Warby Parker(WRBY) - 2025 Q2 - Quarterly Results

Overview and Highlights 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 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] - Launched "Advisor," a personalized, AI-driven recommendation tool, which has shown strong early traction[3] - Celebrated major milestones including the opening of its 300th store and the distribution of 20 million pairs of glasses to people in need[2] Second Quarter 2025 Highlights 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 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) 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] - 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][11] - 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] - 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] Balance Sheet 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] Full Year 2025 Outlook 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 This section provides an update on Warby Parker's leadership, including the CFO's departure and interim appointment of a Co-CEO Leadership Update 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][9] - Co-Founder and Co-CEO Dave Gilboa will serve as interim principal financial officer and principal accounting officer until a successor is appointed[8] Appendix This appendix provides supplementary information including conference call details, forward-looking statements, a glossary, and selected financial statements Conference Call Information 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] Forward-Looking Statements 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] - 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][17] Glossary and Non-GAAP Financial Measures 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] - 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] - 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][21] Selected Financial Information 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 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 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 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 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][44]