Under Armour, Inc. (UA) FY 2025 MD&A

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help readers understand our results of operations and financial condition, and is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes to our Consolidated Financial Statements under Part II, Item 8 and the information contained elsewhere in this Annual Report on Form 10-K under the captions "Business" and "Risk Factors".

This Annual Report on Form 10-K, including this MD&A, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the U.S. Securities Act of 1933, as amended ("the Securities Act"), and is subject to the safe harbors created by those sections. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. See "Forward Looking Statements."

All dollar and percentage comparisons made herein refer to Fiscal 2025 compared to Fiscal 2024, unless otherwise noted. Please refer to Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2024, filed with the Securities Exchange Commission ("SEC") on May 29, 2024, which is incorporated by reference herein, for a comparative discussion of our Fiscal 2024 financial results as compared to Fiscal 2023.

OVERVIEW

We are a leading developer, marketer, and distributor of branded performance apparel, footwear, and accessories. Our brand's moisture-wicking fabrications are engineered in various designs and styles for wear in nearly every climate to provide a performance alternative to traditional products. Our products are sold worldwide

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and worn by athletes at all levels, from youth to professional, on playing fields around the globe and by consumers with active lifestyles.

We remain focused on driving premium brand-right growth and delivering improved profitability. We plan to continue to grow our business over the long term through increased sales of our apparel, footwear and accessories; growth in our direct-to-consumer sales channel; and expansion of our wholesale distribution. Achieving these long-term growth objectives depends, in part, on our ability to successfully execute strategic initiatives across key areas of the business, including within our North America region. In support of these long-term growth objectives, our digital strategy is designed to enhance consumer engagement and strengthen brand connectivity through multiple digital touchpoints.

Fiscal 2025 Performance

During Fiscal 2025, we faced a challenging environment, particularly in North America and Asia-Pacific, that included lower demand in our wholesale channel, in addition to the impacts of proactive strategies to reduce discounting and promotional activity in our direct-to-consumer channel, particularly in e-commerce.

Financial highlights for Fiscal 2025 as compared to Fiscal 2024 include:

•Total net revenues decreased 9.4%.

•Within our channels, wholesale revenue decreased 8.1% and direct-to-consumer revenue decreased 10.5%.

•Within our product categories, apparel revenue decreased 8.9%, footwear revenue decreased 12.8%, and accessories revenue increased 1.3%.

•Net revenue decreased 11.4% in North America, increased 0.4% in EMEA, decreased 13.5% in Asia-Pacific and decreased 6.1% in Latin America.

•Gross margin increased 180 basis points to 47.9%.

•Selling, general and administrative expenses increased 8.4%.

2025 Restructuring Plan

On May 15, 2024, our Board of Directors approved a restructuring plan (the "2025 restructuring plan") designed to strengthen and support our financial and operational efficiencies. On September 5, 2024, our Board of Directors approved a $70 million increase to the 2025 restructuring plan, resulting in an updated restructuring plan of approximately $140 million to $160 million of pre-tax restructuring and related charges, which is expected to be substantially complete by the end of Fiscal 2026.

We currently expect the charges to be incurred under the 2025 restructuring plan to include (i) up to $90 million in cash-related charges, consisting of approximately $23 million in employee severance and benefits costs and $67 million related to various transformational initiatives; and (ii) up to $70 million in non-cash charges, including approximately $7 million in employee severance and benefits costs and $63 million in facility, software, and other asset-related charges and impairments.

Restructuring and related charges are included in our Corporate Other non-operating segment. For Fiscal 2025, the restructuring and related charges included $75.9 million relating to North America, $12.1 million relating to EMEA, and $6.4 million relating to Asia-Pacific. These charges were offset by a net gain of $5.3 million from the sale of the MapMyFitness platform, relating to our Corporate Other non-operating segment.

The following table summarizes the costs incurred during Fiscal 2025, as well as the current estimate of remaining charges expected to be incurred in connection with the 2025 restructuring plan.

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(1) Estimated restructuring and related charges reflect the high-end of the range of the total estimated charges expected to be incurred in connection with the 2025 restructuring plan.

Restructuring charges and recoveries require us to make certain judgments and estimates regarding the amount and timing as to when these charges or recoveries occur. The estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate, as new or updated information becomes available.

Macroeconomic Factors and Other Global Events

We are actively monitoring the global trade environment due to recent and potential changes in global trade policy, as well as indirect effects on capital markets and consumer discretionary spending. We continue to analyze the impacts of the evolving situation on our business and actions we can take to minimize their impact. However, based on information that is currently available, we expect these changes will have a material impact on our results of operations, including gross profit, in Fiscal 2026.

Other macroeconomic factors, such as inflationary pressures and fluctuations in foreign currency exchange rates, have and may continue to impact our business. We continue to monitor these factors and the potential impacts they may have on our financial results, including product input costs, freight costs and consumer discretionary spending and therefore consumer demand for our products. We also continue to monitor the broader impacts of conflicts around the world on the economy, including their effect on inflationary pressures and the price of oil globally.

See "Risk Factors—Economic and Industry Risks—Our business depends on consumer purchases of discretionary items, which can be negatively impacted during an economic downturn or periods of inflation. This could materially impact our sales, profitability, results of operations and financial condition"; "—Fluctuations in the cost of raw materials and commodities we use in our products and costs related to our supply chain could negatively affect our operating results"; "—Our financial results and ability to grow our business may be negatively impacted by global events beyond our control"; and "—Financial Risks—Our financial results could be adversely impacted by currency exchange rate fluctuations" included in Item 1A of this Annual Report on Form 10-K.

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RESULTS OF OPERATIONS

The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of net revenues:

Revenues

Net revenues consist of net sales and license revenues. Net sales consist of sales from apparel, footwear and accessories products. Our license revenues primarily consist of fees paid to us by licensees in exchange for the use of our trademarks on their products. The following tables summarize net revenues by product category and distribution channel for the periods indicated:

(1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program.

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(1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program.

Net Sales

Net sales decreased by $509.9 million, or 9.1%, to $5.1 billion during Fiscal 2025, from $5.6 billion during Fiscal 2024. Apparel decreased primarily due to lower unit sales and unfavorable channel mix, partially offset by higher average selling prices. Footwear decreased primarily due to lower unit sales, lower average selling prices and unfavorable channel mix. Accessories increased primarily due to higher unit sales and higher average selling prices, partially offset by unfavorable channel mix. From a channel perspective, the decrease in net sales was due to a decrease in both wholesale and direct-to-consumer.

License Revenues

License revenues decreased by $16.7 million or 15.0%, to $94.6 million during Fiscal 2025, from $111.2 million during Fiscal 2024. This was primarily due to lower revenues from our licensing partners in North America, partially offset by higher revenues from our international licensing partners.

Gross Profit

Cost of goods sold consists primarily of product costs, inbound freight and duty costs, outbound freight costs, handling costs to make products floor-ready to customer specifications, royalty payments to endorsers based on a predetermined percentage of sales of selected products and write downs for inventory obsolescence. In general, as a percentage of net revenues, we expect cost of goods sold associated with our apparel and accessories to be lower than that of our footwear. No cost of goods sold is associated with our license revenues.

We include outbound freight costs associated with shipping goods to customers as cost of goods sold; however, we include the majority of outbound handling costs as a component of selling, general and administrative expenses. As a result, our gross profit may not be comparable to that of other companies that include outbound handling costs in their cost of goods sold. Outbound handling costs include costs associated with preparing goods to ship to customers and certain costs to operate our distribution facilities. These costs were $78.0 million for Fiscal 2025 (Fiscal 2024: $79.8 million).

Gross profit decreased by $155.5 million to $2.5 billion during Fiscal 2025, as compared to $2.6 billion during Fiscal 2024. Gross profit as a percentage of net revenues, or gross margin, increased to 47.9% from 46.1%. This increase in gross margin of approximately 180 basis points was primarily driven by favorable impacts of 130 basis points from supply chain benefits related to lower freight and product costs and approximately 80 basis points of pricing benefits largely due to lower levels of discounting and promotions within our direct-to-consumer channel. These increases were partially offset by unfavorable regional and channel mix of 30 basis points and unfavorable foreign exchange of 10 basis points.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses consist of costs related to marketing and advertising, selling, product innovation and supply chain, and corporate services. We consolidate our selling, general and administrative expenses into two primary categories: "marketing and advertising" and "other." The other category is the sum of our selling, product innovation and supply chain, and corporate services categories. The marketing and advertising category consists primarily of sports and brand marketing, media, and retail presentation. Sports and brand marketing includes professional, club and collegiate sponsorship agreements, individual athlete and influencer agreements, and providing and selling products directly to teams and individual athletes. Media includes digital, broadcast, and print media outlets, including social and mobile media. Retail presentation includes sales

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displays and concept shops and depreciation expense specific to our in-store fixture programs. Our marketing and advertising costs are an important driver of our growth.

Selling, general and administrative expenses increased by $201.5 million, or 8.4%, during Fiscal 2025 as compared to Fiscal 2024. Within selling, general and administrative expenses:

•Marketing and advertising costs decreased $18.7 million or 3.3%, due to a reduction in marketing activities during the period. As a percentage of net revenues, marketing and advertising costs increased to 10.6% from 10.0%.

•Other costs increased $220.1 million or 12.0%, primarily driven by higher net litigation expenses related to the settlements of the Consolidated Securities Action and the Derivatives Actions, as discussed in Note 10 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. Additionally, other costs increased due to an impairment charge of $28.4 million related to vacating our previous global headquarters and transformational charges of $31.2 million recorded in connection with the 2025 restructuring plan. See Note 13 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details. As a percentage of net revenues, other costs increased to 39.7% from 32.1%.

As a percentage of net revenues, selling, general and administrative expenses increased to 50.4% during Fiscal 2025 as compared to 42.1% during Fiscal 2024.

Restructuring Charges

Restructuring charges within our operating expenses primarily consist of employee severance and benefit costs, various transformational initiatives and facility, software and other asset-related charges and impairments. See Note 13 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.

Restructuring charges increased by $58.0 million during Fiscal 2025 compared to Fiscal 2024 due to $14.8 million of employee-related charges, $25.5 million of facility-related charges, and $17.7 million of other restructuring charges.

Interest Income (Expense), net

Interest income (expense), net is primarily comprised of interest income earned on our cash and cash equivalents, offset by interest expense incurred on our debt facilities. See Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details.

Interest expense, net increased by $6.4 million to $6.1 million during Fiscal 2025 compared to interest income, net of $0.3 million during Fiscal 2024. This was primarily due to a decrease in interest income resulting from lower interest rates on a lower cash balance and a reduction in capitalized interest. These were partially offset by a decrease in interest expense from our Convertible Senior Notes, which matured during Fiscal 2025.

Other Income (Expense), net

Other income (expense), net generally consists of unrealized and realized gains and losses on our foreign currency derivative financial instruments, and unrealized and realized gains and losses on adjustments that arise from fluctuations in foreign currency exchange rates relating to transactions generated by our international subsidiaries. Other income (expense), net also includes earn-out income recorded in connection with the sale of the

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MyFitnessPal platform and rent expense and associated sublease income relating to lease assets held solely for sublet purposes, primarily the lease related to our New York City, 5th Avenue location.

Other expense, net increased by $45.5 million to $13.4 million during Fiscal 2025 compared to other income, net of $32.1 million during Fiscal 2024. This was primarily due to an earn-out recorded during Fiscal 2024 in connection with the sale of MyFitnessPal platform, partially offset by a net gain from foreign currency hedges.

Income Tax Expense (Benefit)

Income tax expense decreased $32.9 million to a tax benefit of $2.9 million during Fiscal 2025 from income tax expense of $30.0 million during Fiscal 2024. For Fiscal 2025, our effective tax rate was 1.4% compared to 11.4% for Fiscal 2024. The decrease in our effective tax rate was primarily driven by the proportion of earnings subject to tax in the U.S. as compared to foreign jurisdictions in each period and the Fiscal 2025 impact of U.S. losses on foreign earnings subject to tax in the United States.

SEGMENT RESULTS OF OPERATIONS

Our operating segments are based on how our Chief Operating Decision Maker ("CODM") makes decisions about allocating resources and assessing performance. Our segments are defined by geographic regions, including North America, EMEA, Asia-Pacific and Latin America.

We exclude certain corporate items from our segment profitability measures. We report these items within Corporate Other, which is designed to provide increased transparency and comparability of our operating segments' performance. Corporate Other consists primarily of (i) general and administrative expenses not allocated to an operating segment, including expenses associated with centrally managed departments such as global marketing, global information technology, global supply chain and innovation, and other corporate support functions; (ii) restructuring and restructuring related charges, if any; (iii) certain foreign currency hedge gains and losses; and (iv) operating results from the MapMyFitness digital platform, which was sold during the second quarter of Fiscal 2025.

The net revenues and operating income (loss) associated with our segments are summarized in the following tables.

Net Revenues

(1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program.

The decrease in total net revenues for Fiscal 2025, compared to Fiscal 2024, was driven by the following:

•Net revenues in our North America region decreased by $399.5 million, or 11.4%. This was driven by a decrease in both our direct-to-consumer and wholesale channels, as well as a decrease in license

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revenues. Within our direct-to-consumer channel, net revenues decreased in both e-commerce and owned and operated retail stores.

•Net revenues in our EMEA region increased by $4.7 million, or 0.4%. This was driven by an increase in our direct-to-consumer channel, partially offset by a decrease in our wholesale channel. Within our direct-to-consumer channel, net revenues increased in both owned and operated retail stores and e-commerce.

•Net revenues in our Asia-Pacific region decreased by $117.6 million, or 13.5%. This was driven by a decrease in both our wholesale and direct-to-consumer channels, partially offset by an increase in license revenues. Within our direct-to-consumer channel, net revenues decreased in both e-commerce and owned and operated retail stores. Net revenues in our Asia-Pacific region were also negatively impacted by changes in foreign exchange rates.

•Net revenues in our Latin America region decreased by $14.1 million, or 6.1%. This was primarily driven by negative impacts of changes in foreign exchange rates. By channel, the decrease was in both our wholesale channel and our direct-to-consumer channel, partially offset by an increase in license revenues. Within our direct-to-consumer channel, net revenues decreased in e-commerce and were flat in owned and operated retail stores.

•Net revenues in our Corporate Other non-operating segment decreased by $11.1 million or 89.9%. This was primarily driven by lower foreign currency hedge gains related to revenues generated by entities within our operating segments.

Operating Income (Loss)

(1) Corporate Other primarily includes foreign currency hedge gains and losses related to revenues generated by entities within our operating segments but managed through our central foreign exchange risk management program. Corporate Other also includes expenses related to our central supporting functions.

The decrease in total operating income for Fiscal 2025, compared to Fiscal 2024, was primarily driven by the following:

•Operating income in our North America region decreased by $48.4 million, or 7.1%. This was primarily due to a decrease in gross profit, partially offset by lower marketing and advertising costs, selling and distribution expenses and salaried compensation expenses. The decline in gross profit was primarily driven by lower net revenues as discussed above, partially offset by lower freight costs and lower product input costs.

•Operating income in our EMEA region decreased by $29.0 million, or 16.5%. This was primarily due to higher marketing and advertising costs partially offset by an increase in gross profit. The increase in gross profit was driven by higher net revenues as discussed above and lower product input costs.

•Operating income in our Asia-Pacific region decreased by $46.5 million, or 38.8%. This was primarily due to a decrease in gross profit, partially offset by lower marketing and advertising costs. The decline in gross profit was driven by lower net revenues as discussed above and higher inventory returns.

•Operating income in our Latin America region increased by $9.1 million, or 23.8%. This was primarily due to lower marketing and advertising costs and selling and distribution expenses and an increase in gross profit, which was primarily driven by lower product input costs.

•Operating loss in our Corporate Other non-operating segment increased by $300.2 million, or 38.4%. This was primarily due to higher net litigation expenses related to the settlements of the Consolidated Securities Action and the Derivative Actions, as discussed in Note 10 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. The increase was also driven by restructuring

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and related charges of $89.2 million and an impairment charge of $28.4 million related to vacating our previous global headquarters. This was partially offset by lower salaries expense as a result of actions taken under the 2025 restructuring plan.

LIQUIDITY AND CAPITAL RESOURCES

Our cash requirements have principally been for working capital and capital expenditures. We fund our working capital, primarily inventory, and capital investments from cash flows from operating activities, cash and cash equivalents on hand, and borrowings available under our credit and long-term debt facilities. Our working capital requirements generally reflect the seasonality in our business as we historically recognize the majority of our net revenues in the last two quarters of the calendar year. Our capital investments have generally included expanding our in-store fixture and branded concept shop program, improvements and expansion of our distribution and corporate facilities, including construction of our new global headquarters, leasehold improvements to our Brand and Factory House stores, and investment and improvements in information technology systems. Our inventory strategy is focused on continuing to meet consumer demand while improving our inventory efficiency over the long term by putting systems and processes in place to improve our inventory management. These systems and processes are designed to improve our forecasting and supply planning capabilities. In addition, we strive to enhance our inventory performance by focusing on adding discipline around product purchasing, reducing production lead time and improving planning and execution for selling excess inventory through our Factory House stores and other liquidation channels.

As of March 31, 2025, we had approximately $501.4 million of cash and cash equivalents. We believe our cash and cash equivalents on hand, cash from operations, our ability to reduce our expenditures as needed, borrowings available to us under our amended credit agreement, our ability to access the capital markets, and other financing alternatives are adequate to meet our liquidity needs and capital expenditure requirements for at least the next twelve months. In addition, from time to time, based on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors and subject to compliance with applicable laws and regulations, we may seek to utilize cash on hand, borrowings or raise capital to retire, repurchase or redeem our debt securities, repay debt, repurchase shares of our common stock or otherwise enter into similar transactions to support our capital structure and business or utilize excess cash flow on a strategic basis. For example, as further described below, in May 2024, our Board of Directors authorized a new share repurchase program pursuant to which we are authorized to repurchase a total of $500 million of our Class C Common Stock through May 2027. As of March 31, 2025, we have repurchased a total of $90 million Class C Common Stock through accelerated share repurchase transactions under this program.

If there are unexpected material impacts to our business in future periods from significant global events, such as an economic recession or changes in global trade policy, that have a significant adverse effect on our profitability, including increased costs to create and sell our products, we may consider additional alternatives to preserve our liquidity. These alternatives may include further reducing our expenditures, changing our investment strategies, reducing compensation costs, and limiting certain marketing and capital expenditures. In addition, we may seek alternative sources of liquidity, including but not limited to, accessing the capital markets, sale-leaseback transactions or other sales of assets or other alternative financing measures. However, instability in, or tightening of the capital markets, could adversely affect our ability to access the capital markets on terms acceptable to us or at all. Although we believe we have adequate sources of liquidity over the long term, a prolonged or more severe economic recession, inflationary pressure, or a slow recovery could adversely affect our business and liquidity and could require us to take certain of the liquidity preserving actions described above.

As of March 31, 2025, $404.5 million or approximately 81% of cash and cash equivalents was held by our foreign subsidiaries. During the first quarter of Fiscal 2025, we re-evaluated our assertion related to the reinvestment of our non-U.S. subsidiaries’ cumulative and current undistributed earnings and determined that we may repatriate a portion of these earnings to the U.S. As a result, approximately $522 million of foreign earnings, inclusive of a $390 million cash dividend repatriated in Fiscal 2025, are no longer indefinitely reinvested. We recorded approximately $1.3 million of state income tax expense and an offsetting $1.2 million of state valuation allowance release related to this change in our assertion. The remainder of our prior and current year undistributed foreign earnings will continue to be indefinitely reinvested to fund international growth and operations. As the majority of such foreign earnings have been previously subject to U.S. federal tax, additional taxes including currency gains or losses, capital gains, foreign withholding taxes, and U.S. state taxes are not expected to be material.

Refer to our "Risk Factors" section included in Part I, Item 1A of this Annual Report on Form 10-K.

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Share Repurchase Program

On May 15, 2024, our Board of Directors authorized us to repurchase up to $500 million (exclusive of fees and commissions) of outstanding shares of our Class C Common Stock through May 31, 2027. The Class C Common Stock may be repurchased from time to time at prevailing prices in the open market, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, via private purchases through forward, derivative, accelerated share repurchase transactions or otherwise, subject to applicable regulatory restrictions on volume, pricing and timing. The timing and amount of any repurchases will depend on market conditions, our financial condition, results of operations, liquidity and other factors.

During the three months ended March 31, 2025, we entered into a supplemental confirmation (the "March 2025 ASR Agreement") of an accelerated share repurchase transaction with Truist Bank ("Truist") to repurchase $25.0 million of our Class C Common Stock, and received a total of 4.1 million shares of Class C Common Stock from Truist, which were immediately retired. As a result, $25.9 million was recorded to retained earnings to reflect the difference between the market price of the Class C Common Stock repurchased and its par value.

During Fiscal 2025, pursuant to the March 2025 ASR Agreement and the previously disclosed accelerated share repurchase transactions that we entered into in May 2024 and December 2024, we repurchased $90 million or 12.8 million shares of Class C Common Stock, which were immediately retired. As a result, $91.2 million was recorded to retained earnings to reflect the difference between the market price of the Class C Common Stock repurchased and its par value.

As of the date of this Annual Report on Form 10-K, we repurchased a total of $90 million or 12.8 million outstanding shares of Class C Common Stock, leaving approximately $410 million remaining under our current share repurchase program.

Contractual Commitments

We lease warehouse space, office facilities, space for our Brand and Factory House stores and certain equipment under non-cancelable operating leases. The leases expire at various dates through 2038, excluding extensions at our option, and include provisions for rental adjustments. In addition, this table includes executed lease agreements for Brand and Factory House stores that have not yet commenced as of March 31, 2025. The operating leases generally contain renewal provisions for varying periods of time. Our significant contractual obligations and commitments as of March 31, 2025 are summarized in the following table:

(1) Includes estimated interest payments based on applicable fixed interest rates as of March 31, 2025, timing of scheduled payments, and the term of the debt obligations.

(2) Includes future minimum payments for operating lease obligations as of March 31, 2025. Minimum payments for lease obligations exclude variable lease costs, such as contingent rent expense we may incur at our Brand and Factory house stores based on future sales above a specified minimum or payments made for common area maintenance and real estate taxes. Excludes sublease income from certain excess office facilities, retail space and warehouse space that we sublease to third parties.

(3) We generally place orders with our manufacturers between four and six months in advance of expected future sales. The amounts listed for product purchase obligations primarily represent our open production purchase orders with our manufacturers for our apparel, footwear and accessories, including expected inbound freight, duties and other costs. These open purchase orders specify fixed or minimum quantities of products at determinable prices. The product purchase obligations also includes fabric commitments with our suppliers, which secure a portion of our material needs for future seasons. The reported amounts exclude product purchase liabilities included in accounts payable as of March 31, 2025.

(4) Includes the fixed minimum amounts required to be paid under sponsorship agreements and minimum guaranteed royalty payments to endorsers and licensors based upon a predetermined percent of sales of particular products. Sponsorship agreements include professional teams, professional leagues, colleges and universities, individual athletes, athletic events and other marketing commitments in order to promote our brand. Some of these sponsorship agreements provide for additional performance incentives and product supply obligations. It is not possible to determine how much we will spend on product supply obligations on an annual basis as contracts generally do not stipulate specific cash amounts to be spent on products. The amount of product provided to these sponsorships depends on many factors including general playing conditions, the number of sporting events in which they participate and our decisions regarding product and marketing

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initiatives. In addition, it is not possible to determine the performance incentive amounts we may be required to pay under these agreements as they are primarily subject to certain performance based and other variables.

The table above excludes a liability of $79.4 million for uncertain tax positions, inclusive of related interest and penalties, as we are unable to reasonably estimate the timing and amount of future cash settlement. Refer to Note 18 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, for a further discussion of our uncertain tax positions.

Cash Flows

The following table presents the major components of our cash flows provided by and used in operating, investing and financing activities for the periods presented:

Operating Activities

Cash flows from operating activities decreased by $413.3 million, as compared to Fiscal 2024, primarily driven by decrease in net income before the impact of non-cash items of $455.5 million offset by an increase from changes in working capital of $42.2 million.

The changes in working capital were due to the following outflows:

•$205.5 million from changes in inventories;

•$76.7 million from changes in other non-current assets; and

•$44.4 million from changes in accrued expenses and other liabilities.

These outflows were partially offset by the following working capital inflows:

•$139.4 million from changes in accounts payable;

•$83.9 million from changes in accounts receivable;

•$75.2 million from changes in income taxes payable and receivable, net;

•$42.2 million from changes in prepaid expenses and other current assets; and

•$28.2 million from changes in customer refund liabilities.

Investing Activities

Cash flows used in investing activities increased by $21.0 million, as compared to Fiscal 2024. This was primarily due to an increase in capital expenditures, the acquisition of UNLESS COLLECTIVE, Inc and the equity method investment in ISC Sport. These outflows were partially offset by a higher earn-out collected in connection with the sale of the MyFitnessPal platform and the proceeds from the sale of the MapMyFitness platform.

Total capital expenditures during Fiscal 2025 were $168.7 million, or approximately 3% of net revenues, representing a $18.4 million increase from $150.3 million during Fiscal 2024. Our long-term operating principle for capital expenditures is to spend between 3% and 5% of annual net revenues as we invest in our global direct-to-consumer, e-commerce and digital businesses, information technology systems, distribution centers and our global offices, including our new global headquarters in the Baltimore Peninsula, an area of Baltimore, Maryland, which we moved into in December 2024. During Fiscal 2025, we incurred capital expenditures of $99.7 million relating to the construction of our new global headquarters, which as previously disclosed, was designed in line with our long-term sustainability strategy. A portion of our capital expenditures included investments incorporating sustainable and intelligent building design features into this facility.

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Financing Activities

Cash flows used in financing activities increased by $102.1 million, as compared to Fiscal 2024. During Fiscal 2025, we repaid the $80.9 million aggregate principal amount of the Convertible Senior Notes outstanding using cash on hand. Additionally, we paid $90.0 million to repurchase shares of our Class C Common Stock through accelerated share repurchase transactions during Fiscal 2025. During Fiscal 2024, we paid $75.0 million to repurchase shares of our Class C Common Stock through accelerated share repurchase transactions. For more details, see discussion above under "Share Repurchase Program".

Capital Resources

Credit Facility

On March 8, 2019, we entered into an amended and restated credit agreement by and among us, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders and arrangers party thereto (the "credit agreement"). In March 2025, we entered into the sixth amendment to the credit agreement (the credit agreement as amended, the "amended credit agreement" or the "revolving credit facility"). The amended credit agreement provides for an aggregate $1.1 billion of revolving credit commitments comprised of two tranches: (i) one tranche of $50 million that has a term that ends on December 3, 2026, and (ii) a second tranche of $1.05 billion that has a term that ends on December 3, 2028, in each case with permitted extensions under certain circumstances. As of March 31, 2025 and March 31, 2024, there were no amounts outstanding under the revolving credit facility.

At our request and a lender's consent, commitments under the amended credit agreement may be increased by up to $300.0 million in aggregate, subject to certain conditions as set forth in the amended credit agreement. Incremental borrowings are uncommitted and the availability thereof will depend on market conditions at the time we seek to incur such borrowings.

Up to $50.0 million of the facility may be used for the issuance of letters of credit. As of March 31, 2025, $45.7 million of letters of credit were outstanding (March 31, 2024: $4.2 million).

Our obligations under the amended credit agreement are guaranteed by certain domestic significant subsidiaries of Under Armour, Inc., subject to customary exceptions (the "subsidiary guarantors") and primarily secured by a first-priority security interest in substantially all of the assets of Under Armour, Inc. and the subsidiary guarantors, excluding real property, capital stock in and debt of subsidiaries of Under Armour, Inc. holding certain real property and other customary exceptions. The amended credit agreement provides for the permanent fall away of guarantees and collateral upon our achievement of investment grade rating from two rating agencies.

The amended credit agreement contains negative covenants that, subject to significant exceptions, limit our ability to, among other things: incur additional secured and unsecured indebtedness; pledge the assets as security; make investments, loans, advances, guarantees and acquisitions (including investments in and loans to non-guarantor subsidiaries); undergo fundamental changes; sell assets outside the ordinary course of business; enter into transactions with affiliates; and make restricted payments.

We are also required to maintain a ratio of consolidated EBITDA, to consolidated interest expense of not less than 3.50 to 1.0 (the "interest coverage covenant") and we are not permitted to allow the ratio of consolidated total indebtedness to consolidated EBITDA to be greater than 3.25 to 1.0 (the "leverage covenant"), as described in more detail in the amended credit agreement. In July 2024, we entered into an amendment to the credit agreement to exclude from the definition of consolidated EBITDA certain charges related to the settlement of the Class Action Securities litigation described in Note 10 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. As of March 31, 2025, we were in compliance with the applicable covenants.

In addition, the amended credit agreement contains events of default that are customary for a facility of this nature, and includes a cross default provision whereby an event of default under other material indebtedness, as defined in the amended credit agreement, will be considered an event of default under the amended credit agreement.

The amended credit agreement implemented SOFR as the replacement for LIBOR as a benchmark interest rate for U.S. dollar borrowings (and analogous benchmark rate replacements for borrowings in Yen, Pound Sterling and Euro). Borrowings under the amended credit agreement bear interest at a rate per annum equal to, at our option, either (a) an alternate base rate (for borrowings in U.S. dollars), (b) a term rate (for borrowings in U.S. dollars, Euro or Japanese Yen) or (c) a "risk free" rate (for borrowings in U.S. dollars or Pounds Sterling), plus in each case an applicable margin. The applicable margin for loans will be adjusted by reference to a grid (the "pricing grid") based on the leverage ratio of consolidated total indebtedness to consolidated EBITDA and ranges between 1.00% to 1.75% (or, in the case of alternate base loans 0.00% to 0.75%). We will also pay a commitment fee

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determined in accordance with the pricing grid on the average daily unused amount of the revolving credit facility and certain fees with respect to letters of credit. As of March 31, 2025, the commitment fee was 17.5 basis points.

1.50% Convertible Senior Notes

On June 1, 2024, our previously outstanding $80.9 million aggregate principal amount of 1.50% convertible senior notes due 2024 (the "Convertible Senior Notes") matured. The Convertible Senior Notes bore interest at the fixed rate of 1.50% per annum, payable semiannually in arrears on June 1 and December 1 of each year, beginning December 1, 2020. Upon maturity, we repaid the $80.9 million aggregate principal amount of the Convertible Senior Notes outstanding, plus $0.6 million of accrued interest, using cash on hand. No holders exercised their rights to convert prior to maturity.

3.25% Senior Notes

In June 2016, we issued $600.0 million aggregate principal amount of 3.25% senior unsecured notes due June 15, 2026 (the "Senior Notes"). The Senior Notes bear interest at the fixed rate of 3.25% per annum, payable semi-annually on June 15 and December 15 beginning December 15, 2016. Prior to March 15, 2026 (three months prior to the maturity date of the Notes), we may redeem some or all of the Senior Notes at any time or from time to time at a redemption price equal to the greater of 100% of the principal amount of the Senior Notes to be redeemed or a "make-whole" amount applicable to such Senior Notes as described in the indenture governing the Senior Notes, plus accrued and unpaid interest to, but excluding, the redemption date.

The indenture governing the Senior Notes contains covenants, including limitations that restrict our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness and enter into sale and leaseback transactions and our ability to consolidate, merge or transfer all or substantially all of our properties or assets to another person, in each case subject to material exceptions described in the indenture.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Our Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K, have been prepared in accordance with U.S. GAAP. To prepare these financial statements, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosures of contingent assets and liabilities. Our estimates are often based on judgments, probabilities and assumptions that management believes to be reasonable, but that are inherently uncertain and unpredictable. It is also possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. Actual results could be significantly different from these estimates.

As the impacts of major global events, including recent and potential changes in global trade policy, continue to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. The extent to which the evolving events impact our financial statements will depend on a number of factors including, but not limited to, any new information that may emerge concerning the severity of these major events and the actions that governments around the world may take in response. While we believe we have made appropriate accounting estimates and assumptions based on the facts and circumstances available as of this reporting date, we may experience further impacts based on long-term effects on our customers and the countries in which we operate. Refer to the risk factors discussed in Part I, Item 1A "Risk Factors" of this Annual Report on Form 10-K.

Revenue Recognition

We recognize revenue pursuant to Accounting Standards Codification 606 ("ASC 606"). The amount of revenue recognized considers terms of sale that create variability in the amount of consideration that we ultimately expect to be entitled to in exchange for the products or services and is subject to an overall constraint that a significant revenue reversal will not occur in future periods.

We record reductions to revenue at the time of the transaction for estimated customer returns, allowances, markdowns and discounts. These estimates are based on historical rates of customer returns and allowances as well as the specific identification of outstanding returns, markdowns and allowances that we have not yet received. The actual amount of customer returns and allowances, which are inherently uncertain, may differ from our estimates. At a minimum, the Company reviews and refines these estimates on a quarterly basis. If we determine that actual or expected returns or allowances are significantly higher or lower than the reserves we established, we would record a reduction or increase, as appropriate, to net sales in the period in which such a determination was

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made. Provisions for customer specific discounts are based on contractual obligations with certain major customers. Reserves for returns, allowances, markdowns and discounts included within customer refund liability on the Consolidated Balance Sheets as of March 31, 2025 was $146.0 million (March 31, 2024: $139.3 million). The value of inventory associated with reserves for sales returns included within prepaid expenses and other current assets on the Consolidated Balance Sheets as of March 31, 2025 was $33.6 million (March 31, 2024: $29.5 million).

Accounts Receivable and Credit Losses - Allowance for Doubtful Accounts

We make ongoing estimates relating to the collectability of accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make required payments. In determining the amount of the reserve, we consider historical levels of credit losses and significant economic developments within the retail environment that could impact the ability of our customers to pay outstanding balances and make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Because we cannot predict future changes in the financial stability of our customers, actual future losses from uncollectible accounts may differ from estimates. If the financial condition of customers were to deteriorate, resulting in their inability to make payments, a larger reserve might be required. In the event we determine a smaller or larger reserve is appropriate, we would record a benefit or charge to selling, general and administrative expenses in the period in which such a determination was made. As of March 31, 2025 and 2024, the allowance for doubtful accounts was $17.0 million and $15.0 million, respectively.

Inventory Valuation and Reserves

We value our inventory at standard cost, which approximates the first-in, first-out method of cost determination. Net realizable value is estimated based upon assumptions made about future demand and retail market conditions, which are inherently uncertain. If we determine that the estimated net realizable value of our inventory is less than the carrying value of such inventory, we record a charge to cost of goods sold to reflect the lower of cost or net realizable value. If actual market conditions are less favorable than those that we projected, further adjustments may be required that would increase the cost of goods sold in the period in which such a determination was made. As March 31, 2025 and 2024, the inventory reserve was $46.6 million and $44.2 million, respectively.

Goodwill

Goodwill is recorded at its estimated fair value at the date of acquisition and is allocated to the reporting units that are expected to receive the related benefits. Goodwill is required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In conducting an annual impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that is the case, or if we choose to bypass the qualitative assessment, we perform a quantitative goodwill impairment test. We compare the fair value of the reporting unit with its carrying amount. We estimate fair value using the discounted cash flows model, under the income approach, which indicates the fair value of the reporting unit based on the present value of the cash flows that we expect the reporting unit to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital, long-term growth rate and profitability of the reporting unit's business, and working capital effects. If the carrying amount of a reporting unit exceeds its fair value, goodwill is impaired to the extent that the carrying value exceeds the fair value of the reporting unit.

Long-Lived Assets

We continually evaluate long-lived assets and whether events and circumstances have occurred that indicate the remaining estimated useful life may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. When factors indicate that an asset group should be evaluated for possible impairment, the Company estimates the fair value of the asset group based on its discounted cash flows or market rent assessments and compares the estimated fair value to the net carrying value. The significant estimates used in the fair value methodology, which are based on Level 3 inputs, include: the Company's expectations for future operations and projected cash flows, including net revenue, gross profit and operating expenses and market conditions, including estimated market rent. If future undiscounted cash flows are less than the carrying value, an impairment is recognized in earnings to the extent that the carrying value exceeds fair value.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of our

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assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary.

Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions or obtaining new information on particular tax positions may cause a change to the effective tax rate.

Assessing whether deferred tax assets are realizable requires significant judgment. We consider all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent we believe it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against our deferred tax assets, which increase income tax expense in the period when such a determination is made.

Stock-Based Compensation

The assumptions used in calculating the fair value of stock-based compensation awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment. In addition, compensation expense for performance-based awards with performance conditions is recorded over the related service period when achievement of the performance targets is deemed probable, which requires management judgment.

Summary of Significant Account Policies

Refer to Note 2 of our Consolidated Financial Statements, included in Part II, Item 8 this Annual Report on Form 10-K, for a summary of our significant accounting policies and our assessment of recently issued accounting standards.