Wayfair(US:W) ZACKSยท2025-05-02 16:20Core Viewpoint - Wayfair reported a better-than-expected first-quarter 2025 performance with non-GAAP earnings of 10 cents per share, contrasting with a consensus estimate of a loss of 18 cents, and a loss of 32 cents per share in the same quarter last year [1] Financial Performance - Net revenues reached $2.7 billion, exceeding the consensus estimate by 0.7%, with a year-over-year increase of only $1 million, primarily driven by the U.S. segment [1] - Last Twelve Months (LTM) net revenues per active customer rose 4.7% year over year to $562, surpassing the consensus estimate by 7.68% [2] - Active customer base declined by 5.4% year over year to 21.1 million, missing the consensus mark by 5.8% [2] - U.S. net revenues, accounting for 88.9% of total revenues, increased 1.6% year over year to $2.4 billion, beating the consensus estimate by 1.55% [3] - International net revenues, making up 11.1% of total revenues, fell 10.9% year over year to $301 million, missing the consensus estimate by 2.77% [3] Customer Metrics - Orders per customer increased to 1.85 from 1.84 year over year, beating the consensus estimate by 3.35% [3] - Average order value rose from $285 to $301 year over year, exceeding the consensus mark by 4.89% [4] - Total delivered orders decreased by 5.2% year over year to 9.1 million, with repeat customers placing 7.3 million orders, also down 5.2% year over year [4] - 63.4% of total delivered orders were placed through mobile devices, slightly up from 63.1% in the previous year [4] Operating Results - Gross margin improved to 30.7% from 30% year over year, attributed to proactive reinvestments [5] - Adjusted EBITDA increased to $106 million from $75 million in the year-ago quarter [5] - Customer service and merchant fees decreased by 8.5% year over year to $107 million [5] - Advertising expenses rose by 6.2% year over year to $344 million, while selling, operations, technology, and general and administrative expenses decreased by 19.7% year over year to $429 million [6] - GAAP operating loss narrowed to $122 million from $235 million in the year-ago quarter [6] Balance Sheet & Cash Flow - As of March 31, 2025, cash, cash equivalents, and short-term investments remained stable at $1.4 billion [7] - Long-term debt increased to $3 billion from $2.882 billion as of December 31, 2024 [8] - Net cash used in operations was $96 million, compared to $162 million cash from operations in the fourth quarter [8] - Free cash flow was negative $138 million in the first quarter [8] Guidance - For Q2 2025, Wayfair expects revenues to remain flat year-over-year, with gross margin projected to be in the range of 30-31% and adjusted EBITDA expected to be in the range of 4-5% [9]