On Holding AG (ONON): Business Model Canvas [Dec-2025 Updated]

You're digging into how On Holding AG is sustaining its hyper-growth, and honestly, the numbers from late 2025 tell a compelling story: Q3 net sales hit CHF 731.3 million, with apparel soaring 86.9%, pointing toward a projected full-year take of nearly CHF 2.98 billion. As a former BlackRock analyst, I can tell you this isn't luck; it's a meticulously engineered model built on proprietary tech like CloudTec®, a premium Direct-to-Consumer (DTC) push for better margins, and high-profile brand partnerships. This canvas breaks down exactly where the money comes from and what it costs to keep that engine running at this premium pace, so dive in to see the structure supporting this performance.

On Holding AG (ONON) - Canvas Business Model: Key Partnerships

You're looking at the structure that supports On Holding AG's premium growth, which is heavily reliant on a carefully managed external network. The company's strategy hinges on balancing direct control with the scale provided by external partners across manufacturing, distribution, and brand building.

The financial performance for the third quarter ended September 30, 2025, shows the wholesale channel contributed significantly, with net sales reaching CHF 479.6 million, representing a year-over-year increase of 23.3%, or 32.5% on a constant currency basis. This is slightly behind the Direct-to-Consumer (DTC) channel's reported growth of 27.6% (37.5% constant currency) to CHF 314.7 million, but still demonstrates sustained demand from key accounts.

Here's a breakdown of the key external relationships:

• Asian manufacturing partners (Vietnam, China) for production volume.
• Global wholesale retailers for broad market access.
• Run specialty partners for performance credibility.
• High-profile cultural collaborators for brand resonance.
• Logistics and supply chain providers for global delivery.

The reliance on external manufacturing is clear, though On Holding AG engineers all products in Switzerland. As of February 2025, footwear production was concentrated among nine suppliers; specifically, eight were located in Vietnam and one in Indonesia. For apparel and accessories, the sourcing network was more diverse, involving 13 suppliers across Vietnam, Slovenia, Portugal, Turkey, and China. For instance, Shanghai Weijie Garment Co., Ltd. in China is listed as a finished goods supplier for accessories.

The company actively manages supply chain risks, having raised U.S. prices on July 1, 2025, to offset higher costs from factors like U.S. tariffs affecting Asian suppliers. Operational focus in late 2025 included better demand forecasting and inventory optimization to protect premium margins.

The wholesale distribution network remains vital, even as DTC grows faster. The success of this channel is reflected in the overall wholesale net sales figures for the year so far:

Period Ended	Wholesale Net Sales (Reported)	Wholesale Growth (Reported YoY)	Wholesale Growth (Constant Currency YoY)
March 31, 2025 (Q1)	CHF 449.7 million	41.5%	38.6%
September 30, 2025 (Q3)	CHF 479.6 million	23.3%	32.5%

While specific revenue contributions from retailers like Foot Locker or Dick's Sporting Goods aren't itemized, the overall wholesale channel performance is robust.

Performance credibility is directly tied to specialized retail channels. During Q3 2025, the newly launched Cloudsurfer Max model achieved a significant milestone by ranking among the top 5 selling models with key run specialty partners in its first month alone. This indicates that the specialized running stores remain a crucial partner for validating performance claims.

Brand building is amplified through high-profile cultural alignments. Impactful brand-building campaigns featuring talent like Zendaya were cited as driving global momentum for On Holding AG through the first quarter of 2025. The company's strategy is to elevate the brand as the benchmark for performance and design through community building and cultural relevance.

Logistics and supply chain partners are foundational to global delivery, with the company's full-year 2025 guidance raised based on strong execution across this network. The company's cash reserves were CHF 846.6 million as of June 30, 2025, showing the capital base supporting these complex global operations.

Finance: review Q4 2025 inventory turnover projections against current supplier lead times by end of January.

On Holding AG (ONON) - Canvas Business Model: Key Activities

You're looking at the core engine driving On Holding AG's premium growth trajectory through late 2025. The Key Activities section of the Business Model Canvas is where the company translates its value proposition into tangible results, focusing heavily on innovation, brand equity, and channel execution.

Continuous R&D and product innovation (e.g., LightSpray technology).

On Holding AG's commitment to engineering in Switzerland remains central. This activity involves the ongoing development of proprietary platforms like CloudTec®, Helion superfoam, Speedboard, and the groundbreaking LightSpray™ technology, which management indicated they were scaling production capabilities for in 2025. While specific 2025 R&D expenditure figures aren't explicitly detailed in the latest reports, the resulting product pipeline, including launches like the Cloudsurfer 2 and Cloud 6, drove significant top-line momentum across the year.

• Products engineered in Switzerland.
• Focus on proprietary cushioning systems.
• Scaling production for new innovations like LightSpray™.

Global brand building and premium marketing campaigns.

Maintaining a premium, differentiated positioning requires consistent, high-impact marketing. This activity ensures the brand resonates across sports, fashion, and design communities globally. The success of these efforts is evidenced by the strong top-line growth and the ability to command premium pricing, which contributed to margin expansion. Impactful brand-building campaigns featuring high-profile talent, such as collaborations with Zendaya, have driven global momentum.

Managing a seamless omnichannel (DTC and wholesale) distribution.

Executing across Direct-to-Consumer (DTC) and wholesale channels with precision is a critical activity. The DTC channel consistently delivers superior profitability and has been a major driver of margin expansion. The DTC share reached 38.1% of total net sales in Q1 2025, up from 48.8% in Q4 2024, showing a dynamic balance. The growth rates across these channels in Q2 2025 highlight this execution:

Channel	Q2 2025 Net Sales Growth (Constant Currency)	Q2 2025 Net Sales (CHF Million)
Direct-to-Consumer (DTC)	54.3%	308.3
Wholesale	28.8%	(Implied from total growth and DTC)

The company operates in over 80 countries, with the Americas representing 60.7% of revenue, EMEA 25%, and Asia-Pacific 14.3% as of mid-2025. The APAC region, in particular, saw revenue more than double in Q2 2025, surging 101.3% reported YoY.

Expanding the high-growth apparel and accessories category.

Scaling these categories beyond core footwear is a deliberate activity to diversify revenue and capture market share. The growth rates here have been explosive, significantly outpacing the overall business growth. For instance, in Q2 2025 compared to the prior year:

• Apparel net sales grew by 75.5% (constant currency).
• Accessories net sales grew by 143.2% (constant currency).

This focus is clearly paying off; the apparel category saw robust growth of 77.5% in Q4 2024, reaching CHF 32.6 million. By Q3 2025, management was confident enough to raise the full-year net sales growth guidance to at least 34% constant currency, translating to reported net sales of approximately CHF 2.98 billion.

Maintaining disciplined cost control and operational efficiencies.

This activity ensures that hyper-growth translates into expanding profitability, which is visible in the margin performance. The focus on operational excellence and full-price sales is key. The gross profit margin expanded to 61.5% in Q2 2025 and hit a record of 65.7% in Q3 2025, up 510 basis points year-over-year for that quarter. The full-year 2025 guidance projects a gross profit margin around 62.5% and an Adjusted EBITDA margin above 18.0%. The Q3 2025 results showed a net income margin of 15.0%, a significant jump from 4.8% in the prior year, confirming pricing power and cost control are working in tandem.

The adjusted EBITDA margin for Q2 2025 was 18.2%, corresponding to an absolute adjusted EBITDA of CHF 136.1 million.

On Holding AG (ONON) - Canvas Business Model: Key Resources

You're looking at the core assets that power On Holding AG's growth right now, late in 2025. It's a mix of proprietary tech, serious brand cachet, and a rapidly expanding physical footprint. Honestly, the numbers tell a compelling story of premium positioning.

Proprietary CloudTec® cushioning technology

The foundation of On Holding AG's value is its patented cushioning system. This isn't just marketing fluff; the technology has measurable performance advantages. CloudTec® is cited as delivering 82% energy return during running, which is a key differentiator against established competitors. The technology is protected by 38 patents, creating a significant barrier to entry. Furthermore, the engineering focus continues with new innovations like LightSpray™ mentioned in early 2025 updates. The weight of their footwear, often around 220 grams per shoe, is noted as being 35% lighter than industry averages, a tangible benefit of their design process.

Here's a snapshot of the innovation investment:

Metric	Value	Context/Year
2023 R&D Investment	$16.5 million	For CloudTec and related innovation
Patents Held	38	Protecting core technology
Shoe Weight (Example)	220 grams	Lightweight design advantage

Strong, premium global brand equity and athlete-first image

On Holding AG has successfully translated performance credibility into broad lifestyle appeal. This premium image is reinforced by high-profile associations; the brand is noted as being Roger Federer-backed and featuring campaigns with talent like Zendaya. This positioning allows for strong pricing power, evidenced by impressive margin performance. The brand's expansion beyond footwear is also a key equity driver, with apparel sales spiking 99% following key 2025 product launches. While still a smaller player globally, the brand commanded an estimated 2% of the global athletic footwear market as of 2024.

Global network of owned retail stores and e-commerce platforms

The company is aggressively building out its physical presence to cement its premium image while leveraging a strong digital backbone. As of mid-2025, On Holding AG operated 49 stores globally, with plans to open another 20 to 25 stores annually. This physical expansion is seen as a flag in the ground for emerging markets. The direct-to-consumer (DTC) channel remains a massive resource, accounting for 38.1% of total net sales in the first quarter of 2025. The e-commerce network itself spans 28 countries.

The channel split shows the importance of DTC:

• DTC Share (Q1 2025): 38.1% of total net sales.
• DTC Net Sales (Q1 2025): CHF 276.9 million.
• DTC Net Sales Growth (Q1 2025 YoY): 45.3%.
• Wholesale Net Sales (Q1 2025): CHF 449.7 million.
• Wholesale Net Sales Growth (Q1 2025 YoY): 41.5%.

Key talent in design, engineering, and digital commerce

The operational strength relies on its people. As of the end of 2024, On Holding AG employed 3,254 individuals. Key leadership remains deeply involved, with founders serving as Executive Co-Chairmen and one founder, Martin Hoffmann, holding the roles of Co-CEO and CFO. The focus on digital commerce is crucial, driving the strong DTC performance mentioned above.

Significant cash flow to fund strategic investments

The company has maintained a strong balance sheet, which funds its growth initiatives like store rollouts and R&D. At the end of 2024, the cash balance was nearing CHF 1 billion. By the end of the first quarter of 2025, cash and cash equivalents stood at CHF 871.8 million. The operational resilience is clear in the margins, with the gross profit margin hitting a record 65.7% in Q3 2025, and the net income margin reaching 15.0% in the same period. For the full year 2025, the company raised its guidance to achieve reported net sales of at least CHF 2.94 billion.

Here are some key financial metrics from the 2024 fiscal year and recent 2025 results:

Financial Metric	Amount	Period/Context
Net Sales	CHF 2,318.3 million	Full Year 2024
Net Income	CHF 242.3 million	Full Year 2024
Cash & Equivalents	CHF 871.8 million	End of Q1 2025
Net Sales (Latest Quarter)	CHF 794.4 million	Q3 2025
Adjusted EPS	CHF 0.43	Q3 2025
Gross Profit Margin	65.7%	Q3 2025 (Record)

On Holding AG (ONON) - Canvas Business Model: Value Propositions

You're looking at the core reasons why On Holding AG commands its premium spot in the athletic market as of late 2025. The value proposition is built on tangible performance advantages and a clear commitment to premium execution, which the numbers definitely back up.

High-performance running shoes with unique cushioning technology

The foundation of On Holding AG's value is its proprietary cushioning technology, specifically the CloudTec® system, often paired with Helion superfoam and the Speedboard®. This engineering focus attracts serious athletes and casual users alike. The company continues to push this envelope; for instance, the introduction of the LightSpray™ technology is a major step, claiming up to a 75% reduction in CO₂ emissions during upper production compared to conventional methods used in other On shoes.

This innovation fuels a rapid product cycle. For example, the successful launches of the Cloudsurfer 2 and Cloud 6 contributed to record net sales in the first quarter of 2025.

Seamless blend of performance, design, and lifestyle appeal

On Holding AG successfully bridges the gap between technical running gear and fashion-forward aesthetics. This dual appeal drives exceptional growth across all segments. The momentum is clear in the financial results, showing broad-based demand across categories and regions. The company's strategic brand-building, including campaigns with high-profile talent like Zendaya, helps capture the lifestyle consumer.

The growth in non-footwear categories is telling:

• Apparel category saw an 86.9% increase in Q3 2025.
• Accessories soared by 145.3% in Q3 2025.
• Footwear sales still grew by 21.1% in Q3 2025.

Premium product quality justifying strong pricing power

The focus on premium execution translates directly to strong margin performance, which is a key indicator of pricing power. You see this in the company's ability to consistently raise its financial guidance. The gross profit margin has expanded, reflecting both this premium positioning and operational efficiencies.

Here's a look at the financial performance supporting this premium stance through the first three quarters of 2025:

Metric	Q1 2025 Result	Q2 2025 Result	Updated Full-Year 2025 Outlook
Net Sales (Reported)	CHF 726.6 million	CHF 749.2 million	Implied: CHF 2.98 billion
Gross Profit Margin	59.9%	61.5%	Around 62.5%
Adjusted EBITDA Margin	16.5%	18.2%	Above 18.0%
DTC Sales Growth (YoY)	45.3%	47.2%	N/A

The market prices this premium story high; for instance, the Forward P/E was noted at 46.79, significantly above peers like Adidas at 39.56x.

Commitment to sustainability and circular economy strides

On Holding AG embeds sustainability into its product value, moving beyond simple compliance. This commitment is tracked through its Impact Progress Reports. The company is actively working to decouple emissions from its rapid growth.

Key sustainability metrics reported leading into 2025 include:

• 84% of polyester fibers sourced from recycled or renewable resources in 2024.
• 100% of offices and stores powered by purchased renewable electricity in 2024.
• 100% of Tier 1 Suppliers phased out coal in 2024.
• The Cyclon™ program is the subscription-based circularity initiative.

The long-term goal remains a 55% economic intensity reduction in Scope 3 emissions by 2030, relative to the 2019 baseline.

Rapid product innovation cycle (e.g., Cloudsurfer Max)

The ability to launch new, high-demand products quickly supports the premium pricing and growth trajectory. The company raised its full-year 2025 net sales guidance for the third consecutive quarter following strong Q3 results, signaling that the innovation pipeline is effectively meeting demand. The updated full-year 2025 outlook projects constant currency net sales growth of 34% year-over-year.

This consistent outperformance, driven by product strength, is evident in the sequential margin improvement: Gross Profit Margin rose from 59.9% in Q1 2025 to 61.5% in Q2 2025, with the outlook for the full year climbing to around 62.5%.

Finance: draft Q4 2025 cash flow forecast by next Tuesday.

On Holding AG (ONON) - Canvas Business Model: Customer Relationships

You're looking at how On Holding AG keeps its customers close, which is key when you're charging premium prices. The relationship strategy centers on making every interaction feel exclusive, even at scale.

High-touch, premium experience across all channels.

On Holding AG reinforces its premium positioning by ensuring the experience matches the price point. This isn't just about the product; it's about the perception of quality and exclusivity you get when you buy. The company's focus on premium execution is reflected in its profitability metrics. For instance, the gross profit margin reached 65.7% in the third quarter of 2025, up from 61.5% in the second quarter of 2025. This margin strength suggests customers are willing to pay for the differentiated value. Footwear, for example, is typically priced in the $150 and $230 range, which supports this high-touch perception.

Direct-to-Consumer (DTC) focus to build loyalty and lifetime value.

The push toward DTC is central to owning the customer relationship, which helps build loyalty and capture more of the lifetime value. You can see this shift clearly in the numbers. For the nine-month period ending September 30, 2025, net sales through the DTC channel grew by 39.2% to CHF 899.9 million. This channel is growing faster than wholesale, though wholesale still represents the larger volume. The DTC share of total net sales was 39.6% in Q3 2025, up from 38.8% in the same period last year. This direct access allows On Holding AG to gather data for hyper-personalized marketing, a defintely valuable asset.

Here's how the two main channels stacked up in the third quarter of 2025:

Metric	DTC Channel	Wholesale Channel
Q3 2025 Net Sales (Reported)	CHF 314.7 million	CHF 479.6 million
Q3 2025 Net Sales Growth (Reported)	27.6%	23.3%
Q3 2025 Net Sales Growth (Constant Currency)	37.5%	32.5%
Q3 2025 Share of Total Net Sales	39.6%	60.4%

Community building through running and movement events.

On Holding AG invests heavily in brand advocacy, which serves as a form of scaled community engagement. This is visible through high-profile partnerships, such as those with talent like Zendaya and Roger Federer, which drive global momentum. While specific event attendance figures aren't public, the strategy relies on these endorsements and brand-building campaigns to foster a sense of belonging among performance-conscious consumers.

Digital engagement via e-commerce and social media platforms.

The e-commerce platform is the engine of the DTC relationship. On Holding AG utilizes an AI-driven e-commerce platform to tailor product recommendations, which is designed to drive repeat purchases. The success of this digital focus is evident in the Q1 2025 DTC sales growth of 45.3% year-over-year. The company is also focused on strengthening the relationship between e-commerce and its growing network of owned retail stores, treating them as interconnected omnichannel touchpoints.

Dedicated personal assistance for elite athletes and partners.

For its most visible partners, the relationship is highly dedicated, which trickles down to brand perception for all customers. The apparel segment, which caters to dedicated movement, saw net sales increase by 75.5% at constant exchange rates in the first nine months of 2025, driven by heightened consumer engagement and repeat transactions. This indicates that the high-level support for elite athletes translates into strong loyalty within the broader community.

On Holding AG (ONON) - Canvas Business Model: Channels

You're mapping out On Holding AG's distribution strategy as of late 2025, and the numbers show a clear, aggressive pivot toward owning the customer relationship.

Direct-to-Consumer (DTC) via On-owned e-commerce is accelerating, driving margin expansion. For the third quarter of 2025, the DTC channel accounted for 39.6% of total net sales, up from 38.8% in the same period last year. This channel saw net sales rise by 27.6% on a reported basis in Q3 2025. The company is defintely leaning into this higher-margin path.

Owned retail stores in key global cities are acting as brand flagships and omnichannel hubs. As of June 2025, On Holding AG operated 49 stores globally. Management planned to open between 20 to 25 stores annually in 2025, with specific expansion targets in Southeast Asia and the Middle East.

The channel mix for the third quarter of 2025 clearly illustrates the ongoing strategic shift, even though wholesale remains the larger segment:

Channel	Net Sales Share (Q3 2025)	Reported Net Sales (Q3 2025)	Reported YoY Growth (Q3 2025)
Wholesale Distribution	60.4%	CHF 479.6 million	23.3%
Direct-to-Consumer (DTC)	39.6%	CHF 314.7 million	27.6%

Wholesale distribution through multi-brand sporting goods retailers remains the core volume driver, contributing 60.4% of net sales in Q3 2025. This growth is being managed selectively, focusing on expansion with key accounts like Dick's, JD, and Footlocker, as well as increasing shelf space with existing partners.

Specialized run specialty stores for core runners are integrated within the broader wholesale strategy, emphasizing selective expansion to maintain premium brand positioning. The company's overall strategy relies on this dual approach for broad market penetration alongside controlled customer experience.

Digital marketplaces like Zalando and Amazon are a smaller focus in the overall strategy, though the company continuously evaluates its pricing strategy within the marketplace environment.

• The full-year 2025 reported net sales guidance was raised to approximately CHF 2.98 billion.
• The company achieved a gross profit margin of 65.7% in Q3 2025.
• For the full year 2025, On Holding AG expects an Adjusted EBITDA margin above 18.0%.

Finance: finalize the Q4 2025 channel mix projection by next Tuesday.

On Holding AG (ONON) - Canvas Business Model: Customer Segments

You're analyzing On Holding AG's customer base as of late 2025, and the data clearly shows a successful pivot toward a premium, multi-faceted consumer. The strategy is clearly not just about the dedicated runner anymore; it's about capturing the entire active lifestyle spectrum.

The overall financial health supports this premium focus, with management raising the full-year 2025 net sales guidance to at least CHF 2.98 billion at current spot rates, reflecting a projected growth of 34% year-over-year on a constant currency basis. Furthermore, the Q3 2025 gross profit margin hit a record 65.7%, which tells you these segments are accepting the premium pricing structure.

Here is the breakdown of the core customer segments On Holding AG targets:

• Performance runners and professional athletes.
• Affluent, active lifestyle consumers seeking premium sportswear.
• Fashion-forward individuals valuing design and cultural relevance.
• Environmentally conscious buyers seeking sustainable options.

The company's success in capturing these distinct groups is visible through channel and product performance:

Performance Runners and Professional Athletes

This is the foundational segment, driven by the company's core engineering ethos. On Holding AG underscores this with an athlete-first innovation strategy, recently underscored by victories in major athletic events. This credibility directly supports the premium positioning across the entire product line.

Affluent, Active Lifestyle Consumers Seeking Premium Sportswear

This group is highly responsive to the brand's direct engagement strategy. The Direct-to-Consumer (DTC) channel, which typically captures the most brand-loyal and premium-paying customers, is growing rapidly. In Q2 2025, net sales through the DTC channel surged 47.2% on a reported basis. By Q1 2025, the DTC sales mix accounted for 38.1% of total net sales, showing a clear shift toward direct, higher-margin relationships.

Fashion-Forward Individuals Valuing Design and Cultural Relevance

This segment is being actively courted through high-profile cultural collaborations. The success here is evident in the explosive growth of non-footwear categories. For instance, apparel net sales saw a remarkable increase of 86.9% in Q3 2025. Furthermore, accessories net sales increased by 133.3% in Q2 2025, suggesting these consumers are buying into the full lifestyle offering, often influenced by partnerships with figures like Zendaya and Burna Boy.

Environmentally Conscious Buyers Seeking Sustainable Options

While direct sales figures for this segment aren't itemized, the commitment to sustainability is a stated value proposition that attracts this buyer. The company highlights its 'groundbreaking strides within the circular economy' as a key part of its mission to be the most premium global sportswear brand. This focus helps justify the premium price point for a segment increasingly prioritizing corporate responsibility.

To give you a clearer picture of the financial scale underpinning these segments, here is a look at the revenue distribution by channel and product category for recent periods:

Metric	Value (Q3 2025)	Comparison/Context
Total Net Sales	CHF 794.4 million	24.9% year-over-year increase
DTC Net Sales	CHF 314.7 million	27.6% year-over-year growth
Wholesale Net Sales	CHF 479.6 million	23.3% year-over-year growth
Apparel Net Sales Growth	86.9% increase	Constant currency growth in Q3 2025
Gross Profit Margin	65.7%	Record high for the quarter

The growth in the Americas region, which represented 60.7% of revenue in a prior period, remains a key driver, but the Asia-Pacific region delivered triple-digit growth, showing the successful expansion into new consumer markets globally.

On Holding AG (ONON) - Canvas Business Model: Cost Structure

You're looking at the cost side of On Holding AG's premium engine, and the numbers from late 2025 show a deliberate trade-off: high gross margins funded by premium pricing, offset by heavy investment in brand visibility. The structure is clearly built to support a global, high-growth, premium sportswear brand.

High Cost of Goods Sold (COGS) due to premium materials and manufacturing

The cost of the product itself, what we call Cost of Sales, is managed tightly through pricing power, but the underlying cost structure reflects premium sourcing. For the third quarter ended September 30, 2025, On Holding AG achieved a record gross profit margin of 65.7%. This translated to a gross profit of CHF 522.2 million on net sales of CHF 794.4 million for the quarter. However, you need to know that this Q3 peak included a positive one-time adjustment of approximately 200 basis points due to lower-than-anticipated freight and other costs, which management confirmed were sustainable efficiencies. For the full year 2025, the guidance reflects a slightly lower, but still very strong, gross profit margin expectation of around 62.5% on projected reported net sales of CHF 2.98 billion.

Here's a quick look at the key cost-related metrics from the Q3 2025 report:

• Q3 2025 Cost of Sales: CHF 272.1 million.
• Q3 2025 Gross Profit Margin: 65.7%.
• Full Year 2025 Gross Profit Margin Guidance: ~62.5%.
• Full Year 2025 Net Sales Guidance: CHF 2.98 billion.

Significant marketing and brand building expenditure

To maintain that premium positioning, On Holding AG spends heavily on getting its name and technology in front of the consumer. Selling, General & Administrative (SG&A) expenses are substantial, reflecting this deliberate investment in growth. For the nine months ended September 30, 2025, SG&A expenses totaled CHF 1,123.8 million. Looking specifically at Q3 2025, SG&A, excluding share-based compensation, was 47.1% of net sales, an increase from 46% in the prior year, which management explicitly stated reflects a deliberate decision to invest in future growth through marketing and global retail expansion. This spend is what fuels the brand momentum, including high-profile talent partnerships.

R&D costs for proprietary technology (CloudTec®, LightSpray)

The innovation pipeline, which includes proprietary cushioning systems like CloudTec® and technologies such as LightSpray™, is funded through the operating budget. While the specific R&D line item isn't isolated from the broader SG&A, the commitment is clear: all sportswear is engineered in Switzerland by dedicated in-house teams. This investment is non-negotiable for sustaining the premium price point and competitive edge. The company's ability to command a 65.7% gross margin in Q3 2025 is a direct reflection of the perceived value of this innovation.

Operating expenses for a sizable Swiss Franc cost base

As a company headquartered in Zurich, Switzerland, a significant portion of the fixed and operating costs are denominated in Swiss Francs (CHF). This creates a specific exposure. For the twelve months ending September 30, 2025, On Holding AG's total operating expenses were reported as $2.985B. The strength of the Swiss Franc has been a noted challenge, with management acknowledging in earlier periods that material depreciation of all key operating currencies against the CHF introduced planning uncertainty. The high profitability seen in Q3 2025, with a net income margin of 15.0%, helps provide a buffer against these currency-related cost pressures.

Logistics and freight costs, though recently lower

Logistics costs have been a recent area of favorable variance. As mentioned, the Q3 2025 gross margin benefited from a one-time positive adjustment of approximately 200 basis points due to lower than anticipated freight and other costs. Management attributed these lower costs partly to successful negotiations and scale benefits achieved during the first half of the year. The company is focused on structurally improving its distribution cost baseline, which continues to decline as a percentage of net sales, partly due to increasing Direct-to-Consumer (DTC) share.

Here is a summary of the key financial metrics impacting the cost structure:

Metric	Q3 2025 Actual (CHF Million)	Full Year 2025 Guidance	Prior Year Q3 (CHF Million)
Net Sales	794.4	CHF 2.98 billion (Reported)	635.8
Cost of Sales (COGS)	272.1	Implied by Margin/Sales	250.5
Gross Profit	522.2	Implied by Margin/Sales	385.3
SG&A Expenses	397.5	Implied by Margin/Sales	312.7
Gross Profit Margin	65.7%	~62.5%	60.6%
SG&A as % of Net Sales (Excl. SBC)	47.1%	Trend towards efficiency	46.0%

Finance: draft 13-week cash view by Friday.

On Holding AG (ONON) - Canvas Business Model: Revenue Streams

You're looking at the core ways On Holding AG brings in money, which is heavily weighted toward product sales, as you'd expect from a premium sportswear brand. The business model relies on moving high-margin product through two main routes: selling directly to you and selling through established retail partners.

The primary revenue driver remains footwear. For the third quarter of 2025, net sales from shoes alone hit CHF 731.3 million. This segment is the engine, but the growth story is increasingly about diversification across product lines and channels.

The apparel category is showing explosive growth, which is a key strategic win for On Holding AG. Apparel sales jumped 86.9% in Q3 2025 compared to the prior year period. Accessories are growing even faster, with a reported increase of 145.3% in the same quarter. Honestly, seeing that kind of acceleration in non-footwear categories suggests successful brand expansion.

Here's a quick look at how the product categories stacked up in Q3 2025:

Revenue Stream Component	Q3 2025 Net Sales (CHF million)	Q3 2025 Year-over-Year Growth (Reported)
Footwear Sales	731.3	21.1%
Apparel Sales	50.1	86.9%
Accessories Sales	13.0	145.3%
Total Q3 Net Sales	794.4	24.9%

The split between how the product reaches the customer is critical to profitability. Direct-to-Consumer (DTC) sales are where On Holding AG captures the highest margin, which is why they emphasize this channel. For Q3 2025, DTC sales reached CHF 314.7 million. This channel grew by 27.6% year-over-year on a reported basis.

The Wholesale channel remains a massive volume driver, providing broad market access through retail partners. Wholesale channel sales for the quarter were CHF 479.6 million, showing a reported increase of 23.3%. The mix shift towards DTC is what helps push the overall gross profit margin up, which hit 65.7% in Q3 2025.

Looking at the full picture, On Holding AG has raised its expectations for the entire year. The full-year 2025 net sales projection is now approximately CHF 2.98 billion, based on an expected constant-currency growth of 34% year-over-year. That revised guidance shows confidence in maintaining this revenue momentum through the end of the year.

You can see the key revenue stream dynamics here:

• Footwear sales are the base, generating CHF 731.3 million in Q3 2025.
• Apparel sales grew by 86.9% in Q3 2025, showing successful category penetration.
• DTC sales hit CHF 314.7 million in Q3 2025, supporting superior profitability.
• Wholesale sales provided CHF 479.6 million in Q3 2025 volume.
• Full-year 2025 net sales guidance is set at about CHF 2.98 billion.

Finance: draft 13-week cash view by Friday.