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Wayfair(W) - 2024 Q3 - Quarterly Report
WWayfair(W)2024-11-01 20:16
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Revenue Performance - Net revenue decreased by 2.0% to 2.884billioninQ32024comparedto2.884 billion in Q3 2024 compared to 2.944 billion in Q3 2023, driven by lower order volume[104][112] - U.S. net revenue decreased by 2.3% to 2.512billioninQ32024,whileinternationalnetrevenueremainedconstantat2.512 billion in Q3 2024, while international net revenue remained constant at 372 million[112][113] - Net revenue decreased by 159million(1.8159 million (1.8%) to 8,730 million in the nine months ended September 30, 2024, driven by lower order volume and macroeconomic pressures[133] Customer Metrics - Active customers remained flat at 22 million, with 79.9% of orders coming from repeat buyers in Q3 2024[104] - Average order value increased to 310inQ32024from310 in Q3 2024 from 297 in Q3 2023[111] - Orders delivered decreased to 9 million in Q3 2024 from 10 million in Q3 2023[111] - LTM net revenue per active customer increased to 545inQ32024from545 in Q3 2024 from 538 in Q3 2023[111] Cost of Goods Sold and Operating Expenses - Cost of goods sold decreased by 0.8% to 2.011billioninQ32024,butincreasedasapercentageofnetrevenueto69.72.011 billion in Q3 2024, but increased as a percentage of net revenue to 69.7% from 68.9% in Q3 2023[114][115] - Cost of goods sold decreased by 69 million (1.1%) to 6,097millionintheninemonthsendedSeptember30,2024,duetooperationalcostsavingsandlowerordervolume[135]−Totaloperatingexpensesdecreasedby6,097 million in the nine months ended September 30, 2024, due to operational cost savings and lower order volume[135] - Total operating expenses decreased by 122 million (11.4%) to 947millioninQ32024comparedto947 million in Q3 2024 compared to 1,069 million in Q3 2023, primarily due to reduced compensation costs[117] - Selling, operations, technology, general and administrative expenses decreased by 116million(19.5116 million (19.5%) to 480 million in Q3 2024, driven by lower compensation costs[117] - Selling, operations, technology, general and administrative expenses decreased by 213million,or15.0213 million, or 15.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[144] Advertising Expenses - Advertising expenses increased by 17 million (5.0%) to 354millioninQ32024,reflectingrenewedinvestmentopportunitiesandchangingmarketconditions[123]−Advertisingexpensesincreasedby354 million in Q3 2024, reflecting renewed investment opportunities and changing market conditions[123] - Advertising expenses increased by 27 million (2.7%) to 1,043millionintheninemonthsendedSeptember30,2024,reflectingstrategicinvestmentsinresponsetomarketconditions[143]−Advertisingexpensesincreasedto11.91,043 million in the nine months ended September 30, 2024, reflecting strategic investments in response to market conditions[143] - Advertising expenses increased to 11.9% of net revenue for the nine months ended September 30, 2024, compared to 11.4% in the same period in 2023[144] Compensation and Related Costs - Equity-based compensation and related taxes decreased by 48 million (33.3%) in Q3 2024 compared to Q3 2023, primarily due to fewer vested restricted stock units[118] - Equity-based compensation and related taxes decreased by 142million(31.1142 million (31.1%) in the nine months ended September 30, 2024, driven by fewer vested restricted stock units[140] - Customer service and merchant fees decreased by 21 million (16.3%) in Q3 2024, excluding equity-based compensation, due to reduced compensation costs[120] - Customer service and merchant fees decreased by 61million(15.461 million (15.4%) in the nine months ended September 30, 2024, excluding equity-based compensation, due to reduced compensation costs[141] Financial Performance Metrics - Adjusted EBITDA increased to 119 million in Q3 2024 from 100millioninQ32023[111]−FreeCashFlowwasnegative100 million in Q3 2023[111] - Free Cash Flow was negative 9 million in Q3 2024 compared to positive 42millioninQ32023[111]−AdjustedDilutedEarningsperShareimprovedto42 million in Q3 2023[111] - Adjusted Diluted Earnings per Share improved to 0.22 in Q3 2024 from a loss of 0.13pershareinQ32023[111]−AdjustedEBITDAfortheninemonthsendedSeptember30,2024,was0.13 per share in Q3 2023[111] - Adjusted EBITDA for the nine months ended September 30, 2024, was 357 million, compared to 214millioninthesameperiodin2023[181]−FreeCashFlowfortheninemonthsendedSeptember30,2024,was−214 million in the same period in 2023[181] - Free Cash Flow for the nine months ended September 30, 2024, was -19 million, compared to -64millioninthesameperiodin2023[185]−AdjustedDilutedEarnings(Loss)perSharefortheninemonthsendedSeptember30,2024,was64 million in the same period in 2023[185] - Adjusted Diluted Earnings (Loss) per Share for the nine months ended September 30, 2024, was 0.38, compared to -1.02inthesameperiodin2023[191]−NetlossfortheninemonthsendedSeptember30,2024,was1.02 in the same period in 2023[191] - Net loss for the nine months ended September 30, 2024, was 364 million, compared to 564millioninthesameperiodin2023[181]RestructuringandImpairmentCharges−Restructuringchargesincreasedby564 million in the same period in 2023[181] Restructuring and Impairment Charges - Restructuring charges increased by 14 million, or 21.5%, for the nine months ended September 30, 2024, compared to the same period in 2023[146] - Restructuring charges for the nine months ended September 30, 2024, were 79million,primarilyduetoone−timeemployeeseveranceandbenefitcosts[182]−Impairmentandotherrelatednetchargesdecreasedby79 million, primarily due to one-time employee severance and benefit costs[182] - Impairment and other related net charges decreased by 12 million, or 85.7%, for the nine months ended September 30, 2024, compared to the same period in 2023[145] Cash Flow and Capital Expenditures - Net cash provided by operating activities decreased by 36millionfortheninemonthsendedSeptember30,2024,comparedtothesameperiodin2023[170]−CapitalExpenditureswere2.036 million for the nine months ended September 30, 2024, compared to the same period in 2023[170] - Capital Expenditures were 2.0% of net revenue for the nine months ended September 30, 2024, primarily for equipment purchases and improvements in leased warehouses and proprietary technology investments[172] - Cash flows from financing activities decreased by 74 million during the nine months ended September 30, 2024, compared to the same period in 2023, due to the net impact of debt and other financing transactions[174] - Net cash provided by operating activities for the nine months ended September 30, 2024, was 155million,comparedto155 million, compared to 191 million in the same period in 2023[185] - Purchase of property and equipment for the nine months ended September 30, 2024, was 53million,comparedto53 million, compared to 101 million in the same period in 2023[185] - Site and software development costs for the nine months ended September 30, 2024, were 121million,comparedto121 million, compared to 154 million in the same period in 2023[185] Other Financial Metrics - Interest expense, net remained constant at 15millionfortheninemonthsendedSeptember30,2024,comparedtothesameperiodin2023[148]−Otherincome(expense),netincreasedby15 million for the nine months ended September 30, 2024, compared to the same period in 2023[148] - Other income (expense), net increased by 5 million, or 250.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[149] - Gain on debt extinguishment decreased by 100million,or100.0100 million, or 100.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[151] - Provision for income taxes, net increased by 2 million, or 33.3%, for the nine months ended September 30, 2024, compared to the same period in 2023[153] - Cash and cash equivalents and short-term investments totaled $1.3 billion as of September 30, 2024[155] Market Risk and Other Notes - No significant changes in the company's exposures to market risk since December 31, 2023[198]