crox-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 000-51754

_____________________________________________________________

CROCS, INC.

(Exact name of registrant as specified in its charter)


Delaware						20-2164234
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

500 Eldorado Blvd., Building 5, Broomfield, Colorado 80021

(Address, including zip code, of registrant’s principal executive offices)

(303) 848-7000

(Registrant’s telephone number, including area code)

_____________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading symbol:

Name of each exchange on which registered:

Common Stock, par value $0.001 per share

CROX

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated

filer

Non-accelerated

filer

Smaller reporting company

Emerging growth company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 23, 2026, Crocs, Inc. had 49,689,648 shares of its common stock, par value $0.001 per share, outstanding.

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995.

Statements that refer to industry trends, projections of our future financial performance, anticipated trends in our business and other characterizations of future events or circumstances are forward-looking statements. These statements, which express management’s current views concerning future events or results, use words like “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “plan,” “project,” “strive,” and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will,” “would,” and similar expressions or variations. Examples of forward-looking statements include, but are not limited to, statements we make regarding:

•our expectations regarding future trends, expectations, and performance of our business;

•our expectations regarding the impact of economic trends on our business;

•our belief that we have sufficient liquidity to fund our business operations during the next twelve months; and

•our expectations about the impact of our strategic plans.

Forward-looking statements are subject to risks, uncertainties, and other factors, which may cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation, those described in the section entitled “Risk Factors” under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2025, and our subsequent filings with the Securities and Exchange Commission, including those described in the section entitled “Risk Factors” under Item 1A in this report. Caution should be taken not to place undue reliance on any such forward-looking statements. Moreover, such forward-looking statements speak only as of the date of this report. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements, except as required by applicable law.

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Crocs, Inc.

Table of Contents to the Quarterly Report on Form 10-Q

For the Quarterly Period Ended March 31, 2026


PART I — Financial Information

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

PART II — Other Information		31

Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31

Item 5.	Other Information	31
Item 6.	Exhibits	32
Signatures		33

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PART I — Financial Information

ITEM 1. Financial Statements

CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except per share data)


	Three Months Ended March 31,
	2026		2025
Revenues	$	921,457	$	937,333
Cost of sales	398,512		395,784
Gross profit	522,945		541,549
Selling, general and administrative expenses	322,101		318,575
Income from operations	200,844		222,974
Foreign currency gains (losses), net	(1,625)		4,873
Interest income	335		333
Interest expense	(20,459)		(22,766)
Other expense, net	(251)		(475)
Income before income taxes	178,844		204,939
Income tax expense	41,288		44,836
Net income	$	137,556	$	160,103
Net income per common share:
Basic	$	2.74	$	2.85
Diluted	$	2.71	$	2.83
Weighted average common shares outstanding:
Basic	50,282		56,110
Diluted	50,707		56,502

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(in thousands)


	Three Months Ended March 31,
	2026		2025
Net income	$	137,556	$	160,103
Other comprehensive income (loss), net of tax:
Derivatives designated as hedging instruments:
Unrealized gains on derivative instruments	1,048		23
Reclassification adjustment for realized (gains) losses on derivative instruments	—		(419)
Net increase (decrease) from derivatives designated as hedging instruments	1,048		(396)
Foreign currency translation gains (losses), net	(12,834)		29,968
Total comprehensive income, net of tax	$	125,770	$	189,675

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and par value amounts)


	March 31, 2026		December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	130,881	$	130,354

Accounts receivable, net of allowances of $26,303 and $28,136, respectively	442,320		278,191
Inventories	397,557		368,687
Income taxes receivable	2,443		32,782
Other receivables	25,315		22,082
Prepaid expenses and other assets	66,687		53,787
Total current assets	1,065,203		885,883
Property and equipment, net of accumulated depreciation of $222,974 and $209,873, respectively	236,874		238,191
Intangible assets, net of accumulated amortization of $190,442 and $184,490, respectively	1,320,658		1,324,680
Goodwill	404,662		404,689
Deferred tax assets, net	920,050		935,054
Restricted cash	3,467		3,557
Right-of-use assets	345,137		338,669
Other assets	47,363		44,027
Total assets	$	4,343,414	$	4,174,750
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	242,474	$	266,090
Accrued expenses and other liabilities	259,430		300,959
Income taxes payable	43,764		47,308
Current borrowings	5,550		—
Current operating lease liabilities	88,298		85,772
Total current liabilities	639,516		700,129
Deferred tax liabilities, net	902		882
Long-term income taxes payable	640,521		649,057
Long-term borrowings	1,330,271		1,230,885
Long-term operating lease liabilities	301,325		297,192
Other liabilities	3,489		3,322
Total liabilities	2,916,024		2,881,467
Commitments and contingencies
Stockholders’ equity:

Common stock, par value $0.001 per share, 250.0 million shares authorized, 110.9 million and 110.7 million issued, 50.4 million and 50.2 million outstanding, respectively	111		111
Treasury stock, at cost, 60.5 million and 60.5 million shares, respectively	(3,042,686)		(3,040,416)
Additional paid-in capital	907,212		896,605
Retained earnings	3,618,194		3,480,638
Accumulated other comprehensive loss	(55,441)		(43,655)
Total stockholders’ equity	1,427,390		1,293,283
Total liabilities and stockholders’ equity	$	4,343,414	$	4,174,750

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands)


	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2025	50,220	$	111	60,481	$	(3,040,416)	$	896,605	$	3,480,638	$	(43,655)	$	1,293,283
Share-based compensation	—	—		—	—		10,607		—		—		10,607
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes	225	—		30	(2,455)		—		—		—		(2,455)
Repurchases of common stock, including excise tax	—	—		—	185		—		—		—		185

Net income	—	—		—	—		—		137,556		—		137,556
Other comprehensive loss	—	—		—	—		—		—		(11,786)		(11,786)
Balance at March 31, 2026	50,445	$	111	60,511	$	(3,042,686)	$	907,212	$	3,618,194	$	(55,441)	$	1,427,390


	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2024	56,475	$	110	53,930	$	(2,453,473)	$	859,904	$	3,561,836	$	(132,645)	$	1,835,732
Share-based compensation	—	—		—	—		8,777		—		—		8,777
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes	189	1		33	(3,310)		—		—		—		(3,309)
Repurchases of common stock, including excise tax	(607)	—		607	(61,282)		—		—		—		(61,282)
Net income	—	—		—	—		—		160,103		—		160,103
Other comprehensive income	—	—		—	—		—		—		29,572		29,572
Balance at March 31, 2025	56,057	$	111	54,570	$	(2,518,065)	$	868,681	$	3,721,939	$	(103,073)	$	1,969,593

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	137,556	$	160,103
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,240		18,537

Operating lease cost	28,053		24,186


Share-based compensation	10,607		8,777
Asset impairment	3,301		—
Deferred taxes	954		13,589
Other non-cash items	4,568		(355)
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
Accounts receivable	(165,459)		(183,607)
Inventories	(30,959)		(36,633)
Prepaid expenses and other assets	(20,246)		3,516
Accounts payable, accrued expenses and other liabilities	(64,574)		(71,094)
Right-of-use assets and operating lease liabilities	(27,786)		(23,901)
Income taxes	22,811		19,647
Cash used in operating activities	(80,934)		(67,235)
Cash flows from investing activities:
Purchases of property, equipment, and software	(18,000)		(15,375)


Cash used in investing activities	(18,000)		(15,375)
Cash flows from financing activities:

Proceeds from borrowings	178,550		195,000
Repayments of borrowings	(76,000)		(65,000)

Repurchases of common stock	—		(60,866)
Repurchases of common stock for tax withholding	(2,455)		(3,310)

Cash provided by financing activities	100,095		65,824
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(724)		2,845
Net change in cash, cash equivalents, and restricted cash	437		(13,941)
Cash, cash equivalents, and restricted cash—beginning of period	133,911		183,678
Cash, cash equivalents, and restricted cash—end of period	$	134,348	$	169,737

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CROCS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise noted in this report, any description of the “Company,” “we,” “us,” or “our” includes Crocs, Inc. and our consolidated subsidiaries within our reportable operating segments and corporate operations. We are engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for all. We strive to be the global leader in the sale of casual footwear characterized by functionality, comfort, color, and lightweight design.

Our reportable operating segments include: (i) the Crocs Brand and (ii) the HEYDUDE Brand. See Note 13 — Operating Segments for additional information.

The accompanying unaudited condensed consolidated interim financial statements include our accounts and those of our wholly-owned subsidiaries, and they reflect all adjustments which are necessary for a fair statement of results of operations, financial position, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such unaudited condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

These unaudited condensed consolidated interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 (“Annual Report”), and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report. Our accounting policies did not change during the three months ended March 31, 2026, other than with respect to the new accounting pronouncements adopted, as applicable, as described in Note 2 — Recent Accounting Pronouncements.

Reclassifications

We have reclassified certain amounts within Note 1 — Basis of Presentation and Summary of Significant Accounting Policies to conform to current period presentation.

Use of Estimates

U.S. GAAP requires us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, customer rebates, sales returns and allowances, impairment assessments and charges, recoverability of long-lived assets, deferred tax assets, valuation allowances, uncertain tax positions, income tax expense, share-based compensation expense, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, goodwill, and indefinite-lived intangible assets are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our condensed consolidated financial statements may be materially affected.

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Condensed Consolidated Statements of Cash Flows - Supplemental Disclosures


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Cash paid for interest	$	24,360	$	26,838
Cash paid for income taxes, net of refunds (1)	17,069		12,020
Cash paid for operating leases	27,860		24,579

Non-Cash Investing and Financing Activities:
Right-of-use assets obtained in exchange for operating lease liabilities, net of terminations	$	29,232	$	45,361
Accrued purchases of property, equipment, and software	6,893		8,809

(1) In the fourth quarter of 2025, we revised our presentation for cash paid for income taxes. Previously, cash paid for income taxes was presented excluding income tax refunds received. Under the revised presentation, cash paid for income taxes is presented net of refunds. We believe the revised presentation provides more meaningful and transparent information regarding our operating cash flows. Amounts for the three months ended March 31, 2025, have been recast to conform to current period presentation.

2. RECENT ACCOUNTING PRONOUNCEMENTS

New Accounting Pronouncements Not Yet Adopted

Disaggregation of Income Statement Expenses

In November 2024, with subsequent clarification in January 2025, the FASB issued authoritative guidance related to the disclosure of disaggregation of income statement expenses. This guidance becomes effective for annual periods beginning after December 15, 2026, with early adoption permitted, and should be applied on a prospective basis. We do not expect this standard to have a material impact on our consolidated financial statements, but it will require increased disclosures within the notes to our consolidated financial statements.

Other new pronouncements issued but not effective until after March 31, 2026, are not expected to have a material impact on our condensed consolidated financial statements.

3. ACCRUED EXPENSES AND OTHER LIABILITIES

Amounts reported in ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheets were:


	March 31, 2026		December 31, 2025
	(in thousands)
Accrued compensation and benefits	$	54,111	$	88,242
Professional services	43,108		53,331
Fulfillment, freight, and duties	44,508		39,720
Return liabilities	36,868		37,960
Sales/use and value added taxes payable	23,958		23,068
Other	56,877		58,638
Total accrued expenses and other liabilities	$	259,430	$	300,959

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4. LEASES

Right-of-Use Assets and Operating Lease Liabilities

Amounts reported in the condensed consolidated balance sheets were:


	March 31, 2026		December 31, 2025
	(in thousands)
Assets:
Right-of-use assets	$	345,137	$	338,669
Liabilities:
Current operating lease liabilities	$	88,298	$	85,772
Long-term operating lease liabilities	301,325		297,192
Total operating lease liabilities	$	389,623	$	382,964

Lease Costs and Other Information

Lease-related costs reported within ‘Cost of sales’ and ‘Selling, general and administrative expenses’ in our condensed consolidated statements of income were:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Operating lease cost	$	28,053	$	24,186
Short-term lease cost	2,650		2,960
Variable lease cost	5,825		5,589
Total lease costs	$	36,528	$	32,735

The weighted average remaining lease term and discount rate related to our lease liabilities as of March 31, 2026, was 5.4 years and 6.6%, respectively. As of March 31, 2025, the weighted average remaining lease term and discount rate related to our lease liabilities was 6.0 years and 6.5%, respectively.

Maturities

The maturities of our operating lease liabilities were:


	As of March 31, 2026
	(in thousands)
2026 (remainder of year)	$	75,021
2027	97,935
2028	78,406
2029	62,685
2030	47,313
Thereafter	104,260
Total future minimum lease payments	465,620
Less: imputed interest	(75,997)
Total operating lease liabilities	$	389,623

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5. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

All of our derivative instruments are classified as Level 2 of the fair value hierarchy and are reported in the condensed consolidated balance sheets within either ‘Prepaid expenses and other assets’ or ‘Accrued expenses and other liabilities’ at March 31, 2026, and December 31, 2025. The fair values of our derivative instruments were an insignificant asset at March 31, 2026, and an insignificant asset and an insignificant liability at December 31, 2025. See Note 6 — Derivative Financial Instruments for more information.

The carrying amounts of our cash, cash equivalents, and restricted cash approximate their fair value and are classified as Level

1 of the fair value hierarchy. The carrying amounts of our accounts receivable, accounts payable, and current accrued expenses and other liabilities approximate their fair value as recorded due to the short-term maturity of these instruments and are classified as Level 2 of the fair value hierarchy.

Our borrowing instruments are recorded at their carrying values in the condensed consolidated balance sheets, which may differ from their respective fair values. The Term Loan B Facility (as defined below) and the Notes (as defined below) are classified as Level 1 of the fair value hierarchy and are reported in our condensed consolidated balance sheet at face value, less unamortized issuance costs. The fair value of our Revolving Facility (as defined below) approximates its carrying value at March 31, 2026, and December 31, 2025, based on interest rates currently available to us for similar borrowings. The carrying value and fair value of our borrowing instruments as of March 31, 2026, and December 31, 2025, were:


	March 31, 2026				December 31, 2025
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Term Loan B Facility	$	500,000	$	502,188	$	500,000	$	504,063
2029 Notes	350,000		336,424		350,000		339,304
2031 Notes	350,000		316,306		350,000		323,971
Revolving Facility	159,000		159,000		62,000		62,000

Non-Financial Assets and Liabilities

Our non-financial assets, which primarily consist of property and equipment, right-of-use assets, goodwill, and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value.

The fair values of these assets were determined based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. We recorded impairments within ‘Selling, general and administrative expenses’ in our condensed consolidated statements of income as follows:


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Leasehold improvement asset impairment (1)	$	3,301	$	—
Total asset impairments	$	3,301	$	—

(1) During the three months ended March 31, 2026, we recognized impairment charges of $3.3 million for certain HEYDUDE retail stores.

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6. DERIVATIVE FINANCIAL INSTRUMENTS

We transact business in various foreign entities and are therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. Dollar (“USD”) amounts of revenues, expenses, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in earnings caused by fluctuations in foreign exchange rates, we may enter into forward contracts to buy and sell foreign currency. By policy, we do not enter into these contracts for trading purposes or speculation.

Counterparty default risk is considered low because the forward contracts we enter into are over-the-counter instruments transacted with highly-rated financial institutions. We were not required to and did not post collateral as of March 31, 2026, or December 31, 2025.

Our derivative instruments are recorded at fair value as a derivative asset or liability in the condensed consolidated balance sheets within either ‘Prepaid expenses and other assets’ or ‘Accrued expenses and other liabilities’ at March 31, 2026, and December 31, 2025. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain components of its risk, even though hedge accounting does not apply, or we elect not to apply hedge accounting.

We report derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. For the condensed consolidated statements of cash flows, we classify cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash used in operating activities.’

As of March 31, 2026, we have derivatives not designated as hedging instruments (“non-hedged derivatives”), which consist of foreign currency forward contracts primarily used to hedge monetary assets and liabilities denominated in non-functional currencies. For our non-hedged derivatives, changes in fair value are recognized within ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of income.

We also have cash flow hedges (“hedged derivatives”) as of March 31, 2026. We are exposed to fluctuations in various foreign currencies against our functional currency, the U.S. Dollar. Specifically, we have subsidiaries that transact in currencies other than their functional currency. We use cash flow hedges to minimize the variability in cash flows caused by fluctuations in foreign currency exchange rates related to our external sales and external purchases of inventory. Currency forward agreements involve fixing the exchange rates for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in USD for their fair value at or close to their settlement date. We may also use currency option contracts under which we will pay a premium for the right to sell a specified amount of a foreign currency prior to the maturity date of the option.

For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in ‘Accumulated other comprehensive loss’ in the condensed consolidated balance sheets. In the period during which the hedged transaction affects earnings, the related gain or loss is subsequently reclassified to ‘Revenues’ or ‘Cost of sales’ in the condensed consolidated statements of income, which is consistent with the nature of the hedged transaction. During the three months ended March 31, 2026, and 2025, there was no gain or loss and a gain of $0.6 million, respectively, recognized due to reclassification from ‘Accumulated other comprehensive loss’ to ‘Revenues’ or ‘Cost of sales’ related to our hedged derivatives. During the next twelve months, we estimate that a gain of $0.5 million will be reclassified to our condensed consolidated statements of income.

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The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within either ‘Prepaid expenses and other assets’ or ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheets, were:


	March 31, 2026				December 31, 2025
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
	(in thousands)
Non-hedged derivatives:
Forward foreign currency exchange contracts	$	985	$	(784)	$	888	$	(291)
Hedged derivatives:
Cash flow foreign currency contracts	927		(262)		109		(961)
Total derivatives	1,912		(1,046)		997		(1,252)
Netting of counterparty contracts	(789)		789		(268)		268
Total derivatives, net of counterparty contracts	$	1,123	$	(257)	$	729	$	(984)

The notional amounts of outstanding foreign currency forward exchange contracts presented below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position.


	March 31, 2026				December 31, 2025
	Notional		Fair Value		Notional		Fair Value
	(in thousands)
Non-hedged derivatives:
British Pound Sterling	$	6,322	$	105	$	69,908	$	(154)
South Korean Won	9,330		270		18,690		257
Euro	31,426		548		12,712		18
Brazilian Real	15,205		(695)		12,026		28
Japanese Yen	6,762		62		7,882		354
Canadian Dollar	7,642		(89)		4,938		94
Total non-hedged derivatives	76,687		201		126,156		597
Hedged derivatives:
Euro	22,389		295		39,909		(279)
South Korean Won	13,252		360		23,963		(494)
Japanese Yen	6,007		187		9,342		109
British Pound Sterling	4,624		39		7,931		(82)
Australian Dollar	6,729		(262)		7,677		(46)
Canadian Dollar	5,407		46		7,595		(60)
Total hedged derivatives	58,408		665

SEC Form 10-Q filed by Crocs Inc.