Wayfair Inc.
10/28/2025 | Press release | Distributed by Public on 10/28/2025 14:07
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q are forward-looking statements, including statements regarding our investment plans and anticipated returns on those investments; our future customer growth; our future results of operations and financial position; including the exit of our German business; available liquidity and access to financing sources; our business strategy, plans and objectives of management for future operations, including our international growth and omni-channel strategy; consumer activity and behaviors; developments in our technology and systems and anticipated results of those developments; and the impact of macroeconomic events, including tariffs, interest rates, inflation and changes in tariffs and global trade relations, and our response to such events. In some cases, you can identify forward-looking statements by terms such as "aim," "may," "will," "should," "expects," "plans," "anticipates," "continues," "could," "intends," "goals," "target," "projects," "contemplates," "believes," "estimates," "predicts" or "potential" or the negative of these terms or other similar expressions.
Forward-looking statements are based on current expectations of future events. We cannot guarantee that any forward-looking statement will be accurate, although we believe that we have been reasonable in our expectations and assumptions. Investors should realize that if underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from Wayfair's forward-looking statements, including our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise.
Factors that could cause or contribute to differences in our future results include, without limitation, the following:
•adverse macroeconomic conditions, including: economic instability; changes in laws and regulations and other governmental actions or policies, including those related to taxes and new or increased tariffs, and the uncertainty surrounding potential changes in such laws and regulations or other potential governmental actions or policies; export controls; sustained higher interest rates and inflation; slower growth or the potential for recession; disruptions in the global supply chain and other conditions affecting the retail environment for products we sell; and other matters that influence consumer spending and preferences, as well as our ability to plan for and respond to the impact of these conditions;
•our ability to manage the impacts of our restructurings and workforce reductions, including the exit of our German business;
•our ability to acquire and retain customers in a cost-effective manner;
•our ability to increase our net revenue per active customer;
•our ability to build and maintain strong brands;
•our ability to expand our business and compete successfully;
•disruptions, capacity constraints or inefficiencies in our information systems network, or any potential cybersecurity incident;
•geopolitical events, natural disasters, public health emergencies, civil disturbances and terrorist attacks; and
•developments in, and the outcome of, legal and regulatory proceedings and investigations to which we are a party or are subject, and the liabilities, obligations and expenses, if any, that we may incur in connection therewith.
A further list and description of risks, uncertainties and other factors that could cause or contribute to differences in our future results include the cautionary statements herein and in our other filings with the Securities and Exchange Commission, including those set forth under Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024. We qualify all of our forward-looking statements by these cautionary statements.
All dollar and percentage comparisons made herein refer to the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, unless otherwise noted.
Overview
Wayfair is the destination for all things home. Through our e-commerce business model, we offer visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over 30 million products from over 20 thousand suppliers.
We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity to acquire more market share. Our business model is designed to grow our net revenue by acquiring new customers as well as stimulating repeat purchases from our existing customers. Through increasing brand awareness as well as paid and unpaid advertising, we attract new and repeat customers to our family of sites. We aim to turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey - offering best-in-class product discovery, purchasing, fulfillment and customer service.
During the three months ended September 30, 2025, net revenue increased by 8.1% compared to the same period in 2024. As of September 30, 2025, we had 21 million active customers and during the three months ended September 30, 2025, 80.1% of orders came from repeat buyers. The increased sales represents our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers. We also continued to manage our advertising spend according to a return on investment-oriented approach that carefully tracks and monitors the results of advertising campaigns as we seek to maintain appropriate return targets.
Global Considerations
As disclosed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2024, our business is subject to risks related to trade policy, including new or increased tariffs by the United States ("U.S.") and/or other foreign governments. Starting in the first quarter of 2025, the U.S. government announced additional tariffs on goods imported into the U.S. from numerous countries, including the home goods category, and starting in the fourth quarter of 2025, the U.S. government began imposing additional tariffs applicable to certain home goods, which as of the date of this report are scheduled to increase in January 2026. Multiple nations have announced tariffs and other actions in response. While some trade deals have been reached and trade negotiations are ongoing, overall the global trade environment remains fluid and highly uncertain. Despite this uncertainty, we believe the structural characteristics of our retail platform position us to capture incremental market share within a category that is largely unbranded and highly substitutable. We have and will continue to partner with our suppliers to help them strategize and deliver value for our customers.
Further, we continue to closely monitor additional macroeconomic conditions, including, but not limited to, general economic instability, changes in tax laws or regulations or other governmental actions or policies, sustained higher interest rates and inflationary pressures, on our business, results of operations and financial results. For example, on July 4, 2025, the One Big Beautiful Bill Act was signed into law, which contains a broad range of tax reform provisions affecting businesses. We continue to evaluate the full effects on the full year income tax provision and cash tax position, but the legislation is not expected to have a material impact on the financial statements. Nevertheless, these types of developments have and may continue to negatively impact global economic activity and consumer behavior, which have and may continue to adversely affect our business and our
results of operations. As our customers react to these global economic conditions, we may take precautionary measures to limit or delay expenditures and preserve capital and liquidity.
While it is difficult to quantify and predict the impacts on our business of these global and domestic economic events, including fluctuating interest rates, inflationary pressures and changes in global trade policy, and to predict consumer spending in the near term, we believe the long-term opportunity we see for shopping for the home online remains unchanged.
We will continue to monitor economic conditions as we work to manage our business to meet the evolving needs of our customers, employees, suppliers, partners, stockholders and communities.
Factors Affecting our Performance
We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024.
Key Financial Statement and Operating Metrics
We measure our business using the key financial statement, operating metrics and non-GAAP financial measures that are reflected in the below table. See "Non-GAAP Financial Measures" below for more information regarding our use of Adjusted EBITDA, Free Cash Flow and Adjusted Diluted Earnings or Loss per Share and a reconciliation of these non-GAAP financial measures to the most directly comparable financial measure that is prepared in accordance with accounting principles generally accepted in the United States of America or "GAAP."
Our Free Cash Flow and Adjusted Diluted Earnings or Loss per Share are measured on a consolidated basis, while our Adjusted EBITDA is measured on a consolidated and reportable segment basis. All other key financial statement and operating metrics are derived and reported from our consolidated net revenue.
We use the following metrics to assess the performance of our overall business:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (in millions, except LTM net revenue per active customer, average order value and per share data) | ||||||||||||||||||||||||||
| Key Financial Statement Metrics: | ||||||||||||||||||||||||||
| Net revenue | $ | 3,117 | $ | 2,884 | $ | 9,120 | $ | 8,730 | ||||||||||||||||||
| Gross profit | $ | 934 | $ | 873 | $ | 2,755 | $ | 2,633 | ||||||||||||||||||
| Income (Loss) from operations | $ | 38 | $ | (74) | $ | (67) | $ | (344) | ||||||||||||||||||
| Net loss | $ | (99) | $ | (74) | $ | (197) | $ | (364) | ||||||||||||||||||
| Loss per share | ||||||||||||||||||||||||||
| Basic | $ | (0.76) | $ | (0.60) | $ | (1.54) | $ | (2.98) | ||||||||||||||||||
| Diluted | $ | (0.76) | $ | (0.60) | $ | (1.54) | $ | (2.98) | ||||||||||||||||||
| Net cash provided by operating activities | $ | 155 | $ | 49 | $ | 332 | $ | 155 | ||||||||||||||||||
| Key Operating Metrics: | ||||||||||||||||||||||||||
|
Active customers (1)
|
21 | 22 | 21 | 22 | ||||||||||||||||||||||
|
LTM net revenue per active customer(2)
|
$ | 578 | $ | 545 | $ | 578 | $ | 545 | ||||||||||||||||||
|
Orders delivered (3)
|
10 | 9 | 29 | 29 | ||||||||||||||||||||||
|
Average order value(4)
|
$ | 317 | $ | 310 | $ | 315 | $ | 303 | ||||||||||||||||||
|
Non-GAAP Financial Measures:
|
||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 208 | $ | 119 | $ | 519 | $ | 357 | ||||||||||||||||||
| Free Cash Flow | $ | 93 | $ | (9) | $ | 184 | $ | (19) | ||||||||||||||||||
| Adjusted Diluted Earnings per Share | $ | 0.70 | $ | 0.22 | $ | 1.73 | $ | 0.38 | ||||||||||||||||||
(1)The number of active customers represents the total number of individual customers who have purchased at least once directly from our sites during the preceding twelve-month period. The change in active customers in a reported period captures both the inflow of new customers as well as the outflow of existing customers who have not made a purchase in the last twelve months. We view the number of active customers as a key indicator of our growth.
(2)Last twelve months ("LTM") net revenue per active customer represents our total net revenue in the last twelve months divided by our total number of active customers for the same preceding twelve-month period. We view LTM net revenue per active customer as a key indicator of our customers' purchasing patterns, including their initial and repeat purchase behavior.
(3)Orders delivered represent the total orders delivered in any period, inclusive of orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available, and as such we estimate delivery dates based on historical data. We recognize net revenue when an order is delivered, and therefore orders delivered, together with average order value, is an indicator of the net revenue we expect to recognize in a given period. We view orders delivered as a key indicator of our growth.
(4)We define average order value as total net revenue in a given period divided by the orders delivered in that period. We view average order value as a key indicator of the mix of products on our sites, the mix of offers and promotions and the purchasing behavior of our customers.
Results of Consolidated Operations
Comparison of the three months ended September 30, 2025 and 2024
Net revenue
During the three months ended September 30, 2025, net revenue increased by $233 million, or 8.1%, compared to the same period in 2024, which reflects our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers. The increase in net revenue is primarily due to higher order volume in addition to higher average order value resulting from brand and consumer mix shifts, compared to the same period in 2024.
During the three months ended September 30, 2025, our U.S. net revenue increased by 8.6%. During the three months ended September 30, 2025, our International net revenue increased by 4.6% compared to the same period in 2024, driven by growth across our remaining international markets, partially offset by the exit of our German business. During the three months ended September 30, 2025, International Net Revenue Constant Currency Growth was 3.5% (see "Non-GAAP Financial Measures" below for more information regarding our use of Net Revenue Constant Currency Growth).
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| U.S. net revenue | $ | 2,728 | $ | 2,512 | 8.6 | % | ||||||||||||||
| International net revenue | 389 | 372 | 4.6 | % | ||||||||||||||||
| Net revenue | $ | 3,117 | $ | 2,884 | 8.1 | % | ||||||||||||||
For more information on our segments, see Note 9, Segment and Geographic Information, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q.
Cost of goods sold
Cost of goods sold is sensitive to many factors, including quarter-to-quarter variability in product mix, pricing strategies, changes in wholesale, shipping and fulfillment costs, including associated applicable customs duties and fees earned for supplier services rendered. During the three months ended September 30, 2025, cost of goods sold increased by $172 million, or 8.6%, compared to the same period in 2024. The increase in cost of goods sold is driven by higher net revenue, compared to the same period in 2024.
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, due to investments in the customer experience, partially offset by the growth of our supplier services.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Cost of goods sold | $ | 2,183 | $ | 2,011 | 8.6 | % | ||||||||||||||
| As a percentage of net revenue | 70.0 | % | 69.7 | % | ||||||||||||||||
Operating expenses
Operating expenses consist of customer service and merchant fees; advertising; selling, operations, technology, general and administrative expenses; impairment and other related net charges and restructuring charges. We disclose separately the equity-based compensation and related taxes that are included in customer service and merchant fees and selling, operations, technology and general and administrative expenses.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
|
Customer service and merchant fees (1)
|
$ | 118 | $ | 112 | 5.4 | % | ||||||||||||||
| Advertising | 330 | 354 | (6.8) | % | ||||||||||||||||
|
Selling, operations, technology, general and administrative (1)
|
445 | 480 | (7.3) | % | ||||||||||||||||
| Impairment and other related net charges | - | 1 | (100.0) | % | ||||||||||||||||
| Restructuring charges | 3 | - | 100.0 | % | ||||||||||||||||
| Total operating expenses | $ | 896 | $ | 947 | (5.4) | % | ||||||||||||||
| As a percentage of net revenue: | ||||||||||||||||||||
|
Customer service and merchant fees(1)
|
3.8 | % | 3.9 | % | ||||||||||||||||
| Advertising | 10.6 | % | 12.3 | % | ||||||||||||||||
|
Selling, operations, technology, general and administrative (1)
|
14.3 | % | 16.6 | % | ||||||||||||||||
| Impairment and other related net charges | - | % | - | % | ||||||||||||||||
| Restructuring charges | 0.1 | % | - | % | ||||||||||||||||
| 28.8 | % | 32.8 | % | |||||||||||||||||
(1)Includes equity-based compensation and related taxes as follows:
| Three Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Customer service and merchant fees | $ | 4 | $ | 4 | ||||||||||
| Selling, operations, technology, general and administrative | $ | 85 | $ | 92 | ||||||||||
During the three months ended September 30, 2025, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $7 million, or 7.3%, compared to the same period in 2024, as a result of a decrease in restricted stock units awarded during the three months ended September 30, 2025.
The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes:
| Three Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Customer service and merchant fees | 3.7 | % | 3.7 | % | ||||||||||
| Selling, operations, technology, general and administrative | 11.5 | % | 13.5 | % | ||||||||||
Customer Service and Merchant Fees
During the three months ended September 30, 2025, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees increased by $6 million, or 5.6%, compared to the same period in 2024. The increase in customer service and merchant fees is primarily due to higher net revenue, partially offset by lower compensation costs.
As a percentage of net revenue, total customer service and merchant fees decreased to 3.8% for the three months ended September 30, 2025 compared to 3.9% in the same period in 2024 primarily due to increased net revenue during the period.
Advertising
During the three months ended September 30, 2025, our advertising expenses decreased by $24 million, or 6.8%, compared to the same period in 2024. The decrease reflects our response to changing market conditions and changes in our advertising channel mix, as we seek to maintain our return targets across various channels.
As a percentage of net revenue, advertising expenses decreased to 10.6% for the three months ended September 30, 2025 compared to 12.3% in the same period in 2024 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.
Selling, operations, technology, general and administrative
During the three months ended September 30, 2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $28 million, or 7.2%, compared to the same period in 2024. The decrease is primarily due to decreased compensation costs, driven by workforce reductions.
As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 14.3% for the three months ended September 30, 2025, compared to 16.6% in the same period in 2024, primarily due to decreased compensation costs.
Impairment and other related net charges
During the three months ended September 30, 2025, impairment and other related charges remained relatively flat compared to the same period in 2024.
Restructuring charges
During the three months ended September 30, 2025, restructuring charges increased by $3 million, or 100.0%, compared to the same period in 2024. As a percentage of net revenue, restructuring charges increased to 0.1% from 0.0% in the same period in 2024.
During the three months ended September 30, 2025, we incurred $3 million of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs. This is inclusive of $2 million related to the Germany Restructuring and $1 million related to the March 2025 workforce reduction.
Interest expense, net
During the three months ended September 30, 2025, interest expense, net increased by $26 million compared to the same period in 2024, primarily driven by the issuance of the 2029 Secured Notes in October 2024 and of the 2030 Secured Notes in March 2025.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Interest expense, net | $ | (31) | $ | (5) | NM | |||||||||||||||
NM - Not Meaningful
Other income (expense), net
During the three months ended September 30, 2025, other (expense) income, net increased by $13 million compared to the same period in 2024, primarily driven by foreign currency rate fluctuations between the U.S. Dollar and the Canadian Dollar. Included in other (expense) income, net are changes in foreign currency transaction gains and losses and long-term investment income or losses.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Other income (expense), net | $ | (5) | $ | 8 | NM | |||||||||||||||
NM - Not Meaningful
Loss on debt extinguishment
During the three months ended September 30, 2025, loss on debt extinguishment increased by $99 million, or 100.0%, compared to the same period in 2024.
During the three months ended September 30, 2025, we recorded a $99 million loss on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $200 million and the net carrying value of the 2028 Notes of $101 million.
Refer to Note 4, Debt and Other Financing, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
|
Loss on debt extinguishment
|
$ | (99) | $ | - | 100.0 | % | ||||||||||||||
Provision for income taxes, net
During the three months ended September 30, 2025, our provision for income taxes, net decreased by $1 million, or 33.3% compared to the same period in 2024.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Provision for income taxes | $ | 2 | $ | 3 | (33.3) | % | ||||||||||||||
Results of Consolidated Operations
Comparison of the nine months ended September 30, 2025 and 2024
Net revenue
During the nine months ended September 30, 2025, net revenue increased by $390 million, or 4.5%, compared to the same period in 2024, which reflects our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers. The increase in net revenue is due to higher average order value resulting from brand and consumer mix shifts compared to the same period in 2024.
During the nine months ended September 30, 2025, our U.S. net revenue increased by 5.2% and International net revenue decreased by 0.7% compared to the same period in 2024, primarily due to the exit of our German business. During the nine months ended September 30, 2025, International Net Revenue Constant Currency Growth was (0.2)% (see "Non-GAAP Financial Measures" below for more information regarding our use of Net Revenue Constant Currency Growth).
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| U.S. net revenue | $ | 8,031 | $ | 7,633 | 5.2 | % | ||||||||||||||
| International net revenue | 1,089 | 1,097 | (0.7) | % | ||||||||||||||||
| Net revenue | $ | 9,120 | $ | 8,730 | 4.5 | % | ||||||||||||||
For more information on our segments, see Note 9, Segment and Geographic Information, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q.
Cost of goods sold
Cost of goods sold is sensitive to many factors, including quarter-to-quarter variability in product mix, pricing strategies, changes in wholesale, shipping and fulfillment costs, including associated applicable customs duties and fees earned for supplier services rendered. During the nine months ended September 30, 2025, cost of goods sold increased by $268 million, or 4.4%, compared to the same period in 2024. The increase in cost of goods sold is driven by higher net revenue, compared to the same period in 2024.
As a percentage of net revenue, cost of goods sold remained relatively constant at 69.8% for the nine months ended September 30, 2025, compared the same period in 2024.
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Cost of goods sold | $ | 6,365 | $ | 6,097 | 4.4 | % | ||||||||||||||
| As a percentage of net revenue | 69.8 | % | 69.8 | % | ||||||||||||||||
Operating expenses
Operating expenses are comprised of customer service and merchant fees, advertising, selling, operations, technology, general and administrative expenses, impairment and other related net charges and restructuring charges. We disclose separately the equity-based compensation and related taxes that are included in customer service and merchant fees and selling, operations, technology and general and administrative expenses.
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
|
Customer service and merchant fees (1)
|
$ | 346 | $ | 350 | (1.1) | % | ||||||||||||||
| Advertising | 1,046 | 1,043 | 0.3 | % | ||||||||||||||||
|
Selling, operations, technology, general and administrative (1)
|
1,339 | 1,503 | (10.9) | % | ||||||||||||||||
| Impairment and other related net charges | 23 | 2 | NM | |||||||||||||||||
| Restructuring charges | 68 | 79 | (13.9) | % | ||||||||||||||||
| Total operating expenses | $ | 2,822 | $ | 2,977 | (5.2) | % | ||||||||||||||
| As a percentage of net revenue: | ||||||||||||||||||||
|
Customer service and merchant fees(1)
|
3.8 | % | 4.0 | % | ||||||||||||||||
| Advertising | 11.5 | % | 11.9 | % | ||||||||||||||||
|
Selling, operations, technology, general and administrative (1)
|
14.7 | % | 17.2 | % | ||||||||||||||||
| Impairment and other related net charges | 0.3 | % | - | % | ||||||||||||||||
| Restructuring charges | 0.7 | % | 0.9 | % | ||||||||||||||||
| 31.0 | % | 34.0 | % | |||||||||||||||||
NM - Not Meaningful
(1)Includes equity-based compensation and related taxes as follows:
| Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Customer service and merchant fees | $ | 11 | $ | 15 | ||||||||||
| Selling, operations, technology, general and administrative | $ | 243 | $ | 300 | ||||||||||
During the nine months ended September 30, 2025, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $61 million, or 19.4%, compared to the same period in 2024, driven by workforce reductions.
The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes:
| Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Customer service and merchant fees | 3.7 | % | 3.8 | % | ||||||||||
| Selling, operations, technology, general and administrative | 12.0 | % | 13.8 | % | ||||||||||
Customer Service and Merchant Fees
During the nine months ended September 30, 2025, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees remained constant compared to the same period in 2024.
As a percentage of net revenue, total customer service and merchant fees decreased to 3.8% for the nine months ended September 30, 2025, compared to 4.0% in the same period in 2024 due to increased net revenue during the period.
Advertising
During the nine months ended September 30, 2025, our advertising expenses increased by $3 million, or 0.3%, compared to the same period in 2024. The increase reflects our response to changing market conditions and renewed investment opportunities, as we sought to maintain our return targets across various channels.
As a percentage of net revenue, advertising expensesdecreased to 11.5%for the nine months ended September 30, 2025 compared to 11.9% in the same period in 2024 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.
Selling, operations, technology, general and administrative
During the nine months ended September 30, 2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $107 million, or 8.9%compared to the same period in 2024. The decrease is primarily due to decreased compensation costs, driven by workforce reductions.
As a percentage of net revenue, total selling, operations, technology, general and administrative expensesdecreased to 14.7% for the nine months ended September 30, 2025, compared to 17.2% in the same period in 2024, primarily due to decreased compensation costs.
Impairment and other related net charges
During the nine months ended September 30, 2025, impairment and other related charges increased by $21 million compared to the same period in 2024. As a percentage of net revenue, impairment and other related net charges increasedto 0.3% from 0.0% in the same period in 2024.
During the nine months ended September 30, 2025, we recorded net charges of $23 million, inclusive of $20 million associated with the Germany Restructuring and weakened macroeconomic conditions in connection with our German operations and $3 million associated with changes in sublease market conditions for a technology center in the U.S. Refer to Note 2, Supplemental Financial Statement Disclosures, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information.
During the nine months ended September 30, 2024, we recorded charges of $2 million related to changes in sublease market conditions for an identified U.S. office location.
Restructuring charges
During the nine months ended September 30, 2025, restructuring charges decreased by $11 million, or 13.9%, compared to the same period in 2024. As a percentage of net revenue, restructuring charges decreased to 0.7% from 0.9% in the same period in 2024.
During the nine months ended September 30, 2025, Wayfair incurred $68 million of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs. This is inclusive of $48 million related to the Germany Restructuring and $20 million related to the March 2025 workforce reduction. During the nine months ended September 30, 2024, Wayfair incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reduction.
Interest expense, net
During the nine months ended September 30, 2025, interest expense, net increased to $83 million, compared to $15 million in the same period in 2024, primarily driven by the issuances of the 2029 Secured Notes in October 2024 and of the 2030 Secured Notes in March 2025.
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Interest expense, net | $ | (83) | $ | (15) | 453.3 | % | ||||||||||||||
Other income (expense), net
During the nine months ended September 30, 2025, other (expense) income, net increased by $25 million compared to the same period in 2024, primarily driven by foreign currency rate fluctuations between the U.S. Dollar and the Canadian Dollar. Included in other (expense) income, net are changes in foreign currency transaction gains and losses and long-term investment income or losses.
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Other income (expense), net | $ | 28 | $ | 3 | NM | |||||||||||||||
NM - Not Meaningful
Loss on debt extinguishment
During the nine months ended September 30, 2025, loss on debt extinguishment increased by $68 million, or 100.0%, compared to the same period in 2024.
During the nine months ended September 30, 2025, Wayfair recorded a $68 million loss on debt extinguishment upon repurchase of $101 million, $80 million, and $696 million in aggregate principal amount of the 2028 Notes, 2025 Notes, and 2026 Notes, respectively.
Refer to Note 4, Debt and Other Financing, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information.
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Loss on debt extinguishment | $ | (68) | $ | - | 100.0 | % | ||||||||||||||
Provision for income taxes, net
During the nine months ended September 30, 2025, our provision for income taxes, net decreased by $1 million, or 12.5% compared to the same period in 2024.
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | % Change | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Provision for income taxes, net | $ | 7 | $ | 8 | (12.5) | % | ||||||||||||||
Liquidity and Capital Resources
Sources of Liquidity
As of September 30, 2025, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.2 billion. Additionally, we have a $500 million senior secured revolving credit facility that matures on March 13, 2030 (the "Revolver"). As of September 30, 2025, there were no revolving loans outstanding under the Revolver. We had outstanding letters of credit, primarily as security for certain lease agreements, for $74 millionas of September 30, 2025, which reduced the availability of credit under the Revolver. Excluding liquidity available through our Revolver, the following table shows sources of liquidity for the periods presented:
| September 30, | December 31, | |||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Cash and cash equivalents | $ | 1,171 | $ | 1,316 | ||||||||||
| Short-term investments | 54 | 56 | ||||||||||||
| Total liquidity | $ | 1,225 | $ | 1,372 | ||||||||||
We believe that our existing cash and cash equivalents and investments, cash generated from operations and the borrowing availability under our Revolver will be sufficient to meet our anticipated cash needs for at least the foreseeable future including planned capital expenditures, contractual obligations and other such requirements. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may elect to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Further, we have and may from time to time seek to retire, restructure, repurchase or redeem, or otherwise mitigate the equity dilution associated with our outstanding convertible debt through cash purchases, stock buybacks of some or all of the shares underlying convertible notes and/or exchanges for equity or debt in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, exchanges or liability management exercises, if any, will be upon such terms and at such prices and sizes as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Our future capital requirements and the adequacy of available funds will depend on many factors, including those described herein and in our other filings with the SEC, including those set forth in Part I, Item 1A, Risk Factorsin our Annual Report on 10-K for the year ended December 31, 2024. In addition, macroeconomic events have caused disruption in the capital markets, including increased inflation and interest rates, which could make obtaining financing more difficult and/or expensive. As a consequence, we may not be able to secure additional financing to meet our operating requirements or strategic goals on acceptable terms, in a timely manner, or at all. If we raise additional funds through the issuance of equity, equity-linked or debt financing arrangements, those securities and instruments may have rights, preferences or privileges senior to the rights of our common stock, and the holders of our equity securities may experience dilution. We will continue to monitor our liquidity during this time of historic disruption and volatility in the global capital markets.
Credit Agreement and Debt Arrangements
As of September 30, 2025, we had $3.0 billion principal amount of indebtedness outstanding. Our indebtedness includes unsecured 0.625% Convertible Senior Notes due 2025 (the "2025 Notes"), unsecured 1.00% Convertible Senior Notes due 2026 (the "2026 Notes"), unsecured 3.25% Convertible Senior Notes due 2027 (the "2027 Notes"), unsecured 3.50% Convertible Senior Notes due 2028 (the "2028 Notes", and together with the 2025 Notes, 2026 Notes and 2027 Notes, the "Convertible Notes"), 7.250% Senior Secured Notes due 2029 (the "2029 Secured Notes") and 7.750% Senior Secured Notes due 2030 (the "2030 Secured Notes", together with the 2029 Secured Notes, the "Senior Secured Notes" and together with the Convertible Notes, the "Notes").
Under the terms of our Revolver, we may use proceeds to finance working capital, to refinance existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes. Any amounts outstanding under the Revolver are due at maturity.
On March 14, 2025, in connection with the issuance of the 2030 Secured Notes, we repurchased $578 million in aggregate principal amount of the 2026 Notes. On May 9, 2025, we used the remaining proceeds from the 2030 Secured Notes offering, together with cash on hand, to repurchase $80 million in aggregate principal amount of the 2025 Notes and $118 million in aggregate principal amount of the 2026 Notes. On August 20, 2025, we repurchased $101 million in aggregate principal amount of the 2028 Notes. See Note 4, Debt and Other Financing, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information on debt and other financing transactions.
The conditional conversion features of the 2028 Notes were triggered during the calendar quarter ended September 30, 2025, therefore the 2028 Notes are convertible during the calendar quarter ended December 31, 2025. The conditional conversion features of the 2026 Notes and 2027 Notes were not triggered during the calendar quarter ended September 30, 2025, therefore, the 2026 Notes and 2027 Notes are not convertible during the calendar quarter ended December 31, 2025 pursuant to the applicable last reported sales price conditions. On July 1, 2025, the 2025 Notes became freely convertible and the holders of the 2025 Notes could have converted all or a portion of their 2025 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. On October 1, 2025, the 2025 Notes matured and Wayfair paid in cash the remaining outstanding principal of $157 million to the holders of the 2025 Notes.
During the three months ended September 30, 2025, there were no conversions of the Convertible Notes. Whether any of the Convertible Notes will be convertible in future quarters will depend on the satisfaction of the applicable last reported sales price condition or another conversion condition in the future. If one or more holders elect to convert their Convertible Notes at a time when any such Convertible Notes are convertible, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
The credit agreement and indentures governing our convertible notes contain restrictions and covenants that may limit our operating flexibility. Specifically, the Revolver contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict our ability, subject to negotiated exceptions, to incur additional indebtedness and additional liens on our assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, or change the nature of our businesses. The Revolver also requires us to maintain certain levels of performance in order to maintain our access to the Revolver. For instance, we are required to maintain a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the credit agreement governing the Revolver) of 4.0 to 1.0, subject to a 0.5 step-up following certain permitted acquisitions. For information regarding our credit agreement and debt agreements, see Note 4, Debt and Other Financing, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q and Note 6, Debt and Other Financing, included in Part II, Item 8, Financial Statements and Supplementary Data, in our Annual Report on Form 10-K for the year ended December 31, 2024. As of September 30, 2025, we were in compliance with all the terms and conditions of our debt agreements.
Stock Repurchase Program
On August 21, 2020, the board of directors (the "Board") authorized the repurchase of up to $700 million of our Class A common stock in the open market, through privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan (the "2020 Repurchase Program"). On August 10, 2021, the Board authorized a new $1.0 billion share repurchase program on the same terms (the "2021 Repurchase Program" together with the 2020 Repurchase Program, the "Repurchase Programs"). There is no stated expiration date for the Share Repurchase Programs. We will begin repurchasing shares under the 2021 Repurchase Program upon the completion of the 2020 Repurchase Program.
The Repurchase Programs do not obligate us to purchase any shares of our Class A common stock and have no expiration but may be suspended or terminated by the Board at any time. The actual timing, number and value of shares repurchased under the Repurchase Programs in the future will be determined by us in our discretion and will depend on a number of factors, including market conditions, applicable legal requirements, our capital needs and whether there is a better alternative use of capital. As of September 30, 2025, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs.
Trends and Historical Cash Flows
| Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Net loss | $ | (197) | $ | (364) | ||||||||||
| Net cash provided by operating activities | $ | 332 | $ | 155 | ||||||||||
| Net cash used in investing activities | $ | (150) | $ | (178) | ||||||||||
| Net cash (used in) provided by financing activities | $ | (303) | $ | 3 | ||||||||||
Operating Activities
Cash flows in connection with operating activities consisted of net loss adjusted for certain non-cash items including depreciation and amortization, equity-based compensation and certain other non-cash expenses, as well as the effect of changes in working capital and other activities. Operating cash flows can be volatile and are sensitive to many factors, including changes in working capital and our net loss.
Cash flows provided by operating activities increased by $177 million during the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to a decrease in net loss adjusted for non-cash items of $162 million, partially offset by an increase of $15 million for cash changes in operating assets and liabilities.
Investing Activities
Cash flows used in investing activities decreased by $28 million during the nine months ended September 30, 2025, compared to the same period in 2024, due to an increase in purchases of short- and long-term investments of $39 million, increases in sales and maturities of short- and long-term investments of $41 million, decreases in purchases of property and equipment and site and software development costs of $26 million.
Purchases of property and equipment and site and software development costs (collectively, "Capital Expenditures") were 1.6% of net revenue for the nine months ended September 30, 2025 and related primarily to equipment purchases and improvements for leased warehouses within our expanding logistics network and ongoing investments, including our physical retail store expansion, proprietary technology and operational platform.
Financing Activities
Cash flows used in financing activities increased by $306 million during the nine months ended September 30, 2025, compared to the same period in 2024. The increase in cash used is primarily due to payments to extinguish debt of $940 million, partially offset by proceeds from the issuance of debt of $691 million.
Off-Balance Sheet Arrangements
We do not engage in any off-balance sheet activities. We do not have any off-balance sheet interest in variable interest entities, which include special purpose entities and other structured finance entities.
Contractual Obligations
During the nine months ended September 30, 2025, we issued $700 million in aggregate principal amount of the 2030 Secured Notes and repurchased $80 million in aggregate principal amount of the 2025 Notes, $696 million in aggregate principal amount of the 2026 Notes, and $101 million in aggregate principal amount of the 2028 Notes. See Note 4, Debt and Other Financing, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information. Other than these financing transactions, there have been no material changes to our contractual obligations and estimates as compared to the contractual obligations described in Contractual Obligations included in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, 2024.
Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, we have disclosed in this Quarterly Report on Form 10-Q the following non-GAAP financial measures: Adjusted EBITDA, Free Cash Flow, Net Revenue Constant Currency Growth and Adjusted Diluted Earnings or Loss per Share.
Adjusted EBITDA
We calculate Adjusted EBITDA as net income or loss before depreciation and amortization, equity-based compensation and related taxes, interest income or expense, net, other income or expense, net, provision or benefit for income taxes, net, non-recurring items and other items not indicative of our ongoing operating performance. We have provided a reconciliation below of Adjusted EBITDA to net income or loss, the most directly comparable GAAP financial measure.
We disclose Adjusted EBITDA because it is a key measure used by our management and the Board to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis as these costs may vary independent of business performance. For instance, we exclude the impact of equity-based compensation and related taxes as we do not consider this item to be indicative of our core operating performance. Investors should, however, understand that equity-based compensation and related taxes will be a significant recurring expense in our business and an important part of the compensation provided to our employees. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and the Board.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•Adjusted EBITDA does not reflect equity-based compensation and related taxes;
•Adjusted EBITDA does not reflect changes in our working capital;
•Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;
•Adjusted EBITDA does not reflect interest expenses associated with our borrowings;
•Adjusted EBITDA does not include other items not indicative of our ongoing operating performance; and
•Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income or loss and our other GAAP results.
The following table reflects the reconciliation of net income or loss to Adjusted EBITDA for each of the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Reconciliation of Adjusted EBITDA: | |||||||||||||||||||||||||||||
| Net loss | $ | (99) | $ | (74) | $ | (197) | $ | (364) | |||||||||||||||||||||
| Depreciation and amortization | 75 | 94 | 234 | 297 | |||||||||||||||||||||||||
| Equity-based compensation and related taxes | 92 | 98 | 261 | 323 | |||||||||||||||||||||||||
| Interest expense, net | 31 | 5 | 83 | 15 | |||||||||||||||||||||||||
| Other expense (income), net | 5 | (8) | (28) | (3) | |||||||||||||||||||||||||
| Provision for income taxes, net | 2 | 3 | 7 | 8 | |||||||||||||||||||||||||
| Other: | |||||||||||||||||||||||||||||
|
Impairment and other related net charges (1)
|
- | 1 | 23 | 2 | |||||||||||||||||||||||||
|
Restructuring charges (2)
|
3 | - | 68 | 79 | |||||||||||||||||||||||||
|
Loss on debt extinguishment (3)
|
99 | - | 68 | - | |||||||||||||||||||||||||
| Adjusted EBITDA | $ | 208 | $ | 119 | $ | 519 | $ | 357 | |||||||||||||||||||||
|
(1)
|
During the nine months ended September 30, 2025, Wayfair recorded net charges of $23 million, inclusive of $20 million associated with the Germany Restructuring and weakened macroeconomic conditions in connection with its German operations and $3 million associated with changes in sublease market conditions for a technology center in the U.S. Refer to Note 2, Supplemental Financial Statement Disclosures, for additional information.
|
||||||||||||||||||||||||||||
|
(2)
|
During the three and nine months ended September 30, 2025, we incurred $3 million and $68 million, respectively, of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs. This is inclusive of $48 million related to the Germany Restructuring and $20 million related to the March 2025 workforce reduction. During the nine months ended September 30, 2024, we incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reduction.
|
||||||||||||||||||||||||||||
|
(3)
|
During the three and nine months ended September 30, 2025, we recorded a $99 million and $68 million, respectively, loss on debt extinguishment upon repurchase of $101 million in aggregate principal amount of the 2028 Notes, $80 million in aggregate principal amount of the 2025 Notes and $696 million in aggregate principal amount of the 2026 Notes.
|
||||||||||||||||||||||||||||
Free Cash Flow
We calculate Free Cash Flow as net cash provided by or used in operating activities less Capital Expenditures. We have provided a reconciliation below of Free Cash Flow to net cash provided by or used in operating activities, the most directly comparable GAAP financial measure.
We disclose Free Cash Flow because it is an important indicator of our business performance as it measures the amount of cash we generate. Accordingly, we believe that Free Cash Flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
Free Cash Flow has limitations as an analytical tool because it omits certain components of the cash flow statement and does not represent the residual cash flow available for discretionary expenditures. Further, other companies, including companies in our industry, may calculate Free Cash Flow differently. Accordingly, you should not consider Free Cash Flow in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider Free Cash Flow alongside other financial performance measures, including net cash provided by or used in operating activities, Capital Expenditures, and our other GAAP results.
The following table presents a reconciliation of net cash provided by or used in operating activities to Free Cash Flow for each of the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 155 | $ | 49 | $ | 332 | $ | 155 | ||||||||||||||||||
| Purchase of property and equipment | (27) | (17) | (45) | (53) | ||||||||||||||||||||||
| Site and software development costs | (35) | (41) | (103) | (121) | ||||||||||||||||||||||
| Free Cash Flow | $ | 93 | $ | (9) | $ | 184 | $ | (19) | ||||||||||||||||||
Net Revenue Constant Currency Growth
We calculate Net Revenue Constant Currency Growth by translating the current period local currency net revenue by the currency exchange rates used to translate our financial statements in the comparable prior-year period.
We disclose Net Revenue Constant Currency Growth because it is an important indicator of our operating results. Accordingly, we believe that Net Revenue Constant Currency Growth provides useful information to investors and others in understanding and evaluating trends in our operating results in the same manner as our management.
Net Revenue Constant Currency Growth has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Net Revenue Constant Currency Growth rates, by their nature, exclude the impact of foreign exchange, which may have a material impact on net revenue.
Adjusted Diluted Earnings or Loss per Share
We calculate Adjusted Diluted Earnings or Loss per Share as net income or loss plus equity-based compensation and related taxes, provision or benefit for income taxes, net, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method divided by the weighted-average number of shares of common stock used in the computation of diluted earnings or loss per share. Accordingly, we believe that these adjustments to our adjusted diluted net income or loss before calculating per share amounts for all periods presented provide a more meaningful comparison between our operating results from period to period.
Adjusted Diluted Earnings or Loss per Share has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted Diluted Earnings or Loss per Share, by their nature, excludes equity-based compensation and related taxes, provision or benefit for income taxes, net, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method.
Because of these limitations, you should consider Adjusted Diluted Earnings or Loss per Share alongside other financial performance measures.
A reconciliation of the numerator and denominator for diluted earnings or loss per share, the most directly comparable GAAP financial measure, to the numerator and denominator for Adjusted Diluted Earnings or Loss per Share in order to calculate Adjusted Diluted Earnings or Loss per Share, is as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (in millions, except per share data) | ||||||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Numerator for basic and diluted loss per share - net loss | $ | (99) | $ | (74) | $ | (197) | $ | (364) | ||||||||||||||||||
| Adjustments to net income (loss) | ||||||||||||||||||||||||||
| Interest expense associated with convertible debt instruments | 13 | - | 40 | - | ||||||||||||||||||||||
| Equity-based compensation and related taxes | 92 | 98 | 261 | 323 | ||||||||||||||||||||||
| Provision for income taxes, net | 2 | 3 | 7 | 8 | ||||||||||||||||||||||
| Other: | ||||||||||||||||||||||||||
| Impairment and other related net charges | - | 1 | 23 | 2 | ||||||||||||||||||||||
| Restructuring charges | 3 | - | 68 | 79 | ||||||||||||||||||||||
| Loss on debt extinguishment, net | 99 | - | 68 | - | ||||||||||||||||||||||
| Numerator for Adjusted Diluted Earnings per Share - Adjusted net income | $ | 110 | $ | 28 | $ | 270 | $ | 48 | ||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Denominator for basic loss per share - weighted-average number of shares of common stock outstanding | 130 | 123 | 128 | 122 | ||||||||||||||||||||||
| Denominator for diluted loss per share - weighted-average number of shares of common stock outstanding after the effect of dilutive securities | 130 | 123 | 128 | 122 | ||||||||||||||||||||||
| Adjustments to effect of dilutive securities: | ||||||||||||||||||||||||||
| Restricted stock units | - | - | - | 1 | ||||||||||||||||||||||
| Convertible debt instruments | 26 | - | 27 | - | ||||||||||||||||||||||
| Denominator for Adjusted Diluted Earnings per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities | 156 | 123 | 155 | 123 | ||||||||||||||||||||||
| Diluted Loss per Share | $ | (0.76) | $ | (0.60) | $ | (1.54) | $ | (2.98) | ||||||||||||||||||
| Adjusted Diluted Earnings per Share | $ | 0.70 | $ | 0.22 | $ | 1.73 | $ | 0.38 | ||||||||||||||||||
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with accounting principles generally accepted in the U.S. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, net revenue, costs and expenses and related disclosures. We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on our financial statements and, therefore, we consider these to be our critical accounting policies. Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.
There have been no material changes to our critical accounting policies and estimates since December 31, 2024. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, 2024 for a description of our critical accounting policies and estimates.
Recent Accounting Pronouncements
For information about recent accounting pronouncements, see Note 1, Summary of Significant Accounting Policies, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q.
Wayfair Inc. published this content on October 28, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 28, 2025 at 20:09 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]