PR Newswire
BOSTON, Aug. 3, 2023
Returns to Positive Year-Over-Year Order Growth While Hitting Key Profitability Milestone
Q2 Net Revenue of $3.2 billion with 21.8 million Active Customers
Q2 results showed further market share gains driven by strong order momentum
BOSTON, Aug. 3, 2023 /PRNewswire/ -- Wayfair Inc. ("Wayfair," "we," or "our") (NYSE: W), one of the world's largest online destinations for the home, today reported financial results for its second quarter ended June 30, 2023.
Second Quarter 2023 Financial Highlights
- Total net revenue of $3.2 billion decreased $113 million, down 3.4% year over year
- U.S. net revenue of $2.8 billion decreased $11 million, down 0.4% year over year
- International net revenue of $386 million decreased $102 million, down 20.9% year over year. International Net Revenue Constant Currency Growth was (18.2)%
- Gross profit was $985 million, or 31.1% of total net revenue
- Net loss was $46 million and Non-GAAP Adjusted EBITDA was $128 million
- Diluted loss per share was $0.41 and Non-GAAP Adjusted Diluted Earnings Per Share was $0.21
- Net cash provided by operating activities was $217 million and Non-GAAP Free Cash Flow was $128 million
- Cash, cash equivalents and short-term investments totaled $1.3 billion and total liquidity was $1.8 billion, including availability under our revolving credit facility
"Last year, we laid out a plan to strengthen our business that included a path to sustainable and growing profitability with several key milestones. For the past few quarters, you've seen us execute against that plan - to lower our costs, focus on the basics and earn more customer and supplier loyalty. And you've seen the tangible impact of this plan as our performance has continued to improve. I'm pleased to share today that we've passed one of our key milestones and we are reporting positive adjusted EBITDA and positive free cash flow," said Niraj Shah CEO, co-founder and co-chairman, Wayfair.
"This is in combination with a return to momentum in our top line with positive year-over-year order growth, and sequentially higher active customer count, all while investing into initiatives for future growth. This is how we ran the business for our first decade and how we'll continue to do so going forward - profitable, while investing for growth. We think we are now in a very exciting place - having scale while remaining ambitious and entrepreneurial - and we plan to take full advantage of this."
Other Second Quarter Highlights
- Active customers totaled 21.8 million as of June 30, 2023, a decrease of 7.6% year over year
- LTM net revenue per active customer was $545 as of June 30, 2023, an increase of 1.5% year over year
- Orders per customer, measured as LTM orders divided by active customers, was 1.82 for the second quarter of 2023, compared to 1.85 for the second quarter of 2022
- Orders delivered in the second quarter of 2023 were 10.3 million, an increase of 3.0% year over year
- Repeat customers placed 80.1% of total orders delivered in the second quarter of 2023, compared to 78.6% in the second quarter of 2022
- Repeat customers placed 8.3 million orders in the second quarter of 2023, an increase of 6.4% year over year
- Average order value was $307 in the second quarter of 2023, compared to $330 in the second quarter of 2022
- 61.6% of total orders delivered were placed via a mobile device in the second quarter of 2023, compared to 59.0% in the second quarter of 2022
Key Financial Statement and Operating Metrics
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
(in millions, except LTM net revenue per active customer, average order | ||||||||
Key Financial Statement Metrics: | ||||||||
Net revenue | $ 3,171 | $ 3,284 | $ 5,945 | $ 6,277 | ||||
Gross profit | $ 985 | $ 896 | $ 1,806 | $ 1,699 | ||||
Loss from operations | $ (142) | $ (372) | $ (489) | $ (682) | ||||
Net loss | $ (46) | $ (378) | $ (401) | $ (697) | ||||
Loss per share: | ||||||||
Basic | $ (0.41) | $ (3.59) | $ (3.60) | $ (6.62) | ||||
Diluted | $ (0.41) | $ (3.59) | $ (3.60) | $ (6.62) | ||||
Net cash used in (provided by) operating activities | $ 217 | $ (115) | $ 70 | $ (341) | ||||
Key Operating Metrics: | ||||||||
Active customers (1) | 22 | 24 | 22 | 24 | ||||
LTM net revenue per active customer (2) | $ 545 | $ 537 | $ 545 | $ 537 | ||||
Orders delivered (3) | 10 | 10 | 20 | 20 | ||||
Average order value (4) | $ 307 | $ 330 | $ 297 | $ 308 | ||||
Non-GAAP Financial Measures: | ||||||||
Adjusted EBITDA | $ 128 | $ (108) | $ 114 | $ (221) | ||||
Free Cash Flow | $ 128 | $ (244) | $ (106) | $ (575) | ||||
Adjusted Diluted Earnings (Loss) per Share | $ 0.21 | $ (1.94) | $ (0.90) | $ (3.90) | ||||
(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) | 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. |
Webcast and Conference Call
Wayfair will host a conference call and webcast to discuss its second quarter 2023 financial results today at 8 a.m. (ET). Investors and participants should register for the call in advance by visiting https://bit.ly/3qOzwoJ. After registering, instructions will be shared on how to join the call. The call will also be available via live webcast at https://bit.ly/3CNJz2z. An archive of the webcast conference call will be available shortly after the call ends at investor.wayfair.com. Important information may be disseminated initially or exclusively via the Investor website; investors should consult the site to access this information.
About Wayfair
Wayfair is the destination for all things home: helping everyone, anywhere create their feeling of home. From expert customer service, to the development of tools that make the shopping process easier, to carrying one of the widest and deepest selections of items for every space, style, and budget, Wayfair gives everyone the power to create spaces that are just right for them.
The Wayfair family of sites includes:
- Wayfair: Everything home — for a space that's all you.
- Joss & Main: The ultimate style edit for home.
- AllModern: All of modern, made simple.
- Birch Lane: A fresh take on the classics.
- Perigold: An undiscovered world of luxury design.
- Wayfair Professional: Just right for Pros.
Wayfair generated $11.9 billion in net revenue for the twelve months ended June 30, 2023 and is headquartered in Boston, Massachusetts with global operations.
Media Relations Contact:
Claire Gorman
[email protected]
Investor Relations Contact:
James Lamb
[email protected]
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal and state securities laws. All statements other than statements of historical fact contained in this press release, 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 our financial outlook, profitability goals, business strategy, plans and objectives of management for future operations, and, the impact of macroeconomic factors, and our response to such events, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "continues," "could," "intends," "goals," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" 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 that known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. We believe that these risks and uncertainties include, but are not limited to, adverse macroeconomic conditions, including inflation, slower growth or the potential for recession; disruptions in the global supply chain; conditions affecting the retail environment for products we sell, and other matters that influence consumer spending and preferences; 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 manage our growth and expansion initiatives; and our ability to expand our business and compete successfully. 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 most recent Annual Report on Form 10-K for the year ended December 31, 2022 and in our other filings and reports with the Securities and Exchange Commission. We qualify all of our forward-looking statements by these cautionary statements.
These forward-looking statements speak only as of the date of this press release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
WAYFAIR INC. | ||||
June 30, | December 31, | |||
2023 | 2022 | |||
(in millions, except share and per | ||||
Assets: | ||||
Current assets | ||||
Cash and cash equivalents | $ 1,249 | $ 1,050 | ||
Short-term investments | 4 | 228 | ||
Accounts receivable, net | 128 | 272 | ||
Inventories | 77 | 90 | ||
Prepaid expenses and other current assets | 316 | 293 | ||
Total current assets | 1,774 | 1,933 | ||
Operating lease right-of-use assets | 806 | 839 | ||
Property and equipment, net | 759 | 774 | ||
Other non-current assets | 43 | 34 | ||
Total assets | $ 3,382 | $ 3,580 | ||
Liabilities and Stockholders' Deficit: | ||||
Current liabilities | ||||
Accounts payable | $ 1,104 | $ 1,204 | ||
Other current liabilities | 870 | 868 | ||
Total current liabilities | 1,974 | 2,072 | ||
Long-term debt | 3,205 | 3,137 | ||
Operating lease liabilities, net of current | 861 | 893 | ||
Other non-current liabilities | 40 | 28 | ||
Total liabilities | 6,080 | 6,130 | ||
Stockholders' deficit: | ||||
Convertible preferred stock, $0.001 par value per share: 10,000,000 shares authorized | — | — | ||
Class A common stock, par value $0.001 per share, 500,000,000 shares authorized, | — | — | ||
Class B common stock, par value $0.001 per share, 164,000,000 shares authorized, | — | — | ||
Additional paid-in capital | 988 | 737 | ||
Accumulated deficit | (3,681) | (3,280) | ||
Accumulated other comprehensive loss | (5) | (7) | ||
Total stockholders' deficit | (2,698) | (2,550) | ||
Total liabilities and stockholders' deficit | $ 3,382 | $ 3,580 | ||
WAYFAIR INC. | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
(in millions, except per share data) | ||||||||
Net revenue (1) | $ 3,171 | $ 3,284 | $ 5,945 | $ 6,277 | ||||
Cost of goods sold (2) | 2,186 | 2,388 | 4,139 | 4,578 | ||||
Gross profit | 985 | 896 | 1,806 | 1,699 | ||||
Operating expenses: | ||||||||
Customer service and merchant fees (2) | 144 | 162 | 283 | 313 | ||||
Advertising | 352 | 378 | 679 | 714 | ||||
Selling, operations, technology, general and | 630 | 688 | 1,254 | 1,314 | ||||
Impairment and other related net charges | 1 | 40 | 14 | 40 | ||||
Restructuring charges | — | — | 65 | — | ||||
Total operating expenses | 1,127 | 1,268 | 2,295 | 2,381 | ||||
Loss from operations | (142) | (372) | (489) | (682) | ||||
Interest expense, net | (5) | (6) | (10) | (14) | ||||
Other income, net | 3 | 1 | 2 | 1 | ||||
Gain on debt extinguishment | 100 | — | 100 | — | ||||
Loss before income taxes | (44) | (377) | (397) | (695) | ||||
Provision for income taxes, net | 2 | 1 | 4 | 2 | ||||
Net loss | $ (46) | $ (378) | $ (401) | $ (697) | ||||
Loss per share: | ||||||||
Basic | $ (0.41) | $ (3.59) | $ (3.60) | $ (6.62) | ||||
Diluted | $ (0.41) | $ (3.59) | $ (3.60) | $ (6.62) | ||||
Weighted-average number of shares of common stock | ||||||||
Basic | 112 | 105 | 111 | 105 | ||||
Diluted | 112 | 105 | 111 | 105 | ||||
(1) The following tables present net revenue attributable to our reportable segments for the periods indicated: | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
(in millions) | ||||||||
U.S. net revenue | $ 2,785 | $ 2,796 | $ 5,200 | $ 5,338 | ||||
International net revenue | 386 | 488 | 745 | 939 | ||||
Total net revenue | $ 3,171 | $ 3,284 | $ 5,945 | $ 6,277 | ||||
(2)Includes equity-based compensation and related taxes as follows: | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
(in millions) | ||||||||
Cost of goods sold | ||||||||
