Wayfair(US:W)2024-11-01 20:16Revenue Performance - Net revenue decreased by 2.0% to $2.884 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 $2.512 billion in Q3 2024, while international net revenue remained constant at $372 million[112][113] - Net revenue decreased by $159 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 $310 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 $545 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 $2.011 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 $6,097 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 $947 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 $116 million (19.5%) to $480 million in Q3 2024, driven by lower compensation costs[117] - Selling, operations, technology, general and administrative expenses decreased by $213 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 $354 million in Q3 2024, reflecting renewed investment opportunities and changing market conditions[123] - Advertising expenses increased by $27 million (2.7%) to $1,043 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 $142 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 $61 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 $100 million in Q3 2023[111] - Free Cash Flow was negative $9 million in Q3 2024 compared to positive $42 million in Q3 2023[111] - Adjusted Diluted Earnings per Share improved to $0.22 in Q3 2024 from a loss of $0.13 per share in Q3 2023[111] - Adjusted EBITDA for the nine months ended September 30, 2024, was $357 million, compared to $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 -$64 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 -$1.02 in the same period in 2023[191] - Net loss for the nine months ended September 30, 2024, was $364 million, compared to $564 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 $79 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 $36 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 $155 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 $53 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 $121 million, compared to $154 million in the same period in 2023[185] Other Financial Metrics - Interest expense, net remained constant at $15 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 $100 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]