evaluate drivers of changes in net sales. Organic volume growth reflects year-over-year changes in unit volume excluding the impacts of acquisitions and divestitures and certain one-time items, if applicable, and is used to explain changes in organic sales. In the presentation of data in tables or other charts, certain columns and rows may not add due to rounding. OVERVIEW P&G is a global leader in the fast-moving consumer goods industry, focused on providing branded consumer packaged goods of superior quality and value to our consumers around the world. Our products are sold in about 180 countries and territories, primarily through mass merchandisers, e-commerce (including social commerce) channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. We also sell direct to individual consumers. We have on-the-ground operations in about 70 countries. 16 The Procter & Gamble Company Our market environment is highly competitive with global, regional and local competitors. In many of the markets and industry segments in which we sell our products, we compete against other branded products as well as retailers' private-label brands. Additionally, many of the product segments in which we compete are differentiated by price tiers (referred to as super-premium, premium, mid-tier and value-tier products). We believe we are well positioned in the industry segments and markets in which we operate, often holding a leadership or significant market share position. The table below lists our reportable segments, including the product categories and brand composition within each segment. Reportable Segments Product Categories (Sub-Categories) Major Brands Beauty Hair Care ( Conditioners, Shampoos, Styling Aids, Treatments ) Head & Shoulders, Herbal Essences, Pantene, Rejoice Personal Care (1) ( Antiperspirants and Deodorants, Personal Cleansing ) Native, Old Spice, Safeguard, Secret Skin Care (1) (Facial Moisturizers, Cleaners and Treatments) Olay, SK-II Grooming Grooming ( Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Grooming ) Braun, Gillette, Venus Health Care Oral Care ( Toothbrushes, Toothpastes, Other Oral Care ) Crest, Oral-B Personal Health Care ( Gastrointestinal, Pain Relief, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Other Personal Health Care ) Metamucil, Neurobion, Pepto-Bismol, Vicks Fabric & Home Care Fabric Care ( Fabric Enhancers, Laundry Additives, Laundry Detergents ) Ariel, Downy, Gain, Tide Home Care ( Air Care, Dish Care, P&G Professional, Surface Care ) Cascade, Dawn, Fairy, Febreze, Mr. Clean, Swiffer Baby, Feminine & Family Care Baby Care ( Baby Wipes, Taped Diapers and Pants ) Luvs, Pampers Feminine Care ( Adult Incontinence, Menstrual Care ) Always, Always Discreet, Tampax Family Care ( Paper Towels, Tissues, Toilet Paper ) Bounty, Charmin, Puffs (1) Effective July 1, 2024, the Beauty reportable business segment separated Skin and Personal Care into individual operating segments, Skin Care and Personal Care. This transition included separation of the management team, strategic decision-making, innovation plans, financial targets, budgets and management reporting. Throughout the MD&A, we reference business results by region, which are comprised of North America, Europe, Greater China, Latin America, Asia Pacific and India, Middle East and Africa (IMEA). The following table provides the percentage of net sales and net earnings by reportable business segment (excluding Corporate) for the three and six months ended December 31, 2025: Three Months Ended December 31, 2025 Six Months Ended December 31, 2025 Net Sales Net Earnings Net Sales Net Earnings Beauty 18 % 17 % 19 % 18 % Grooming 8 % 9 % 8 % 9 % Health Care 16 % 17 % 15 % 16 % Fabric & Home Care 35 % 34 % 35 % 34 % Baby, Feminine & Family Care 23 % 23 % 23 % 23 % Total Company 100 % 100 % 100 % 100 % RECENT DEVELOPMENTS Limited Market Portfolio Restructuring In the fiscal year ended June 30, 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. During the period ended September 30, 2024, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina and recorded incremental restructuring charges of approximately $0.8 billion after tax, comprised primarily of non-cash charges for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss). The total incremental restructuring charges incurred under the program beginning in the three-month period ended December 31, 2023, through the three-month period ended September 30, 2024, were approximately $1.2 billion after tax. The Procter & Gamble Company 17 Focused Portfolio, Supply Chain and Productivity Plan In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. The Company expects to incur approximately $1.5 to $2.0 billion in before-tax restructuring costs over a two-year period. The Company expects to incur half of the costs under this plan by the end of fiscal 2026, with the remainder incurred in fiscal 2027. The restructuring activities will be executed across the Sector Business Units as well as the Enterprise Markets, Corporate Functions and Global Business Services. These restructuring activities include a plan for a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027. Consistent with our historical policies for ongoing restructuring-type activities, resulting charges were funded by and included within Corporate for segment reporting. Restructuring charges above the normal ongoing level of restructuring costs are reported as non-core charges. For more details on the restructuring program, refer to Note 11 to the Consolidated Financial Statements. Glad Joint Venture Agreement The Company and The Clorox Company (Clorox) have jointly decided not to renew the Glad joint venture agreement. Under the terms of the agreement, Clorox will purchase the Company’s minority interest in the venture at fair market value as of the agreement termination in January 2026. Subject to market conditions and the parties' negotiations with respect to fair market value, the Company expects to receive cash proceeds of approximately $500 million and record an after-tax gain in the range of $250 to $300 million in the third quarter of the fiscal year ended June 30, 2026. SUMMARY OF RESULTS – Six Months Ended December 31, 2025 The following are highlights of results for the six months ended December 31, 2025, versus the six months ended December 31, 2024: • Net sales were $44.6 billion, an increase of $975 million, or 2%, versus the prior year period. Net sales increased mid-single digits in Beauty, Grooming and Health Care, and low single digits in Fabric & Home Care. Net sales decreased low single digits in Baby, Feminine & Family Care. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 1% versus the prior year period. Organic sales increased mid-single digits in Beauty and low single digits in Grooming and Health Care and were unchanged in Fabric & Home Care. Organic sales decreased low single digits in Baby, Feminine & Family Care. • Net earnings were $9.1 billion, an increase of $466 million, or 5%, versus the prior year period due primarily to higher restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina in the prior year period. • Net earnings attributable to Procter & Gamble were $9.1 billion, an increase of $481 million, or 6%, versus the prior year period. • Diluted EPS increased 7% to $3.73 due to the increase in net earnings. Core EPS, which excludes incremental restructuring charges, increased 2% to $3.87. • Operating cash flow was $10.4 billion. Adjusted free cash flow, which is defined as operating cash flow less capital expenditures and excluding payments for the transitional tax resulting from the 2017 U.S. Tax Act, was $8.7 billion. Adjusted free cash flow productivity, which is defined as adjusted free cash flow as a percentage of net earnings, was 95%. ECONOMIC CONDITIONS AND UNCERTAINTI ES Global Economic Conditions. Our products are sold in numerous countries worldwide, with more than half our sales generated outside the United States. Our largest international markets are Greater China, the United Kingdom, Canada, Japan and Germany and collectively comprised approximately 21% of our net sales in fiscal 2025. As a result, we are exposed to global macroeconomic factors, geopolitical tensions and government policies. We are exposed to various risks due to economic, political and social instabilities, market volatility, natural disasters, debt and credit issues, currency controls, new or increased tariffs, foreign exchange and interest rate changes. These risks can negatively impact our net sales, net earnings and cash flows. For example, we are exposed to risks due to the ongoing war between Russia and Ukraine. Our Russia business accounted for 1% of consolidated net sales, net earnings and net assets as of June 30, 2025. Foreign Exchange. We have significant exposure to exchange rate fluctuations, both due to translation and transaction exposures. Translation exposures arise from measuring income statements of foreign subsidiaries with functional currencies other than the U.S. dollar. Transaction exposures involve impacts from 1) input costs that are denominated in currencies other than the local reporting currency and 2) revaluation of working capital balances denominated in currencies other than the functional currency. We have experienced significant foreign exchange impacts in the past due to the weakening of certain foreign currencies versus the U.S. dollar, which have negatively impacted net sales, net earnings and cash flows. In response to the devaluation of foreign currencies (including those deemed highly inflationary), any lags or inability (due to government restrictions) to implement price increases or the negative impacts of such actions on product consumption may lead to a decline in our net sales, net earnings and cash flows. 18 The Procter & Gamble Company Commodities and Supply Chain. Our costs are subject to fluctuations due to changes in commodity and input material prices, transportation costs, inflationary impacts and productivity efforts. We have significant exposures to certain commodities and input materials, in particular certain oil-derived materials like resins and paper-based materials like pulp. Volatility in the market price of commodities and input materials directly affects our costs. Disruptions in manufacturing, supply and distribution operations can lead to increased costs. Legal or regulatory requirements and sustainability initiatives may result in increased costs. We strive to implement, achieve and sustain cost improvement plans, including supply chain optimization and general overhead and workforce optimization. Increased pricing in response to certain inflationary or cost increases may also offset portions of the cost impacts; however, such price increases may negatively impact product consumption. If we are unable to manage cost impacts through pricing actions and consistent productivity improvements, it may negatively impact our net sales, net earnings and cash flows. Government Policies. We are exposed to changes in U.S. and foreign government legislative, regulatory or enforcement policies that can have a negative impact on net sales, net earnings and cash flows. These include tax policy changes (both U.S. and foreign), including those resulting from the current work being led by the OECD/G20 Inclusive Framework focused on "Addressing the Challenges of the Digitalization of the Economy”. Government controls such as currency exchanges, pricing and import authorizations as well as government policies related to environmental and climate change matters and changes to international trade agreements, including tariffs, can also impact our financial performance. For additional information on risk factors that could impact our business results, please refer to Risk Factors in Part I, Item 1A of the Company's Form 10-K for the fiscal year ended June 30, 2025. RESULTS OF OPERATIONS – Three Months Ended December 31, 2025 The following discussion provides a review of results for the three months ended December 31, 2025, versus the three months ended December 31, 2024. Three Months Ended December 31 Amounts in millions, except per share amounts 2025 2024 % Chg Net sales $ 22,208 $ 21,882 1% Operating income 5,366 5,741 (7)% Earnings before income taxes 5,421 5,845 (7)% Net earnings 4,331 4,659 (7)% Net earnings attributable to Procter & Gamble 4,319 4,630 (7)% Diluted net earnings per common share 1.78 1.88 (5)% Core net earnings per common share 1.88 1.88 —% Three Months Ended December 31 COMPARISONS AS A PERCENTAGE OF NET SALES 2025 2024 Basis Pt Chg Gross margin 51.2 % 52.4 % (120) Selling, general & administrative expense 27.1 % 26.2 % 90 Operating income 24.2 % 26.2 % (200) Earnings before income taxes 24.4 % 26.7 % (230) Net earnings 19.5 % 21.3 % (180) Net earnings attributable to Procter & Gamble 19.4 % 21.2 % (180) Net Sales Net sales for the quarter increased 1% to $22.2 billion. The increase in net sales was due to favorable foreign exchange of 1% and higher pricing of 1%, partially offset by a decline in unit volume of 1%. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales were unchanged. The Procter & Gamble Company 19 The following table summarizes key drivers of the change in net sales by reportable segment: Net Sales Change Drivers 2025 vs. 2024 (Three Months Ended December 31) (1) Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2) Net Sales Growth Beauty 3 % 3 % 1 % 2 % (1) % — % 5 % Grooming (2) % (2) % 2 % 2 % — % — % 2 % Health Care (1) % (1) % 2 % 1 % 2 % 1 % 5 % Fabric & Home Care — % — % 1 % 1 % (1) % — % 1 % Baby, Feminine & Family Care (5) % (5) % 1 % — % — % 1 % (3) % Total Company (1) % (1) % 1 % 1 % — % — % 1 % (1) Net sales percentage changes are approximations based on quantitative formulas that are consistently applied. (2) Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales. Operating Costs Gross margin decreased 120 basis points to 51.2% of net sales for the quarter. The decrease in gross margin was due to: • 120 basis points of decline from unfavorable product mix, • 70 basis points of higher restructuring costs, • 60 basis points of product and packaging investments, • 60 basis points of higher costs from tariffs, • 20 basis points of unfavorable foreign exchange impacts and • 10 basis points of other items and rounding. These impacts were partially offset by: • 170 basis points of manufacturing productivity savings and • 50 basis points of increase due to higher pricing. Total SG&A spending increased 5% to $6.0 billion versus the prior year period due to increased marketing spending and overhead costs. SG&A as a percentage of net sales increased 90 basis points to 27.1% due primarily to an increase in marketing spending as a percentage of net sales and an increase in overhead costs as a percentage of net sales, partially offset by a decrease in other operating expenses as a percentage of net sales. Marketing spending as a percentage of net sales increased 80 basis points due to an increase in marketing spending, partially offset by productivity savings. Overhead costs as a percentage of net sales were increased 40 basis points as wage inflation and restructuring spending were partially offset by productivity savings. Other operating expenses as a percentage of net sales decreased 40 basis points primarily driven by favorable foreign exchange impacts. Productivity-driven cost savings delivered 110 basis points of benefit to SG&A as a percentage of net sales. Operating income decreased $375 million, or 7%, to $5.4 billion and operating margin decreased 200 basis points to 24.2% versus the prior year period due to the decrease in gross margin and an increase in SG&A as a percentage of net sales, the components of which are described above. Non-Operating Expenses and Income Interest expense was $220 million for the quarter, a decrease of $20 million versus the prior year period. Interest income was $115 million for the quarter, a decrease of $4 million versus the prior year period. Other non-operating income/(expense) was $160 million, which is a decrease of $64 million versus the prior year period. Income Taxes The effective income tax rate for the three months ended December 31, 2025, was 20.1%, compared to 20.3% for the three months ended December 31, 2024. The decrease in the effective tax rate was primarily driven by discrete impacts related to uncertain tax positions, partially offset by an increase due to lower excess tax benefits of share-based compensation in the current year. Net Earnings Net earnings were $4.3 billion, a decrease of $328 million, or 7%, versus the prior year period due primarily to the decrease in operating income, the details of which are described above. Foreign exchange had a positive impact of approximately $89 million on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars. Net earnings attributable to Procter & Gamble were $4.3 billion, a decrease of $311 million, or 7%, for the quarter. Diluted EPS decreased 5% to $1.78 versus the prior year period. 20 The Procter & Gamble Company RESULTS OF OPERATIONS – Six Months Ended December 31, 2025 The following discussion provides a review of results for the six months ended December 31, 2025, versus the six months ended December 31, 2024. Six Months Ended December 31 Amounts in millions, except per share amounts 2025 2024 % Chg Net sales $ 44,594 $ 43,619 2% Operating income 11,222 11,538 (3)% Earnings before income taxes 11,455 10,985 4% Net earnings 9,112 8,646 5% Net earnings attributable to Procter & Gamble 9,070 8,589 6% Diluted net earnings per common share 3.73 3.49 7% Core net earnings per common share 3.87 3.81 2% Six Months Ended December 31 COMPARISONS AS A PERCENTAGE OF NET SALES 2025 2024 Basis Pt Chg Gross margin 51.3 % 52.2 % (90) Selling, general & administrative expense 26.1 % 25.8 % 30 Operating income 25.2 % 26.5 % (130) Earnings before income taxes 25.7 % 25.2 % 50 Net earnings 20.4 % 19.8 % 60 Net earnings attributable to Procter & Gamble 20.3 % 19.7 % 60 Net Sales Net sales for the period increased 2% to $44.6 billion driven by a 1% increase from higher pricing and a 1% increase from favorable foreign exchange. Volume and mix was unchanged. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 1%. The following table summarizes key drivers of the change in net sales by reportable segment: Net Sales Change Drivers 2025 vs. 2024 (Six Months Ended December 31) (1) Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2) Net Sales Growth Beauty 4 % 4 % 1 % 2 % (1) % — % 6 % Grooming — % — % 2 % 3 % (1) % — % 4 % Health Care (1) % (1) % 2 % 1 % 2 % — % 4 % Fabric & Home Care (1) % (1) % 1 % 1 % — % — % 1 % Baby, Feminine & Family Care (3) % (3) % 1 % — % 1 % — % (1) % Total Company — % — % 1 % 1 % — % — % 2 % (1) Net sales percentage changes are approximations based on quantitative formulas that are consistently applied. (2) Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales. Operating Costs Gross margin decreased 90 basis points to 51.3% of net sales for the period. The decrease in gross margin was due to: • 90 basis points of decline from unfavorable product mix, • 60 basis points of product and packaging investments, • 60 basis points of higher tariff costs, • 60 basis points of unfavorable foreign exchange impacts and • 50 basis points of higher restructuring costs. These impacts were partially offset by: • 170 basis points of manufacturing productivity savings, • 50 basis points of increase due to higher pricing and The Procter & Gamble Company 21 • 10 basis points of other items and rounding. Total SG&A spending increased 4% to $11.7 billion versus the prior year period due to increased marketing spending and overhead costs. SG&A as a percentage of net sales increased 30 basis points to 26.1% due primarily to a 30 basis point increase in marketing spending as a percentage of sales as the increase in marketing spending was partially offset by productivity savings. Overhead costs as a percentage of net sales increased 20 basis points as wage inflation and restructuring spending were partially offset by productivity savings. Other operating expenses as a percentage of net sales decreased 10 basis points primarily driven by favorable foreign exchange impacts. Productivity-driven cost savings delivered 100 basis points of benefit to SG&A as a percentage of net sales. Operating income decreased $316 million, or 3%, to $11.2 billion and operating margin decreased 130 basis points to 25.2% versus the prior year period due primarily to incremental restructuring charges in the current year. Non-Operating Expenses and Income Interest expense was $417 million for the period, a decrease of $61 million versus the prior year period. Interest income was $222 million for the period, a decrease of $32 million versus the prior year period. Other non-operating income/(expense) was $427 million, which is an increase of $757 million versus the prior year period primarily due to the non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina recorded in the prior year period. Income Taxes The effective income tax rate for the six months ended December 31, 2025, was 20.5%, compared to 21.3% for the six months ended December 31, 2024. The decrease in the effective tax rate was primarily driven by the prior year charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina of 140 basis points and discrete impacts related to uncertain tax positions, partially offset by a 120 basis point increase due to lower excess tax benefits of share-based compensation in the current year. Net Earnings Net earnings increased $466 million, or 5%, to $9.1 billion, as the increase in other non-operating income/(expense), the components of which are described above, were partially offset by the decrease in operating income. Foreign exchange had a positive impact of approximately $85 million on net earnings for the period, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars. Net earnings attributable to Procter & Gamble increased $481 million, or 6%, to $9.1 billion for the period. Diluted EPS increased 7% to $3.73 versus the prior year period due to the increase in net earnings. Core EPS, which represents diluted EPS excluding charges for incremental restructuring, increased 2% to $3.87. SEGMENT RESULTS – Three and Six Months Ended December 31, 2025 The following discussion provides a review of results by reportable business segment. Analysis of the results for the three and six months ended December 31, 2025, is provided based on a comparison to the three and six months ended December 31, 2024. The primary financial measures used to evaluate segment performance are net sales and net earnings. The table below provides supplemental information on net sales, earnings before income taxes and net earnings by reportable business segment for the three and six months ended December 31, 2025, versus the comparable prior year period (dollar amounts in millions): Three Months Ended December 31, 2025 Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago Beauty $ 4,039 5 % $ 992 — % $ 763 (2) % Grooming 1,794 2 % 531 (7) % 417 (9) % Health Care 3,406 5 % 1,009 4 % 770 2 % Fabric & Home Care 7,686 1 % 1,961 (1) % 1,521 (3) % Baby, Feminine & Family Care 5,123 (3) % 1,338 (9) % 1,020 (9) % Corporate 160 N/A (412) N/A (161) N/A Total Company $ 22,208 1 % $ 5,421 (7) % $ 4,331 (7) % 22 The Procter & Gamble Company Six Months Ended December 31, 2025 Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago Beauty $ 8,182 6 % $ 2,124 3 % $ 1,643 1 % Grooming 3,611 4 % 1,117 2 % 881 — % Health Care 6,626 4 % 1,947 1 % 1,489 (1) % Fabric & Home Care 15,479 1 % 4,003 (2) % 3,100 (3) % Baby, Feminine & Family Care 10,294 (1) % 2,784 (2) % 2,125 (3) % Corporate 402 N/A (520) N/A (125) N/A Total Company $ 44,594 2 % $ 11,455 4 % $ 9,112 5 % Beauty Three months ended December 31, 2025, compared with three months ended December 31, 2024 Beauty net sales increased 5% to $4.0 billion as a 3% increase in unit volume, the positive impacts of pricing of 2% and favorable foreign exchange of 1% were partially offset by unfavorable geographic mix of 1%. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 4%. Global market share of the Beauty segment decreased 0.3 points. • Hair Care net sales increased mid-single digits. Positive impacts of an increase in unit volume, higher pricing (primarily in Latin America and Europe) and favorable foreign exchange were partially offset by unfavorable geographic mix. The volume increase was driven by growth in Latin America and Asia Pacific (both due to innovation), partially offset by a decline in North America (due to competitive activity). Organic sales also increased mid-single digits due to mid-teens growth in Latin America, high single-digit growth in Asia Pacific and mid-single-digit growth in Europe, partially offset by a mid-single-digit decline in North America. Global market share of the Hair Care category decreased 0.7 points. • Personal Care net sales increased mid-single digits. Positive impacts from an increase in unit volume, innovation-driven pricing (primarily in North America) and favorable foreign exchange were partially offset by negative impacts from unfavorable geographic mix. The volume increase was across all regions, led by growth in Europe, Greater China and North America (all due to innovation). Organic sales also increased mid-single digits led by high-teens growth in Europe, mid-single-digit growth in Greater China and low single-digit growth in North America. Global market share of the Personal Care category increased 0.4 points. • Skin Care net sales increased low single digits. Positive impacts from favorable product mix (due primarily to the increase of the super-premium SK-II brand, which has higher than category-average selling prices) and higher pricing (primarily in Greater China) were partially offset by a decrease in unit volume. The volume decrease was driven by Greater China (due to competitive activity). Organic sales also increased low single digits due to a mid-single-digit growth in Greater China, partially offset by a high single-digit decline in North America. Global market share of the Skin Care category decreased 0.7 points. Net earnings decreased 2% to $763 million as the increase in net sales was more than offset by a 140 basis-point decline in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and an increase in SG&A as a percentage of net sales. The gross margin decline of 50 basis points was driven by higher cost of tariffs, higher commodity costs and unfavorable geographic mix, partially offset by productivity savings. SG&A as a percentage of net sales increased due to an increase in marketing spending, partially offset by a decrease in overhead spending. Six months ended December 31, 2025, compared with six months ended December 31, 2024 Beauty net sales increased 6% to $8.2 billion, driven by a 4% increase in unit volume, the positive impacts of higher pricing of 2% and favorable foreign exchange of 1%, partially offset by unfavorable geographic mix of 1%. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 5%. Global market share of the Beauty segment decreased 0.4 points. • Hair Care net sales increased mid-single digits. Positive impacts of a unit volume increase, higher pricing (primarily in North America and Europe) and favorable foreign exchange were partially offset by unfavorable geographic mix. The increase in unit volume was driven by growth in Latin America and Europe (both due to innovation), partially offset by a decline in North America (due to competitive activity). Organic sales also increased mid-single digits due to low-teens growth in Latin America, high single-digit growth in Europe and mid-single-digit growth in Asia Pacific, partially offset by a low single-digit decline in North America. Global market share of the Hair Care category decreased 0.8 points. • Personal Care net sales increased high single digits. Positive impacts of an increase in unit volume, higher pricing (primarily in North America) and favorable foreign exchange were partially offset by unfavorable geographic mix. The volume increase was across all regions, led by growth in Greater China, North America and Europe (all due to innovation). Organic sales also increased high single digits led by mid-teens growth in Europe, high single-digit growth in Greater The Procter & Gamble Company 23 China and mid-single-digit growth in North America. Global market share of the Personal Care category increased 0.3 points. • Skin Care net sales increased low single digits. Positive impacts of favorable product mix (due primarily to the increase of the super-premium SK-II brand, which has higher than category-average selling prices) and higher pricing (primarily in Greater China) were partially offset by a unit volume decrease. The volume decrease was driven by Europe (due to distribution loss) and Greater China (due to competitive activity). Organic sales also increased low single digits due to a high single-digit growth in Greater China and a mid-single-digit growth in Asia Pacific, partially offset by a low single-digit decline in North America. Global market share of the Skin Care category decreased 0.7 points. Net earnings increased 1% to $1.6 billion due to an increase in net sales, partially offset by a 80 basis-point decline in net earnings margin. Net earnings margin decreased due to a decrease in gross margin. The gross margin decline of 70 basis-points was driven by higher cost of tariffs, unfavorable category mix and higher commodities, partially offset by increased productivity savings. SG&A as a percentage of net sales was unchanged as the increase in marketing spending was offset by a decrease in overhead spending. Grooming Three months ended December 31, 2025, compared with three months ended December 31, 2024 Grooming net sales increased 2% to $1.8 billion as innovation-driven pricing of 2% (primarily by North America and Europe) and favorable foreign exchange of 2% were partially offset by a unit volume decrease of 2%. The volume decrease was driven by North America (due to market contraction) and Asia Pacific (due to competitive activity). Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales were unchanged as a mid-single-digit growth in Europe was offset by a high single-digit decline in Asia Pacific and a mid-single-digit decline in North America. Global market share of the Grooming segment decreased 0.4 points. Net earnings decreased 9% to $417 million due to a 290 basis-point decrease in net earnings margin, partially offset by an increase in net sales. Net earnings margin decreased due to a decrease in gross margin and an increase in SG&A as a percentage of net sales. The gross margin decrease of 190 basis points was primarily driven by unfavorable product mix and higher cost of tariffs, partially offset by increased productivity savings and higher pricing. SG&A as a percentage of net sales increased due to an increase in marketing spending, partially offset by a decrease in overhead spending. Six months ended December 31, 2025, compared with six months ended December 31, 2024 Grooming net sales increased 4% to $3.6 billion as the benefits of higher pricing of 3% (driven by North America and Europe) and favorable foreign exchange of 2% were partially offset by unfavorable impacts of geographic mix of 1%. Unit volume was unchanged as growth in Latin America (due to increased distribution) was offset by a decline in North America (due to market contraction) and IMEA (due to competitive activity). Excluding the impact of acquisitions and divestitures and foreign exchange, Grooming organic sales increased 2% due to mid-single-digit growth in Europe and Latin America, partially offset by a low single-digit decline in North America. Global market share of the Grooming segment decreased 0.6 points. Net earnings were unchanged at $881 million due to an increase in net sales offset by a 110 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and an increase in the effective tax rate, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decline of 90 basis points was driven by unfavorable product mix and higher tariffs costs, partially offset by higher pricing and productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead spending, partially offset by an increase in marketing spending. The higher effective tax rate was driven by unfavorable geographic mix. Health Care Three months ended December 31, 2025, compared with three months ended December 31, 2024 Health Care net sales increased 5% to $3.4 billion as the benefits of favorable product mix of 2%, favorable foreign exchange impacts of 2% and higher pricing of 1% were partially offset by a 1% decrease in unit volume. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3%. Global market share of the Health Care segment increased 0.3 points. • Oral Care net sales increased mid-single digits driven by positive impacts of favorable product mix (due to growth of power brushes and premium paste, which have higher than category-average selling prices) and favorable foreign exchange, partially offset by lower pricing (due to investments in North America and Europe) and a unit volume decline. The unit volume decrease was driven by declines in Greater China (due to market contraction and competitive activity), partially offset by increases in Europe (due to innovation) and Latin America (due to distribution gains). Organic sales increased low single digits driven by a high single-digit increase in Europe and a low single-digit increase in North America, partially offset by a mid-teens decrease in Greater China. Global market share of the Oral Care category decreased 0.1 points. • Personal Health Care net sales increased mid-single digits driven by positive impacts of higher pricing (driven by North America) and favorable foreign exchange, partially offset by unfavorable product mix (due to the decline of respiratory 24 The Procter & Gamble Company products, which have higher than category-average selling prices). Unit volume was unchanged as an increase in IMEA and Europe (both due to innovation) was offset by a decrease in North America (due to lower average incidence of cough and cold). Organic sales increased low single digits driven by a high single-digit increase in Latin America, a mid-single-digit increase in Europe and a low single-digit increase in North America. Global market share of the Personal Health Care category increased 0.4 points. Net earnings increased 2% to $770 million due to an increase in net sales, partially offset by a 70 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and a higher effective tax rate, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 80 basis points was driven primarily by unfavorable geographic mix and higher cost of tariffs, partially offset by productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead spending, partially offset by an increase in marketing spending. The higher effective tax rate was driven by unfavorable geographic mix. Six months ended December 31, 2025, compared with six months ended December 31, 2024 Health Care net sales increased 4% to $6.6 billion driven by favorable product mix of 2%, favorable foreign exchange of 2% and higher pricing of 1%, partially offset by a 1% decrease in unit volume. Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 2%. Global market share of the Health Care segment increased 0.3 points. • Oral Care net sales increased low single digits due to the positive impacts of favorable product mix (due to growth of premium paste and power brushes, which have higher than category-average selling prices) and favorable foreign exchange, partially offset by a unit volume decrease and lower pricing (due to investments in North America and Europe). The unit volume decrease was due to a decline in Greater China (due to market contraction and competitive activity) and North America (due to competitive activity), partially offset by growth in Latin America (due to distribution gains). Organic sales also increased low single digits due to a mid-single-digit increase in Europe and a low single-digit increase in North America, partially offset by a double-digit decrease in Greater China. Global market share of the Oral Care category decreased 0.2 points. • Personal Health Care net sales increased mid-single digits due to the positive impacts of higher pricing (driven by North America and Latin America) and favorable foreign exchange, partially offset by a decrease in unit volume. The unit volume decrease was driven by a decline in North America (due to lower average incidence of cough and cold), partially offset by an increase in IMEA and Europe (both due to innovation). Organic sales increased low single digits due to a double-digit growth in Latin America and a mid-single-digit growth in Europe, partially offset by a low single-digit decline in North America. Global market share of the Personal Health Care category increased 0.4 points. Net earnings decreased 1% to $1.5 billion as the increase in net sales was more than offset by a 90 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 120 basis points was driven by unfavorable geographic mix and higher tariff costs, partially offset by higher pricing. SG&A as a percentage of net sales decreased primarily due to a reduction in overhead spending, partially offset by increased marketing spending. Fabric & Home Care Three months ended December 31, 2025, compared with three months ended December 31, 2024 Fabric & Home Care net sales increased 1% to $7.7 billion driven by favorable foreign exchange of 1% and higher pricing of 1%, partially offset by unfavorable product mix of 1%. Unit volume was unchanged. Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales were unchanged. Global market share of the Fabric & Home Care segment decreased 0.2 points. • Fabric Care net sales increased low single digits as positive impacts from favorable foreign exchange were partially offset by negative impacts from unfavorable product mix. Unit volume was unchanged as an increase in North America (due to innovation) and Latin America (due to market growth) was offset by a decrease in Europe (due to competitive activity). Organic sales were unchanged as the impact of a high single-digit increase in Latin America was offset by the impact of a low single-digit decline in Europe. Global market share of the Fabric Care category decreased 0.6 points. • Home Care net sales increased low single digits driven by the positive impacts of higher pricing (primarily in North America) and favorable foreign exchange, partially offset by a decrease in unit volume. The decrease in volume was due to a decline in North America (due to a shift in customer order timing for merchandising events), partially offset by an increase in Latin America (due to innovation). Organic sales also increased low single digits driven by a low single-digit increase in Europe, partially offset by a low single-digit decline in North America. Global market share of the Home Care category increased 0.3 points. Net earnings decreased 3% to $1.5 billion due to a 90 basis-point decrease in net earnings margin, partially offset by an increase in net sales. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 90 basis points was driven by unfavorable product mix and higher cost of The Procter & Gamble Company 25 tariffs, partially offset by productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead spending, partially offset by an increase in marketing spending. Six months ended December 31, 2025, compared with six months ended December 31, 2024 Fabric & Home Care net sales increased 1% to $15.5 billion as the benefits of favorable foreign exchange of 1% and higher pricing of 1% were partially offset by a unit volume decline of 1%. Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales were unchanged. Global market share of the Fabric & Home Care segment decreased 0.3 points. • Fabric Care net sales increased low single digits driven by a favorable foreign exchange impact, partially offset by a unit volume decline. The unit volume decline was driven by a decline in Europe (due to competitive activity), partially offset by an increase in Latin America (due to market growth) and North America (due to innovation). Organic sales decreased low single digits driven by a mid-single-digit decrease in Europe, partially offset by a low single-digit increase in North America. Global market share of the Fabric Care category decreased 0.7 points. • Home Care net sales increased low single digits driven by higher pricing (primarily in North America and Europe) and favorable foreign exchange, partially offset by a unit volume decrease. The decrease in volume was driven by declines in Europe (due to competitive activity) and North America (due to a shift in customer order timing for merchandising events). Organic sales also increased low single digits driven by low single-digit growth in Europe and North America, partially offset by a mid-single-digit decline in Asia Pacific. Global market share of the Home Care category increased 0.4 points. Net earnings decreased 3% to $3.1 billion due to a 90 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. The gross margin decrease of 100 basis points was driven by unfavorable product mix and higher tariff costs, partially offset by increased productivity savings. SG&A as a percentage of net sales decreased due to a decrease in overhead and marketing spending. Baby, Feminine & Family Care Three months ended December 31, 2025, compared with three months ended December 31, 2024 Baby, Feminine & Family Care net sales decreased 3% to $5.1 billion driven by a unit volume decline of 5%, partially offset by favorable foreign exchange of 1%. Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales decreased 4%. Global market share of the Baby, Feminine & Family Care segment decreased 0.3 points. • Baby Care net sales were unchanged as positive impacts of favorable foreign exchange and higher pricing (primarily in North America) were offset by a unit volume decline and unfavorable geographic mix. The unit volume decrease was driven by a decline in North America (due to competitive activity), partially offset by an increase in Europe (due to distribution gains) and Greater China (due to innovation). Organic sales decreased low single digits driven by a double-digit decline in North America, partially offset by a 20% increase in Greater China. Global market share of the Baby Care category increased 0.4 points. • Feminine Care net sales increased low single digits as the positive impacts of innovation-driven pricing (primarily in North America), favorable foreign exchange and premium product mix were partially offset by a unit volume decline. The unit volume decrease was driven by declines across all regions, led by North America (due to share losses) and Europe and IMEA (both due to competitive activity). Organic sales decreased low single digits led by a mid-single-digit decline in IMEA and a low single-digit decline in Europe. Global market share of the Feminine Care category decreased 0.2 points. • Net sales in Family Care, which is predominantly a North America business, decreased double digits driven by a unit volume decrease (due to strong consumption offtake and retail inventory build in the prior year) and lower pricing (due to merchandising investments). Organic sales also decreased double digits. North America market share of the Family Care category decreased 1.1 points. Net earnings decreased 9% to $1.0 billion due to a decrease in net sales and a 120 basis-point decrease in net earnings margin. Net earnings margin decreased due to a decrease in gross margin and an increase in SG&A as a percentage of net sales. The gross margin decrease of 70 basis points was primarily due to unfavorable category mix and higher cost of tariffs, partially offset by lower commodity costs and productivity savings. SG&A as a percentage of net sales increased primarily due to an increase in marketing spending. Six months ended December 31, 2025, compared with six months ended December 31, 2024 Baby, Feminine & Family Care net sales decreased 1% to $10.3 billion driven by a unit volume decline of 3%, partially offset by favorable foreign exchange of 1% and favorable category mix of 1%. Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales decreased 2%. Global market share of the Baby, Feminine & Family Care segment decreased 0.2 points. • Baby Care net sales increased low single digits driven by favorable foreign exchange, partially offset by a unit volume decline. The unit volume decline was driven by a decrease in North America (due to competitive activity), partially offset by an increase in Greater China (due to innovation) and Europe (due to distribution gains). Organic sales were unchanged as a 20% increase in Greater China and a low single-digit increase in Europe were offset by a mid-single-digit decline in North America. Global market share of the Baby Care category increased 0.4 points. 26 The Procter & Gamble Company • Feminine Care net sales increased low single digits. Positive impacts of favorable foreign exchange, higher pricing (primarily in North America) and favorable geographic mix were partially offset by a decrease in unit volume. The unit volume decrease was driven by declines across all regions, led by IMEA (due to competitive activity), North America (due to share losses) and Greater China (due to market contraction). Organic sales were unchanged as a low single-digit growth in North America was offset by a high single-digit decline in IMEA and a low single-digit decline in Europe. Global market share of the Feminine Care category decreased 0.1 points. • Net sales in Family Care, which is predominantly a North America business, decreased mid-single digits driven by a unit volume decrease (due to strong consumption offtake and retail inventory build in the prior year) and lower pricing (due to merchandising investments). Excluding the impact of foreign exchange, organic sales also decreased mid-single digits. North America market share of the Family Care category decreased 0.9 points. Net earnings decreased 3% to $2.1 billion due to a decrease in net sales and a 40 basis-point decline in net earnings margin. Net earnings margin decreased due to a decrease in gross margin, partially offset by a decrease in SG&A as a percentage of net sales. Gross margin decreased 30 basis points due to unfavorable category mix and higher tariff costs, partially offset by productivity savings and lower commodity costs. SG&A as a percentage of net sales decreased due a decrease in overhead spending, partially offset by an increase in marketing spending. Corporate Corporate includes certain operating and non-operating activities not allocated to specific business segments. These include but are not limited to incidental businesses managed at the corporate level, gains and losses related to certain divested brands or businesses, impacts from various financing and investing activities, certain impacts related to employee benefits, asset impairments and restructuring activities including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust the accounting policies used within the reportable segments to U.S. GAAP. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company effective tax rate. For the three months ended December 31, 2025, Corporate net sales increased $1 million to $160 million. Corporate net earnings decreased $137 million to a loss of $161 million for the quarter due primarily to incremental restructuring charges in the current year. For the six months ended December 31, 2025, Corporate net sales increased $80 million to $402 million. Corporate net earnings increased $606 million to a loss of $125 million due primarily to restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina, in the prior year period, partially offset by current year restructuring charges. LIQUIDITY & CAPITAL RESOURCES Operating Activities Operating cash flow was $10.4 billion fiscal year to date, an increase of $1.3 billion versus the prior year period. Net earnings, adjusted for non-cash items (depreciation and amortization, share-based compensation expense, deferred income taxes and (gain)/loss on sale of assets), generated $11.1 billion of operating cash flow. Working capital and other impacts consumed $753 million of cash in the period. Accounts receivable increased, consuming $92 million of cash. Days sales outstanding decreased by one day. Total inventories increased, consuming $255 million of cash, driven primarily by increased safety stock levels and new product initiatives. Days inventory on hand decreased by one day. Trade payables generated $239 million of cash, driven primarily by increased supply chain activity in line with the increase in inventory and increased marketing support activity. Other impacts consumed additional cash of $645 million primarily driven by the payment of the transitional tax related to the 2017 U.S. Tax Act and a reduction in postretirement benefit and compensation accruals, partially offset by current year income tax accruals in excess of estimated payments. Investing Activities Investing activities used $2.8 billion of cash fiscal year to date primarily driven by capital expenditures. Financing Activities Financing activities used $6.3 billion of net cash fiscal year to date, mainly due to dividends to shareholders and treasury stock purchases, partially offset by a net debt increase. As of December 31, 2025, our current liabilities exceeded current assets by $10.1 billion. We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations. We have strong short- and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in commercial paper and bond markets. In addition, we have agreements with a diverse group of financial institutions that, if needed, should provide sufficient funding to meet short-term financing requirements. MEASURES NOT DEFINED BY U.S. GAAP In accordance with the SEC's Regulation S-K Item 10(e), the following provides definitions of the non-GAAP measures and the reconciliation to the most closely related GAAP measure. We believe that these measures provide useful perspective on The Procter & Gamble Company 27 underlying business trends (i.e., trends excluding non-recurring or unusual items) and results and provide a supplemental measure of period-to-period results. The non-GAAP measures described below are used by management in making operating decisions, allocating financial resources and for business strategy purposes. These measures may be useful to investors, as they provide supplemental information about business performance and provide investors a view of our business results through the eyes of management. These measures are also used to evaluate senior management and are a factor in determining their at-risk compensation. These non-GAAP measures are not intended to be considered by the user in place of the related GAAP measures but rather as supplemental information to our business results. These non-GAAP measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted. Organic sales growth. Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions and divestitures and foreign exchange from year-over-year comparisons. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. This measure is used in assessing the achievement of management goals for at-risk compensation. The following tables provide a numerical reconciliation of net sales growth to organic sales growth: Three Months Ended December 31, 2025 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1) Organic Sales Growth Beauty 5 % (1) % — % 4 % Grooming 2 % (2) % — % — % Health Care 5 % (2) % — % 3 % Fabric & Home Care 1 % (1) % — % — % Baby, Feminine & Family Care (3) % (1) % — % (4) % Total Company 1 % (1) % — % — % (1) Acquisition & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures and rounding impacts necessary to reconcile net sales to organic sales. Six Months Ended December 31, 2025 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1) Organic Sales Growth Beauty 6 % (1) % — % 5 % Grooming 4 % (2) % — % 2 % Health Care 4 % (2) % — % 2 % Fabric & Home Care 1 % (1) % — % — % Baby, Feminine & Family Care (1) % (1) % — % (2) % Total Company 2 % (1) % — % 1 % (1) Acquisition & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures and rounding impacts necessary to reconcile net sales to organic sales. Adjusted free cash flow. Adjusted free cash flow is defined as operating cash flow less capital spending and excluding payments for the transitional tax resulting from the 2017 U.S. Tax Act. Adjusted free cash flow represents the cash that the Company is able to generate after taking into account planned maintenance and asset expansion. We view adjusted free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends, share repurchases, acquisitions and other discretionary investments. The following table provides a numerical reconciliation of adjusted free cash flow ($ millions): Six Months Ended December 31, 2025 Operating Cash Flow Capital Spending 2017 U.S. Tax Act Payments Adjusted Free Cash Flow $ 10,380 $ (2,367) $ 688 $ 8,701 Adjusted free cash flow productivity. Adjusted free cash flow productivity is defined as the ratio of adjusted free cash flow to net earnings. We view adjusted free cash flow productivity as a useful measure to help investors understand P&G’s ability to generate cash. Adjusted free cash flow productivity is used by management in making operating decisions, in allocating financial resources and for budget planning purposes. This measure is also used in assessing the achievement of management goals for at-risk compensation. 28 The Procter & Gamble Company The following table provides a numerical reconciliation of adjusted free cash flow productivity ($ millions): Six Months Ended December 31, 2025 Adjusted Free Cash Flow Net Earnings Adjusted Free Cash Flow Productivity $ 8,701 $ 9,112 95 % Core EPS. Core EPS is a measure of the Company's diluted EPS excluding items that are not judged by management to be part of the Company's sustainable results or trends. Management views this non-GAAP measure as a useful supplemental measure of Company performance over time. This measure is also used in assessing the achievement of management goals for at-risk compensation. The Core earnings measures included in the following reconciliation tables refer to the equivalent GAAP measures adjusted as applicable for the following items: • Incremental restructuring: The Company has historically had an ongoing level of restructuring activities of approximately $250 - $500 million before tax. On June 5, 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. In the fiscal year ended June 30, 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. During the period ended September 30, 2024, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina. The adjustment to Core earnings includes the restructuring charges that exceed the normal, recurring level of restructuring charges. We do not view the above items to be part of our sustainable results, and their exclusion from Core earnings measures provides a more comparable measure of year-on-year results. This item is also excluded when evaluating senior management in determining their at-risk compensation. THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures Three Months Ended December 31, 2025 Three Months Ended December 31, 2024 Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Core (Non-GAAP) As Reported (GAAP) (1) Cost of products sold $ 10,834 $ (152) $ 10,681 $ 10,418 Selling, general and administrative expense 6,008 (144) 5,864 5,723 Operating income 5,366 296 5,662 5,741 Other non-operating income/(expense), net 160 23 183 224 Income taxes 1,090 59 1,149 1,187 Net earnings 4,331 261 4,592 4,659 Less: Net earnings attributable to noncontrolling interests 12 15 27 29 Net earnings attributable to P&G 4,319 246 4,565 4,630 Core EPS Diluted net earnings per common share (2) $ 1.78 $ 0.10 $ 1.88 $ 1.88 (1) For the three months ended December 31, 2024, there were no adjustments to or reconciling items for Core EPS. (2) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. CHANGE VERSUS YEAR AGO Net earnings attributable to P&G (7) % Core net earnings attributable to P&G (1) % Diluted net earnings per common share (5) % Core EPS — % The Procter & Gamble Company 29 THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures Six Months Ended December 31, 2025 Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Core (Non-GAAP) Cost of products sold $ 21,721 $ (191) $ 21,529 Selling, general and administrative expense 11,651 (221) 11,430 Operating income 11,222 412 11,634 Other non-operating income/(expense), net 427 31 458 Income taxes 2,343 82 2,425 Net earnings 9,112 361 9,472 Less: Net earnings attributable to noncontrolling interests 42 15 57 Net earnings attributable to P&G 9,070 346 9,415 Core EPS Diluted net earnings per common share (1) $ 3.73 $ 0.14 $ 3.87 (1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. CHANGE VERSUS YEAR AGO Net earnings attributable to P&G 6 % Core net earnings attributable to P&G — % Diluted net earnings per common share 7 % Core EPS 2 % THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES Reconciliation of Non-GAAP Measures Six Months Ended December 31, 2024 Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Core (Non-GAAP) Cost of products sold $ 20,839 $ 20 $ 20,859 Selling, general and administrative expense 11,242 (25) 11,216 Operating income 11,538 5 11,543 Other non-operating income/(expense), net (330) 789 459 Income taxes 2,339 (7) 2,331 Net earnings attributable to P&G 8,589 801 9,391 Core EPS Diluted net earnings per common share (1) $ 3.49 $ 0.33 $ 3.81 (1) Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in the Company’s exposure to market risk since June 30, 2025. Additional information can be found in Note 9, Risk Management Activities and Fair Value Measurements, of the Company's Form 10-K for the fiscal year ended June 30, 2025.