vvv-20251231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 10-Q

(Mark one)


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

For the quarterly period ended December 31, 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 001-37884

VALVOLINE INC.

(Exact name of registrant as specified in its charter)


Kentucky			30-0939371
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

100 Valvoline Way, Suite 100

Lexington, Kentucky 40509

(Address of principal executive offices) (Zip Code)

Telephone Number (859) 357-7777

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

VVV

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 þ 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 þ 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	☑	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 Act). Yes ☐ No þ

At January 30, 2026, there were 127,315,826 shares of the registrant’s common stock outstanding.

TABLE OF CONTENTS


			Page
PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

Condensed Consolidated Statements of Comprehensive Income			3

Condensed Consolidated Balance Sheets			4

Condensed Consolidated Statements of Cash Flows			5

Condensed Consolidated Statements of Stockholders' Equity			6

Notes to Condensed Consolidated Financial Statements			7

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			29

ITEM 5. OTHER INFORMATION			31

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS			32

ITEM 1A. RISK FACTORS			32

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			32

ITEM 6. EXHIBITS			32

SIGNATURE			33

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Valvoline Inc. and Consolidated Subsidiaries

Condensed Consolidated Statements of Comprehensive Income


	Three months ended December 31
(In millions, except per share amounts - unaudited)	2025		2024
Net revenues	$	461.8	$	414.3
Cost of sales	289.3		261.4
Gross profit	172.5		152.9

Selling, general and administrative expenses	106.8		80.4
Net legacy and separation-related expenses	5.2		0.4
Other loss (income), net	42.2		(71.7)
Operating income	18.3		143.8
Net pension and other postretirement plan income	(1.2)		(0.9)
Net interest and other financing expenses	25.5		17.5
(Loss) income before income taxes	(6.0)		127.2
Income tax expense	26.2		33.3
(Loss) income from continuing operations	(32.2)		93.9
Loss from discontinued operations, net of tax	(0.6)		(2.3)
Net (loss) income	$	(32.8)	$	91.6

Net (loss) earnings per share
Basic (loss) earnings per share
Continuing operations	$	(0.25)	$	0.73
Discontinued operations	(0.01)		(0.02)
Basic (loss) earnings per share	$	(0.26)	$	0.71

Diluted (loss) earnings per share
Continuing operations	$	(0.25)	$	0.73
Discontinued operations	(0.01)		(0.02)
Diluted (loss) earnings per share	$	(0.26)	$	0.71

Weighted average common shares outstanding
Basic	127.7		128.7
Diluted	127.7		129.5

Comprehensive (loss) income
Net (loss) income	$	(32.8)	$	91.6
Other comprehensive income (loss), net of tax
Currency translation adjustments	1.7		(6.5)
Amortization of pension and other postretirement plan prior service credits	(0.4)		(0.4)

Other comprehensive income (loss)	1.3		(6.9)
Comprehensive (loss) income	$	(31.5)	$	84.7

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.

Valvoline Inc. and Consolidated Subsidiaries

Condensed Consolidated Balance Sheets


(In millions, except per share amounts - unaudited)	December 31 2025		September 30 2025
Assets
Current assets
Cash and cash equivalents	$	69.9	$	51.6
Receivables, net	98.5		89.6
Inventories, net	48.5		42.6
Prepaid expenses and other current assets	38.3		59.9


Total current assets	255.2		243.7
Noncurrent assets
Property, plant and equipment, net	1,217.3		1,134.6
Operating lease assets	403.3		331.8
Goodwill and intangibles, net	1,304.9		740.5

Other noncurrent assets	221.4		219.8

Total noncurrent assets	3,146.9		2,426.7
Total assets	$	3,402.1	$	2,670.4

Liabilities and Stockholders’ Equity
Current liabilities

Current portion of long-term debt	$	31.2	$	23.8
Trade and other payables	113.4		118.9
Accrued expenses and other liabilities	219.2		204.7

Total current liabilities	363.8		347.4
Noncurrent liabilities
Long-term debt	1,633.6		1,050.2
Employee benefit obligations	186.1		187.5
Operating lease liabilities	376.0		315.3

Other noncurrent liabilities	535.0		431.5

Total noncurrent liabilities	2,730.7		1,984.5
Commitments and contingencies
Stockholders' equity
Preferred stock, no par value, 40.0 shares authorized; no shares issued and outstanding	—		—
Common stock, par value $0.01 per share, 400.0 shares authorized; 127.2 and 127.1 shares issued and outstanding at December 31, 2025 and September 30, 2025, respectively	1.3		1.3
Paid-in capital	59.0		58.4
Retained earnings	240.8		273.6


Accumulated other comprehensive income	6.5		5.2
Stockholders' equity	307.6		338.5
Total liabilities and stockholders’ equity	$	3,402.1	$	2,670.4

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.

Valvoline Inc. and Consolidated Subsidiaries

Condensed Consolidated Statements of Cash Flows


	Three months ended December 31
(In millions - unaudited)	2025		2024
Cash flows from operating activities
Net (loss) income	$	(32.8)	$	91.6
Adjustments to reconcile net (loss) income to cash flows from operating activities:
Loss from discontinued operations	0.6		2.3

Loss (gain) on sale of operations	43.1		(71.2)
Depreciation and amortization	33.5		28.0



Stock-based compensation expense	2.4		2.0
Other, net	1.2		0.2
Change in operating assets and liabilities
Receivables	9.4		1.6
Inventories	(2.5)		(0.6)
Payables and accrued liabilities	(23.3)		(38.5)
Other assets and liabilities	33.2		26.0
Operating cash flows from continuing operations	64.8		41.4
Operating cash flows from discontinued operations	—		(0.2)
Total cash provided by operating activities	64.8		41.2
Cash flows from investing activities
Additions to property, plant and equipment	(57.4)		(53.6)
Acquisitions, net of cash acquired	(635.6)		(4.4)
Proceeds from sale of operations	63.6		121.0




Other investing activities, net	(2.0)		1.0


Total cash (used in) provided by investing activities	(631.4)		64.0
Cash flows from financing activities
Proceeds from borrowings	740.0		25.0
Payments of debt issuance costs and discounts	(13.7)		—
Repayments on borrowings	(135.9)		(85.9)

Repurchases of common stock, including excise taxes of $14.3 in fiscal 2025	—		(45.7)


Other financing activities, net	(5.7)		(6.1)


Total cash provided by (used in) financing activities	584.7		(112.7)
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	0.2		(0.8)
Increase (decrease) in cash, cash equivalents and restricted cash	18.3		(8.3)
Cash, cash equivalents and restricted cash - beginning of period	51.6		68.7
Cash, cash equivalents and restricted cash - end of period	$	69.9	$	60.4

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.

Valvoline Inc. and Consolidated Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity


	Three months ended December 31, 2025
(In millions, except per share amounts - unaudited)	Common stock			Paid-in capital		Retained earnings		Accumulated other comprehensive income		Totals
	Shares	Amount
Balance at September 30, 2025	127.1	$	1.3	$	58.4	$	273.6	$	5.2	$	338.5
Net loss	—	—		—		(32.8)		—		(32.8)

Stock-based compensation, net of issuances	0.1	—		0.6		—		—		0.6


Other comprehensive income, net of tax	—	—		—		—		1.3		1.3
Balance at December 31, 2025	127.2	$	1.3	$	59.0	$	240.8	$	6.5	$	307.6












































	Three months ended December 31, 2024
(In millions, except per share amounts - unaudited)	Common stock			Paid-in capital		Retained earnings		Accumulated other comprehensive income		Totals
	Shares	Amount
Balance at September 30, 2024	128.5	$	1.3	$	51.2	$	123.2	$	9.9	$	185.6
Net income	—	—		—		91.6		—		91.6

Stock-based compensation, net of issuances	0.1	—		(0.9)		—		—		(0.9)
Repurchase of common stock	(1.0)	—		—		(39.6)		—		(39.6)

Other comprehensive loss, net of tax	—	—		—		—		(6.9)		(6.9)
Balance at December 31, 2024	127.6	$	1.3	$	50.3	$	175.2	$	3.0	$	229.8

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.


Index to Notes to Condensed Consolidated Financial Statements			Page

Note 1 - Basis of Presentation and Significant Accounting Policies			8
Note 2 - Fair Value Measurements			9
Note 3 - Acquisitions and Dispositions			10
Note 4 - Intangible Assets			12
Note 5 - Debt			13
Note 6 - Income Taxes			14
Note 7 - Employee Benefit Plans			14
Note 8 - Litigation, Claims and Contingencies			15
Note 9 - Earnings Per Share			15
Note 10 - Reportable Segment Information			16
Note 1 1 - Supplemental Financial Information			16

Valvoline Inc. and Consolidated Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements have been prepared by Valvoline Inc. (“Valvoline” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and Securities and Exchange Commission regulations for interim financial reporting, which do not include all information and footnote disclosures normally included in annual financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with Valvoline’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Certain prior period amounts have been reclassified to conform to the current presentation.

Use of estimates, risks and uncertainties

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent matters. Although management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ significantly from the estimates under different assumptions or conditions.

Sale of Global Products business

On March 1, 2023, Valvoline completed the sale of its former Global Products reportable segment (“Global Products”) to Aramco Overseas Company B.V. The operating results and cash flows associated with and directly attributed to the Global Products disposal group are reflected as discontinued operations within these condensed consolidated financial statements. Unless otherwise noted, disclosures within these remaining Notes to Condensed Consolidated Financial Statements relate solely to the Company's continuing operations.

Recent accounting pronouncements

The following accounting guidance relevant to Valvoline was either issued or adopted in the current fiscal year or is expected to have a meaningful impact on Valvoline in future periods upon adoption.

Issued but not yet adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which enhances income tax disclosure requirements to include additional disaggregation within the effective tax rate reconciliation and income taxes paid. This guidance will be effective for Valvoline beginning with its fiscal 2026 annual financial statements, with early adoption permitted. The guidance must be applied prospectively, while retrospective application is permitted. The Company is continuing to assess the new guidance and is preparing for the related enhanced income tax disclosures in its fiscal 2026 annual financial statements. The Company does not expect this guidance will result in any changes to its results of operations, cash flows, or financial condition.

In November 2024, the FASB issued guidance which requires enhanced disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the face of the income statement. This guidance will be effective for Valvoline beginning with its fiscal 2028 Form 10-K and interim periods beginning in fiscal 2029, with early adoption permitted, in addition to either prospective or retrospective application. The Company is currently evaluating this guidance to determine its adoption approach and the impact on the presentation and disclosure of its consolidated income statement and expenses. The Company anticipates its processes will be enhanced to address the disaggregation and disclosure requirements, though it does not expect adoption to impact its overall results from operations.

In September 2025, the FASB issued new guidance related to accounting for internal-use software costs. The new standard removes references to software development project stages, making the guidance easier to apply and neutral across different software development methods. The update is effective for fiscal years beginning after December 15, 2027, including interim periods within those years. Early adoption is permitted and the guidance can

be applied on a prospective transition approach, a retrospective transition approach, or a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption. Valvoline does not expect the adoption of this guidance to have a material impact on its consolidated financial statements, based on its existing practices and policies.

NOTE 2 - FAIR VALUE MEASUREMENTS

Recurring fair value measurements

The following tables set forth the Company’s financial assets and liabilities by level within the fair value hierarchy for those measured at fair value on a recurring basis:


	As of December 31, 2025
(In millions)	Total		Level 1		Level 2		Level 3		NAV (a)
Cash and cash equivalents
Money market funds	$	0.3	$	0.3	$	—	$	—	$	—
Time deposits	2.7		—		2.7		—		—




Other noncurrent assets
Non-qualified trust funds	1.5		—		—		—		1.5

Deferred compensation investments	19.5		19.5		—		—		—
Total assets at fair value	$	24.0	$	19.8	$	2.7	$	—	$	1.5




Other noncurrent liabilities
Deferred compensation obligations	$	21.3	$	—	$	—	$	—	$	21.3
Total liabilities at fair value	$	21.3	$	—	$	—	$	—	$	21.3


	As of September 30, 2025
(In millions)	Total		Level 1		Level 2		Level 3		NAV (a)
Cash and cash equivalents
Money market funds	$	0.8	$	0.8	$	—	$	—	$	—
Time deposits	2.6		—		2.6		—		—



Other noncurrent assets
Non-qualified trust funds	2.2		—		—		—		2.2

Deferred compensation investments	19.2		19.2		—		—		—
Total assets at fair value	$	24.8	$	20.0	$	2.6	$	—	$	2.2




Other noncurrent liabilities
Deferred compensation obligations	$	20.4	$	—	$	—	$	—	$	20.4
Total liabilities at fair value	$	20.4	$	—	$	—	$	—	$	20.4

(a)Funds measured at fair value using the net asset value ("NAV") per share practical expedient have not been classified in the fair value hierarchy.

Fair value disclosures

Long-term debt is reported in the Company’s Condensed Consolidated Balance Sheets at carrying value, rather than fair value and is therefore excluded from the disclosure above of financial assets and liabilities measured at fair value within the condensed consolidated financial statements on a recurring basis. The fair value of the Company's outstanding fixed rate senior notes shown below is based on recent trading values, which is considered a Level 2 input within the fair value hierarchy.


	December 31, 2025						September 30, 2025
(In millions)	Fair value		Carrying value (a)		Unamortized discounts and issuance costs		Fair value		Carrying value (a)		Unamortized discounts and issuance costs

2031 Notes	$	492.3	$	531.2	$	(3.8)	$	491.0	$	531.0	$	(4.0)

(a)Carrying values shown are net of unamortized discounts and debt issuance costs.

Refer to Note 5 for details of the senior notes as well as Valvoline's other debt instruments that have variable interest rates with carrying amounts that approximate fair value.

NOTE 3 - ACQUISITIONS AND DISPOSITIONS

Store acquisitions

The transactions summarized herein were accounted for as business combinations and the operating results of all acquired entities are included within the consolidated operating results of the Company from the date of each respective acquisition. The Company’s acquisitions are accounted for such that the assets acquired and liabilities assumed are recognized at their acquisition date fair values, with any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired recorded as goodwill. The fair values are preliminary for up to one year from the date of acquisition as they may be subject to measurement period adjustments if new information is obtained about facts and circumstances that existed as of the acquisition date.

Breeze Autocare

On December 1, 2025, the Company acquired 100% of the equity interests in Breeze Autocare (“Breeze”) for total cash consideration of $638.7 million, subject to certain customary post-closing adjustments. Breeze is a provider of automotive quick lube and other preventive maintenance services operating predominantly under the Oil ChangersSM brand with stores in California, Texas, and the Midwest. The acquisition initially included 204 service center stores and aligns with the Company’s strategy to expand the store network in key markets. The Company funded the Breeze acquisition with an amendment to its Senior Credit Agreement to add a seven-year $740.0 million term loan facility (the “Term Loan B”) commensurate with the closing of the transaction with excess proceeds used to pay down outstanding debt. Refer to Note 5 for further discussion regarding the Term Loan B.

Immediately following the acquisition, 45 of the acquired Breeze stores were sold in accordance with the Federal Trade Commission Decision and Order that required the disposal of certain acquired locations to receive clearance to close the acquisition of Breeze. The fair value of the net assets divested, including allocated goodwill, was $90.0 million. As a result, the Company recognized a $57.9 million pre-tax loss on sale within Other loss (income), net in the Condensed Consolidated Statement of Comprehensive Income for the three months ended December 31, 2025.

A summary follows of the aggregate cash consideration paid and the total assets acquired and liabilities assumed:


(In millions)	2025
Cash	$	4.6
Receivables	15.4
Inventories	4.0
Other current assets	2.2
Property, plant and equipment (a)	75.2
Operating lease assets	72.9
Goodwill (b)	553.3
Intangible assets (c)


Customer relationships	11.0
Trademarks and trade names	8.0

Other noncurrent assets	0.4
Net assets held for sale (d)	90.0
Trade and other payables	(7.8)
Accrued expenses and other liabilities	(14.5)
Other current liabilities (a)	(14.8)
Operating lease liabilities	(62.7)

Other noncurrent liabilities (a)	(98.5)
Total net assets acquired	$	638.7

(a)Includes finance lease assets in property, plant and equipment and finance lease liabilities in other current and noncurrent liabilities. Finance lease assets acquired were $45.2 million and finance lease liabilities of $3.9 million and $57.0 million in other current and noncurrent liabilities, respectively.

(b)Goodwill is not deductible for income tax purposes and is primarily attributed to the operational synergies and potential growth expected to result in economic benefits in the respective markets of the acquisition.

(c)Intangible assets acquired December 1, 2025 have a weighted average amortization period of 10 years.

(d)Net assets held for sale were disposed on December 1, 2025 in connection with the required divestiture and sale and are no longer held for sale as of December 31, 2025.

Adjustments to preliminary fair value amounts are expected to primarily relate to the finalization of the related third-party valuation and working capital adjustments and will be recorded during the one-year measurement period with a corresponding offset to goodwill.

The Company incurred $12.5 million in third-party costs pertaining to the acquisition of Breeze, which are included in Selling, general and administration expenses in the Condensed Consolidated Statements of Comprehensive Income during the three months ended December 31, 2025. Net revenues and Net income from the Breeze acquisition included in the Company's results since December 1, 2025, the date of the acquisition, are $15.7 million and $1.4 million, respectively.

The following table presents the unaudited pro forma information summarizing the combined results of operations for Valvoline and Breeze, prepared as if the Breeze acquisition occurred on October 1, 2024:


	Three months ended December 31

(In millions)	2025		2024
Net revenues	$	495.8	$	461.9
Net income	46.9		8.8

These pro forma amounts are calculated after applying the Company's accounting policies and adjusting the results to reflect the incremental amortization of acquired intangible assets and interest expense on acquisition-related debt. Material nonrecurring adjustments, such as the $12.5 million in transaction costs and the $57.9 million pre-tax loss on the sale of the divested locations have been included as if the Breeze acquisition had occurred on October 1, 2024. The pro forma net income amounts also incorporate adjustments to reflect the income tax effects of the pro forma adjustments described above.

The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have actually occurred had the acquisition been completed on the date assumed, nor is it intended to project future results. The unaudited pro forma results exclude the impact of any cost synergies or integration benefits.

Other acquisitions

In addition to the Breeze acquisition, the Company acquired six service center stores in single and multi-store transactions, including four former Express Care locations converted to company-operated service center stores, for an aggregate purchase price of $1.5 million during the three months ended December 31, 2025. These acquisitions expand Valvoline's retail presence in key North American markets and contributed to growing the number of company-operated service center stores to 1,196 as of December 31, 2025.

Dispositions

Valvoline completed the sale of 10 company-operated service center stores to a franchisee during the first fiscal quarter of 2026 and completed the sale of 39 company-operated service center stores to a new franchisee during the first fiscal quarter of 2025. Valvoline recognized pre-tax gains on sale of $14.8 million and $73.9 million within Other loss (income), net in the Condensed Consolidated Statements of Comprehensive Income related to these transactions during the three months ended December 31, 2025 and 2024, respectively.

NOTE 4 - INTANGIBLE ASSETS

Goodwill

The following table summarizes changes in the carrying amount of goodwill during the three months ended December 31, 2025:


(In millions)
Balance as of September 30, 2025	$	658.0
Acquisitions (a)	551.3
Dispositions	(3.4)
Currency translation	0.8
Balance at December 31, 2025	$	1,206.7

(a) Includes measurement period adjustments of $3.4 million.

Other intangible assets

Valvoline’s purchased intangible assets were specifically identified when acquired, have finite lives, and are reported in Goodwill and intangibles, net within the Condensed Consolidated Balance Sheets. The following summarizes the gross carrying amounts and accumulated amortization of the Company’s intangible assets:


	December 31, 2025						September 30, 2025
(In millions)	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Definite-lived intangible assets
Trademarks and trade names	$	37.5	$	(13.3)	$	24.2	$	29.5	$	(12.7)	$	16.8
Reacquired franchise rights	122.3		(66.4)		55.9		122.3

SEC Form 10-Q filed by Valvoline Inc.