Wayfair's Q4 Earnings Miss Estimates, Revenues Rise Y/Y

Core Insights - Wayfair reported a fourth-quarter 2024 non-GAAP loss of 25 cents per share, missing the Zacks Consensus Estimate for earnings of 2 cents per share, compared to a loss of 11 cents per share in the same quarter last year [1] Financial Performance - Net revenues reached $3.12 billion, exceeding the consensus mark by 1.73%, and increased by 0.2% year over year, driven by strong performance in the U.S. segment [2] - The active customer base declined by 4.5% year over year to 21.4 million, missing the consensus mark by 3.85% [3] - U.S. net revenues, which account for 87.8% of total revenues, decreased by 1.1% year over year to$ 2.74 billion, beating the Zacks Consensus Estimate by 3.22% [4] - International net revenues, making up 12.2% of total revenues, fell by 5.7% year over year to $381 million, missing the consensus mark by 5.40% [4] - Average order value increased from$ 276 to $290 year over year, surpassing the consensus mark by 2.16% [5] - Total delivered orders decreased by 5.3% year over year to 10.7 million, with repeat customers placing 8.5 million orders, down 5.6% year over year [5] Operating Results - Gross margin for the fourth quarter was 30.2%, slightly down from 30.3% in the previous year, influenced by contracting orders and proactive reinvestments [6] - Adjusted EBITDA rose to$ 96 million from $92 million in the year-ago quarter [6] - Advertising expenses increased by 12.6% year over year to$ 429 million, while selling, operations, technology, and general and administrative expenses decreased by 20.6% year over year to $474 million [7] - The company incurred a GAAP operating loss of$ 117 million, an improvement from a loss of $172 million in the year-ago quarter [7] Balance Sheet & Cash Flow - As of December 31, 2024, cash, cash equivalents, and short-term investments totaled$ 1.4 billion, up from $1.3 billion on September 30, 2024 [8] - Long-term debt decreased to$ 2.882 billion from $3.061 billion on September 30, 2024 [9] - Cash from operations amounted to$ 162 million, compared to a cash outflow of $49 million in the third quarter, with free cash flow reported at$ 102 million for the fourth quarter [9] Q1 2025 Guidance - For Q1 2025, Wayfair expects revenues to either remain flat or decline compared to the previous year, factoring in a negative impact of about 100 basis points due to the exit from the German business [10] - Gross margin is anticipated to be in the range of 30-31%, with adjusted EBITDA projected between 2-4% [10]