Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached $214.5 million, reflecting a year-over-year increase of 13.9% [29] - Adjusted EBITDA for Q2 was $25 million, with an adjusted EBITDA margin of 11.7%, up from 10.4% in the previous year [36] - Active customers increased by 9% year-over-year, totaling 2.6 million, with average revenue per customer rising 4.6% to $316 [10][29] Business Line Data and Key Metrics Changes - Glasses revenue grew approximately 11% year-over-year, with progressive lenses accounting for 23% of prescription units sold [13][30] - Contact lenses saw a significant increase of 28% year-over-year, now representing 11.5% of total revenue [20][30] - Eye exams grew 44% year-over-year, contributing 6% to total revenue [21][30] Market Data and Key Metrics Changes - Retail revenue increased by 19.3% year-over-year, driven by the opening of new stores and growth in existing locations [29][15] - The company opened 11 new stores in Q2, bringing the total to 298 stores, with a focus on underpenetrated suburban markets [15][30] Company Strategy and Development Direction - The company aims to expand its store footprint to over 900 locations across North America, highlighting significant growth potential [6] - A partnership with Google was announced to develop AI-powered intelligent eyewear, expanding the company's total addressable market beyond traditional glasses [7][9] - The company is transitioning away from the Home Try On program to focus on in-store experiences and AI-driven digital tools [18][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the eye care consumer and the ability to maintain growth despite macroeconomic challenges [48] - The company raised its full-year guidance, expecting net revenue between $880 million and $888 million, representing 14-15% growth year-over-year [41] - Management noted that tariff-related impacts have moderated, allowing for improved financial performance [38] Other Important Information - Steve Miller, the Chief Financial Officer, announced his departure after 14 years, with Dave Gilboa assuming interim financial responsibilities [23][25] - The company is focusing on leveraging AI technology to enhance customer experience and operational efficiency [51][72] Q&A Session Summary Question: Thoughts on the health of the eye care consumer and future growth - Management noted stability in the customer base and confidence in continued growth, citing the ability to adapt quickly to market changes [48][49] Question: Progress on the Google partnership and its importance - The partnership is expected to unlock new levels of utility for consumers, with glasses becoming a primary interface for engaging with AI [57][60] Question: Drivers of revenue growth acceleration into July - Growth has been observed across both retail and e-commerce channels, supported by recent pricing changes [70] Question: Details on the Warby Advisor feature - The AI-driven tool provides personalized frame recommendations based on user preferences, showing strong engagement and sales [72] Question: Impact of sunsetting the Home Try On program - The program's sunset allows for resource reallocation towards marketing and higher-margin initiatives, reflecting a shift in the company's business model [90]

Financial Performance - Net revenue for Q2 2025 reached $214 million, a 13.9% increase year-over-year[10] - Adjusted EBITDA for Q2 2025 was $25 million, representing an 11.7% margin[10] - The company projects full year 2025 net revenue to be between $880 million and $888 million, representing approximately 14-15% year-over-year growth[28] - The company anticipates full year 2025 Adjusted EBITDA to be between $98 million and $101 million, with an 11.1-11.4% margin[28] - For Q3 2025, the company expects net revenue between $223 million and $225 million, a growth of approximately 16-17% year-over-year, with an Adjusted EBITDA margin of approximately 11%[30] Business Highlights - The company has 298 stores, including 293 in the U S and 5 in Canada[8, 23] - The company estimates a potential footprint of over 900 stores[24] - Over 20 million pairs of glasses have been distributed through the Buy a Pair, Give a Pair program[8] Customer Retention - The company demonstrates compelling and consistent sales retention rates, with customer cohorts showing increasing sales retention over time[17]

[Overview and Highlights](index=1&type=section&id=Warby%20Parker%20Announces%20Second%20Quarter%202025%20Results) Warby Parker achieved significant milestones, including opening its 300th store and partnering with Google for intelligent eyewear, while leveraging AI with its new 'Advisor' tool [Executive Summary & Strategic Initiatives](index=1&type=section&id=Executive%20Summary%20%26%20Strategic%20Initiatives) Warby Parker achieved significant milestones, including opening its 300th store and partnering with Google for intelligent eyewear, while leveraging AI with its new 'Advisor' tool - Announced a partnership with Google to develop intelligent eyewear, signaling a commitment to innovation and AI integration[2](index=2&type=chunk) - Launched "Advisor," a personalized, AI-driven recommendation tool, which has shown strong early traction[3](index=3&type=chunk) - Celebrated major milestones including the opening of its **300th store** and the distribution of **20 million pairs of glasses** to people in need[2](index=2&type=chunk) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Warby Parker reported strong Q2 2025 results, with net revenue up **13.9%** to **$214.5 million**, improved net loss, and expanded retail footprint Q2 2025 Key Financial & Operational Metrics (YoY) | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Net Revenue | $214.5 million | +13.9% | | Active Customers (TTM) | 2.60 million | +9.0% | | Average Revenue per Customer | $316 | +4.6% | | Net Loss | ($1.8 million) | Improved by $5.0M | | Adjusted EBITDA | $25.0 million | +$5.4M | | Adjusted EBITDA Margin | 11.7% | +1.3 pts | | Free Cash Flow | $23.9 million | - | | Net New Stores | 11 | - | [Financial Performance](index=1&type=section&id=Financial%20Performance) This section details Warby Parker's Q2 2025 financial results, balance sheet, and full-year 2025 outlook, highlighting key performance indicators [Detailed Financial Results (Q2 2025)](index=1&type=section&id=Detailed%20Financial%20Results%20%28Q2%202025%29) Q2 2025 saw gross margin decline to **53.0%** due to a **$2.5 million** inventory write-down, while SG&A leverage improved net loss to **$1.8 million** - Gross margin declined to **53.0%** from **56.0%** in the prior year. The decrease was driven by a **$2.5 million** one-time inventory write-down, sales growth of contact lenses, and increased store occupancy costs[6](index=6&type=chunk) - The decision to sunset the Home-Try On program at the end of the year was a primary reason for the one-time inventory write-downs[6](index=6&type=chunk)[11](index=11&type=chunk) - SG&A expenses as a percentage of revenue decreased to **55.1%** from **60.8%** in the prior year, primarily due to leverage from lower stock-based compensation and corporate expenses[11](index=11&type=chunk) - Net loss improved by **$5.0 million** to **$1.8 million**. This figure includes **$3.8 million** in one-time costs, comprising **$2.5 million** in inventory write-downs and **$1.3 million** in restructuring costs[11](index=11&type=chunk) [Balance Sheet](index=2&type=section&id=Balance%20Sheet%20Highlights) Warby Parker maintained a solid financial position, ending Q2 2025 with **$286.4 million** in cash and cash equivalents - The company ended Q2 2025 with **$286.4 million** in cash and cash equivalents[7](index=7&type=chunk) [Full Year 2025 Outlook](index=2&type=section&id=2025%20Outlook) The company raised its full-year 2025 guidance, projecting **14% to 15%** net revenue growth and an Adjusted EBITDA margin of **11.1% to 11.4%** Full Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | Net Revenue | $880M - $888M (+14% to +15% growth) | | Adjusted EBITDA | $98M - $101M | | Adjusted EBITDA Margin | 11.1% - 11.4% | | New Store Openings | 45 (including 5 shop-in-shops at Target) | [Corporate Updates](index=2&type=section&id=Corporate%20Updates) This section provides an update on Warby Parker's leadership, including the CFO's departure and interim appointment of a Co-CEO [Leadership Update](index=2&type=section&id=Leadership%20Update) Warby Parker announced CFO Steve Miller's departure on October 1, 2025, with Co-CEO Dave Gilboa assuming interim financial officer roles - Steve Miller is stepping down as Chief Financial Officer, effective October 1, 2025, after fourteen years with the company[8](index=8&type=chunk)[9](index=9&type=chunk) - Co-Founder and Co-CEO Dave Gilboa will serve as interim principal financial officer and principal accounting officer until a successor is appointed[8](index=8&type=chunk) [Appendix](index=3&type=section&id=Appendix) This appendix provides supplementary information including conference call details, forward-looking statements, a glossary, and selected financial statements [Conference Call Information](index=3&type=section&id=Webcast%20and%20Conference%20Call) A conference call and webcast were scheduled for August 7, 2025, at 8:00 a.m. ET to discuss Q2 2025 results and outlook - A conference call to discuss Q2 2025 results was scheduled for 8:00 a.m. ET on August 7, 2025[14](index=14&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains legal disclaimers regarding forward-looking statements, outlining risks and uncertainties that could impact future results - The press release includes forward-looking statements concerning future operating results, growth, new store openings, and strategic initiatives[15](index=15&type=chunk) - These statements are subject to numerous risks and uncertainties, including economic conditions, competition, supply chain issues, and the ability to successfully collaborate with partners like Google[16](index=16&type=chunk)[17](index=17&type=chunk) [Glossary and Non-GAAP Financial Measures](index=4&type=section&id=Glossary%20and%20Non-GAAP%20Financial%20Measures) This section defines key operational metrics like **Active Customers** and explains non-GAAP financial measures such as Adjusted EBITDA and Free Cash Flow - Defines **Active Customers** as unique customer accounts with at least one purchase in the preceding 12-month period[19](index=19&type=chunk) - Defines **Average Revenue per Customer** as the total net revenues in the preceding 12-month period divided by the current period's Active Customers[19](index=19&type=chunk) - Explains the use of non-GAAP measures such as Adjusted EBITDA, Adjusted Gross Margin, and Free Cash Flow to provide consistency and comparability with past financial performance[20](index=20&type=chunk)[21](index=21&type=chunk) [Selected Financial Information](index=6&type=section&id=Selected%20Financial%20Information) This section presents Warby Parker's unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, and Cash Flows, with GAAP to non-GAAP reconciliations [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$701.9 million**, with cash and cash equivalents at **$286.4 million**, reflecting a solid financial position Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $286,384 | $254,161 | | Total current assets | $346,097 | $326,046 | | Total assets | $701,899 | $676,490 | | Total current liabilities | $135,533 | $130,354 | | Total liabilities | $340,448 | $336,417 | | Total stockholders' equity | $361,451 | $340,073 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, net loss improved to **$1.8 million** on **$214.5 million** revenue, compared to a **$6.8 million** net loss in Q2 2024, with diluted EPS at **($0.01)** Statement of Operations Summary - Three Months Ended June 30 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net revenue | $214,475 | $188,222 | | Gross profit | $113,609 | $105,382 | | Loss from operations | ($4,525) | ($8,956) | | Net (loss) income | ($1,752) | ($6,762) | | Diluted EPS | ($0.01) | ($0.06) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operations increased to **$69.6 million**, leading to a **$32.2 million** rise in cash and cash equivalents Statement of Cash Flows Summary - Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $69,557 | $51,550 | | Net cash used in investing activities | ($32,438) | ($34,088) | | Net cash (used in) provided by financing activities | ($5,075) | $3,707 | | Net change in cash and cash equivalents | $32,223 | $21,064 | [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section details adjustments to reconcile GAAP net loss of **$1.8 million** to an Adjusted EBITDA of **$25.0 million** for Q2 2025, including stock-based compensation and one-time costs Reconciliation of Net Loss to Adjusted EBITDA - Q2 2025 (in thousands) | Description | Amount | | :--- | :--- | | **Net loss (GAAP)** | **($1,752)** | | Depreciation and amortization | $12,486 | | Stock-based compensation expense | $9,162 | | Inventory write-downs | $2,456 | | Other costs (restructuring) | $1,341 | | Other adjustments | $1,721 | | **Adjusted EBITDA (Non-GAAP)** | **$25,014** | - Adjusted Gross Margin for Q2 2025 was **54.3%**, compared to a GAAP Gross Margin of **53.0%**, primarily due to the exclusion of one-time inventory write-downs[42](index=42&type=chunk)[44](index=44&type=chunk)

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Warby Parker Inc. due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Warby Parker is expected to report quarterly earnings of $0.09 per share, reflecting a 50% increase year-over-year, with revenues projected at $212.8 million, up 13.1% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Warby Parker is lower than the consensus estimate, resulting in an Earnings ESP of -11.11%, suggesting bearish sentiment among analysts [11]. Historical Performance - Warby Parker has only beaten consensus EPS estimates once in the last four quarters, with the most recent quarter matching expectations with no surprise [12][13]. Overall Assessment - Given the negative Earnings ESP and a Zacks Rank of 4 (Sell), Warby Parker does not appear to be a strong candidate for an earnings beat, and investors should consider other factors before making decisions [16].

Group 1 - The S&P 500 is reaching new record highs, indicating a favorable environment for investors to engage in selective stock-picking [1] - The focus is on reallocating portfolio investments, particularly in the technology sector, which is influenced by various themes shaping the industry [1] Group 2 - Gary Alexander has extensive experience in both Wall Street and Silicon Valley, providing insights into technology companies and emerging startups [1]

Core Insights - Major tech companies, including Google, Apple, Meta, and Snap, are competing in the smart glasses market, with a focus on leveraging retail stores to engage consumers [3][4]. - Google has committed up to $150 million to partner with Warby Parker to develop AI-powered smart glasses, with an initial investment of $75 million for product development [4][5]. - Warby Parker reported a nearly 12% year-over-year increase in Q1 net revenue, reaching $223.8 million, and achieved its first positive quarterly net income as a public company [6]. Group 1: Company Strategies - Google is following a retail strategy similar to Meta's by partnering with Warby Parker, aiming to utilize the latter's popular eyewear designs and retail presence [9][10]. - Meta's success with Ray-Ban smart glasses highlights the importance of stylish design and retail distribution in the smart glasses market [8][9]. - Snap plans to release a sixth generation of its augmented reality glasses, named Specs, which will be smaller and lighter than previous models [11][12]. Group 2: Market Developments - Apple is developing its own smart glasses, expected to launch around 2027, utilizing its existing store network for product introduction [13]. - The collaboration between Google and Warby Parker is expected to yield a series of products, with the first line anticipated to launch after 2025 [10].

Core Insights - Warby Parker and Google are collaborating on AI-powered smart glasses, which are expected to launch after 2025, aiming to provide real-time contextual assistance and all-day utility [2][3][4] - The company is actively mitigating tariff exposure by shifting its supply chain, implementing selective price increases, and controlling expenses, with reliance on China expected to drop below 10% by year-end [1][10][14] Company Developments - Warby Parker's co-CEO, Dave Gilboa, emphasized the transformative potential of AI-powered glasses, which will enhance user interaction with technology and provide contextual information [3][8][9] - The company is expanding its retail presence, planning to open 45 new stores this year, including five within Target locations, and has nearly 300 retail locations generating close to $800 million in annual revenue [12][13] - Warby Parker's revenue streams are diversifying, with contact lenses and eye exams contributing approximately 10% and 6% of revenue, respectively, and showing significant growth [12][13] Industry Context - The collaboration between Warby Parker and Google is part of a broader trend in the smart glasses market, with competitors like Meta, Amazon, Apple, and Samsung also developing similar technologies [4][5] - The market for AI-powered glasses is seen as an evolution of earlier smart glasses, with increased adoption driven by enhanced functionality and design [5][6] - The integration of AI into wearables, particularly in health tracking, is gaining traction among younger demographics, indicating a shift in consumer preferences [6]

Warby Parker Conference Call Summary Company Overview - Warby Parker is a mission-driven vision care and lifestyle brand, recognized as a direct-to-consumer (DTC) pioneer in the eyeglasses category [1][2] Industry Insights - The U.S. vision care market is valued at approximately $68 billion, with a significant portion of Americans requiring corrective vision care products [4] - The market is divided between large optical chains and independent optical shops, with consolidation leading to limited competition and high prices [5] - Most glasses in the U.S. are marked up 10 to 20 times their manufacturing cost, and 75% of glasses are sold at the same location as eye exams, creating a lack of transparency in pricing [5][6] Company Performance - Warby Parker has achieved nearly $800 million in revenue, with a low teens growth rate over the past few years [3] - The company is guiding for 12% to 14% growth in Q2 and 13% to 15% for the full year, a slight reduction from previous expectations [9][10] Competitive Advantages - Warby Parker offers high-quality glasses at a price point of $95, which has remained unchanged since its launch in 2010, contrasting with competitors who have consistently raised prices [6][7] - The company has expanded its product assortment to include progressive lenses and contact lenses, appealing to a broader market [7][12] Growth Strategy - Plans to open 45 new stores in 2025, including five stores within Target locations [11][37] - Focus on expanding complex lens types and enhancing the vision care offering, which includes contacts and eye exams [12][13] Partnership with Google - Warby Parker announced a partnership with Google to develop AI-powered smart glasses, aiming to transform user interaction with technology [14][15] - The glasses are expected to provide real-time contextual information and be aesthetically appealing for everyday use [18] Tariff Mitigation Strategies - The company has reduced its sourcing from China from 20% to less than 10% to mitigate the impact of tariffs, which previously could have cost $40 million to $45 million [21][22] - Strategies include reallocating supply globally, implementing selective price increases, and maintaining expense discipline [23][24][25] Vision Insurance and Eye Exams - Vision insurance represents about 7% of Warby Parker's revenue, with efforts to increase awareness and utilization among insured customers [38][41] - Eye exams are growing rapidly, with a 40% increase last year, and are seen as a strategic pivot to drive higher-margin glasses sales [43][45] Financial Metrics - The company reported a 13.1% adjusted EBITDA margin in Q1, with a focus on controlling expenses and maintaining profitability [25] Conclusion - Warby Parker is positioned to capitalize on growth opportunities in the vision care market through strategic partnerships, innovative product offerings, and a commitment to fair pricing and customer satisfaction [29][31]

Core Viewpoint - TD Securities analyst Oliver Chen maintains a Buy rating on Warby Parker, raising the price forecast from $20 to $24 due to a new collaboration with Google for AI-enabled smart glasses [1][2]. Group 1: Partnership with Google - Google is committing $75 million towards product development and commercialization, with the potential for an additional $75 million investment in Warby Parker stock [2]. - The partnership is seen as a strong signal of Warby Parker's commitment to innovation and its potential to disrupt the eyewear industry [3]. Group 2: Product Development and Market Potential - The AI-powered glasses initiative must leverage advanced, context-aware AI and integrate with tools like Google Maps, featuring stylish designs [4]. - The U.S. smart glasses market is estimated to reach $2-$4 billion by 2030, compared to Warby Parker's current revenue of approximately $800 million [5]. Group 3: Financial Outlook - The partnership is expected to improve customer lifetime value and encourage broader wearable tech development, reinforcing Warby's tech-forward approach [5]. - Warby Parker targets over 20% annual revenue growth, with gross margins in the 58% to 60% range and EBITDA margin gains of around 20% [6]. Group 4: Stock Performance - Warby Parker shares are trading higher by 3.05% to $20.96 [7].

Core Insights - Warby Parker has announced a partnership with Google to develop AI glasses that can be worn all day, based on Android XR technology [1] - Google has committed to providing up to $75 million in funding for the product development and commercialization costs of Warby Parker [1] Company Summary - Warby Parker is collaborating with Google to create innovative AI eyewear [1] - The partnership aims to leverage Google's technological expertise and financial support to enhance Warby Parker's product offerings [1] Industry Summary - The collaboration signifies a growing trend in the eyewear industry towards integrating advanced technology, such as AI, into consumer products [1] - The investment from Google highlights the increasing interest of tech companies in the eyewear market, potentially leading to more innovations and competition [1]