qvc-20250630

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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 June 30, 2025

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

For the transition period from to

Commission File Number 001-38654

QVC, Inc.

(Exact name of Registrant as specified in its charter)


State of Delaware						23-2414041
(State or other jurisdiction of						(I.R.S. Employer Identification
incorporation or organization)						Number)

1200 Wilson Drive						19380
West Chester, Pennsylvania						(Zip Code)
(Address of principal executive offices)

Registrant's telephone number, including area code: (484) 701-1000

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


Title of each class	Trading Symbol	Name of each exchange on which registered
6.375% Senior Secured Notes due 2067	QVCD	New York Stock Exchange
6.250% Senior Secured Notes due 2068	QVCC	New York Stock Exchange

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 x No o

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 x No o

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 o Accelerated filer o 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. o

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

None of the voting stock of the registrant is held by a non-affiliate of the registrant. There is no publicly traded market for any class of voting stock of the registrant. There is one holder of record of our equity, Qurate Retail Group, Inc., an indirect wholly-owned subsidiary of QVC Group, Inc.

QVC, Inc.

2025 QUARTERLY REPORT ON FORM 10-Q

Table of Contents


	Part I	Page

Item 1.	Financial Statements (unaudited)	I-1
	Condensed Consolidated Balance Sheets	I-1
	Condensed Consolidated Statements of Operations	I-2
	Condensed Consolidated Statements of Comprehensive Earnings	I-3
	Condensed Consolidated Statements of Cash Flows	I-4
	Condensed Consolidated Statements of Equity	I-5
	Notes to the Condensed Consolidated Financial Statements (unaudited)	I-7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	I-18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	I-31
Item 4.	Controls and Procedures	I-31

	Part II
Item 1.	Legal Proceedings	II-1
Item 1A.	Risk Factors	II-1
Item 5.	Other Information	II-6
Item 6.	Exhibits	II-7
	Signatures	II-8

Item 1. Financial Statements

QVC, Inc.

Condensed Consolidated Balance Sheets

(unaudited)


	June 30,		December 31,
(in millions, except share amounts)	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	330	297
Trade and other receivables, net of allowance for credit losses of $76 million and $89 million, respectively	821		1,134
Inventories	1,012		901
Other current assets	159		172
Total current assets	2,322		2,504
Property and equipment, net of accumulated depreciation of $1,001 million and $891 million, respectively	373		410
Intangible assets not subject to amortization (note 2):
Goodwill	817		2,204
Tradenames	1,190		2,120
Intangible assets subject to amortization, net (note 2)	405		385
Operating lease right-of-use assets	477		482
Note receivable - related party (note 1)	1,740		1,740
Other noncurrent assets	51		44
Total assets	$	7,375	9,889
Liabilities and Equity
Current liabilities:
Accounts payable	$	586	722
Accrued liabilities	688		874
Current debt (note 3)	1		585
Other current liabilities	51		52
Total current liabilities	1,326		2,233
Long-term debt (note 3)	4,047		3,313
Deferred income tax liabilities	167		394
Operating lease liabilities	474		475
Other liabilities	98		105
Total liabilities	6,112		6,520
Equity:
Stockholder's equity:
Common stock, $0.01 par value, 1 authorized share	—		—
Additional paid-in capital	11,206		11,201
Accumulated deficit	(9,787)		(7,538)
Accumulated other comprehensive earnings (loss)	(236)		(370)
Total stockholder's equity	1,183		3,293
Noncontrolling interest in equity of subsidiary	80		76
Total equity	1,263		3,369
Commitments and contingencies (note 4)
Total liabilities and equity	$	7,375	9,889

See accompanying notes to condensed consolidated financial statements

I-1

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QVC, Inc.

Condensed Consolidated Statements of Operations

(unaudited)


	Three months ended June 30,			Six months ended June 30,
(in millions)	2025		2024	2025	2024
Total revenue, net	$	1,984	2,134	3,889	4,245
Operating costs and expenses:
Cost of goods sold (exclusive of depreciation and amortization shown separately below)	1,281		1,374	2,552	2,747
Operating expense	154		167	308	337
Selling, general and administrative, including stock-based compensation	328		324	627	644
Depreciation and amortization	98		88	193	180
Impairment of goodwill and intangible assets (note 2)	2,395		—	2,395	—
Restructuring costs (note 4)	—		18	57	18
Gain on sale leaseback transaction	—		—	—	(1)
	4,256		1,971	6,132	3,925
Operating income (loss)	(2,272)		163	(2,243)	320
Other income (expense):
Interest expense, net	(63)		(67)	(123)	(129)
Foreign currency gain (loss)	(9)		1	(13)	—
	(72)		(66)	(136)	(129)
Earnings (loss) before income taxes	(2,344)		97	(2,379)	191
Income tax (expense) benefit	190		(31)	192	(63)
Net earnings (loss)	(2,154)		66	(2,187)	128
Less net (earnings) loss attributable to the noncontrolling interest	(11)		(13)	(20)	(24)
Net earnings (loss) attributable to QVC, Inc. shareholder	$	(2,165)	53	(2,207)	104

See accompanying notes to condensed consolidated financial statements

I-2

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QVC, Inc.

Condensed Consolidated Statements of Comprehensive Earnings

(unaudited)


	Three months ended June 30,			Six months ended June 30,
(in millions)	2025		2024	2025	2024
Net earnings (loss)	$	(2,154)	66	(2,187)	128
Foreign currency translation adjustments, net of tax	90		(29)	140	(73)
Total comprehensive earnings (loss)	(2,064)		37	(2,047)	55
Comprehensive (earnings) loss attributable to noncontrolling interest	(13)		(9)	(26)	(14)
Comprehensive earnings (loss) attributable to QVC, Inc. shareholder	$	(2,077)	28	(2,073)	41

See accompanying notes to condensed consolidated financial statements

I-3

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QVC, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Six months ended June 30,
(in millions)	2025		2024
Cash flows from operating activities:
Net earnings (loss)	(2,187)		128
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities:
Depreciation and amortization	193		180
Impairment of goodwill and intangible assets	2,395		—
Stock-based compensation	8		14
Gain on sale leaseback transaction	—		(1)
Change in fair value of financial instruments and noncash interest	(1)		(1)
Deferred income tax expense (benefit)	(230)		(2)
Other charges, net	64		45
Change in operating assets and liabilities
Decrease (increase) in trade and other receivables	315		394
Decrease (increase) in inventories	(85)		(96)
Decrease (increase) in other current assets	31		13
(Decrease) increase in accounts payable	(157)		(134)
(Decrease) increase in accrued and other liabilities	(248)		(292)
Net cash provided (used) by operating activities	98		248
Cash flows from investing activities:
Capital expenditures	(63)		(81)
Expenditures for television distribution rights	(88)		(13)
Proceeds from sale of fixed assets	—		6
Other investing activities, net	(7)		(3)
Net cash provided (used) by investing activities	(158)		(91)
Cash flows from financing activities:
Borrowings of debt	1,011		1,660
Repayments of debt	(867)		(1,715)
Dividends paid to QVC Group, Inc.	(42)		(50)
Dividends paid to noncontrolling interest	(22)		(22)
Other financing activities, net	(2)		(1)
Net cash provided (used) by financing activities	78		(128)
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash	27		(21)
Net increase (decrease) in cash, cash equivalents and restricted cash	45		8
Cash, cash equivalents and restricted cash, beginning of period	315		322
Cash, cash equivalents and restricted cash, end of period	$	360	330

The following table reconciles cash, cash equivalents and restricted cash reported in our condensed consolidated balance sheets to the total amount presented in our condensed consolidated statements of cash flows:


	June 30,		December 31,
(in millions)	2025		2024
Cash and cash equivalents	$	330	297
Restricted cash included in other current assets	30		18
Total cash, cash equivalents and restricted cash in the condensed consolidated statements of cash flows	$	360	315

See accompanying notes to condensed consolidated financial statements

I-4

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QVC, Inc.

Condensed Consolidated Statements of Equity

(unaudited)


	Common stock			Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Noncontrolling interest	Total equity
(in millions, except share data)	Shares	Amount
Balance, December 31, 2023	1	$	—	10,901	(290)	(6,361)	87	4,337
Net earnings (loss)	—	—		—	—	104	24	128
Foreign currency translation adjustments, net of tax	—	—		—	(63)	—	(10)	(73)
Stock-based compensation	—	—		12	—	—	—	12
Dividends paid to QVC Group, Inc. and noncontrolling interest	—	—		—	—	(50)	(22)	(72)
Withholding taxes on net share settlements of stock-based compensation	—	—		(1)	—	—	—	(1)
Impact of tax liability allocation and indemnification agreement with QVC Group, Inc.	—	—		1	—	—	—	1
Balance, June 30, 2024	1	$	—	10,913	(353)	(6,307)	79	4,332


	Common stock			Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Noncontrolling interest	Total equity
(in millions, except share data)	Shares	Amount
Balance, March 31, 2024	1	$	—	10,908	(328)	(6,352)	81	4,309
Net earnings (loss)	—	—		—	—	53	13	66
Foreign currency translation adjustments, net of tax	—	—		—	(25)	—	(4)	(29)
Stock-based compensation	—	—		5	—	—	—	5
Dividends paid to QVC Group, Inc. and noncontrolling interest	—	—		—	—	(8)	(11)	(19)
Balance, June 30, 2024	1	$	—	10,913	(353)	(6,307)	79	4,332

See accompanying notes to condensed consolidated financial statements

I-5

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QVC, Inc.

Condensed Consolidated Statements of Equity

(unaudited)


	Common stock			Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Noncontrolling interest	Total equity
(in millions, except share data)	Shares	Amount
Balance, December 31, 2024	1	$	—	11,201	(370)	(7,538)	76	3,369
Net earnings (loss)	—	—		—	—	(2,207)	20	(2,187)
Foreign currency translation adjustments, net of tax	—	—		—	134	—	6	140
Stock-based compensation	—	—		4	—	—	—	4
Dividends paid to QVC Group, Inc. and noncontrolling interest	—	—		—	—	(42)	(22)	(64)
Impact of tax liability allocation and indemnification agreement with QVC Group, Inc.	—	—		1	—	—	—	1
Balance, June 30, 2025	1	$	—	11,206	(236)	(9,787)	80	1,263


	Common stock			Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Noncontrolling interest	Total equity
(in millions, except share data)	Shares	Amount
Balance, March 31, 2025	1	$	—	11,204	(324)	(7,622)	78	3,336
Net earnings (loss)	—	—		—	—	(2,165)	11	(2,154)
Foreign currency translation adjustments, net of tax	—	—		—	88	—	2	90
Stock-based compensation	—	—		1	—	—	—	1
Dividends paid to QVC Group, Inc. and noncontrolling interest	—	—		—	—	—	(11)	(11)
Impact of tax liability allocation and indemnification agreement with QVC Group, Inc.	—	$	—	1	—	—	—	1
Balance, June 30, 2025	1	$	—	11,206	(236)	(9,787)	80	1,263

See accompanying notes to condensed consolidated financial statements

I-6

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QVC, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(1) Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of QVC, Inc. and its controlled subsidiaries (collectively, "QVC," the "Company," “us,” “we,” or “our” unless the context otherwise requires). All significant intercompany accounts and transactions have been eliminated in consolidation. QVC is a retailer of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised shopping programs, the internet (including social media) and mobile applications.

In the United States ("U.S."), QVC's televised shopping programs, including live and recorded content, are distributed across multiple channels nationally on a full-time basis, including QVC, QVC2, QVC3, HSN and HSN2. The Company's U.S. programming is also available on QVC.com and HSN.com, which we refer to as our "U.S. websites"; virtual multichannel video programming distributors (including Hulu + Live TV, DirecTV Stream and YouTube TV); applications via streaming video; Facebook Live, Roku, Apple TV, Amazon Fire, Xfinity Flex and Samsung TV Plus; mobile applications; social media pages and over-the-air broadcasters (collectively, our "Digital Platforms").

QVC's Digital Platforms enable consumers to purchase goods offered on our televised programming, along with a wide assortment of products that are available only on our U.S. websites. Our other Digital Platforms (including our mobile applications, social media pages and others) are natural extensions of our business model, allowing customers to engage in our shopping experience wherever they are, with live or on-demand content customized to the device they are using. In addition to offering video content, our U.S. websites allow shoppers to browse, research, compare and perform targeted searches for products, read customer reviews, control the order-entry process and conveniently access their account.

Internationally, QVC's televised shopping programs, including live and recorded content, are distributed to households primarily in Germany, Japan, the United Kingdom ("U.K."), and Italy. In some of the countries where QVC operates, QVC's televised shopping programs are distributed across multiple QVC channels: QVC Style and QVC2 in Germany and QVC Beauty, QVC Extra and QVC Style in the U.K. Similar to the U.S., our international businesses also engage customers via websites, mobile applications and social media pages. QVC's international business employs product sourcing teams who select products tailored to the interests of each local market.

The Company's Japanese operations ("QVC-Japan") are conducted through a joint venture with Mitsui & Co. LTD. ("Mitsui"). QVC-Japan is owned 60% by the Company and 40% by Mitsui. The Company and Mitsui share in all profits and losses based on their respective ownership interests. QVC-Japan paid dividends to Mitsui of $22 million during each of the six months ended June 30, 2025 and 2024.

The Company is an indirect wholly-owned subsidiary of QVC Group, Inc., ("QVC Group") (Nasdaq: QVCGA, QVCGP and OTCMKTS: QVCGB), which also owns Cornerstone Brands, Inc. ("CBI"), as well as other minority investments.

During each of the six months ended June 30, 2025 and 2024, QVC and CBI engaged in multiple transactions relating to personnel and business advisory services. QVC allocated expenses of $10 million and $14 million to CBI for the six months ended June 30, 2025 and 2024, respectively. CBI allocated expenses of $1 million to QVC for each of the six months ended June 30, 2025 and 2024.

On December 30, 2020, the Company and Liberty Interactive LLC ("LIC") completed an internal realignment of the Company's global finance structure that resulted in a common control transaction with QVC Group. As part of the common control transaction, LIC issued a promissory note (“LIC Note”) to a subsidiary of the Company with an initial face amount of $1.8 billion, a stated interest rate of 0.48% and a maturity of December 29, 2029. Interest on the LIC Note is paid annually. QVC recorded $4 million of related party interest income for each of the six months ended June 30, 2025 and 2024, included in interest expense, net in the condensed consolidated statements of operations.

I-7

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QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

The accompanying (a) condensed consolidated balance sheet as of December 31, 2024, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The Company’s business is seasonal due to a higher volume of sales in the fourth calendar quarter related to year-end holiday shopping. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in QVC's Annual Report on Form 10-K for the year ended December 31, 2024. Certain prior period balances were reclassified to conform to the current year's presentation.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates include, but are not limited to, retail-related adjustments and allowances, depreciable lives of fixed assets and internally developed software, valuation of acquired intangible assets and goodwill and income taxes.

Restricted cash as of June 30, 2025, primarily includes a cash deposit with a third party trustee that provides financial assurance that the Company will fulfill its obligations in relation to claims under its workers' compensation policy and a cash deposit to cover potential disputes or other financial obligations with a counterparty.

I-8

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QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(2) Intangible Assets

The changes in the carrying amount of goodwill by operating segment for the six months ended June 30, 2025 were as follows:


(in millions)	QxH		QVC-Int'l	Total
Balance as of December 31, 2024	$	1,465	739	2,204
Impairment	(1,465)		—	(1,465)
Exchange rate fluctuations	—		78	78
Balance as of June 30, 2025	$	—	817	817

Other intangible assets consisted of the following:


	June 30, 2025				December 31, 2024
(in millions)	Gross cost		Accumulated amortization	Intangible assets subject to amortization, net	Gross cost	Accumulated amortization	Intangible assets subject to amortization, net
Purchased and internally developed software	$	1,159	(927)	232	1,094	(852)	242
Affiliate and customer relationships	2,835		(2,765)	70	2,816	(2,722)	94
Television distribution rights	543		(442)	101	535	(489)	46
Debt origination fees	9		(7)	2	9	(6)	3
Intangible assets subject to amortization	$	4,546	(4,141)	405	4,454	(4,069)	385
Tradenames (indefinite life)	$	1,190		1,190	2,120		2,120

The Company recorded amortization expense of $66 million and $69 million for the three months ended June 30, 2025 and 2024, respectively, related to intangible assets with finite useful lives. For the six months ended June 30, 2025 and 2024, amortization expense related to intangible assets with finite useful lives was $127 million and $141 million, respectively.

I-9

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QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

As of June 30, 2025, the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions):


Remainder of 2025	$	128
2026	201
2027	56
2028	16
2029	4

As a result of recent financial performance, macroeconomic conditions, declines in stock price and credit rating downgrades, it was determined during the second quarter of 2025 that an indication of impairment existed for the QxH reporting unit related to the QVC and HSN tradenames and goodwill. With the assistance of a third party specialist, the fair value of the tradenames was determined using the relief from royalty method, primarily using a discounted cash flow model using projections of future operating performance (income approach) and applying a royalty rate (market approach) (Level 3), and an impairment in the amount of $930 million for the QVC and HSN tradenames, was recorded during the second quarter of 2025, in impairment of goodwill and intangible assets in the consolidated statements of operations. With the assistance of a third party specialist, the fair value of the QxH reporting unit was determined using a discounted cash flow method (Level 3), and a goodwill impairment in the amount of $1,465 million was recorded during the second quarter of 2025 in impairment of goodwill and intangible assets in the consolidated statements of operations.

Based on the assessments performed during the second quarter of 2025 and the resulting impairment losses recorded, the estimated fair value of the QxH reporting unit did not significantly exceed its carrying value as of June 30, 2025. The Company had accumulated goodwill impairment losses of $5,113 million attributed to the QxH reporting unit as of June 30, 2025.

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QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(3) Long-Term Debt

Long-term debt consisted of the following:


(in millions)	June 30, 2025		December 31, 2024
4.45% Senior Secured Notes due 2025, net of original issue discount	$	—	585
4.75% Senior Secured Notes due 2027	44		44
4.375% Senior Secured Notes due 2028	72		72
6.875% Senior Secured Notes due 2029	605		605
5.45% Senior Secured Notes due 2034, net of original issue discount	400		400
5.95% Senior Secured Notes due 2043, net of original issue discount	300		300
6.375% Senior Secured Notes due 2067	225		225
6.25% Senior Secured Notes due 2068	500		500
Senior secured credit facility	1,925		1,195
Finance lease obligations	2		—
Less: deferred loan costs, net	(25)		(28)
Total debt obligations	4,048		3,898
Less current portion	(1)		(585)
Long-term portion of debt	$	4,047	3,313

Senior Secured Notes

All of QVC's senior secured notes are secured by the capital stock of QVC and have equal priority to the senior secured credit facility ("Credit Facility"). The interest on QVC's senior secured notes is payable semi-annually with the exception of interest on the 6.375% Senior Secured Notes due 2067 ("2067 Notes") and the 6.25% Senior Secured Notes due 2068 ("2068 Notes"), which is payable quarterly.

On February 18, 2025, QVC repaid the remaining 4.45% Senior Secured Notes due 2025 ("2025 Notes"), at maturity, using availability under the Credit Facility and cash on hand.

The senior secured notes contain certain covenants, including certain restrictions on QVC and its restricted subsidiaries (subject to certain exceptions), with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; and restricting subsidiary distributions.

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QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Senior Secured Credit Facility

On October 27, 2021, QVC entered into the Fifth Amended and Restated Credit Agreement (the "Fifth Amended and Restated Credit Agreement") with CBI and QVC Global Corporate Holdings, LLC (“QVC Global”), each a direct or indirect wholly owned subsidiary of QVC Group, as borrowers (collectively, the “Borrowers”), and the other parties thereto. The Fifth Amended and Restated Credit Agreement is a multi-currency facility providing for a $3.25 billion revolving credit facility, with a $450 million sub-limit for letters of credit and an alternative currency revolving sub-limit equal to 50% of the revolving commitments thereunder. The Fifth Amended and Restated Credit Agreement may be borrowed by any Borrower, with each Borrower jointly and severally liable for the outstanding borrowings. Borrowings bear interest at either the alternate base rate (“ABR Rate”) or a London Inter-bank Offered Rate ("LIBOR")-based rate (or the applicable non-U.S. Dollar equivalent rate) (“Term Benchmark/RFR Rate”) at the applicable Borrower’s election in each case plus a margin. Borrowings that are ABR Rate loans will bear interest at a per annum rate equal to the base rate plus a margin that varies between 0.25% and 0.625% depending on the Borrowers’ combined ratio of consolidated total debt to consolidated EBITDA (the “consolidated leverage ratio”). Borrowings that are Term Benchmark/RFR Rate loans will bear interest at a per annum rate equal to the applicable rate plus a margin that varies between 1.25% and 1.625% depending on the Borrowers’ consolidated leverage ratio. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed availability; provided that, if QVC Global or any other borrower (other than QVC) is removed, at the election of QVC, as a borrower thereunder, all of its loans must be repaid and its letters of credit are terminated or cash collateralized. Any amounts prepaid may be reborrowed. The facility matures on October 27, 2026. Payment of loans may be accelerated following certain customary events of default.

On June 20, 2023, QVC and QVC Global, as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, and the other parties thereto entered into an agreement whereby, in accordance with the Fifth Amended and Restated Credit Agreement, LIBOR-based rate loans denominated in U.S. dollars made on or after June 30, 2023 would be replaced with Secured Overnight Financing Rate ("SOFR")-based rate loans. Borrowings that are SOFR-based loans will bear interest at a per annum rate equal to the applicable SOFR rate, plus a credit spread adjustment, plus a margin that varies between 1.25% and 1.625% depending on the Borrowers’ consolidated leverage ratio.

On April 1, 2025, CBI was removed as a borrower under the Fifth Amended and Restated Credit Agreement. CBI had no outstanding borrowings under the Fifth Amended and Restated Credit Agreement at the time of its removal from the Fifth Amended and Restated Credit Agreement.

Availability under the Fifth Amended and Restated Credit Agreement at June 30, 2025 was $1,196 million reflecting outstanding borrowings net of letters of credit. The interest rate on the senior secured credit facility was 6.1% and 6.9% at June 30, 2025 and 2024, respectively. In July 2025, the Company borrowed $975 million under the Fifth Amended and Restated Credit Agreement. Availability under the Fifth Amended and Restated Credit Agreement at August 1, 2025 was approximately $200 million. The Company remains in compliance with its debt covenants at June 30, 2025, and following the borrowing in July 2025.

The payment and performance of the Borrowers’ obligations under the Fifth Amended and Restated Credit Agreement are guaranteed by each of QVC’s and QVC Global’s Material Domestic Subsidiaries (as defined in the Fifth Amended and Restated Credit Agreement), if any, and certain other subsidiaries of any Borrower that such Borrower has chosen to provide guarantees. Further, the borrowings under the Fifth Amended and Restated Credit Agreement are secured, pari passu with QVC’s existing notes, by a pledge of all of QVC’s equity interests.

The Fifth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on the Borrowers and each of their respective restricted subsidiaries (subject to certain exceptions) with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting the Borrowers’ consolidated leverage ratio.

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Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Other Debt Related Information

There are no restrictions under the debt agreements on QVC's ability to pay dividends or make other restricted payments if QVC is not in default on its senior secured notes or the Fifth Amended and Restated Credit Agreement and (i) with respect to QVC’s senior secured notes, QVC's consolidated leverage ratio would be no greater than 3.5 to 1.0 (“senior secured notes leverage basket”) and (ii) with respect to the Fifth Amended and Restated Credit Agreement, the consolidated net leverage ratio for QVC and QVC Global would be no greater than 4.0 to 1.0. As of June 30, 2025, QVC’s consolidated leverage ratio (as calculated under QVC’s senior secured notes) was greater than 3.5 to 1.0 and as a result QVC is restricted in its ability to make dividends or other restricted payments under the senior secured notes. Although QVC will not be able to make unlimited dividends or other restricted payments under the senior secured notes leverage basket, under the indentures, QVC will continue to be permitted to make unlimited dividends under the senior secured notes to parent entities of QVC to service the principal and interest when due in respect of indebtedness of such parent entities (so long as there is no default under the indentures governing QVC’s senior secured notes) and permitted to make certain restricted payments to QVC Group under an intercompany tax sharing agreement (the “Tax Agreement”) in respect of certain tax obligations of QVC and its subsidiaries.

The weighted average interest rate applicable to all of the outstanding debt (excluding finance leases) prior to amortization of bond discounts and related debt issuance costs was 6.1% and 5.7% as of June 30, 2025 and 2024, respectively.

(4) Commitments and Contingencies

Litigation

The Company has contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that the amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements.

As previously reported, in October 2023, HSN entered into a settlement agreement with the Consumer Product Safety Commission (“CPSC”) in which HSN agreed to pay a civil penalty to settle the CPSC’s claims in relation to certain handheld clothing steamers sold by HSN that were subject to a voluntary recall previously announced in 2021. In January 2024, HSN received a grand jury subpoena from the U.S. Attorney for the Central District of California that was issued in connection with an official criminal investigation into the clothing steamer matter. We have cooperated (and intend to continue cooperating) fully with this investigation, and at this time, we are unable to predict the eventual scope, duration or outcome of this investigation, nor are we able to reasonably estimate any range of loss or possible loss.

Contingencies

Network and information systems, including the internet and telecommunication systems, third party delivery services and other technologies are critical to QVC's business activities. Substantially all of QVC's customer orders, fulfillment and delivery services are dependent upon the use of network and information systems, including the use of third party telecommunication and delivery service providers. If information systems including the internet or telecommunication services are disrupted, or if the third party delivery services experience a disruption in their transportation delivery services, the Company could face a significant disruption in fulfilling QVC's customer orders and shipment of QVC's products. The Company has active disaster recovery programs in place to help mitigate risks associated with these critical business activities.

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Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Restructuring

On November 14, 2024 QVC announced the WIN strategy, targeting top-line growth through three central priorities: (i) ‘Wherever She Shops’ - aims to enhance customer interactions across diverse platforms; (ii) ‘Inspiring People & Products’ - fosters rich, engaging content experiences; and (iii) ‘New Ways of Working’ - emphasizes leveraging technology and process enhancements to streamline operations and fuel innovation. With the WIN strategy, QVC plans to broaden content outreach by creating dynamic, purpose-built experiences that resonate across social media and digital streaming channels. By optimizing its production studios and fostering continuous improvement, QVC envisages content creation as an integrated, efficient process that adapts to various platforms without losing the essence of the brand. QVC aims to grow audiences and redefine shopping experiences, ensuring that it meets its customers wherever they are while building on its heritage for sustained success.

On January 29, 2025, the Company announced the consolidation of its QVC and HSN operations at the Company’s Studio Park location in West Chester, PA, and the closing of the St. Petersburg, FL campus. The consolidation is part of QVC’s organizational and strategic changes intended to support the Company’s WIN strategy. As a result, the Company accelerated depreciation related to the planned closure of the St. Petersburg, FL campus and recorded $15 million and $29 million of incremental depreciation during the three and six months ended June 30, 2025, respectively. On March 27, 2025 the Company announced a plan to reorganize teams across the Company as part of the WIN strategy, which is intended to increase revenue through growth initiatives while maintaining Adjusted OIBDA margin. As a result of the reorganization, QVC recorded $36 million and $21 million of restructuring costs at QxH and QVC International, respectively, during the six months ended June 30, 2025.

During the second quarter of 2024, QVC entered into an agreement and announced a plan to shift its global operating model for information technology services to a managed services model. As a result, during the three and six months ended June 30, 2024, QVC recorded restructuring charges of $18 million in restructuring costs in the condensed consolidated statement of operations.

(5) Financial Instruments and Fair Value Measurements

For assets and liabilities required to be reported or disclosed at fair value, U.S. GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs, other than quoted market prices included within Level 1, are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

The Company measures the fair value of money market funds based on quoted prices in active markets for identical assets. Money market funds are included as cash equivalents in Level 1 fair value instruments in the table below. The 2067 Notes (ticker: QVCD) and the 2068 Notes (ticker: QVCC) are traded on the New York Stock Exchange, which the Company considers to be an "active market," as defined by U.S. GAAP. Therefore, these Notes are measured based on quoted prices in an active market and included as Level 1 fair value instruments in the table below. The remainder of the Company's debt instruments are considered Level 2 fair value instruments and measured based on quoted market prices that are not considered to be traded on "active markets." Accordingly, these financial instruments are reported in the below tables as Level 2 fair value instruments.

The Company's assets and liabilities measured or disclosed at fair value on a recurring basis were as follows:


			Fair value measurements at June 30, 2025
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)
Cash equivalents	$	73	73	—
Debt	2,797		289	2,508

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Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)


			Fair value measurements at December 31, 2024
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)
Cash equivalents	$	52	52	—
Debt	3,137		344	2,793

(6) Information about QVC's Operating Segments

The Company's chief operating decision maker ("CODM") is the Company's Chief Executive Officer who has ultimate responsibility for enterprise decisions. QVC's CODM determines, in particular, resource allocation for, and monitors performance of, the consolidated enterprise, QxH, and QVC International. The segment managers have responsibility for operating decisions, allocating resources and assessing performance within their respective segments. QVC's CODM relies on internal management reporting that analyzes enterprise results and segment results to the Adjusted OIBDA level (see below).

For the three and six months ended June 30, 2025 and 2024, QVC has identified QxH and QVC International as its two operating segments. Both operating segments (which are also the reportable segments) are retailers of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised-shopping programs as well as via the internet (including social media) and mobile applications in certain markets.

The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as net revenue, Adjusted OIBDA (defined below), gross margin, average sales price per unit, number of units shipped and revenue or sales per customer. For segment reporting purposes, the Company defines Adjusted OIBDA, as net revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation, and restructuring costs). The Company believes this measure is an important indicator of the operational strength and performance of its segments by identifying those items that are not directly a reflection of each segment's performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking among the Company's businesses and identify strategies to improve performance. This measure of performance excludes depreciation, amortization, impairment of goodwill and intangible assets, gains on sale of assets and sale-leaseback transactions, restructuring, and stock-based compensation that are included in the measurement of operating income pursuant to U.S. GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net earnings (loss), cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. GAAP. The segment presentation for prior periods has been conformed to the current period segment presentation.

Disaggregated revenue by segment and product category consisted of the following:


	Three months ended June 30, 2025				Six months ended June 30, 2025
(in millions)	QxH		QVC Int'l	Total	QxH	QVC Int'l	Total
Home	$	527	233	760	1,065	456	1,521
Apparel	299		112	411	557	211	768
Beauty	208		138	346	419	258	677
Accessories	180		56	236	353	102	455
Jewelry	62		37	99	125	70	195
Electronics	76		16	92	165	31	196
Other revenue	39		1	40	75	2	77
Total net revenue	$

SEC Form 10-Q filed by QVC, Inc.