Brilliant Earth (BRLT) - 2025 Q2 - Quarterly Results

Executive Summary & Key Announcements Brilliant Earth reported strong Q2 2025 results, exceeding guidance, announced a one-time dividend, and paid off its debt facility, reflecting robust financial health and commitment to shareholder returns Second Quarter 2025 Highlights Brilliant Earth reported strong Q2 2025 results, exceeding guidance with 3.3% Y/Y net sales growth and 18% Y/Y total order growth. The company achieved a gross margin of 58.3% and an Adjusted EBITDA of $3.2 million, while expanding its retail showroom portfolio and ending the quarter with $98.8 million in net cash Q2 2025 Key Performance Indicators | Metric | Q2 2025 | Y/Y Change | | :----- | :------ | :--------- | | Net Sales | $108.9 million | +3.3% | | Total Orders | 52,535 | +18% | | Fine Jewelry Bookings | - | +38% | | Gross Margin | 58.3% | Consistent with target | | GAAP Net Loss | $1.1 million | - | | Adjusted EBITDA | $3.2 million | - | | Net Cash | $98.8 million | +5% | - Expanded retail showroom portfolio to 42 locations with a new opening in Alpharetta, Atlanta metro area[6] Strategic Announcements Brilliant Earth announced a one-time cash dividend of $0.25 per share and successfully paid off the remaining $34.8 million of its term loan, terminating its debt facility Dividend and Distribution The company's Board of Directors declared a one-time cash dividend of $0.25 per share, totaling approximately $25.3 million, payable on September 8, 2025 - Board of Directors declared a one-time cash dividend and distribution of $0.25 per share[3] - The distribution from Brilliant Earth, LLC will total approximately $25.3 million[3] - Payment date is September 8, 2025, to holders of record as of August 22, 2025[3] Debt Facility Payoff Brilliant Earth successfully paid off its remaining $34.8 million term loan, terminating its debt facility and achieving a zero-debt position - The company paid off the remaining $34.8 million of its term loan[4] - Debt facility terminated as of August 4, 2025, leaving the Company with zero debt[4][6] CEO Commentary CEO Beth Gerstein expressed satisfaction with Q2 results, highlighting market outperformance, share gains, and validation of the company's strategic vision. She noted strong growth in engagement rings, wedding bands, and fine jewelry, attributing success to brand momentum and a diversified supply chain. The dividend reflects commitment to shareholder returns and a strong financial position - Q2 results represent the strongest year-over-year topline growth in a year and a half, significantly exceeding Net Sales and Adjusted EBITDA expectations[5] - Drove high-single digit year-over-year unit growth in both engagement rings and wedding and anniversary bands[5] - Grew fine jewelry bookings 38% year-over-year in Q2[5] Financial Performance This section details Brilliant Earth's financial results for Q2 and the first six months of 2025, highlighting net sales, profitability, and key operational metrics Second Quarter 2025 Results In Q2 2025, Brilliant Earth reported net sales of $108.9 million, a 3.3% increase year-over-year, driven by an 18.3% rise in total orders. However, Average Order Value (AOV) decreased by 12.6%. The company experienced a GAAP net loss of $1.1 million, a significant decline from a $1.4 million net income in Q2 2024, and Adjusted EBITDA also decreased by 41.9% to $3.2 million Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 | Q2 2024 | % Change | | :----------------------------------- | :------ | :------ | :------- | | Total Orders | 52,535 | 44,404 | 18.3% | | AOV | $2,074 | $2,374 | (12.6)% | | Net Sales | $108.9M | $105.4M | 3.3% | | Gross Profit | $63.5M | $64.1M | (0.9)% | | Gross Margin | 58.3% | 60.8% | (250)bps | | Net (loss) income, as reported | $(1.1)M | $1.4M | (180.9)% | | Net (loss) income margin | (1.0)% | 1.3% | (230)bps | | Adjusted EBITDA | $3.2M | $5.5M | (41.9)% | | Adjusted EBITDA margin | 2.9% | 5.2% | (230)bps | | GAAP Diluted EPS | $(0.01) | $0.01 | (200.0)% | | Adjusted Diluted EPS | $0.01 | $0.03 | (66.7)% | Six Month Results For the six months ended June 30, 2025, Net Sales remained flat year-over-year at $202.8 million, despite a 15.5% increase in total orders. AOV declined by 13.4%. The company reported a GAAP net loss of $4.4 million, a significant decrease from a $2.4 million net income in the prior year period, and Adjusted EBITDA fell by 59.7% to $4.3 million YTD June 2025 vs YTD June 2024 Financial Performance | Metric | YTD June 2025 | YTD June 2024 | % Change | | :----------------------------------- | :------------ | :------------ | :------- | | Total Orders | 98,070 | 84,929 | 15.5% | | AOV | $2,068 | $2,387 | (13.4)% | | Net Sales | $202.8M | $202.8M | —% | | Gross Profit | $118.5M | $122.4M | (3.2)% | | Gross Margin | 58.4% | 60.4% | (200)bps | | Net (loss) income, as reported | $(4.4)M | $2.4M | (279.4)% | | Net (loss) income margin | (2.2)% | 1.2% | (340)bps | | Adjusted EBITDA | $4.3M | $10.6M | (59.7)% | | Adjusted EBITDA margin | 2.1% | 5.2% | (310)bps | | GAAP Diluted EPS | $(0.04) | $0.02 | (300.0)% | | Adjusted Diluted EPS | $0.01 | $0.06 | (83.3)% | Business Outlook & Company Information This section provides Brilliant Earth's 2025 financial outlook, company overview, non-GAAP disclosures, dividend policy, and forward-looking statements 2025 Outlook Brilliant Earth has raised its annual net sales guidance for 2025, projecting a year-over-year growth of 2.5% to 4%, with an Adjusted EBITDA margin of 3% to 4%. For the third quarter, the company anticipates net sales growth of 8% to 10% year-over-year and Adjusted EBITDA between $3 million and $4.5 million 2025 Financial Outlook | Period | Metric | Guidance | | :------- | :---------- | :-------------------- | | Third Quarter | Net Sales | +8% to 10% Y/Y | | | Adjusted EBITDA | $3M to $4.5M | | Full Year | Net Sales | +2.5% to 4% Y/Y | | | Adjusted EBITDA | 3% to 4% Margin | - Outlook reflects metal prices and tariffs as of August 5, 2025, and does not include impacts from subsequent tariff announcements or metal price fluctuations[11] About Brilliant Earth Brilliant Earth is an industry-disrupting global leader in ethically sourced fine jewelry, founded in 2005 with a mission for transparency and sustainability. The company operates with a premium brand, curated products, an omnichannel experience, and a data-driven business model, serving customers in over 50 countries with 42 showrooms - Founded in 2005, mission is to create a more transparent, sustainable, and compassionate jewelry industry[13] - Operates with a premium brand, curated proprietary product assortment, seamless omnichannel shopping experience, and asset-light, data-driven business model[13] - 2024 full year Net Sales were $422 million and has reported positive Adjusted EBITDA for 16 consecutive quarters since going public in 2021[13] Non-GAAP Financial Measures and Key Metrics Disclosure This section defines non-GAAP financial measures like Adjusted EBITDA, Adjusted Net (loss) income, and Adjusted Diluted EPS, explaining their exclusion of certain variable or non-core items to provide a clearer view of underlying business performance. It also outlines key business metrics such as net cash, bookings, total orders, average order value (AOV), and average selling price (ASP, detailing how these are calculated and their utility in evaluating business trends and operational efficiency - Non-GAAP measures (Adjusted EBITDA, Adjusted Net (loss) income, Adjusted Diluted EPS) are used to evaluate operating performance by excluding items that vary substantially in frequency and magnitude[14] - Key business metrics defined include: * Net cash: Cash and cash equivalents less the total principal balance of outstanding debt * Bookings: Dollar value of confirmed orders, representing gross sales and potential future Net Sales * Total orders: Total number of customer orders delivered less total orders returned (excluding repairs/resizes) * AOV (Average Order Value): Net sales in a given period divided by total orders * ASP (Average Selling Price): Total retail sales price of products sold divided by total product units sold[20] Dividend Policy Future dividend declarations are at the discretion of the Board of Directors, subject to legal requirements, contractual restrictions, and the company's business prospects, financial condition, cash requirements, industry trends, and other relevant factors - Any future dividend declaration and payment are at the discretion of the Company's Board of Directors[21] - Subject to the requirements of applicable law, compliance with contractual restrictions, and covenants in debt agreements[21] - Dependent on business prospects, results of operations, financial condition, cash requirements and availability, industry trends, and other factors[21] Forward-Looking Statements This section contains a standard legal disclaimer regarding forward-looking statements, indicating that they are not guarantees of future performance and are subject to various risks, assumptions, and uncertainties. These include fluctuations in material pricing, economic conditions, customer acquisition, growth management, supply chain issues, competition, brand maintenance, IT systems, and regulatory impacts. The company disclaims any obligation to update these statements - Forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict[22] - Risks include fluctuations in pricing and supply of diamonds/precious metals, overall economic health, consumer spending, trade policy changes (tariffs), ability to acquire/retain customers, managing rapid growth, supply chain issues, competition, brand maintenance, reliance on IT systems, ESG matters, and obligations under the Tax Receivable Agreement[22] - The company undertakes no obligation to update or revise any forward-looking statements unless required by applicable law[22] Unaudited Consolidated Financial Statements This section presents Brilliant Earth's unaudited consolidated statements of operations and balance sheets for Q2 and YTD June 30, 2025, and comparative periods Consolidated Statements of Operations The unaudited consolidated statements of operations detail the company's financial performance for the three and six months ended June 30, 2025 and 2024, showing net sales, cost of sales, gross profit, operating expenses, and ultimately net (loss) income and earnings per share Consolidated Statements of Operations (Q2 & YTD June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Net sales | $108,936 | $105,426 | $202,820 | $202,763 | | Cost of sales | $45,432 | $41,349 | $84,274 | $80,380 | | Gross profit | $63,504 | $64,077 | $118,546 | $122,383 | | Total operating expenses | $64,717 | $62,945 | $123,282 | $120,374 | | (Loss) income from operations | $(1,213) | $1,132 | $(4,736) | $2,009 | | Net (loss) income | $(1,113) | $1,375 | $(4,380) | $2,442 | | Diluted EPS | $(0.01) | $0.01 | $(0.04) | $0.02 | Consolidated Balance Sheets The unaudited consolidated balance sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity. Key changes include a decrease in cash and cash equivalents and the elimination of long-term debt Consolidated Balance Sheets (June 30, 2025 vs Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | Dec 31, 2024 | | :-------------------- | :------------ | :----------- | | Total assets | $260,875 | $281,245 | | Cash and cash equivalents | $133,615 | $161,925 | | Inventories, net | $47,348 | $38,292 | | Total current liabilities | $115,251 | $78,169 | | Long-term debt, net | — | $50,010 | | Total liabilities | $158,193 | $171,863 | | Total stockholders' equity | $102,682 | $109,382 | GAAP to Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP net (loss) income to Adjusted EBITDA and Adjusted Net Income, along with Adjusted Diluted EPS, for Q2 and YTD June 30, 2025, and 2024 Adjusted EBITDA and Adjusted EBITDA Margin This section provides a reconciliation of GAAP net (loss) income to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024, detailing adjustments for interest, taxes, depreciation, amortization, showroom pre-opening expenses, equity-based compensation, and other income Adjusted EBITDA Reconciliation (Q2 & YTD June 30) | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :----------------------------------- | :------ | :------ | :------- | :------- | | Net (loss) income | $(1,113) | $1,375 | $(4,380) | $2,442 | | Interest expense | $895 | $1,293 | $2,010 | $2,507 | | Income tax expense (benefit) | $143 | $(62) | $12 | $11 | | Depreciation expense | $1,544 | $1,302 | $3,032 | $2,505 | | Amortization of cloud-based software | $204 | $213 | $366 | $418 | | Showroom pre-opening expense | $319 | $409 | $901 | $622 | | Equity-based compensation expense | $2,328 | $2,425 | $4,697 | $5,012 | | Other income, net | $(1,138) | $(1,474) | $(2,378) | $(2,951) | | Adjusted EBITDA | $3,182 | $5,481 | $4,260 | $10,566 | | Net (loss) income margin | (1.0)% | 1.3% | (2.2)% | 1.2% | | Adjusted EBITDA margin | 2.9% | 5.2% | 2.1% | 5.2% | Adjusted Net (Loss) Income and Adjusted Diluted Earnings Per Share This section reconciles GAAP net (loss) income attributable to Brilliant Earth Group, Inc. to Adjusted Net Income and Adjusted Diluted EPS, accounting for the impact of assumed redemption of LLC Units, income tax benefits/expenses, equity-based compensation, showroom pre-opening expenses, and their tax impacts Adjusted Net Income & Diluted EPS Reconciliation (Q2 & YTD June 30) | Metric (in thousands, except EPS) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------------ | :------ | :------ | :------- | :------- | | Net (loss) income attributable to BRLT, as reported | $(166) | $185 | $(632) | $324 | | Net (loss) income, as reported | $(1,113) | $1,375 | $(4,380) | $2,442 | | Tax effected net (loss) income after assumed conversion | $(872) | $1,071 | $(3,427) | $1,901 | | Equity-based compensation expense | $2,328 | $2,425 | $4,697 | $5,012 | | Showroom pre-opening expense | $319 | $409 | $901 | $622 | | Tax impact of adjustments | $(673) | $(723) | $(1,424) | $(1,438) | | Adjusted Net Income | $1,102 | $3,182 | $747 | $6,097 | | Diluted EPS, As reported | $(0.01) | $0.01 | $(0.04) | $0.02 | | Diluted EPS, As adjusted | $0.01 | $0.03 | $0.01 | $0.06 |