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 June 30, 2023 or ☐ 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: 001-38927 REVOLVE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 46-1640160 (State or other jurisdict ...

Financial Data and Key Metrics Changes - Net sales for Q1 2023 were $280 million, a year-over-year decrease of 1% [86] - Gross margin was 49.8%, a decrease of 468 basis points year-over-year, primarily due to a lower mix of net sales at full price [87] - Net income for Q1 was $14 million or $0.19 per diluted share, a decrease of 37% year-over-year [88] - Cash flow from operating activities was $49 million, more than double the cash flow generation for the full year of 2022 [31][57] - Cash and cash equivalents increased to $283 million, a 21% increase from year-end 2022 [117] Business Line Data and Key Metrics Changes - REVOLVE segment net sales decreased 3% year-over-year, while FRWD segment net sales increased 5% year-over-year in Q1 [55] - Active customers grew to 2.4 million, an increase of 19% year-over-year [44] - Average order value remained flat year-over-year at $288 [115] Market Data and Key Metrics Changes - U.S. net sales decreased 5% year-over-year, while international net sales increased 16% year-over-year in Q1 [68] - Mexico's market saw exceptional growth, with net sales almost doubling year-over-year [38] Company Strategy and Development Direction - The company is focused on driving cost efficiencies within global shipping and logistics operations to offset cost pressures [70] - Investments in technology, including AI, are being prioritized to enhance customer experience and operational efficiency [41][71] - The company plans to expand its loyalty program to key international markets [73] Management's Comments on Operating Environment and Future Outlook - The management noted that the macro environment remains uncertain, impacting consumer spending behavior [53] - They expect some pressure points on the P&L to ease in the coming quarters, including reduced air freight costs and variable fuel surcharges [39] - Management expressed confidence in rebalancing inventory by the end of Q2 2023 [66][89] Other Important Information - The company reported a significant increase in cash flow generation, strengthening its balance sheet and liquidity [31][117] - The company is actively monitoring the valuation landscape for potential opportunistic acquisitions [101] Q&A Session Summary Question: What classifications were more concerning regarding softer revenue trends? - Management indicated that softness was observed across various customer segments, particularly among aspirational customers [96] Question: How is the company thinking about opportunistic acquisitions in the current landscape? - The company is actively monitoring acquisition opportunities as valuations become more attractive, but no specific targets were mentioned [101] Question: Can you elaborate on the opportunities to go on offense in the current environment? - Management highlighted ongoing brand marketing investments and technology advancements, particularly in AI, as areas of focus [103] Question: What is the outlook for top-line performance considering current trends? - Management acknowledged the challenges but emphasized the importance of staying on offense and leveraging technology for future growth [107] Question: What has been observed regarding customer acquisition trends? - New customer acquisition was strong, but overall trends were impacted by broader market weaknesses [124]

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 March 31, 2023 or ☐ 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: 001-38927 REVOLVE GROUP, INC. (Exact name of registrant as specified in its charter) Securities registered pursuant to Section 12 ...

Financial Performance - In 2022, the company generated $1.1 billion in net sales and served over 2.3 million active customers, with an average order value of $304[44] - Approximately 85% of net sales in 2022 were at full price, indicating effective inventory management and pricing strategies[35] - The company's owned brands contributed 22.4% of the REVOLVE segment's net sales in 2022, with a significant increase from previous years[37] Customer Engagement and Marketing - Mobile sales accounted for 66.6% of total orders in 2022, reflecting the growing trend of digital channel usage among consumers[40] - In 2022, 48% of traffic for REVOLVE was driven from free and low-cost sources, highlighting the effectiveness of its marketing strategy[48] - The company has over 10.3 million Instagram followers across its brands, enhancing its social media and influencer marketing efforts[67] Product Development and Innovation - The company launched over 1,500 new styles per week on average in 2022, showcasing its commitment to product newness and trend responsiveness[35] - The company utilizes machine learning and artificial intelligence to optimize assortment and personalize the website experience, enhancing customer engagement[71] - The management team emphasizes a culture of innovation and data-driven decision-making, which has proven effective in navigating macroeconomic challenges[53] Customer Relationship Management - The company aims to continue acquiring new customers, leveraging strong repeat purchase behavior to enhance customer lifetime value relative to acquisition costs[54] - The company plans to deepen existing customer relationships to improve revenue retention and increase wallet share through enhanced customer experience and expanded loyalty programs[55] International Expansion - The company intends to grow international sales by localizing the shopping experience and leveraging its influencer network to accelerate growth outside the United States[56] Technology and Operations - The company has developed a highly scalable technology platform that supports its operations and enhances customer experience through data analytics and reporting[69] - The company's proprietary technology platform manages hundreds of millions of data points, enhancing its merchandising and marketing capabilities[51] Workforce and Structure - As of December 31, 2022, the company had 1,384 employees, with the largest teams in fulfillment and logistics (682 employees) and owned brand design and development (144 employees)[75] Strategic Focus - The company is focused on pursuing strategic acquisitions and investments to expand its product offerings and improve technology infrastructure[59] - The company has a portfolio of 31 owned brands and continuously optimizes its assortment to drive revenue and profitability growth[62] Financial Management - The company primarily holds cash and cash equivalents in money market funds and cash deposits, which are not significantly affected by interest rate changes[416] - Most sales are denominated in U.S. dollars, minimizing foreign currency risk; however, pricing in local currencies may impact demand in foreign markets[417] - Fluctuations in foreign currency exchange rates have not materially affected the consolidated financial statements, and the company has not engaged in foreign currency hedging[418]

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 September 30, 2022 or ☐ 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: 001-38927 REVOLVE GROUP, INC. (Mark One) (Exact name of registrant as specified in its charter) Delaware 46-1640160 (State or other juri ...

Financial Performance - Gross margin for Q2 2022 was 55.9%, compared to 55.6% in Q2 2021, and 55.2% for the first half of 2022, up from 54.9% in the same period of 2021[90]. - Adjusted EBITDA for Q2 2022 was $26.878 million, down from $35.403 million in Q2 2021, while for the first half of 2022, it was $58.421 million compared to $58.743 million in the first half of 2021[90]. - Net income for the three months ended June 30, 2022, was $16,273,000, a decrease of 48.3% compared to $31,538,000 in the same period of 2021[100]. - Adjusted EBITDA for the six months ended June 30, 2022, was $58,421,000, slightly down from $58,743,000 in the same period of 2021[100]. - Free cash flow for the three months ended June 30, 2022, was $(30,798,000), compared to $32,830,000 in the same period of 2021[105]. - Total net sales for the three months ended June 30, 2022, were $290.1 million, a 26.9% increase from $228.6 million in the same period in 2021[144]. - Net sales for the six months ended June 30, 2022, increased by $166.0 million (40.7%) to $573.6 million, driven by a 44.2% increase in the number of orders and a 16.1% increase in average order value[154]. Customer Metrics - Active customers reached 2.165 million in Q2 2022, an increase from 1.554 million in Q2 2021[90]. - Active customers increased during the period ended June 30, 2022, compared to the same period in 2021, driven by sales and marketing efforts and easing of restrictions[107]. - Total orders placed in Q2 2022 were 2.243 million, up from 1.769 million in Q2 2021, and 4.399 million for the first half of 2022 compared to 3.051 million in the same period of 2021[90]. - Average order value increased to $303 in Q2 2022 from $255 in Q2 2021, and $296 in the first half of 2022 compared to $255 in the same period of 2021[90]. - Average order value increased by 18.8% for the three months ended June 30, 2022, compared to the same period in 2021[145]. Operational Challenges - The impact of COVID-19 continues to create uncertainty, affecting demand and operational results, with potential supply chain disruptions and changes in consumer behavior[84]. - Inventory levels increased significantly in the second quarter of 2022 due to a downturn in consumer demand, impacting operating results[124]. - Rising inflation has impacted the company, leading to increased costs in merchandise, labor, and shipping[179]. Marketing and Sales Strategy - The company focuses on increasing the percentage of net sales from owned brands, which typically have higher gross margins compared to third-party brands[92]. - The company has invested in technology and data analytics to optimize inventory management and enhance customer experience[79]. - The company plans to continue hosting in-person events to enhance customer engagement and brand awareness[119]. Segment Performance - REVOLVE segment net sales increased by 29.6% to $244.7 million for the three months ended June 30, 2022, compared to $188.8 million in the same period in 2021[127]. - FWRD segment net sales increased by 13.8% to $45.3 million for the three months ended June 30, 2022, compared to $39.8 million in the same period in 2021[128]. - The REVOLVE segment's net sales increased by 41.5% to $482.5 million for the six months ended June 30, 2022, while the FWRD segment's net sales rose by 36.8% to $91.1 million[155]. Financial Position and Cash Flow - As of June 30, 2022, cash and cash equivalents were $237.9 million, up from $218.5 million at the end of 2021, with working capital increasing to $318.2 million from $279.6 million[163]. - The company believes that existing cash and cash equivalents, along with cash flows from operations, will be sufficient to meet anticipated cash needs for at least the next 12 months[164]. - The company amended its credit agreement to extend the expiration date to March 23, 2026, with a line of credit providing up to $75.0 million in borrowings[167]. - As of June 30, 2022, the company had no outstanding borrowings under the credit agreement[167]. - For the six months ended June 30, 2022, the company generated $24.4 million in operating cash flow, a decrease of 63.3% compared to $66.6 million for the same period in 2021[172]. - Net cash used in investing activities was $2.5 million for the six months ended June 30, 2022, compared to $1.3 million in 2021[175]. - Net cash provided by financing activities was $0.4 million for the six months ended June 30, 2022, a significant decrease from $8.2 million in 2021[176]. - The company is currently in compliance with all financial covenants as of June 30, 2022[168]. Cost Structure - Total operating expenses for the three months ended June 30, 2022, were $143.0 million, representing 49.2% of net sales, compared to 41.3% in the same period in 2021[143]. - Fulfillment expenses increased to 2.7% of net sales for the three months ended June 30, 2022, compared to 2.3% in the same period in 2021[143]. - Marketing expenses increased to 17.9% of net sales for the three months ended June 30, 2022, compared to 15.3% in the same period in 2021[143]. - Selling and distribution expenses increased by $19.8 million (61.7%) to $52.0 million for the three months ended June 30, 2022, with these expenses as a percentage of net sales rising to 17.9% from 14.1%[149]. - Cost of sales increased by $26.4 million (26.1%) to $127.8 million compared to $101.4 million in the same period of 2021, with cost of sales as a percentage of net sales decreasing slightly to 44.1% from 44.4%[147].

Financial Performance - Gross margin for Q1 2022 was 54.5%, up from 54.0% in Q1 2021[90] - Adjusted EBITDA for Q1 2022 was $31,543,000, compared to $23,340,000 in Q1 2021, representing a year-over-year increase of 35.5%[90] - Free cash flow for Q1 2022 was $52,727,000, an increase of 62.3% from $32,473,000 in Q1 2021[90] - Net income for the three months ended March 31, 2022, was $22,568,000, compared to $22,252,000 for the same period in 2021, reflecting a growth of 1.4%[100] - Adjusted EBITDA for the three months ended March 31, 2022, was $31,543,000, up from $23,340,000 in 2021, representing an increase of 35.3%[100] - Free cash flow for the three months ended March 31, 2022, was $52,727,000, compared to $32,473,000 in 2021, indicating a growth of 62.2%[105] - Net sales for the three months ended March 31, 2022, were $283.5 million, a 58.5% increase from $178.9 million in the same period in 2021[141] - Income before income taxes for the three months ended March 31, 2022, was $28.97 million, up from $20.98 million in 2021, with an effective tax rate of 22.1% compared to (6.1%) in 2021[153] Customer Engagement - Active customers reached 2,041,000 in Q1 2022, a 38.3% increase from 1,477,000 in Q1 2021[90] - Active customers increased during the period ended March 31, 2022, due to effective engagement and acquisition strategies, alongside easing restrictions in key regions[107] - Total orders placed in Q1 2022 were 2,156,000, up 68.1% from 1,282,000 in Q1 2021[90] - Total orders placed increased in the three months ended March 31, 2022, compared to the same period in 2021, driven by enhanced customer engagement and marketing efforts[110] - The number of orders placed by customers increased by 68.2%, and the average order value rose by 12.5% compared to the same period in 2021[144] Sales and Marketing - The REVOLVE segment generated $237.7 million in net sales for the three months ended March 31, 2022, a 56.2% increase from $152.2 million in 2021[126] - The FWRD segment achieved $45.8 million in net sales for the three months ended March 31, 2022, representing a 71.1% increase from $26.7 million in 2021[127] - The company plans to continue investing in marketing initiatives to capture consumer demand as economies reopen, despite potential short-term impacts on operating income[118] - Marketing expenses increased by 72.5% to $45.3 million, compared to $26.2 million in the same period in 2021, with marketing expenses as a percentage of net sales at 16.0%[149] Cost and Expenses - Cost of sales increased to $129.1 million, a 57.0% rise from $82.2 million in the same period in 2021, with cost of sales as a percentage of net sales decreasing to 45.5% from 46.0%[146] - Fulfillment expenses rose to $7.3 million, a 66.9% increase from $4.4 million in the same period in 2021, with fulfillment expenses as a percentage of net sales increasing to 2.6%[147] - Selling and distribution expenses increased by 86.5% to $46.6 million, up from $25.0 million in the same period in 2021, with selling and distribution expenses as a percentage of net sales rising to 16.4%[148] - General and administrative expenses rose to $26.8 million, a 35.0% increase from $19.9 million in the same period in 2021, with general and administrative expenses as a percentage of net sales decreasing to 9.5%[150] - General and administrative expenses increased by $4.2 million due to higher salaries, benefits, and operating expenses, but decreased as a percentage of net sales due to significant sales growth[152] Cash Flow and Liquidity - Cash and cash equivalents increased to $270.61 million as of March 31, 2022, from $218.46 million as of December 31, 2021, with working capital rising to $302.66 million[154] - Operating cash flow for the three months ended March 31, 2022, was $53.80 million, an increase from $33.21 million in the same period in 2021, primarily due to positive changes in working capital[163] - The company has a line of credit of up to $75 million, with no borrowings outstanding as of March 31, 2022[157] - The company believes existing cash and cash equivalents will be sufficient to meet anticipated cash needs for at least the next 12 months, although liquidity assumptions may prove incorrect[155] Strategic Initiatives - The company has expanded its international presence, offering localized shopping experiences in multiple countries since 2018, including recent expansions to Saudi Arabia in 2022[83] - The product mix has shifted back towards higher-margin categories, particularly dresses, which saw significant growth in Q1 2022[94] - The company continues to invest in its owned brand platform, expecting an increase in the mix of owned brand sales in 2022[94] - The company aims to increase the percentage of net sales from owned brands to enhance gross margin over time[121] Market Conditions - The impact of the COVID-19 pandemic remains uncertain, with potential effects on demand and operational results[84] - The company expects fulfillment and selling expenses to fluctuate in the short term due to increased costs and return rates, but anticipates long-term efficiencies from scale and automation[134][135] - The effective tax rate increased due to a decrease in excess tax benefits related to stock options[153] - The company has not engaged in any foreign currency hedging transactions, and foreign currency transaction gains and losses have not been material[178] - There have been no material changes in contractual obligations compared to the previous fiscal year[169]

(Exact Name of Registrant as Specified in Its Charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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: 001-38927 REVOLVE GROUP, INC. Delaware 46-1640160 (State or Other Jurisdiction of Incorp ...

Financial Performance - Gross margin for Q3 2021 was 55.1%, slightly down from 55.3% in Q3 2020, while the nine-month gross margin was 55.0%, up from 51.5% in the same period last year[100]. - Adjusted EBITDA for Q3 2021 was $21.666 million, down from $24.025 million in Q3 2020, with a nine-month total of $80.409 million compared to $50.511 million in the previous year[100]. - Free cash flow for the three months ended September 30, 2021, was $1,340,000, down from $13,877,000 in the same period of 2020, indicating a significant decline of 90.3%[115]. - Net income for the three months ended September 30, 2021, was $16.7 million, down from $19.4 million in the same period in 2020, with an effective tax rate increase to 13.9% from 9.8%[160]. - For the nine months ended September 30, 2021, net sales increased by 48.1% to $651.6 million, driven by a 40.4% increase in orders and a 13.4% increase in average order value[161]. Customer Metrics - Active customers increased to 1.678 million in Q3 2021, up from 1.504 million in Q3 2020, while total orders placed rose to 1.830 million from 1.141 million year-over-year[100]. - Active customers increased during the period ended September 30, 2021, compared to the same period in 2020, driven by increased demand due to easing restrictions and government stimulus payments[118]. - Total orders placed increased in the three and nine months ended September 30, 2021, relative to the same periods in 2020, attributed to heightened demand from easing restrictions and stimulus payments[120]. Sales and Revenue - Net sales for the three months ended September 30, 2021, increased by 61.6% to $244.1 million compared to $151.0 million in the same period in 2020, driven by a 60.4% increase in the number of orders and a 19.0% increase in average order value[152]. - REVOLVE segment net sales increased by 56.4% to $204.2 million for the three months ended September 30, 2021, compared to $130.6 million in the same period of 2020[137]. - FWRD segment net sales increased by 94.8% to $39.9 million for the three months ended September 30, 2021, compared to $20.5 million in the same period of 2020[138]. - Net sales to customers outside of the United States increased by 49.0% to $45.6 million for the three months ended September 30, 2021, compared to $30.6 million in the same period of 2020[139]. Marketing and Expenses - The company plans to increase marketing investments to capture consumer demand as economies reopen, which may lead to higher marketing costs as a percentage of net sales[129]. - Marketing expenses increased by 148.4% to $47.0 million, representing 19.2% of net sales, driven by higher investments in customer acquisition and brand marketing initiatives[157]. - Selling and distribution expenses surged by 83.8% to $38.4 million, accounting for 15.7% of net sales, attributed to increased shipping and handling fees and a higher return rate[156]. - General and administrative expenses are expected to increase in the near term as the company plans to invest in its team to support future growth[147]. Inventory and Fulfillment - The company reduced inventory receipts significantly in 2020 due to COVID-19, impacting sales demand, but has since increased inventory purchases to meet recovering demand[134]. - The company expects fulfillment expenses to fluctuate in the short term due to increased return rates and input cost pressures[143]. - Fulfillment expenses for the three months ended September 30, 2021, were $5.8 million, a 38.9% increase, but decreased as a percentage of net sales to 2.4% from 2.8% in 2020 due to automation efficiencies[155]. Economic Impact and Future Outlook - The COVID-19 pandemic initially caused a significant decline in net sales starting in March 2020, but sales returned to growth in 2021 due to easing restrictions and government stimulus[94]. - The overall economic environment and consumer behavior significantly impact the company's business, with macroeconomic factors influencing customer spending patterns[125]. - The COVID-19 pandemic continues to pose risks to net sales and gross margins, with unpredictable long-term impacts[137]. - The company plans to use existing cash and cash equivalents to meet anticipated cash needs for at least the next 12 months, although liquidity assumptions may prove incorrect[172][175].

PART I. FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Revolve Group, Inc.'s unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Income, and Cash Flows, for periods ending June 30, 2021, detailing financial position and performance Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $219,582 | $146,013 | | Inventory | $118,827 | $95,272 | | Total current assets | $389,621 | $276,925 | | **Total assets** | **$419,666** | **$305,752** | | **Liabilities & Equity** | | | | Accounts payable | $58,634 | $39,337 | | Returns reserve | $44,024 | $25,602 | | Total current liabilities | $155,218 | $105,688 | | Total stockholders' equity | $264,448 | $200,064 | | **Total liabilities and stockholders' equity** | **$419,666** | **$305,752** | Condensed Consolidated Statements of Income Highlights (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $228,614 | $142,784 | $407,521 | $288,859 | | Gross profit | $127,218 | $72,071 | $223,883 | $143,021 | | Income from operations | $32,929 | $18,804 | $54,144 | $22,658 | | Net income | $31,538 | $14,236 | $53,790 | $18,392 | | Diluted EPS | $0.42 | $0.20 | $0.72 | $0.26 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $66,556 | $61,887 | | Net cash used in investing activities | ($1,253) | ($1,381) | | Net cash provided by financing activities | $8,217 | $25,315 | | **Net increase in cash and cash equivalents** | **$73,569** | **$85,354** | - The company's business operations and results improved in the first half of 2021 due to increased demand from easing stay-at-home orders, U.S. government stimulus, and vaccine rollouts, though future impact of COVID-19 variants remains uncertain[27](index=27&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition and operational results, highlighting strong recovery and growth in H1 2021 driven by easing COVID-19 restrictions and consumer demand [Overview and COVID-19 Impact](index=21&type=section&id=Overview%20and%20COVID-19%20Impact) This section provides an overview of REVOLVE's business model and the impact of the COVID-19 pandemic on its operations and sales recovery - REVOLVE is a next-generation fashion retailer for Millennial and Generation Z consumers, operating through two segments: REVOLVE (premium apparel) and FORWARD (luxury brands), leveraging a proprietary technology platform, data analytics, and influencer marketing[81](index=81&type=chunk)[82](index=82&type=chunk) - After a material negative impact from COVID-19 in 2020, net sales returned to growth in Q1 and Q2 2021, driven by easing restrictions, U.S. government stimulus, and vaccine rollouts, though future demand remains uncertain due to new COVID-19 variants[88](index=88&type=chunk)[89](index=89&type=chunk) [Key Operating and Financial Metrics](index=23&type=section&id=Key%20Operating%20and%20Financial%20Metrics) This section presents key operating and financial metrics, including gross margin, Adjusted EBITDA, active customers, and average order value, for comparative periods Key Metrics Comparison | Metric | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Gross margin | 55.6% | 50.5% | 54.9% | 49.5% | | Adjusted EBITDA (in thousands) | $35,403 | $20,877 | $58,743 | $26,486 | | Active customers (in thousands) | 1,554 | 1,533 | 1,554 | 1,533 | | Total orders placed (in thousands) | 1,769 | 1,163 | 3,051 | 2,335 | | Average order value | $255 | $204 | $255 | $231 | Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income | $31,538 | $14,236 | $53,790 | $18,392 | | Other expense, net | $264 | $174 | $497 | $47 | | Provision for (benefit from) income taxes | $1,127 | $4,394 | ($143) | $4,219 | | Depreciation and amortization | $1,122 | $1,205 | $2,271 | $2,396 | | Equity-based compensation | $1,352 | $868 | $2,328 | $1,432 | | **Adjusted EBITDA** | **$35,403** | **$20,877** | **$58,743** | **$26,486** | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's operating results for the three and six-month periods ended June 30, 2021 and 2020 Comparison of Three Months Ended June 30, 2021 and 2020 | Metric | Q2 2021 | Q2 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $228,614 | $142,784 | $85,830 | 60.1% | | Gross Profit | $127,218 | $72,071 | $55,147 | 76.5% | | Marketing Expenses | $34,871 | $14,638 | $20,233 | 138.2% | | Income from Operations | $32,929 | $18,804 | $14,125 | 75.1% | - The **60.1% increase in net sales** for Q2 2021 was driven by a **52.1% increase in orders placed** and a **25.0% increase in average order value**, reflecting strong consumer demand recovery[148](index=148&type=chunk) Comparison of Six Months Ended June 30, 2021 and 2020 | Metric | H1 2021 | H1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $407,521 | $288,859 | $118,662 | 41.1% | | Gross Profit | $223,883 | $143,021 | $80,862 | 56.5% | | Marketing Expenses | $61,099 | $36,588 | $24,511 | 67.0% | | Income from Operations | $54,144 | $22,658 | $31,486 | 138.9% | - The **41.1% increase in net sales** for H1 2021 was driven by a **30.7% increase in orders placed** and a **10.4% increase in average order value**[157](index=157&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's liquidity position and capital resources, including cash flows, working capital, and credit facilities Liquidity Position (in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $219,582 | $146,013 | | Working capital | $234,403 | $171,237 | - The company amended its credit agreement on March 23, 2021, extending the expiration to March 23, 2026, providing up to **$75.0 million in revolver borrowings**, with no outstanding borrowings as of June 30, 2021[171](index=171&type=chunk) - For the six months ended June 30, 2021, net cash from operating activities was **$66.6 million**, primarily driven by higher net income, while net cash from financing activities was **$8.2 million** from stock option exercises[176](index=176&type=chunk)[179](index=179&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, including interest rate, foreign currency, and inflation, noting no material impact on financial condition or operations - The company's primary market risks are identified as interest rate changes, foreign currency fluctuations, and inflation[189](index=189&type=chunk) - Interest rate risk is low due to short-term cash equivalents and no floating-rate debt, foreign currency risk is not significant as most sales are in U.S. dollars, and inflation has not materially affected operations[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms management's conclusion that disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2021, the company's disclosure controls and procedures were effective to provide reasonable assurance that required information is recorded, processed, and reported in a timely manner[193](index=193&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[194](index=194&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section provides information on material pending legal proceedings, with further details available in Note 5 of the financial statements - The company settled a purported class action lawsuit related to employee wage-and-hour claims, with court approval on January 5, 2021, and payment during the first quarter of 2021[55](index=55&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section details numerous risks, including ongoing COVID-19 impacts, intense competition, reliance on consumer spending, inventory management, technology dependence, regulatory changes, and the dual-class stock structure - The COVID-19 pandemic continues to pose a significant risk, with potential impacts from changing consumer behavior, supply chain disruptions, and the possibility of reinstated business restrictions[199](index=199&type=chunk)[201](index=201&type=chunk) - The company faces intense competition from department stores, specialty retailers, and other eCommerce companies, which could lead to pricing pressure and affect market share[215](index=215&type=chunk)[219](index=219&type=chunk) - The dual-class stock structure concentrates approximately **90% of voting power** with the co-chief executive officers and their affiliates, allowing them to control all matters submitted to stockholders for approval[357](index=357&type=chunk) - Evolving privacy laws, such as GDPR in Europe and CCPA/CPRA in California, as well as changes in tracking technologies by companies like Apple, could increase compliance costs and adversely affect customer acquisition and marketing effectiveness[296](index=296&type=chunk)[297](index=297&type=chunk)[303](index=303&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=77&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on any unregistered sales of equity securities under the Securities Act of 1933, with the company reporting no such sales during the period - The company reported no unregistered sales of equity securities during the reporting period[374](index=374&type=chunk)