Polaris Inc. (PII)

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

The following discussion pertains to the results of operations and financial position of Polaris Inc., a Delaware corporation, for the three and six-month periods ended June 30, 2026 compared to the three and six-month periods ended June 30, 2025. The terms “Polaris,” the “Company,” “we,” “us,” and “our” as used herein refer to the business and operations of Polaris Inc., its subsidiaries and its predecessors, which began doing business in 1954. We design, engineer, manufacture and market powersports vehicles which include: off-road vehicles (“ORV”), including all-terrain vehicles (“ATV”) and side-by-side vehicles; military and commercial ORVs; snowmobiles; moto-roadsters; quadricycles; and boats. We also design and manufacture or source parts, garments and accessories (“PG&A”), which includes aftermarket accessories and apparel. Due to the seasonal trends for certain products and certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year. Unless otherwise noted, all “quarter” comparisons are from the second quarter of 2026 to the second quarter of 2025 and all “year-to-date” comparisons are from the six-month period ended June 30, 2026 to the six-month period ended June 30, 2025. Estimates related to industry retail sales are unaudited and based on internally-generated management estimates, including estimates based on extrapolations from third-party surveys of the industries in which we compete, and are subject to change.

Overview

Second quarter sales totaled $2,022.8 million, an increase of nine percent from last year’s second quarter sales of $1,852.7 million. The increase in sales for the quarter was primarily driven by increased shipments and higher net pricing, partially offset by reduced motorcycle shipments as a result of the Indian Motorcycle divestiture.

Our gross profit of $478.3 million increased 33 percent from $359.2 million in the comparable prior year second quarter. Gross profit, as a percentage of sales, increased primarily as a result of tariff refunds, favorable net price, and favorable product mix, partially offset by incremental tariff expense.

Net income attributable to Polaris was $106.4 million, or $1.82 per diluted share, compared to 2025 second quarter net loss attributable to Polaris of $79.3 million, or $1.39 net loss per diluted share. The improvement for the quarter was primarily driven by certain impairment charges recorded in the prior year comparable period that did not recur in 2026, tariff refunds, increased shipments and favorable net price, partially offset by incremental tariff expense. We reported second quarter adjusted EBITDA of $239.4 million, compared to 2025 second quarter adjusted EBITDA of $119.0 million. For information on how we define and calculate Adjusted EBITDA, and a reconciliation from net income (loss) to adjusted EBITDA, see “Non-GAAP Financial Measures”.

Global Economic Conditions

We continue to monitor macroeconomic trends and uncertainties and changes in international trade relations and trade policy, including those related to tariffs. The U.S. government has implemented a general tariff on all imports from countries not exempted under certain trade reciprocity criteria and elevated tariffs have been imposed on imports from major trading partners. Impacted countries have and may impose retaliatory tariffs, and such actions could give rise to an escalation of other trade measures by the countries subjected to such tariffs.

In November 2025, the U.S. Supreme Court heard arguments in a case challenging tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), and in February 2026, the Court issued a ruling that IEEPA does not authorize the imposition of tariffs. The Court only ruled on IEEPA tariffs and did not invalidate any other tariffs. As a result of this ruling, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection (“CBP”) to formalize a process for refunds. On April 20, 2026, CBP launched an online portal (“CAPE”) that can be used to submit IEEPA tariff refund requests and began issuing refunds in May 2026. Although CAPE is now available for the majority of entries and refunds are being issued, CBP and the U.S. Department of Justice appealed the Court of International Trade’s order as applied to a subset of entries.

Since the Supreme Court’s ruling, the U.S. government has implemented various tariffs, invoking other statutory authorities. These actions continue to be challenged in court and could impact the manner in which tariff costs or potential refunds are calculated. Adverse rulings, or the replacement or implementation of new tariffs or trade restrictions, may have a material adverse impact on our results of operations, including our profitability. The tariff policy environment is rapidly evolving and there is no guarantee that additional or increased tariffs will not be imposed.

We currently procure components from countries subject to such tariffs. As a result of the current tariffs, we anticipate increased supply chain challenges, commodity cost volatility, economic uncertainty, and economic pressures on customers and consumers as a result of the challenges of high inflation combined with the effects of increased tariffs. To mitigate the impact of tariffs on our supply chain and manufacturing, we continue to evaluate sourcing alternatives, negotiate with

22

Table of Contents

suppliers, and work to increase the percentage of shipments qualified under favorable trade agreements. Incremental tariffs and changed trade policies had a notable impact on our financial results for the three and six-month periods ended June 30, 2026, and could continue to adversely impact our results in the future.

During the quarter ended June 30, 2026, we submitted claims for refunds of certain IEEPA tariffs previously paid on imports. Related to the claims submitted, we recognized a benefit of $73.9 million in cost of sales in the consolidated statements of income (loss) for the quarter and year-to-date period ended June 30, 2026.

23

Table of Contents

Consolidated Results of Operations

The consolidated results of operations were as follows:

24

Table of Contents

Sales:

The increase in sales for the quarter and year-to-date period was primarily driven by increased shipments and higher net pricing, partially offset by reduced motorcycle shipments as a result of the Indian Motorcycle divestiture.

The components of the consolidated sales change were as follows:

Sales by geographic region were as follows:

Sales in the United States increased during the quarter and year-to-date periods primarily as a result of increased ORV shipments and PG&A sales, partially offset by reduced motorcycle shipments as a result of the Indian Motorcycle divestiture.

Sales in Canada decreased during the quarter and year-to-date periods primarily due to reduced snowmobile shipments and motorcycle shipments as a result of the Indian Motorcycle divestiture, partially offset by increased ORV shipments. Currency rate movements had no impact on quarter sales and a favorable impact of two percentage points on year-to-date sales.

Sales in other countries decreas

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion pertains to the results of operations and financial position of the Company and should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere in this Annual Report. This section of this Annual Report generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Overview

2025 sales totaled $7.2 billion and were approximately flat as compared to 2024. This was primarily driven by decreased shipments and lower net pricing driven by higher promotional costs, mostly offset by product mix.

Our gross profit of $1.4 billion decreased seven percent from $1.5 billion in 2024. Gross profit, as a percentage of sales, decreased primarily due to incremental tariff charges, lower net pricing driven by higher promotional costs and increased incentive compensation costs, partially offset by favorable operational costs and reduced warranty expense.

Full year net loss attributable to Polaris Inc. was $465.5 million, or $8.18 net loss per diluted share, compared to 2024 full year net income attributable to Polaris Inc. of $110.8 million, or $1.95 per diluted share. These decreases were primarily the result of impairment and other charges recorded as a result of the Indian Motorcycle business being classified as held for sale, goodwill and other intangible asset impairment charges recorded, incremental tariff charges and increased incentive compensation costs, partially offset by favorable operating costs. We reported Adjusted EBITDA of $410.2 million in 2025 compared to $635.4 million in 2024. For information on how we define and calculate Adjusted EBITDA, and a reconciliation from net (loss) income to Adjusted EBITDA, see “Non-GAAP Financial Measures”.

On October 10, 2025, we entered into a definitive agreement to sell a majority interest in the Indian Motorcycle business. During the year ended December 31, 2025, operating results of the Indian Motorcycle business were reported in our On Road segment and its assets and liabilities were classified as held for sale as of December 31, 2025. The sale closed in the first quarter of 2026.

On January 29, 2026, we announced that our Board of Directors declared a quarterly cash dividend of $0.68 per share for the first quarter of 2026, a one percent increase from the prior quarterly cash dividend, representing the 31st consecutive year of increased dividends to shareholders.

Global Economic Conditions

We continue to monitor macroeconomic trends and uncertainties and changes in international trade relations and trade policy, including those related to tariffs. The U.S. government has implemented a general tariff on all imports from countries not exempted under certain trade reciprocity criteria and elevated tariffs have been imposed on imports from major trading partners. Impacted countries have and may impose retaliatory tariffs, and such actions could give rise to an escalation of other trade measures by the countries subjected to such tariffs. Although the validity of certain tariffs are being challenged in litigation pending before the Supreme Court of the United States, there can be no guarantee about the outcome of such proceedings. The tariff policy environment is rapidly evolving and there is no guarantee that additional or increased tariffs will not be imposed.

We currently procure components from countries subject to such tariffs, which are utilized in our facilities in the United States and Mexico. A portion of our annual sales originate from products manufactured in our facilities in Mexico, and we sell our products globally. As a result of the current tariffs, we anticipate increased supply chain challenges, commodity cost volatility, economic uncertainty, and economic pressures on customers and consumers as a result of the challenges of high inflation combined with the effects of increased tariffs. To mitigate the impact of tariffs on our supply chain and manufacturing, we continue to evaluate sourcing alternatives, negotiate with suppliers, and work to increase the percentage of shipments qualified under favorable trade agreements. Incremental tariffs and changed trade policies had a notable impact on our financial results for 2025, and could continue to adversely impact our results in the future. We will continue to evaluate the impact of tariffs on our operations and profitability.

25

Table of Contents

Consolidated Results of Operations

The consolidated results of operations were as follows:

26

Table of Contents

Sales:

The year-over-year decrease in sales was due to decreased shipments and lower net pricing driven by higher promotional costs, partially offset by favorable product mix.

The components of the consolidated sales change were as follows:

The year-over-year volume decrease was primarily due to reduced recreational ORV, snowmobile and On Road shipments, partially offset by increased utility ORV shipments. Product mix was favorable as a result of a higher sales mix of ORVs. This favorability was partially offset by lower net pricing driven by higher promotional costs.

Sales by geographic region were as follows:

Sales in the United States increased primarily as a result of higher Marine and ORV shipments, partially offset by reduced snowmobile and motorcycle shipments.

Sales in Canada decreased primarily as a result of reduced snowmobile shipments. Currency rate movements had an unfavorable impact of two percentage points on sales in 2025.

Sales in other countries decreased primarily as a result of reduced On Road shipments. Currency rate movements had a favorable impact of two percentage points on sales in 2025.

Cost of sales:

The following table reflects our cost of sales in dollars and as a percentage of sales:

The year-over-year increase in cost of sales was primarily due to higher materials costs driven by incremental tariff charges, partially offset by reduced warranty expense.

27

Table of Contents

Gross profit:

Gross profit for 2025, as a percentage of sales, decreased primarily as a result of incremental tariff charges, lower net pricing driven by higher promotional costs and increased incentive compensation costs, partially offset by favorable operational costs and reduced warranty expense.

Operating expenses:

Operating expenses for 2025, in absolute dollars and as

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]