Wayfair(US:W)2025-10-28 20:07Revenue Performance - For the three months ended September 30, 2025, net revenue increased by $233 million, or 8.1%, compared to the same period in 2024, driven by higher order volume and average order value [113]. - U.S. net revenue increased by 8.6% to $2,728 million, while international net revenue increased by 4.6% to $389 million [115]. - For the three months ended September 30, 2025, net revenue increased by $390 million, or 4.5%, compared to the same period in 2024, driven by higher average order value [139]. - U.S. net revenue for the nine months ended September 30, 2025, was $8,031 million, a 5.2% increase from $7,633 million in 2024, while International net revenue decreased by 0.7% [141]. - The last twelve months (LTM) net revenue per active customer was $578, up from $545 in the previous year [111]. Customer Metrics - As of September 30, 2025, the company had 21 million active customers, with 80.1% of orders coming from repeat buyers [102]. Cost and Expenses - The cost of goods sold for the three months ended September 30, 2025, was $2,183 million, representing an increase of 8.6% compared to the same period in 2024 [118]. - As a percentage of net revenue, cost of goods sold increased to 70.0% for the three months ended September 30, 2025, compared to 69.7% in the same period in 2024 [117]. - Total operating expenses for the three months ended September 30, 2025, decreased by $51 million, or 5.4%, to $896 million compared to $947 million in 2024 [120]. - Advertising expenses for the three months ended September 30, 2025, decreased by $24 million, or 6.8%, to $330 million compared to $354 million in 2024 [124]. - Selling, operations, technology, general and administrative expenses decreased by $28 million, or 7.2%, to $445 million for the three months ended September 30, 2025 [126]. Profitability Metrics - Adjusted EBITDA for the three months ended September 30, 2025, was $208 million, compared to $119 million in the same period in 2024 [110]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $519 million, compared to $357 million for the same period in 2024 [191]. - Adjusted Diluted Earnings per Share for the nine months ended September 30, 2025, was $1.73, compared to $0.38 for the same period in 2024 [205]. Cash Flow and Liquidity - Free Cash Flow for the three months ended September 30, 2025, was $93 million, compared to a negative $9 million in the same period in 2024 [110]. - Free Cash Flow for the nine months ended September 30, 2025, was $184 million, compared to a negative $19 million for the same period in 2024 [197]. - As of September 30, 2025, total liquidity was $1.2 billion, including cash and cash equivalents of $1.171 billion and short-term investments of $54 million [168]. - Cash flows provided by operating activities increased by $177 million during the nine months ended September 30, 2025, primarily due to a decrease in net loss adjusted for non-cash items [180]. Debt and Financing - The company had $3.0 billion principal amount of indebtedness outstanding as of September 30, 2025 [170]. - Interest expense, net increased by $26 million for the three months ended September 30, 2025, primarily due to the issuance of new secured notes [131]. - Loss on debt extinguishment for the three months ended September 30, 2025, was $99 million, representing a 100.0% increase compared to no loss in 2024 [136]. - Cash flows used in financing activities increased by $306 million during the nine months ended September 30, 2025, primarily due to debt extinguishment payments of $940 million [183]. - During the nine months ended September 30, 2025, the company issued $700 million in aggregate principal amount of the 2030 Secured Notes and repurchased $696 million in aggregate principal amount of the 2026 Notes [185]. Restructuring and Charges - Restructuring charges increased by $3 million, or 100.0%, to $3 million for the three months ended September 30, 2025, compared to no charges in 2024 [129]. - The company recorded net charges of $23 million during the nine months ended September 30, 2025, related to restructuring and macroeconomic conditions [192]. - The company incurred $68 million in restructuring charges during the nine months ended September 30, 2025, primarily related to workforce reductions [192]. - Restructuring charges decreased by $11 million, or 13.9%, to 0.7% of net revenue for the nine months ended September 30, 2025, down from 0.9% in the same period in 2024 [158]. Taxation - Provision for income taxes decreased by $1 million, or 33.3%, to $2 million for the three months ended September 30, 2025 [138]. - Provision for income taxes, net decreased by $1 million, or 12.5%, for the nine months ended September 30, 2025 [166][167]. Market Conditions - The company continues to monitor macroeconomic conditions, including inflation and interest rates, which may impact consumer behavior and business performance [104]. - The exit of the German business has partially impacted international revenue growth, which was 3.5% in constant currency for the three months ended September 30, 2025 [114]. Other Financial Metrics - Total customer service and merchant fees as a percentage of net revenue decreased to 3.8% for the three months ended September 30, 2025, from 3.9% in 2024, due to increased net revenue [123]. - Total selling, operations, technology, general and administrative expenses decreased to 14.7% of net revenue for the nine months ended September 30, 2025, down from 17.2% in the same period in 2024 [154]. - Impairment and other related net charges increased by $21 million to 0.3% of net revenue during the nine months ended September 30, 2025, compared to 0.0% in the same period in 2024 [155]. - Interest expense, net increased to $83 million for the nine months ended September 30, 2025, compared to $15 million in the same period in 2024, representing a 453.3% increase [160][161]. Accounting Policies - The company does not engage in any off-balance sheet activities or have interests in variable interest entities [184]. - There have been no material changes to critical accounting policies and estimates since December 31, 2024 [207]. - No significant changes in exposures to market risk since December 31, 2024 [209].