Business Model Breakdown
How On Holding AG Makes Money
ONON
Market Cap
$11.7B
Annual Revenue
$3.0B
Profit Margin
6.8%
Employees
3,254
The Short Version
On Holding AG designs, develops, and distributes premium athletic footwear, apparel, and accessories primarily for running and outdoor activities. The company generates revenue by selling its innovative products, known for their unique CloudTec cushioning technology, directly to consumers through its e-commerce platform and brand stores (DTC) as well as through wholesale partners globally. Its business model focuses on capturing market share in the performance sportswear segment by offering high-quality, technologically advanced, and stylish products.
Where the Revenue Comes From
Athletic Footwear sales (~90% of revenue in 2025)
Apparel and Accessories sales (~10% of revenue in 2025)
Who buys: Performance-oriented athletes, runners, and general consumers seeking premium, comfortable, and stylish athletic wear.
Why It Works (Competitive Advantages)
- ✔Proprietary CloudTec cushioning technology offering unique comfort and performance
- ✔Strong brand strength and premium positioning in performance athletic wear
- ✔Effective direct-to-consumer (DTC) sales channel strategy
- ✔Rapid global expansion, especially in Asia-Pacific
Economic Moat: Narrow (Brand Power, Intangible Assets/IP (CloudTec technology, design patents))
What Our Analysis Says
DVR Score as of May 11, 2026
Score Change Explanation: The score has been adjusted upwards by 0.8 points (from 7.2 to 8.0) due to several material improvements and updated market perspectives since the last analysis. The most significant factor is the substantial reduction in the trailing P/E ratio from 93.3x to 47.9x, suggesting that the company's valuation has become more reasonable relative to its earnings, de-risking a key concern from the previous assessment. This is further supported by a PEG ratio of 0.70, indicating potential undervaluation relative to its strong growth trajectory. Additionally, Raymond James' recent upgrade to "Strong Buy" and inclusion in their "Analyst Current Favorites" list signals increasing institutional confidence. The company continues to demonstrate robust operational performance with record gross margins (62.8%) and adjusted EBITDA (CHF 567M), coupled with positive and growing free cash flow (CHF 278.78M TTM), reinforcing its financial health despite the reported 2025 net loss (attributed to non-recurring factors). While insider selling persists, the overall improvement in valuation metrics and analyst sentiment justifies a higher score. On Holding AG demonstrates robust growth potential, driven by innovative CloudTec technology and effective direct-to-consumer strategies, capturing significant market share in the premium athletic wear market. The company achieved record revenues and strong gross margins in 2025, with solid revenue guidance for 2026. While a net loss was reported in 2025 due to FX and transition costs, operational profitability (Adjusted EBITDA) and free cash flow remain strong and growing. A recent analyst upgrade and a favorable PEG ratio indicate positive market sentiment and valuation. Risks include persistent insider selling and impending Q1 earnings.