Group 1 - The previous investment stance on Wayfair (NYSE: W) was a hold rating due to the stock being in a neutral zone, influenced by a poor macro environment affecting demand [1] - The investment strategy focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - The approach is centered on bottom-up analysis, examining the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Group 1 - Investors have been disappointed by the lack of clarity on tariff impacts during the Q1 earnings season, with many companies citing broad uncertainty and adjusting their guidance ranges [1] - Companies are either widening or eliminating their earnings guidance due to the ongoing uncertainty surrounding tariffs [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and advising startups, contributing to discussions on industry themes since 2017 [2] - His insights are featured in various web publications and are syndicated to popular trading apps like Robinhood [2]

Core Viewpoint - Wayfair reported a better-than-expected first-quarter 2025 performance with non-GAAP earnings of 10 cents per share, contrasting with a consensus estimate of a loss of 18 cents, and a loss of 32 cents per share in the same quarter last year [1] Financial Performance - Net revenues reached $2.7 billion, exceeding the consensus estimate by 0.7%, with a year-over-year increase of only $1 million, primarily driven by the U.S. segment [1] - Last Twelve Months (LTM) net revenues per active customer rose 4.7% year over year to $562, surpassing the consensus estimate by 7.68% [2] - Active customer base declined by 5.4% year over year to 21.1 million, missing the consensus mark by 5.8% [2] - U.S. net revenues, accounting for 88.9% of total revenues, increased 1.6% year over year to $2.4 billion, beating the consensus estimate by 1.55% [3] - International net revenues, making up 11.1% of total revenues, fell 10.9% year over year to $301 million, missing the consensus estimate by 2.77% [3] Customer Metrics - Orders per customer increased to 1.85 from 1.84 year over year, beating the consensus estimate by 3.35% [3] - Average order value rose from $285 to $301 year over year, exceeding the consensus mark by 4.89% [4] - Total delivered orders decreased by 5.2% year over year to 9.1 million, with repeat customers placing 7.3 million orders, also down 5.2% year over year [4] - 63.4% of total delivered orders were placed through mobile devices, slightly up from 63.1% in the previous year [4] Operating Results - Gross margin improved to 30.7% from 30% year over year, attributed to proactive reinvestments [5] - Adjusted EBITDA increased to $106 million from $75 million in the year-ago quarter [5] - Customer service and merchant fees decreased by 8.5% year over year to $107 million [5] - Advertising expenses rose by 6.2% year over year to $344 million, while selling, operations, technology, and general and administrative expenses decreased by 19.7% year over year to $429 million [6] - GAAP operating loss narrowed to $122 million from $235 million in the year-ago quarter [6] Balance Sheet & Cash Flow - As of March 31, 2025, cash, cash equivalents, and short-term investments remained stable at $1.4 billion [7] - Long-term debt increased to $3 billion from $2.882 billion as of December 31, 2024 [8] - Net cash used in operations was $96 million, compared to $162 million cash from operations in the fourth quarter [8] - Free cash flow was negative $138 million in the first quarter [8] Guidance - For Q2 2025, Wayfair expects revenues to remain flat year-over-year, with gross margin projected to be in the range of 30-31% and adjusted EBITDA expected to be in the range of 4-5% [9]

Financial Performance - For the three months ended March 31, 2025, net revenue increased by $1 million, or approximately 0.04%, compared to the same period in 2024, driven by higher average order value [100][110]. - U.S. net revenue increased by 1.6% to $2.429 billion, while International net revenue decreased by 10.9% to $301 million, primarily due to the exit from the German market [111][112]. - The average order value for the three months ended March 31, 2025, was $301, up from $285 in the same period in 2024 [108]. - Adjusted EBITDA for the three months ended March 31, 2025, was $106 million, compared to $75 million in the same period in 2024 [108]. - The company reported a net loss of $113 million for the three months ended March 31, 2025, an improvement from a net loss of $248 million in the same period in 2024 [108]. - Free Cash Flow for the three months ended March 31, 2025, was $(139) million, an improvement from $(193) million in the same period in 2024 [108]. - For the three months ended March 31, 2025, total operating expenses decreased to $959 million, a reduction of 9.0% compared to $1,054 million in the same period in 2024 [117]. - Advertising expenses increased by $20 million, or 6.2%, reaching $344 million for the three months ended March 31, 2025, compared to $324 million in 2024 [121]. - Customer service and merchant fees decreased by $7 million, or 6.3%, totaling $107 million for the three months ended March 31, 2025, compared to $117 million in 2024 [119]. - Restructuring charges decreased by $23 million, or 29.1%, totaling $56 million for the three months ended March 31, 2025, compared to $79 million in 2024 [127]. - Interest expense, net increased by $17 million, or 283.3%, reaching $(23) million for the three months ended March 31, 2025, compared to $(6) million in 2024 [129]. - Other income (expense), net increased by $14 million, or 350.0%, totaling $10 million for the three months ended March 31, 2025, compared to $(4) million in 2024 [131]. - Impairment and other related charges increased by $23 million, or 100.0%, totaling $23 million for the three months ended March 31, 2025, compared to no charges in 2024 [125]. - Net cash used in operating activities decreased to $96 million for the three months ended March 31, 2025, compared to $139 million in the same period of 2024, reflecting a $43 million improvement [154]. - Adjusted net income for the same period was $12 million, compared to an adjusted net loss of $39 million in Q1 2024 [177]. - The diluted loss per share improved to $(0.89) from $(2.06) year-over-year [177]. - Adjusted diluted earnings per share were $0.10, compared to $(0.32) in the prior year [177]. - The weighted-average number of shares outstanding increased to 127 million from 120 million year-over-year [177]. Customer Metrics - As of March 31, 2025, the company had 21 million active customers, with 80.2% of orders coming from repeat buyers [100]. Market Strategy - The company aims to capture more market share in the online home goods category, leveraging its e-commerce business model [99]. Liquidity and Debt - As of March 31, 2025, total liquidity was $1.368 billion, consisting of cash and cash equivalents of $1.338 billion and short-term investments of $30 million [139]. - The company had $3.3 billion principal amount of indebtedness outstanding as of March 31, 2025, including various convertible senior notes and secured notes [141]. - The company recorded a gain on debt extinguishment of $25 million for the three months ended March 31, 2025, representing a 100.0% increase compared to no gain in 2024 [136]. - The company issued $700 million aggregate principal amount of the 2030 Secured Notes during the three months ended March 31, 2025 [159]. - The company is required to maintain a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio of 4.0 to 1.0, with a 0.5 step-up following certain permitted acquisitions [148]. - The company does not engage in any off-balance sheet activities and has no off-balance sheet interest in variable interest entities [158]. Economic Conditions - The company continues to monitor macroeconomic conditions, including inflation and consumer spending patterns, which may impact future performance [102][105]. Accounting Policies - There have been no material changes to critical accounting policies since December 31, 2024 [179]. - No significant changes in market risk exposures have occurred since December 31, 2024 [181].

For the quarter ended March 2025, Wayfair (W) reported revenue of $2.73 billion, up 0% over the same period last year. EPS came in at $0.10, compared to -$0.32 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $2.71 billion, representing a surprise of +0.70%. The company delivered an EPS surprise of +155.56%, with the consensus EPS estimate being -$0.18.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectat ...

Wayfair Inc. (NYSE:W) Q1 2025 Earnings Conference Call May 1, 2025 8:00 AM ET Company Participants Ryan Barney - Head of IR Niraj Shah - CEO, Co-Chairman and Co-Founder Kate Gulliver - CFO and Chief Administrative Officer Conference Call Participants Christopher Horvers - JPMorgan Jonathan Matuszewski - Jefferies Brian Nagel - Oppenheimer Ygal Arounian - Citi Michael Lasser - UBS Simeon Gutman - Morgan Stanley Peter Keith - Piper Sandler Operator Thank you for standing by. My name is Kayla and I will be you ...

Wayfair (W) came out with quarterly earnings of $0.10 per share, beating the Zacks Consensus Estimate of a loss of $0.18 per share. This compares to loss of $0.32 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 155.56%. A quarter ago, it was expected that this online home goods retailer would post earnings of $0.02 per share when it actually produced a loss of $0.25, delivering a surprise of -1,350%.Over the last four quarters ...

Financial Data and Key Metrics Changes - The company reported flat net revenue year over year for Q1 2025, impacted by the exit of the German business, which led to a 10.9% decline in the International segment, while the U.S. business grew by 1.6% [28][29] - Gross margin for the quarter was 30.7% of net revenue, influenced by various factors including a refund related to duty calculations and increased costs from suppliers accelerating inventory imports due to tariff considerations [30][32] - Adjusted EBITDA for Q1 was $106 million, representing a 3.9% margin on net revenue, with the U.S. segment also achieving a 3.9% adjusted EBITDA margin [34] Business Line Data and Key Metrics Changes - The U.S. business showed a positive growth of 1.6%, while the International segment experienced a decline due to the exit from Germany [28][29] - Advertising revenue was reported at 12.6%, down from the previous quarter, as the company shifted focus from experimental spending to scaling established channels [33] Market Data and Key Metrics Changes - The company noted a significant divergence between actual demand and consumer sentiment, indicating that demand remained strong despite negative headlines [44] - Suppliers have been cautious about raising prices due to competitive pressures, with many opting to defer price increases to maintain market share [45][46] Company Strategy and Development Direction - The company plans to continue gaining market share through disciplined execution and deepening partnerships with suppliers, while reallocating resources towards higher ROI areas [25][27] - The closure of the German business and a reduction in the technology team were strategic moves to enhance focus on new product development and improve financial returns [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic environment, emphasizing the resilience and flexibility of the company's platform [27] - The company is focused on controlling costs and optimizing supplier relationships to mitigate the impact of tariffs and other economic pressures [87] Other Important Information - The company has a strong capital structure with $1.4 billion in cash and equivalents, and $1.8 billion in total liquidity, positioning it well for future investments [35][24] - The company is exploring new initiatives in advertising and physical retail, with plans for additional store openings [25][26] Q&A Session Summary Question: Impact of Easter and pricing dynamics - Management acknowledged timing mismatches due to Easter and the leap year, affecting revenue comparisons, but noted strong underlying demand [44] - Suppliers are wary of raising prices, focusing instead on maintaining competitiveness in a challenging market [45][46] Question: Pricing strategies on other platforms - Suppliers are generally cautious about raising prices across platforms, focusing on optimizing their business in a competitive environment [56] Question: CastleGate's impact on gross margin - Management indicated that the rush to utilize CastleGate resulted in a gross margin headwind in Q1, but future benefits are expected from increased CastleGate fees and improved product availability [61][63] Question: Tariff dynamics and supplier burden - The company clarified that the burden of tariffs primarily lies with suppliers, who are encouraged to remain competitive to avoid passing costs onto consumers [68][74] Question: Future tariff impacts and supplier flexibility - Management highlighted the diversification of suppliers across multiple countries, which provides flexibility in response to changing tariff conditions [86][87] Question: Advertising strategy and consumer messaging - The company is focused on optimizing marketing spend for profitable growth, with plans to leverage advertising to enhance consumer value perception [90][92]

Financial Data and Key Metrics Changes - The company reported flat net revenue year over year for the first quarter, impacted by the exit of the German business, which led to a 10.9% decline in the International segment, while the U.S. business posted a positive growth of 1.6% [29][30] - Gross margin for the quarter was 30.7% of net revenue, influenced by various factors including a refund related to duty calculations and increased costs from accelerated inventory imports due to tariff considerations [31][33] - Adjusted EBITDA for the first quarter was $106 million, representing a 3.9% margin on net revenue [35] Business Line Data and Key Metrics Changes - The U.S. business showed a year-over-year growth of 1.6%, while the International segment experienced a decline due to the exit from Germany [29][30] - Advertising revenue was 12.6% of net revenue, down from previous quarters due to a surge in experimental spending [34] Market Data and Key Metrics Changes - The company noted a significant divergence between actual demand and consumer sentiment, indicating that demand remained strong despite broader economic concerns [46] - The company operates a platform with over 20,000 suppliers and 20 million customers, allowing for competitive pricing and a diverse sourcing strategy [9][14] Company Strategy and Development Direction - The company aims to continue gaining market share through disciplined execution and deepening partnerships with suppliers while investing in high ROI growth initiatives [27][40] - The closure of the German business was a strategic decision to reallocate resources towards higher ROI areas [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic environment, highlighting the resilience and flexibility of their platform [28][40] - The management team emphasized the importance of supporting suppliers with data and logistics solutions to optimize their pricing strategies amid tariff pressures [72][73] Other Important Information - The company has a strong capital structure with $1.4 billion in cash and equivalents, and $1.8 billion in total liquidity, positioning it well for future investments [36][27] - The company is focused on maintaining a healthy balance sheet while pursuing growth opportunities in a challenging market [40] Q&A Session Summary Question: Impact of Easter and pricing dynamics - Management acknowledged timing mismatches due to Easter and the leap year, affecting revenue comparisons, but noted strong underlying demand [45][46] - Suppliers are wary of raising prices due to competitive pressures, with no significant price increases observed on the platform [47][48] Question: Pull forward demand - Management indicated that there has not been significant pull forward demand, except in large appliances, which is a small category for the company [52][54] Question: Pricing strategies on other platforms - Suppliers are generally cautious about raising prices across platforms, focusing instead on optimizing their business in a challenging demand environment [60][62] Question: CastleGate impact on margins - Management explained that the rush to utilize CastleGate resulted in a gross margin headwind in Q1, but future benefits are expected from increased CastleGate fees and improved pricing for customers [64][66] Question: Tariff dynamics and supplier support - The company assists suppliers by sharing data and providing logistics solutions to help them manage costs and maintain competitive pricing [72][73] Question: Range of potential outcomes regarding tariffs - Management highlighted the diversification of suppliers across multiple countries, which positions the company well to adapt to changing tariff dynamics [90][91]

Exhibit 99.1 Wayfair Announces First Quarter 2025 Results, Reports Further Share Capture with Robust Profitability Q1 Net Revenue of $2.7 billion with 21.1 million Active Customers BOSTON, MA — May 1, 2025 — Wayfair Inc. ("Wayfair," "we," or "our") (NYSE: W), the destination for all things home, today reported financial results for its first quarter ended March 31, 2025. First Quarter 2025 Financial Highlights "Despite persistent category volatility which marked a fourth consecutive year beginning with cont ...