Intro
This post is based on the company’s official 10-K filing and investor relations (IR) materials. It summarizes only objective facts and the logical implications that directly follow from them. Personal opinions and forecasts have been minimized. The goal is to help readers understand and interpret the materials more easily.
Table of Contents
👉 1. Business Overview
👉 2. Financial Highlights
👉 3. Valuation
👉 4. Risk
👉 5. MD&A (Management’s Discussion and Analysis)
👉 6. Summary
1. Business Overview 🌐
WD-40 Company (WDFC) is a global marketing organization based in San Diego, California. The company develops and sells products designed to solve everyday problems in workshops, factories, and homes around the world.
“A simple product portfolio, sold globally, supported by strong distribution.”
🧴 What the Company Sells
WD-40 Company’s portfolio spans maintenance products and homecare & cleaning products. The business is best known for its flagship can of WD-40® Multi-Use Product (blue and yellow can with the red top), which represents a significant majority of sales within the maintenance category.
- Maintenance Products: Multi-purpose maintenance and specialty maintenance products sold worldwide.
- Homecare & Cleaning Products: Primarily sold in North America, the U.K., and Australia (with some assets classified as held for sale as of fiscal year-end).
🛠️ Core Brand: WD-40® Multi-Use Product
WD-40® Multi-Use Product is described as a market leader in many countries within multi-purpose maintenance products. It is sold in multiple formats (including aerosol sprays with different delivery systems, non-aerosol trigger sprays, precision pen formats, and liquid/bulk offerings).
It is used across a wide set of applications, including:
- Household and general repair tasks
- Automotive and marine use cases
- Construction and workshop environments
- Sporting goods and gardening applications
- Industrial settings and professional maintenance work
🧰 Growth Extension: WD-40 Specialist®
WD-40 Specialist® is a professional-grade specialty maintenance line that includes products such as penetrants (fluids that help loosen stuck parts), degreasers (cleaners that remove oil/grease), corrosion inhibitors (products that help prevent rust), greases, lubricants, and rust removers. The line is positioned for both professionals and serious consumer enthusiasts.
- The Specialist line is sold primarily in the U.S. and many countries in Europe, plus parts of Canada, Latin America, Australia, and Asia.
- Within the Specialist portfolio, the company also sells category-specific variants (for example, bike-focused, motorbike-focused, lawn & garden, and automotive-focused offerings) depending on region.
🧼 Other Brands (Portfolio Breadth)
Beyond the flagship WD-40 brand family, the company also owns and sells other brands across maintenance and homecare/cleaning categories. Examples disclosed by the company include:
- Maintenance brands: 3-IN-ONE®, GT85®, Lava®, Solvol®
- Homecare & cleaning brands: X-14®, 2000 Flushes®, Carpet Fresh®, no vac®, Spot Shot®
🌍 Where It Sells (Global Footprint)
The company sells products globally, with maintenance products distributed across North, Central, and South America, Asia, Australia, Europe, India, the Middle East, and Africa. Its homecare & cleaning products are sold primarily in North America, the U.K., and Australia.
Management also frames performance and execution using three main geographic “trade blocs”:
- Americas
- EIMEA (Europe, India, Middle East, and Africa)
- Asia-Pacific
🛒 How It Sells (Distribution Channels)
WD-40 Company products are sold through a broad set of retail and industrial channels, including:
- Hardware and home improvement channels (hardware stores, home center stores)
- Automotive parts outlets
- Industrial distributors and suppliers
- Mass retail, value retailers, and warehouse clubs
- Grocery channels for certain homecare/cleaning products
- Online retailers
- Specialty channels (farm supply, sport retailers, independent bike dealers)
🧭 What Changed in FY2025 (Simple but Important)
In FY2025, the company highlighted continued momentum in its core WD-40® Multi-Use Product business, including growth across all three trade blocs and a focus on geographic expansion as a long-term growth opportunity. Management also discussed portfolio actions in homecare & cleaning products, including assets classified as held for sale at fiscal year-end and planned brand sales in fiscal year 2026 for parts of that portfolio.
🧾 “Plain English” (Beginner-Friendly Recap)
- WD-40 is mainly a brand-and-distribution business. It relies on strong, well-known brands and getting them onto shelves (and online) across many countries.
- The core product is the WD-40 Multi-Use Product. It sells globally and supports a large portion of the business.
- WD-40 Specialist helps expand the same brand into more “serious” use cases. That can deepen shelf space and reach different customer needs without changing the company’s identity.
- Homecare & cleaning is a smaller, less central piece. The company disclosed portfolio actions (including held-for-sale classification and planned sales) that can simplify the overall business focus.
2. Financial Highlights 📊
Income Statement Summary
(Unit: $m, EPS in $)
| FY 2023 | FY 2024 | FY 2025 | |
|---|---|---|---|
| Revenue | 537.3 | 590.6 | 620.0 |
| Cost of Goods Sold | 263.0 | 275.3 | 278.6 |
| Gross Profit | 274.2 | 315.2 | 341.3 |
| SG&A | 154.7 | 183.9 | 199.9 |
| Operating Income | 89.7 | 96.4 | 103.8 |
| Non-Operating Income/Expense | 0.8 | (1.0) | 0.8 |
| Interest Income/Expense | (5.4) | (3.8) | (2.9) |
| Income Before Tax | 85.2 | 91.5 | 101.6 |
| Income Tax | 19.2 | 21.9 | 10.6 |
| Net Income | 66.0 | 69.6 | 91.0 |
| EPS | 4.8 | 5.1 | 6.7 |
Plain English
WD-40 grew revenue steadily from FY2023 to FY2025, while operating income also increased each year. The bigger change in FY2025 came from the bottom line: net income rose to $91.0m and EPS (earnings per share, meaning profit per share) climbed to $6.7. Interest cost (net) improved versus prior years, which helped support profit growth.
Key Financial Ratios
| Ratio | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| ROE (%) | 33.1 | 31.6 | 36.5 |
| ROA (%) | 15.1 | 15.7 | 19.7 |
| ROTC (%) | 27.1 | 29.6 | 29.2 |
| ROIC (%) | 24.6 | 26.3 | 31.3 |
| Gross Margin (%) | 51.0 | 53.4 | 55.1 |
| Operating Margin (%) | 16.7 | 16.3 | 16.7 |
| Pretax Margin (%) | 15.9 | 15.5 | 16.4 |
| Net Margin (%) | 12.3 | 11.8 | 14.7 |
| Debt-to-Equity Ratio (D/E) (%) | 57.4 | 41.1 | 32.4 |
| Net Debt / EBITDA (x) | 0.7 | 0.5 | 0.3 |
| Interest Coverage Ratio (x) | 16.0 | 22.5 | 30.2 |
| Current Ratio (%) | 279.8 | 246.8 | 278.7 |
| Quick Ratio (%) | 164.6 | 158.6 | 174.8 |
| Fixed Asset to Long-term Capital Ratio (%) | 20.9 | 19.9 | 17.0 |
Plain English
This is where WD-40 looks especially “quality-like.” Gross margin improved each year, reaching 55.1% in FY2025, while operating margin held steady at 16.7%. Returns were strong: ROE (return on equity, profit relative to shareholder capital) rose to 36.5%, and ROIC (return on invested capital, profit generated from debt and equity after tax) increased to 31.3%. Leverage also moved in a conservative direction: Debt-to-Equity fell, and Net Debt / EBITDA dropped to 0.3x, meaning net debt was small relative to operating cash earnings.
Balance Sheet Summary Template
(Unit: $m)
| FY 2023 | FY 2024 | FY 2025 | |
|---|---|---|---|
| Assets | |||
| Cash & Equivalents | 48.1 | 46.7 | 58.1 |
| Accounts Receivable | 98.0 | 117.5 | 120.6 |
| Inventory | 86.5 | 79.1 | 79.9 |
| Current Assets | 248.5 | 255.4 | 285.0 |
| Property, Plant & Equipment | 66.8 | 63.0 | 60.4 |
| Intangible Assets | 100.2 | 103.2 | 99.6 |
| Non-current Assets | 189.4 | 193.6 | 190.9 |
| Total Assets | 438.0 | 449.0 | 475.8 |
| Liabilities | |||
| Short-term Debt | 10.8 | 8.7 | 0.8 |
| Accounts Payable | 30.8 | 36.0 | 38.0 |
| Current Liabilities | 88.8 | 103.5 | 102.3 |
| Long-term Debt | 109.7 | 86.0 | 86.2 |
| Non-current Liabilities | 138.9 | 115.0 | 105.4 |
| Total Liabilities | 227.8 | 218.5 | 207.7 |
| Equity | |||
| Common Equity | 210.2 | 230.5 | 268.2 |
| Total Liabilities + Equity | 438.0 | 449.0 | 475.8 |
Plain English
The balance sheet looks conservative for a branded consumer products company. WD-40 ended FY2025 with $58.1m of cash, while short-term debt was only $0.8m. Total liabilities declined versus FY2024, while equity increased to $268.2m, which supports the higher return metrics shown above.
Cash Flow Statement Summary Template
(Unit: $m)
| FY 2023 | FY 2024 | FY 2025 | |
|---|---|---|---|
| Cash Flow from Operating Activities | 98.4 | 92.0 | 87.9 |
| Cash Flow from Investing Activities | (6.2) | (9.7) | (2.4) |
| Cash Flow from Financing Activities | (85.0) | (83.9) | (74.1) |
| Net Change in Cash | 10.3 | (1.4) | 11.4 |
| Beginning Cash Balance | 37.8 | 48.1 | 46.7 |
| Ending Cash Balance | 48.1 | 46.7 | 58.1 |
Plain English
WD-40 consistently generated strong operating cash flow (cash produced by the core business). Financing cash flow was negative each year mainly because the company returned cash to shareholders through dividends and share repurchases. Even after those payouts, FY2025 ended with higher cash because the business still produced solid cash and investing outflows were relatively small.
Beginner Takeaways ✅
- Steady growth, improving profitability: Revenue and gross profit rose over the three-year period, and FY2025 reached a 55.1% gross margin.
- Strong returns on capital: FY2025 showed high returns (for example, ROE 36.5% and ROIC 31.3%), suggesting the company converts its brand strength into real earnings power.
- Conservative leverage: Total debt declined over time and net leverage was low (Net Debt / EBITDA 0.3x), which reduces financial risk.
- Shareholder returns are meaningful: Cash flow shows the company regularly pays dividends and repurchases stock, which can support long-term shareholder value when done sustainably.
3. Valuation 📈
Here are the valuation ratios. These numbers don’t tell you by themselves if the stock is cheap or expensive. Investors typically compare them with peers, the broader market, or with their own view of intrinsic value (DCF). It’s up to each investor to judge whether these multiples signal undervaluation or overvaluation.
| Metric | Company |
|---|---|
| P/E | 30.6 |
| Forward P/E | — |
| P/B | 10.3 |
| EV/EBITDA | 24.9 |
| P/S | 4.5 |
| Dividend Yield (%) | 1.8 |
| Free Cash Flow Yield (%) | 3.0 |
💡 Plain English Recap
P/E (30.6) means investors are paying about 31 times the company’s FY2025 earnings per share. For a beginner, the key question is whether that multiple matches your belief in WD-40’s long-term stability and earnings consistency. P/S (4.5) shows the stock trades at about 4.5 times annual revenue, which is common for established branded businesses when margins and returns are strong. P/B (10.3) is high because the market value reflects brand strength and profit power more than the accounting book value of equity. EV/EBITDA (24.9) is another way to compare valuation across companies because it includes debt and cash; here it suggests a premium multiple relative to many mature businesses. Finally, Dividend Yield (1.8%) and Free Cash Flow Yield (3.0%) imply the company returns cash to shareholders and still generates meaningful cash after reinvestment, but investors are also paying a relatively rich price for that cash flow stability.
Forward P/E is shown as a consensus estimate (average from major financial data providers) for reference.
Date of preparation: 2026-01-16
4. Risks ⚠️
Editorial Note:
In order to enhance readability, we have omitted broad, market-wide risks that generally affect all companies. The following discussion is focused solely on the risks that are specific to this company and the industry in which it operates.
🏭 Supply Chain Dependence on Third Parties (Manufacturing, Logistics, and Key Inputs)
WD-40 Company states that it relies on a limited number of third-party contract manufacturers, logistics providers, and suppliers, including single-source or sole-source suppliers for certain raw materials, packaging, and product components. Because these third parties are not directly controlled by the company (other than through contract terms), the company highlights disruption risks such as:
- Changes in business terms or the amount of production capacity allocated to WD-40 products.
- Availability constraints for critical raw materials, packaging, and components (especially when there is only one qualified source).
- Logistics interruptions that can affect product movement through distribution and delivery to customers.
- Third-party performance issues (quality, service levels, or timing) that can impact product availability and customer fulfillment.
Plain English Recap: WD-40 is telling investors that a meaningful portion of production and product delivery depends on outside partners. If a key supplier, contract manufacturer, or logistics provider cannot deliver on time (or changes terms), the company may not be able to make or ship enough product when customers want it.
📦 Cost Pressure from Raw Materials, Components, and Outside Packaging/Services
The company notes that raw materials and component costs are major drivers of cost of goods sold. It states that significant fluctuations in:
- Raw material and component costs
- Fees charged by third-party contract packagers (outside partners that package products)
- Transportation and other supply/service costs
could materially affect gross margins and results of operations.
Plain English Recap: Even if WD-40 sells the same number of units, profit can move up or down depending on input costs. The company is warning that cost volatility can pressure margins if it cannot offset increases through pricing, sourcing, or efficiency.
🌍 International Operations: Currency Exposure and Cross-Border Compliance
WD-40 Company highlights risks from its global footprint, including:
- Foreign currency exchange rate risk: Results can be negatively impacted when currencies where it operates (such as the Euro or British Pound) weaken relative to the U.S. Dollar.
- Hedging limitations: The company states it uses hedging instruments for certain exposures, but it is not fully protected from currency fluctuations, and reported earnings can be affected by exchange-rate movements.
- Compliance risk in local jurisdictions: The company cites exposure to compliance requirements and operational risks outside the U.S., including anti-corruption frameworks like the U.S. Foreign Corrupt Practices Act (laws that prohibit bribery and improper payments) and the U.K. Bribery Act.
- Evolving privacy and antitrust laws: The company notes that changing privacy regulations (data protection rules) and antitrust regulations (competition laws) in the U.S., Europe, and other jurisdictions present additional risks.
- Emerging market complexity: The company highlights that expanding in markets such as China, Mexico, Brazil, and other emerging markets can increase complexity and risk.
Plain English Recap: WD-40 sells globally, so results can swing when exchange rates change. Separately, operating in many countries increases the chance of compliance mistakes (even inadvertent ones), and violations can lead to penalties and reputational damage.
🛡️ Insurance Coverage May Not Fully Eliminate Losses
The company notes that it carries insurance for items such as property damage, business interruption, product liability (claims related to alleged product harm), and cyber liability (certain losses tied to cyber incidents). It also indicates that insurance policies can include deductibles (amounts the company must pay before coverage applies), coverage limits, and exclusions (items not covered).
Plain English Recap: Insurance can reduce financial damage from major events, but it may not cover everything. If a major incident occurs, the company could still face costs that exceed coverage or fall outside the policy.
✅ Summary of Section 4 — Risk
- Operational dependency risk: WD-40 relies on a limited set of third-party manufacturers, logistics providers, and key suppliers, including sole-source inputs.
- Margin volatility risk: Raw material, component, packaging, and transportation cost swings can materially affect gross margins.
- Global complexity risk: International operations introduce currency exposure and heightened compliance risk across anti-corruption, privacy, and antitrust rules.
- Residual loss risk: Insurance helps, but deductibles, limits, and exclusions mean losses may not be fully covered.
5. MD&A (Management’s Discussion and Analysis) 🧭
📊 Management’s View on FY2025 Performance
In the MD&A section, WD-40 Company’s management explains that FY2025 performance was driven by disciplined execution of its long-term growth strategy, supported by brand strength, global demand, and operational focus. Management emphasizes that results reflect a balance between revenue growth, margin management, and continued investment in the business.
Plain English: Management is saying that FY2025 results were not accidental. They believe performance came from sticking to their strategy and managing the business carefully, rather than from one-time or unusual events.
🌍 Revenue Trends and Geographic Performance
Management highlights that net sales growth was supported by demand across multiple geographic regions. The company discusses how pricing actions, volume trends, and product mix influenced revenue during the year.
- Pricing actions: Adjustments to selling prices made to offset higher costs.
- Volume: The number of units sold.
- Product mix: The combination of products sold, which can affect revenue and profitability.
Plain English: Sales growth came from a mix of selling more products, adjusting prices, and selling the right mix of higher-value items in different regions.
💰 Profitability and Margin Management
The MD&A notes that management focused on protecting gross margin (gross profit divided by net sales) while navigating input cost pressures. Management discusses cost discipline in areas such as:
- Cost of products sold (materials, manufacturing, and packaging costs).
- Operating expenses, including selling, general, and administrative costs.
- Advertising and sales promotion investments to support brand strength.
Plain English: Management is explaining how they tried to keep profits healthy even when costs moved up, while still spending on marketing to support long-term brand value.
🏗️ Investments in the Business and Operating Discipline
Management states that the company continued to invest in areas intended to support long-term growth, including:
- Brand-building activities to maintain global recognition.
- Digital and systems investments, including technology used to support operations.
- Supply chain and operational capabilities to improve efficiency and reliability.
Plain English: WD-40 is not just focusing on today’s profits. Management says they are reinvesting in systems, people, and the brand to support the business for many years.
💵 Cash Flow, Liquidity, and Capital Allocation
The MD&A emphasizes that the company generated strong operating cash flow (cash generated from core business activities). Management explains how this cash was used for:
- Dividends (cash returned directly to shareholders).
- Share repurchases (buying back company stock).
- Debt management, including repayments under existing borrowing arrangements.
Liquidity refers to the company’s ability to meet short-term obligations using cash and available credit. Management states that liquidity remained adequate to support operations and planned investments.
Plain English: The company is saying it produced enough cash to run the business, reward shareholders, and still remain financially flexible.
🧠 Management’s Outlook and Key Focus Areas
While avoiding specific forecasts, management outlines ongoing priorities, including:
- Maintaining brand relevance and customer loyalty.
- Managing costs and margins in a changing operating environment.
- Executing consistently across global markets.
Plain English: Management is not promising specific numbers, but they clearly state what they are paying attention to: the brand, costs, and consistent execution.
✅ MD&A Key Takeaways
- Strategy-driven results: Management attributes FY2025 performance to disciplined execution rather than short-term factors.
- Balanced approach: Focus on growth, margins, and reinvestment at the same time.
- Cash-focused mindset: Strong emphasis on generating cash and allocating it prudently.
- Long-term orientation: Continued investment in brand, systems, and operations to support future performance.
6. Summary ✅
WD-40 Company (WDFC) operates a simple, brand-led business built around global distribution of a core maintenance product portfolio. FY2025 showed steady top-line growth and stronger profitability, with revenue rising to $620.0m, operating income reaching $103.8m, and EPS increasing to $6.7. Key profitability metrics improved, including a 55.1% gross margin and high returns such as ROE 36.5% and ROIC 31.3%, while leverage stayed conservative with Net Debt / EBITDA at 0.3x. The balance sheet remained solid, ending FY2025 with $58.1m in cash and minimal short-term debt. Cash flow continued to support shareholder returns through dividends and share repurchases, even as the company maintained liquidity for operations. The main company-specific risks highlighted relate to dependence on third-party suppliers and manufacturers, input cost volatility, and the added complexity of global operations and compliance. Overall, the company’s results and disclosures point to a stable, cash-generative business where valuation multiples should be interpreted as the market’s pricing of consistency and brand-driven earning power.
📝 Disclaimer
This article is intended for educational purposes only. It does not constitute financial, investment, or legal advice. All investment decisions involve risks, and readers should conduct their own research or consult with a licensed financial advisor.
👉 WD-40 Company (WDFC) FY 2025 10-K Key Highlights (Filed 2025) | Explained for Beginners