Wayfair(US:W)2025-05-01 20:09Financial 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 million, 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, reflecting a positive trend in purchasing behavior [108]. - Adjusted EBITDA for the three months ended March 31, 2025, was $106 million, compared to $75 million in the same period in 2024, indicating improved operational efficiency [108]. - The net loss for the three months ended March 31, 2025, was $113 million, an improvement from a net loss of $248 million in the same period in 2024 [108]. - 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]. - The adjusted diluted earnings per share was $0.10, a recovery from an adjusted diluted loss per share of $(0.32) in the prior 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]. Cost and Expenses - The cost of goods sold decreased by $17 million, or 0.9%, to $1,893 million, with the cost as a percentage of net revenue decreasing to 69.3% from 70.0% [113][115]. - For the three months ended March 31, 2025, total operating expenses decreased by 9.0% to $959 million compared to $1,054 million in the same period in 2024 [117]. - Advertising expenses increased by 6.2% to $344 million for the three months ended March 31, 2025, up from $324 million in the same period in 2024 [121]. - Customer service and merchant fees decreased by 8.5% to $107 million for the three months ended March 31, 2025, compared to $117 million in the same period in 2024 [117]. - Restructuring charges decreased by 29.1% to $56 million for the three months ended March 31, 2025, down from $79 million in the same period in 2024 [127]. Market and Strategic Changes - The company continues to monitor macroeconomic conditions, including inflation and interest rates, which may impact consumer behavior and business performance [102][105]. - The company aims to enhance brand awareness and customer acquisition through both paid and unpaid advertising strategies [99]. - The exit from the German market is part of the company's restructuring efforts to focus on more profitable regions and improve overall financial performance [95][111]. Debt and Liquidity - Total liquidity as of March 31, 2025, was $1.368 billion, slightly down from $1.372 billion as of December 31, 2024 [139]. - The company had $3.3 billion principal amount of indebtedness outstanding as of March 31, 2025 [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 [136]. - Cash flows provided by financing activities increased by $140 million during the three months ended March 31, 2025, primarily due to net proceeds from the issuance of debt of $691 million [157]. - 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]. Cash Flow and Capital Expenditures - 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 in 2024 [169]. - Free Cash Flow for the three months ended March 31, 2025, was $(139) million, an improvement from $(193) million in the same period of 2024 [169]. - Capital expenditures were 1.6% of net revenue for the three months ended March 31, 2025, focusing on equipment purchases and improvements for the logistics network [156]. Accounting and Risk Management - There have been no material changes to the company's critical accounting policies and estimates since December 31, 2024 [179]. - The company has not experienced significant changes in its exposures to market risk since December 31, 2024 [181].