On Running Founders Return to Leadership Amid Record Growth and Innovation
Swiss sportswear company On Running has opened its innovation hub, On Labs, for the first time to external media, coinciding with a significant leadership change and strong financial performance. The company, founded in 2010 by former triathlete Olivier Bernhard along with David Allemann and Caspar Coppetti, is at a pivotal moment. In a recent management reshuffle, co-founders Allemann and Coppetti have reassumed the roles of co-CEOs, taking over from Martin Hoffmann after his five-year tenure, thus bringing the founding team back to the forefront of operations. This leadership transition occurred as On reported its best financial results since its IPO. For the fiscal year 2025, net sales surpassed 3 billion Swiss francs, reaching 3.014 billion, a 30% increase year-over-year (35.6% at constant currency). The gross margin also hit a record high of 62.8%. The growth momentum continued into the first quarter of fiscal year 2026, with net sales climbing 43% to 831.9 million Swiss francs and net profit surging over 80%, while gross margin further improved to 64.2%, a level comparable to some luxury groups. A key driver of this expansion is the Asia-Pacific market, which saw a 96.4% revenue increase in 2025, exceeding 500 million Swiss francs and now representing over a fifth of global revenue. China remains a crucial engine for this growth, with On's premium running shoes ranking among the top five in sales on Tmall during the "Double 11" shopping festival, and flagship stores experiencing doubled foot traffic during the Chinese New Year. This indicates a growing consumer acceptance of On's lifestyle products beyond just running shoes. The company is emphasizing its core differentiator: structural engineering, rather than just foam technology, which is becoming commoditized. On Labs is developing innovations like LightSpray, a seamless, glue-free shoe upper manufacturing process that significantly reduces carbon footprint and allows for flexible, localized production. This platform technology is already being used by elite athletes and is slated for integration into mass-market products. On views its premium positioning as a byproduct of continuous innovation, citing its evolution from CloudTec to advanced foams and now LightSpray, further amplified by collaborations with figures like Roger Federer and Zendaya.
On Running's strategic decision to showcase its innovation pipeline and re-integrate its founding team into leadership signals a deliberate effort to solidify its market position against intensifying competition. The company's impressive financial growth, particularly in the Asia-Pacific region, highlights its success in adapting to diverse consumer preferences and its ability to transcend the limitations of a single product category. By focusing on 'structural engineering' and advanced manufacturing techniques like LightSpray, On is attempting to build a sustainable competitive advantage beyond material science, which is increasingly accessible to rivals. This approach addresses the systemic challenge of differentiation in a mature market where technological parity can quickly erode margins. The emphasis on a culture of experimentation, allowing for failure, suggests a long-term strategy to foster continuous innovation, crucial for maintaining relevance in the rapidly evolving consumer technology landscape. The company's narrative around 'engineering emotion' through a blend of function and aesthetics, coupled with flexible manufacturing capabilities, positions it to navigate future market dynamics influenced by supply chain resilience and sustainability demands. The validation of this strategy by capital markets and its potential to redefine industry competition will be critical indicators of its future trajectory.
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