WD 40 CO 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations As used in this report, the terms “we,” “our,” and “us” and “the Company” refer to WD-40 Company and its wholly-owned subsidiaries, unless the context suggests otherwise. Amounts and percentages in tables and discussions may not total due to rounding. The following information is provided as a supplement to, and should be read in conjunction with, the unaudited condensed consolidated financial statements and notes thereto included in Part I—Item 1 of this Quarterly Report and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the Securities and Exchange Commission (“SEC”) on October 21, 2024. Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. This report contains forward-looking statements, which reflect our current views with respect to future events and financial performance. These forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “project,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions. These forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: expected benefits from any acquisition or divestiture transaction; acquired business not performing as expected; assuming unexpected risks, liabilities and obligations of the acquired business; disruption to the parties’ business as a result of the announcement and acquisition or divestiture transaction; integration of acquired business and operations into the Company; the Company's ability to successfully complete any planned divestiture; expected timing of the closing for the divestiture; expected proceeds from the divestiture; the intended use of proceeds by the Company from the divestiture transaction; impact of the divestiture transaction on the Company's stock price or EPS; growth expectations for maintenance products; expected levels of promotional and advertising spending; anticipated input costs for manufacturing and the costs associated with distribution of our products; plans for and success of product innovation, the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; expected tax rates and the impact of tax legislation and regulatory action; changes in the political conditions or relations between the United States and other nations; changes in trade policies and tariffs; the impacts from inflationary trends, supply chain constraints and supply chain disruptions; changes in interest rates; and forecasted foreign currency exchange rates and commodity prices. We undertake no obligation to revise or update any forward-looking statements. Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I—Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, and in Part II—Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q. Overview The Company WD-40 Company based in San Diego, California, is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world. We own a wide range of well-known brands that include maintenance products and homecare and cleaning products: WD-40® Multi-Use Product, WD-40 Specialist®, 3-IN-ONE®, GT85®, X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®, 1001®, Lava® and Solvol®. Our products are sold in various locations around the world. Maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, India, the Middle East and Africa. Homecare and cleaning products are sold primarily in North America, the United Kingdom (“U.K.”) and Australia. We sell our products primarily through hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, warehouse club stores, farm supply, sport retailers, and independent bike dealers. During the first quarter of fiscal year 2025, we reclassified certain assets of our homecare and cleaning product businesses in the Americas and EIMEA segments to held for sale. 22 Table of Contents Highlights The following summarizes the financial and operational highlights for our business during the nine months ended May 31, 2025: • Consolidated net sales increased $21.9 million or 5%, to $456.5 million compared to the corresponding period of the prior fiscal year. Increases in sales volume favorably impacted net sales by approximately $21.5 million from period to period. Increases in the average selling price of our products positively impacted net sales by approximately $5.4 million from period to period. Changes to net sales attributable to volumes and average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. Consolidated net sales was unfavorably impacted by changes in foreign currency exchange rates, which impact was estimated to be $5.0 million from period to period. • Gross profit as a percentage of net sales increased to 55.2% from 53.1% in the corresponding period of the prior fiscal year. • Consolidated net income increased $16.9 million, or 32%, compared to the corresponding period of the prior fiscal year. During the second quarter of fiscal year 2025, we released an uncertain tax position that generated a favorable income tax adjustment of $11.9 million. Excluding this one-time benefit, net income would have increased $5.0 million, or 9%. • Diluted earnings per common share were $5.13 versus $3.88 in the prior fiscal year period. As noted above, during the second quarter of fiscal year 2025, we released an uncertain tax position that generated a favorable income tax adjustment. Excluding this one-time benefit, on a non-GAAP basis, adjusted diluted EPS was $4.26. • During the first quarter of fiscal year 2025, we reclassified certain assets our homecare and cleaning product businesses in the Americas and EIMEA segments to held for sale. • During the nine months ended May 31, 2025, we returned approximately $47.2 million to our stockholders through share repurchases and dividends. Global Economic Conditions We continue to monitor changes in international trade relations and trade policy, including those related to tariffs, which could adversely impact our results. We utilize third-party manufacturers and distribution centers that are primarily in regions near our customers and end users, which mitigates the potential unfavorable impacts of new tariffs on purchases of our inventory and shipments to our customers. However, certain inputs sourced by our third-party manufacturers to produce our inventory may increase in cost and unfavorably impact our results. In addition, any supply chain constraints, inflationary impacts or weakening in consumer demand as a result of changes to global economic conditions could impact our results. See our risk factors disclosed in Part I―Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the SEC on October 21, 2024 for further information on risks related to global economic conditions and uncertainty of trade relations and tariffs affecting trade between the U.S. and other countries. 23 Table of Contents Results of Operations Three and Nine Months Ended May 31, 2025 Compared to Three and Nine Months Ended May 31, 2024 Operating Items The following table summarizes operating data for our consolidated operations (in thousands, except percentages and per share amounts): Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent Net sales: WD-40 Multi-Use Product $ 120,687 $ 119,053 $ 1,634 1 % $ 352,926 $ 333,964 $ 18,962 6 % WD-40 Specialist 22,028 20,224 1,804 9 % 59,762 53,883 5,879 11 % Other maintenance products 7,687 7,885 (198) (3) % 22,538 22,699 (161) (1) % Total maintenance products 150,402 147,162 3,240 2 % 435,226 410,546 24,680 6 % HCCP (1) 6,513 7,883 (1,370) (17) % 21,288 24,020 (2,732) (11) % Total net sales 156,915 155,045 1,870 1 % 456,514 434,566 21,948 5 % Cost of products sold 68,804 72,657 (3,853) (5) % 204,600 203,684 916 — % Gross profit 88,111 82,388 5,723 7 % 251,914 230,882 21,032 9 % Operating expenses 60,746 55,212 5,534 10 % 176,147 158,581 17,566 11 % Income from operations $ 27,365 $ 27,176 $ 189 1 % $ 75,767 $ 72,301 $ 3,466 5 % Net income $ 20,977 $ 19,842 $ 1,135 6 % $ 69,753 $ 52,860 $ 16,893 32 % EPS – diluted $ 1.54 $ 1.46 $ 0.08 5 % $ 5.13 $ 3.88 $ 1.25 32 % Shares used in diluted EPS 13,567 13,577 (10) — % 13,570 13,581 (11) — % (1) Homecare and cleaning products (“HCCP”) Net Sales by Segment The following table summarizes net sales by segment (in thousands, except percentages): Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent Americas $ 78,162 $ 75,103 $ 3,059 4 % $ 213,127 $ 202,685 $ 10,442 5 % EIMEA 56,705 59,399 (2,694) (5) % 173,763 162,466 11,297 7 % Asia-Pacific 22,048 20,543 1,505 7 % 69,624 69,415 209 — % Total $ 156,915 $ 155,045 $ 1,870 1 % $ 456,514 $ 434,566 $ 21,948 5 % 24 Table of Contents Americas Sales The following table summarizes net sales by product line for the Americas segment, which includes the U.S., Canada and Latin America (in thousands, except percentages): Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 61,225 $ 58,559 $ 2,666 5 % $ 165,184 $ 156,113 $ 9,071 6 % WD-40 Specialist 9,400 9,034 366 4 % 25,353 23,232 2,121 9 % Other maintenance products 4,372 4,333 39 1 % 12,238 12,462 (224) (2) % Total maintenance products 74,997 71,926 3,071 4 % 202,775 191,807 10,968 6 % HCCP 3,165 3,177 (12) — % 10,352 10,878 (526) (5) % Total net sales $ 78,162 $ 75,103 $ 3,059 4 % $ 213,127 $ 202,685 $ 10,442 5 % % of consolidated net sales 50 % 49 % 47 % 47 % The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Americas segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Year to Date Increase in average selling price (1) $ 0.2 $ 0.3 $ 2.4 $ 2.9 Increase in sales volume (1) 6.3 3.1 2.4 11.8 Currency impact on current period (1.1) (1.4) (1.8) (4.3) Increase in net sales $ 5.4 $ 2.0 $ 3.0 $ 10.4 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. Americas Sales – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Net sales in the Americas segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $2.7 million, or 5%, primarily due to the increase in U.S. of $3.0 million. U.S. sales increased primarily due to higher sales volume due to higher level of promotional activities and timing of customer orders from certain mass retailers and online retailers. Sales in Latin America remained relatively constant from period to period. Latin America distributor markets decreased in sales volume from period to period due to a lower level of promotional activities and timing of customer orders, which were offset by an increase in sales volume in Brazil. • WD-40 Specialist sales increased $0.4 million, or 4%, primarily due to increased distribution in the United States. • Other maintenance product and homecare and cleaning product sales remained relatively constant from period to period. • For the three months ended May 31, 2025, 73% of sales came from the U.S., and 27% of sales came from Canada and Latin America combined compared to the three months ended May 31, 2024 when 72% of sales came from the U.S., and 28% of sales came from Canada and Latin America. 25 Table of Contents Americas Sales – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Net sales in the Americas segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $9.1 million, or 6%, primarily due to increases in Latin America and U.S. of $6.9 million and $2.7 million, respectively. Sales in Brazil increased $7.0 million primarily due to operating under a direct model for the nine months ended May 31, 2025. Early in the third quarter of fiscal year 2024, we acquired a Brazilian distributor and shifted from an indirect distribution model to a direct model. In addition, sales in other Latin American markets increased $0.9 million due to improved economic conditions in certain regions as well as a higher level of promotional activities. Sales in U.S. increased primarily due to increased sales volumes due to a higher level of promotional programs. These increases in Latin America and U.S. were partially offset by lower sales in Mexico of $2.1 million primarily due to unfavorable changes in foreign currency exchange rates. • WD-40 Specialist sales increased $2.1 million , or 9% , primarily due to new distribution and increased demand in the United States. • Other maintenance product sales remained relatively constant from period to period. • Homecare and cleaning product sales decreased $0.5 million, or 5%, primarily due to changes in distribution as well as reduced demand in the U.S. as a result of a lower level of advertising and promotional activities associated with these brands, as we focus on increasing sales of maintenance products in support of our four-by-four strategic framework. • For the nine months ended May 31, 2025, 72% of sales came from the U.S., and 28% of sales came from Canada and Latin America combined compared to the nine months ended May 31, 2024 when 74% of sales came from the U.S., and 26% of sales came from Canada and Latin America. 26 Table of Contents EIMEA Sales The following table summarizes net sales by product line for the EIMEA segment, which includes Europe, India, the Middle East and Africa (in thousands, except percentages): Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent WD-40 Multi-Use Product $ 42,804 $ 45,402 $ (2,598) (6) % $ 134,076 $ 124,018 $ 10,058 8 % WD-40 Specialist 9,671 8,407 1,264 15 % 25,912 22,598 3,314 15 % Other maintenance products 3,125 3,317 (192) (6) % 9,573 9,388 185 2 % Total maintenance products 55,600 57,126 (1,526) (3) % 169,561 156,004 13,557 9 % HCCP 1,105 2,273 (1,168) (51) % 4,202 6,462 (2,260) (35) % Total net sales $ 56,705 $ 59,399 $ (2,694) (5) % $ 173,763 $ 162,466 $ 11,297 7 % % of consolidated net sales 36 % 38 % 38 % 37 % The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the EIMEA segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Year to Date Increase in average selling price (1) $ 0.5 $ 0.9 $ 1.7 $ 3.1 Increase (decrease) in sales volume (1) 6.2 7.4 (4.8) 8.8 Currency impact on current period 2.0 (3.0) 0.4 (0.6) Increase (decrease) in net sales $ 8.7 $ 5.3 $ (2.7) $ 11.3 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. The countries and regions in Europe where we sell through a direct sales force include the U.K., Italy, France, Iberia (which includes Spain and Portugal), DACH (which includes Germany, Austria and Switzerland) and Benelux (which includes Belgium, the Netherlands and Luxembourg). The regions in the EIMEA segment where we sell through local distributors include the Middle East, Africa, India, Eastern and Northern Europe. EIMEA Sales – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Net sales decreased in the EIMEA segment from period to period, primarily due to the following: • WD-40 Multi-Use Product sales decreased $2.6 million, or 6%, primarily due to a decrease in sales volume to our marketing distributor customers which unfavorably impacted sales by $3.9 million, primarily in the Middle East region. This decrease was due to lower demand as a result of weaker economic conditions in certain regions as well as timing of customer orders. This decrease was partially offset by increases in some of our direct markets, including the U.K. and France, which increased $0.5 million and $0.4 million, respectively, due to increased sales volume. • WD-40 Specialist sales increased $1.3 million, or 15%, primarily due to higher sales volume as a result of increased promotional activity for our WD-40 Bike line in the DACH region, as well as stronger levels of demand in France and other direct markets. • Other maintenance product sales remained relatively constant from period to period. 27 Table of Contents • Homecare and cleaning product sales decreased $1.2 million, or 51%, primarily due to reduced demand in the U.K. as a result of a lower level of advertising and promotional activities associated with these brands, as we focus on increasing sales of maintenance products in support of our four-by-four strategic framework. EIMEA Sales – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Net sales increased in the EIMEA segment from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $10.1 million, or 8%, primarily due to higher sales volume across nearly all regions. Sales in direct markets increased significantly in France, Iberia, Benelux, and Italy which were up $2.2 million, $1.6 million, $1.4 million, and $1.3 million, respectively. Sales to our marketing distributors in various regions, increased $2.2 million, most predominately in India, primarily due to increased distribution, higher levels of demand and timing of customer orders. Most regions in EIMEA have experienced continued increases in sales volumes after a temporary reduction in demand from price increases we implemented during fiscal year 2023. While most of this volume recovery was experienced in fiscal year 2024 after customers adjusted to those price increases, this volume recovery has continued into fiscal year 2025 and has resulted in higher sales levels from period to period. • WD-40 Specialist and other maintenance product sales increased $3.3 million, or 15%, primarily due to the increased demand and new distribution associated with premiumization efforts in support of our strategic framework. Other contributing factors include increased promotional activities discussed in the section for the three months ended May 31, 2025. • Homecare and cleaning product sales decreased $2.3 million, or 35%, primarily due to reduced demand in the U.K. as a result of a lower level of advertising and promotional activities associated with these brands, as discussed above in the section for the three months ended May 31, 2025. 28 Table of Contents Asia-Pacific Sales The following table summarizes net sales by product line for the Asia-Pacific segment, which includes Australia, China and other countries in the Asia region (in thousands, except percentages): Three Months Ended May 31, Nine Months Ended May 31, Change from Prior Year Change from Prior Year 2025 2024 Dollars Percent 2025 2024 Dollars Percent WD-40 Multi-Use Product $ 16,658 $ 15,092 $ 1,566 10 % $ 53,666 $ 53,833 $ (167) — % WD-40 Specialist 2,957 $ 2,783 $ 174 6 % 8,497 8,053 444 6 % Other maintenance products 190 $ 235 $ (45) (19) % 727 849 (122) (14) % Total maintenance products 19,805 $ 18,110 $ 1,695 9 % 62,890 62,735 155 — % HCCP 2,243 2,433 (190) (8) % 6,734 6,680 54 1 % Total net sales $ 22,048 $ 20,543 $ 1,505 7 % $ 69,624 $ 69,415 $ 209 — % % of consolidated net sales 14 % 13 % 15 % 16 % The following table summarizes management’s estimates of effects on net sales of changes in price, volume and foreign currency exchange rate impacts for the Asia-Pacific segment (in millions): Change from Prior Year First Quarter Second Quarter Third Quarter Year to Date Increase (decrease) in average selling price (1) $ 0.5 $ (1.1) $ — $ (0.6) (Decrease) increase in sales volume (1) (2.1) 1.3 1.7 0.9 Currency impact on current period 0.6 (0.5) (0.2) (0.1) (Decrease) increase in net sales $ (1.0) $ (0.3) $ 1.5 $ 0.2 (1) Management’s estimates of changes in net sales attributable to volumes and the average selling price of our products are impacted by differences in sales mix related to products, markets and distribution channels from period to period. Asia-Pacific Sales – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Net sales in the Asia-Pacific segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales increased $1.6 million, or 10%, primarily due to increases in China and our Asia distributor markets of $0.9 million and $0.6 million, respectively. Sales in China increased due to increased sales volume from successful promotional programs and marketing activities as well as increased distribution. Sales in our Asia Distributor markets increased due to successful promotional programs and increased demand, particularly in Indonesia and Taiwan. • WD-40 Specialist and other maintenance product sales remained relatively constant from period to period. • Homecare and cleaning product sales decreased $0.2 million, or 8%, from period to period primarily due to lower sales due to a lower level of promotional activity. Asia-Pacific Sales – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Net sales in the Asia-Pacific segment increased from period to period, highlighted by the following: • WD-40 Multi-Use Product sales remained relatively constant due to sales decreases in Asia distributor markets of $2.6 million mostly offset by sales increases in China and Australia of $2.1 million and $0.3 million, respectively. 29 Table of Contents Asia distributor markets experienced a decrease in sales volume primarily due to market disruption driven by the strengthening of the U.S. Dollar during the first half of fiscal year 2025, as well as weaker economic conditions in certain regions. In addition, sales volumes decreased due to timing of customer orders placed by certain of our distributors, particularly in the Philippines. Sales in China and Australia increased due to higher sales volume from successful promotional programs and marketing activities. • WD-40 Specialist sales increased $0.4 million, or 6%, primarily due to increased sales volume due to successful promotional programs and marketing activities in China. • Other maintenance and homecare and cleaning product sales remained relatively constant from period to period. Our homecare and cleaning businesses in the Asia-Pacific segment are not held for sale. Gross Profit The following general information is important when assessing fluctuations in our gross margin: • There is often a delay before changes in costs of raw materials, such as specialty chemicals used in the formulation of our products, impact cost of products sold due to production and inventory life cycles. Such delays increase with higher production and inventory levels. • In general, the timing of advertising, promotional and other discounts may cause fluctuations in gross margin from period to period. Advertising, promotional and other discounts that are given to our customers are recorded as a reduction to sales, whereas advertising and sales promotional costs associated with promotional activities that we pay to third parties are recorded as advertising and sales promotion expenses. • In the EIMEA segment, the cost of our products sold are generated in the Pound Sterling and Euro. The strengthening or weakening of the Pound Sterling and Euro against U.S. Dollar may result in foreign currency related changes to the gross margin percentage in the EIMEA segment from period to period. • Our gross profit and gross margin may not be comparable to those of other consumer product companies, since some of these companies include all costs related to distribution of their products in cost of products sold, whereas we exclude the portion associated with amounts paid to third parties for shipment to our customers from our distribution centers and contract manufacturers and include these costs in selling, general and administrative expenses. These costs totaled $4.6 million, or 2.9% of net sales for both the three months ended May 31, 2025 and 2024, respectively, and $13.5 million and $12.6 million, or 3.0% and 2.9% of net sales for the nine months ended May 31, 2025 and 2024, respectively. The following table summarizes gross margin and gross profit (in thousands, except percentages): Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Gross profit $ 88,111 $ 82,388 $ 5,723 $ 251,914 $ 230,882 $ 21,032 Gross margin 56.2 % 53.1 % 310 bps (1) 55.2 % 53.1 % 210 bps (1) (1) Basis points (“bps”) change in gross margin. Gross Margin – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Gross margin increased 310 bps primarily due to the following favorable impacts: Favorable Explanations 110 bps Increases in average selling prices 80 bps Lower costs of specialty chemicals used in the formulation of our products 60 bps Lower costs of aerosol cans During the first quarter of fiscal year 2025, we reclassified certain assets of our homecare and cleaning product businesses in the Americas and EIMEA segments to held for sale. Gross margin excluding these products would have been 0.5% higher during the three months ended May 31, 2025. 30 Table of Contents Gross Margin – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Gross margin increased 210 bps primarily due to the following favorable impacts: Favorable Explanations 70 bps Lower costs of aerosol cans 70 bps Lower costs of specialty chemicals used in the formulation of our products 50 bps Favorable sales mix and other miscellaneous mix impacts Gross margin excluding assets held for sale would have been 0.6% higher during the nine months ended May 31, 2025. Selling, General and Administrative (“SG&A”) Expenses Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year (in thousands) Dollars Percent Dollars Percent SG&A expenses $ 51,541 $ 45,564 $ 5,977 13 % $ 151,054 $ 134,722 $ 16,332 12 % % of net sales 32.8 % 29.4 % 33.1 % 31.0 % SG&A Expenses – Three Months Ended – May 31, 2025 Compared to May 31, 2024 The increase in SG&A expenses was primarily due to increases in employee-related costs of $5.8 million due to higher accrued incentive compensation, annual compensation increases, higher stock-based compensation expense and higher headcount. These higher employee-related costs include additional headcount to support various sales growth initiatives identified within our strategic framework, as well as headcount related to the enhancement of our information systems. SG&A Expenses – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 The increase in SG&A expenses was primarily due to increases in employee-related costs of $11.5 million due to higher accrued incentive compensation, annual compensation increases, higher stock-based compensation expense and higher headcount. These higher employee-related costs include additional headcount to support various sales growth initiatives identified within our strategic framework and headcount related to the enhancement of our information systems. Professional services fees increased SG&A by $1.2 million primarily due to increases in the EIMEA segment in support of various strategic initiatives. Freight expense increased $0.9 million primarily in the Americas and EIMEA segments, due to higher sales volumes that resulted in higher outbound freight costs. Credit loss adjustments increased in the U.S. by $0.6 million and travel and meeting expenses increased $0.6 million as a result of additional travel related to geographic expansion and other initiatives aligned with our strategic framework. Amortization costs associated with cloud computing implementation also increased SG&A by $0.6 million from period to period. We continued our research and development investment, the majority of which is associated with our maintenance products, including efforts focused on sustainability as well as our focus on innovation and renovation of our products. Research and development costs were $2.5 million and $2.2 million for the three months ended May 31, 2025 and 2024, respectively, and $6.3 million and $5.8 million for the nine months ended May 31, 2025 and 2024, respectively. The increase from period to period was partially due to a higher level of research and development activity associated with our sustainability initiatives. Our research and development team engages in consumer research, environmental and sustainability initiatives, product development, product improvements and testing activities. This team leverages its development capabilities by collaborating with a network of outside resources including our current and prospective third-party contract manufacturers. The level and types of expenses incurred within research and development can vary from period to period depending upon the types of activities being performed. 31 Table of Contents Advertising and Sales Promotion (“A&P”) Expenses Three Months Ended May 31, Nine Months Ended May 31, Change from Prior Year Change from Prior Year (in thousands) 2025 2024 Dollars Percent 2025 2024 Dollars Percent A&P expenses $ 9,160 $ 9,345 $ (185) (2) % $ 24,957 $ 23,053 $ 1,904 8 % % of net sales 5.8 % 6.0 % 5.5 % 5.3 % A&P Expenses – Three M onths Ended – May 31, 2025 Compared to May 31, 2024 A&P expenses remained relatively constant from period to period. As a percentage of net sales, A&P expenses may fluctuate period to period based upon the type of marketing activities we employ and the period in which the costs are incurred. Total promotional costs recorded as a reduction to sales were $8.6 million and $7.7 million for the three months ended May 31, 2025 and 2024, respectively. Therefore, our total expenditures on A&P activities were $17.7 million and $17.0 million for the three months ended May 31, 2025 and 2024, respectively. A&P Expenses – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 The increase in A&P expenses was primarily due to a higher level of promotional programs and marketing support, particularly in the Americas and EIMEA segments. Although A&P expenses increased from period to period, A&P expenses as a percentage of net sales remained relatively constant. Total promotional costs recorded as a reduction to sales were $25.1 million and $23.1 million, for the nine months ended May 31, 2025 and 2024, respectively. Therefore, our total expenditure on A&P activities was $50.1 million and $46.1 million for the nine months ended May 31, 2025 and 2024, respectively. Income from Operations by Segment The following table summarizes income from operations by segment (in thousands, except percentages): Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change from Prior Year 2025 2024 Change from Prior Year Dollars Percent Dollars Percent Americas $ 20,483 $ 18,382 $ 2,101 11 % $ 46,345 $ 45,798 $ 547 1 % EIMEA 12,028 13,705 (1,677) (12) % 40,982 35,307 5,675 16 % Asia-Pacific 7,087 6,750 337 5 % 24,616 25,264 (648) (3) % Unallocated corporate (1) (12,233) (11,661) (572) (5) % (36,176) (34,068) (2,108) (6) % Total $ 27,365 $ 27,176 $ 189 1 % $ 75,767 $ 72,301 $ 3,466 5 % (1) Unallocated corporate expenses are general corporate overhead expenses not directly attributable to any one of the business segments. These expenses are reported separate from our identified segments and are included in Selling, General and Administrative expenses on our consolidated statements of operations. Americas Americas Operating Income – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Income from operations for the Americas increased to $20.5 million, up $2.1 million, or 11.0%, primarily due to a $3.1 million increase in sales and a higher gross margin, which was partially offset by higher operating expenses. Gross margin for the Americas segment increased from 50.6% to 54.2%, primarily due a lower level of discounts that we gave to our customers, as well as decreases in the costs of petroleum-based specialty chemicals, and the favorable impact of increases in average selling price. Operating expenses increased $2.3 million primarily due to higher employee-related costs as a result of increased headcount, annual compensation increases and increased stock-based compensation expense from period to period. Operating income as a percentage of net sales increased from 24.5% to 26.2% period over period. 32 Table of Contents Americas Operating Income – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Income from operations for the Americas increased to $46.3 million, up $0.5 million, or 1%, primarily due to a increase in sales of $10.4 million and a higher gross margin partially offset by higher operating expenses. Gross margin for the Americas segment increased from 50.2% to 51.7%, primarily due to decreases in the costs of petroleum-based specialty chemicals, the favorable impact of increases in average selling price and a lower level of discounts that we gave to our customers. These favorable impacts were partially offset by higher warehousing, distribution and freight costs increases as well as increases to miscellaneous other input costs. Operating expenses increased $7.8 million primarily due to higher employee-related costs as a result of increased headcount, higher accrued incentive compensation and annual compensation increases. In addition, operating expenses increased due to a higher level of A&P expenses, higher outbound freight costs primarily due to increased sales and an increase in provision for credit losses from period to period. Operating income as a percentage of net sales decreased from 22.6% to 21.7% period over period. EIMEA EIMEA Operating Income – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Income from operations for the EIMEA segment decreased to $12.0 million, down $1.7 million, or 12%, primarily due to due to higher operating expenses and decreased sales partially offset by higher gross margin. Operating expenses increased $1.9 million primarily due to higher employee-related costs as a result of higher accrued incentive compensation, annual compensation increases and increased headcount. In addition, operating expenses increased due to a higher level of professional service costs and travel and meeting expenses in support of our strategic framework. Gross margin for the EIMEA segment increased from 54.8% to 57.7% primarily due to the favorable impact of price increases as well as favorable changes in sales mix and market mix from period to period, and decreases to miscellaneous other input costs. Operating income as a percentage of net sales decreased from 23.1% to 21.2% period over period. EIMEA Operating Income – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Income from operations for the EIMEA segment increased to $41.0 million, up $5.7 million, or 16%, primarily due to a $11.3 million increase in sales and a higher gross margin, which was partially offset by higher operating expenses. Gross margin for the EIMEA segment increased from 54.4% to 57.9% primarily due to the favorable impact of price increases as well as decreases to miscellaneous other input costs, and decreases in the costs of aerosol cans. Operating expenses increased $6.5 million primarily due to the factors as discussed above in the section for the three months ended May 31, 2025, as well as a higher level of A&P expenses from period to period. Operating income as a percentage of net sales increased from 21.7% to 23.6% period over period. Asia-Pacific Asia-Pacific Operating Income – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Income from operations for the Asia-Pacific segment increased to $7.1 million, up $0.3 million, or 5%, primarily due to a $1.5 million increase in sales and a higher gross margin, partially offset by higher operating expenses. Gross margin for the Asia-Pacific segment increased from 57.6% to 59.0%, primarily due to a lower level of discounts that we gave to our customers partially offset by the unfavorable changes in sales mix and market mix from period to period. Operating expenses increased $0.8 million due to higher employee-related costs as a result of annual compensation increases as well as higher A&P expenses from period to period. Operating income as a percentage of net sales decreased slightly from 32.9% to 32.1%. Asia-Pacific Operating Income – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Income from operations for the Asia-Pacific segment decreased to $24.6 million, down $0.6 million, or 3%, due to higher operating expenses partially offset by increased sales and a higher gross margin, which increased slightly from 58.5% to 59.0%. Operating expenses increased $1.2 million primarily due to the factors as discussed above in the section for the three months ended May 31, 2025. Operating income as a percentage of net sales decreased from 36.4% to 35.4% period over period. 33 Table of Contents Unallocated Corporate Unallocated Corporate Expenses – Three Months Ended – May 31, 2025 Compared to May 31, 2024 Unallocated corporate expenses increased to $12.2 million, up $0.6 million, or 5%, as a result of higher accrued incentive compensation expense from period to period. Unallocated Corporate Expenses – Nine Months Ended – May 31, 2025 Compared to May 31, 2024 Unallocated corporate expenses increased to $36.2 million, up $2.1 million, or 6%, as a result higher accrued incentive compensation costs as well as amortization costs associated with the implementation of the ERP system in the U.S. Non-Operating Items The following table summarizes non-operating income and expenses for our consolidated operations (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 Change 2025 2024 Change Interest income $ 104 $ 136 $ (32) $ 358 $ 276 $ 82 Interest expense $ 887 $ 1,182 $ (295) $ 2,781 $ 3,336 $ (555) Other income (expense), net $ 880 $ (283) $ 1,163 $ 813 $ (516) $ 1,329 Provision for income taxes $ 6,485 $ 6,005 $ 480 $ 4,404 $ 15,865 $ (11,461) Interest Income Interest income remained relatively consistent for both the three and nine months ended May 31, 2025 and 2024. Interest Expense Interest expense decreased by $0.3 million for the $0.6 million for the three months ended May 31, 2025 and 2024, respectively, primarily due to lower aggregate outstanding balances on our revolving credit agreement from period to period. Other Income (Expense), Net Other income (expense), net changed favorably by $1.2 million and $1.3 million for the three and nine months ended May 31, 2025 and 2024, respectively, primarily due to foreign currency exchange gains which were recorded for the three and nine months ended May 31, 2025 compared to net foreign currency exchange losses which were recorded in the same period of the prior fiscal year as a result of fluctuations in the foreign currency exchange rates for both the Euro and the U.S. Dollar against the Pound Sterling. Provision for Income Taxes The provision for income taxes was 23.6% and 23.2% of income before income taxes for the three months ended May 31, 2025 and 2024, respectively. Descriptions of impacts on our effective income tax rate are incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 13 — Income Taxes included in this report. The provision for income taxes was 5.9% and 23.1% of income before income taxes for the nine months ended May 31, 2025 and 2024, respectively. Descriptions of impacts on our effective income tax rate are incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 13 — Income Taxes included in this report. Net Income Net income increased 6% to $21.0 million, or $1.54 per common share on a fully diluted basis, for the three months ended May 31, 2025 compared to $19.8 million, or $1.46 per common share on a fully diluted basis, for the three months ended May 31, 2024. Net income increased 32% to $69.8 million, or $5.13 per common share on a fully diluted basis, for the nine months ended May 31, 2025 compared to $52.9 million, or $3.88 per common share on a fully diluted basis, for the corresponding period of the prior fiscal year. During the second quarter of fiscal year 2025, we released an uncertain tax position that generated a 34 Table of Contents favorable income tax adjustment of $11.9 million. Excluding this one-time benefit, net income would have increased $5.0 million, or 9%. Performance Measures and Non-GAAP Reconciliations In managing our business operations and assessing our financial performance, we supplement the information provided by our financial statements with certain non-GAAP performance measures. These performance measures are part of our current 55/30/25 business model, which includes gross margin, cost of doing business, and “Adjusted EBITDA” (defined below), the latter two of which are non-GAAP performance measures. Cost of doing business is defined as total operating expenses less amortization of definite-lived intangible assets, impairment charges related to intangible assets, amortization of implementation costs associated with cloud computing arrangements (“cloud computing amortization”) and depreciation in operating departments. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation, amortization of definite-lived intangible assets, and cloud computing amortization. We placed a new cloud-based enterprise resource planning system into service in the U.S., which we began to amortize in the second quarter of fiscal year 2024. We target our gross margin to be 55% of net sales, our cost of doing business to be 30% of net sales, and our Adjusted EBITDA to be 25% of net sales. Results for these performance measures may vary from period to period depending on various factors, including economic conditions such as the inflationary environment we have experienced in the last several fiscal years, and our level of investment in activities for the future such as those related to quality assurance, regulatory compliance, information technology, sustainability, and intellectual property protection in order to safeguard our WD-40 brand. Our targets for gross margin, cost of doing business and Adjusted EBITDA are long-term in nature. We expect to make progress towards our cost of doing business and Adjusted EBITDA targets over time. Progression towards our cost of doing business and Adjusted EBITDA measures may be challenging if the anticipated divestiture of certain of our homecare and cleaning product businesses occurs, due to the low level of operating expenses associated with these businesses. Despite these potential challenges, we intend to focus our resources and proceeds from the anticipated sale of those brands on growing our higher growth and higher gross margin core business. The following table summarizes the results of these performance measures: Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 2025 2024 Gross margin – GAAP 56 % 53 % 55 % 53 % Cost of doing business as a percentage of net sales – non-GAAP 38 % 34 % 38 % 35 % Adjusted EBITDA as a percentage of net sales – non-GAAP (1) 20 % 19 % 18 % 18 % (1) Percentages may not aggregate to Adjusted EBITDA percentage due to rounding and because amounts recorded in other income (expense), net on our condensed consolidated statement of operations are not included as an adjustment to earnings in the Adjusted EBITDA calculation. We use the performance measures above to establish financial goals and to gain an understanding of our comparative performance from period to period. We believe that these measures provide our stockholders with additional insights into how we run our business. We believe these measures also provide investors with additional financial information that should be considered when assessing our underlying business performance and trends. These non-GAAP financial measures are supplemental in nature and should not be considered in isolation or as alternatives to net income, income from operations or other financial information prepared in accordance with GAAP as indicators of our performance or operations. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies. Reconciliations of these non-GAAP financial measures to our financial statements as prepared in accordance with GAAP are as follows: 35 Table of Contents Cost of Doing Business (in thousands, except percentages) Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 2025 2024 Total operating expenses – GAAP $ 60,746 $ 55,212 $ 176,147 $ 158,581 Amortization (1) (475) (640) (1,401) (1,456) Depreciation (in operating departments) (881) (1,111) (2,696) (3,256) Cost of doing business $ 59,390 $ 53,461 $ 172,050 $ 153,869 Net sales $ 156,915 $ 155,045 $ 456,514 $ 434,566 Cost of doing business as a percentage of net sales – non-GAAP 38 % 34 % 38 % 35 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. Adjusted EBITDA (in thousands, except percentages) Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 2025 2024 Net income – GAAP $ 20,977 $ 19,842 $ 69,753 $ 52,860 Provision for income taxes 6,485 6,005 4,404 15,865 Interest income (104) (136) (358) (276) Interest expense 887 1,182 2,781 3,336 Amortization (1) 475 640 1,401 1,456 Depreciation 1,992 2,200 5,963 6,380 Adjusted EBITDA $ 30,712 $ 29,733 $ 83,944 $ 79,621 Net sales $ 156,915 $ 155,045 $ 456,514 $ 434,566 Adjusted EBITDA as a percentage of net sales – non-GAAP 20 % 19 % 18 % 18 % (1) Includes amortization of definite-lived intangible assets and cloud computing amortization. Adjusted EPS During the second quarter of fiscal year 2025 we released a previously unrecognized tax benefit associated with the Tax Cuts and Jobs Act of 2017 mandatory “toll tax” on unremitted foreign earnings. This item is infrequent in nature and not reflective of the underlying operational results of our business. We have included a non-GAAP measure of Adjusted EPS which is defined as diluted EPS less benefits associated with this toll tax on unremitted earnings. The following is a reconciliation of diluted EPS to Adjusted EPS: Three Months Ended May 31, Nine Months Ended May 31, 2025 2024 2025 2024 Diluted EPS - GAAP $ 1.54 $ 1.46 $ 5.13 $ 3.88 Release of Uncertain Tax Position - Tax Cut and Jobs Act (1) — — (0.87) — Adjusted diluted EPS - Non-GAAP $ 1.54 $ 1.46 $ 4.26 $ 3.88 (1) Includes the tax impact on adjustment Liquidity and Capital Resources Overview Our financial condition and liquidity remain strong. Although there continues to be uncertainty related to adverse global economic conditions, volatility in financial markets, the current inflationary environment and their impacts on our future results, we believe our efficient business model positions us to manage our business through such situations. We continue 36 to manage all aspects of our business including, but not limited to, monitoring our liquidity, the financial health of our customers, suppliers and other third-party relationships, implementing gross margin enhancement strategies and developing new opportunities for growth. Our principal sources of liquidity are cash generated from operations and cash currently available from our existing unsecured revolving credit facility under the Credit Agreement with Bank of America, N.A. We use the revolving credit facility primarily for our general working capital needs. We also hold borrowings under the Note Agreement. See Note 8 — Debt for additional information on these agreements. We have historically held a balance of outstanding draws on our line of credit in either U.S. Dollars in the Americas segment, or in Euros and Pounds Sterling in the EIMEA segment. Euro and Pound Sterling denominated draws fluctuate in U.S. Dollars from period to period due to changes in foreign currency exchange rates. We regularly convert many of our draws on our line of credit to new draws with new maturity dates and interest rates. We have the ability to refinance any draws under the line of credit with successive short-term borrowings through the April 30, 2029 maturity date of the Credit Agreement. Outstanding draws for which we have both the ability and intent to refinance with successive short-term borrowings for a period of at least twelve months are classified as long-term. As of May 31, 2025, $20.3 million of this facility was classified as long-term and was entirely denominated in Euros. $9.5 million was classified as short-term and was entirely denominated in U.S. Dollars. In the United States, we held $66.0 million in fixed rate long-term borrowings as of May 31, 2025, consisting of senior notes under our Note Agreement. We paid $0.8 million in principal payments on our Series A Notes during the first nine months of fiscal year 2025. There were no other letters of credit outstanding or restrictions on the amount available on our line of credit or notes. Per the terms of both the Note Agreement and the Credit Agreement, our consolidated leverage ratio cannot be greater than three and a half to one and our consolidated interest coverage ratio cannot be less than three to one. See Note 8 — Debt for additional information on these financial covenants. At May 31, 2025, we were in compliance with all material debt covenants. We continue to monitor our compliance with all debt covenants and, at the present time, we believe that the likelihood of being unable to satisfy all material covenants is remote. At May 31, 2025, we had a total of $51.7 million in cash and cash equivalents. We do not foresee any ongoing issues with repaying our borrowings and we closely monitor the use of this credit facility. We believe that our future cash from domestic and international operations, together with our access to funds available under our unsecured revolving credit facility, will provide adequate resources to fund short-term and long-term operating requirements, capital expenditures, dividend payments, acquisitions, new business development activities and share repurchases. On June 16, 2025, the Board approved the extension of the expiration date to August 31, 2026 for the 2023 Repurchase Plan, which became effective on September 1, 2023 and was set to expire August 31, 2025. We are authorized to acquire up to $50.0 million of our outstanding shares through this expiration date of August 31, 2026, of which $32.2 million remains available for the repurchase of shares of common stock as of May 31, 2025. Cash Flows The following table summarizes our cash flows by category for the periods presented (in thousands): Nine Months Ended May 31, 2025 2024 Change Net cash provided by operating activities $ 57,980 $ 64,824 $ (6,844) Net cash used in investing activities (2,848) (9,103) 6,255 Net cash used in financing activities (49,321) (58,145) 8,824 Effect of exchange rate changes on cash and cash equivalents (828) (419) (409) Net increase (decrease) in cash and cash equivalents $ 4,983 $ (2,843) $ 7,826 Operating Activities Net cash provided by operating activities decreased $6.8 million to $58.0 million for the nine months ended May 31, 2025. Cash flows from operating activities depend heavily on operating performance and changes in working capital. Our primary source of operating cash flows for the nine months ended May 31, 2025 was net income of $69.8 million, which increased approximately $16.9 million from period to period, primarily due to the release of the uncertain tax position in the second quarter of fiscal year 2025 that resulted in a net benefit of $11.9 million, as discussed in Note 13 to the condensed consolidated financial statements. 37 Changes in our working capital decreased net cash provided by operating activities by $14.8 million for the nine months ended May 31, 2025, compared to a $3.1 million increase in the prior period. The unfavorable $11.7 million net change in working capital was primarily due to changes in inventory, accounts payable, and other assets. Changes in inventory balances decreased net cash provided by operating activities by $11.7 million from period to period. We took deliberate actions to significantly decrease inventory levels during the nine months ended May 31, 2024, which actions resulted in a significant net cash inflow in the comparative period, whereas inventory levels remained relatively consistent in the current period. Changes in accounts payable balances decreased working capital $9.6 million primarily due to the timing of payments to vendors in the Americas from period to period. Changes in other asset balances decreased working capital by $6.2 million, primarily due to a $4.1 million increase in tax receivable due to timing of tax payments as well as a $0.7 million increase in assets related to cloud-based information systems. These unfavorable changes in working capital were partially offset by favorable changes in trade and other accounts receivable balances of $20.4 million primarily due to the timing of collection of payments from customers, primarily in the U.S. Investing Activities Net cash used in investing activities decreased $6.3 million to $2.8 million. In the prior fiscal year, we acquired a Brazilian distributor for $6.2 million in cash as we shifted from an indirect distribution model to a direct model. Financing Activities Net cash used in financing activities decreased $8.8 million to $49.3 million for the nine months ended May 31, 2025 primarily due to net proceeds of $1.6 million on our revolving credit facility during the first nine months of the fiscal year, compared to net repayments of $11.6 million in the corresponding period of the prior fiscal year. This decrease in net cash used in financing activities was slightly offset by increases in dividends paid to stockholders of $2.3 million and increases of treasury stock repurchases of $1.6 million. Effect of Exchange Rate Changes All of our foreign subsidiaries currently operate in currencies other than the U.S. Dollar and a significant portion of our consolidated cash balance is denominated in these foreign functional currencies, particularly at our U.K. subsidiary. As a result, our cash and cash equivalents balances are subject to the effects of the fluctuations in these functional currencies against the U.S. Dollar at the end of each reporting period. The net effect of exchange rate changes on cash and cash equivalents, when expressed in U.S. Dollar terms, was a decrease in cash of $0.8 million for the nine months ended May 31, 2025 as compared to a decrease in cash of $0.4 million for the nine months ended May 31, 2024. These changes were primarily due to fluctuations in various foreign currency exchange rates from period to period, but the majority is related to the fluctuations in the Euro and Pound Sterling against the U.S. Dollar. Commercial Commitments We have ongoing relationships with various third-party suppliers (contract manufacturers) that manufacture our products and third-party distribution centers that warehouse and ship our products to customers. The contract manufacturers maintain title and control of certain raw materials and components, materials utilized in finished products, and the finished products themselves until shipment to our third-party distribution centers or customers in accordance with agreed upon shipment terms. Although we have contractual minimum purchase obligations with certain contract manufacturers, such obligations are immaterial or well below the volume of goods that we have historically purchased. In addition, in the ordinary course of business, we communicate supply needs to our contract manufacturers based on orders and short-term projections, ranging from two to six months. We are committed to purchase the products produced by the contract manufacturers based on the projections provided. Upon the termination of contracts with contract manufacturers, we obtain certain inventory control rights and are obligated to work with the contract manufacturer to sell through all product held by or manufactured by the contract manufacturer on our behalf during the termination notification period. If any inventory remains at the contract manufacturer at the termination date, we are obligated to purchase such inventory, which may include raw materials, components and finished goods. The amounts for inventory purchased under termination commitments have been immaterial. In addition to the commitments to purchase products from contract manufacturers described above, we may also enter into commitments with other manufacturers to purchase finished goods and components to support innovation initiatives and/or supply chain initiatives. As of May 31, 2025, no such commitments were outstanding. 38 Share Repurchase Plans The information required by this item is incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 9 — Share Repurchase Plan and Note 15 — Subsequent Events included in this report. Dividends On June 17, 2025, the Company’s Board declared a cash dividend of $0.94 per share payable on July 31, 2025 to stockholders of record at the close of business on July 18, 2025. Critical Accounting Estimates Our discussion and analysis of our operating results and financial condition is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Critical accounting estimates are those that involve subjective or complex judgments. The following areas all require the use of judgments and estimates: revenue recognition and accounting for income taxes. Estimates in each of these areas are based on historical experience and various judgments and assumptions that we believe are appropriate. Actual results may materially differ from these estimates. There have been no material changes in our critical accounting estimates from those disclosed in Part II—Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” to our consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the SEC on October 21, 2024. Recently Issued Accounting Standards Information on Recently Issued Accounting Standards that could potentially impact our consolidated financial statements and related disclosures is incorporated by reference to Part I—Item 1, “Notes to Condensed Consolidated Financial Statements” Note 2 — Basis of Presentation and Summary of Significant Accounting Policies, included in this report. Item 3. Quantitative and Qualitative Disclosures About Market Risk The information required by this item is incorporated by reference to Part II—Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2024, which was filed with the SEC on October 21, 2024.