FIGS (FIGS) Q1 2026 earnings summary

Executive summary

• Net revenues grew 28% year-over-year in Q1 2026 to $159.9 million, driven by a 12.2% increase in active customers surpassing three million and higher average order value.

• Adjusted EBITDA rose to $13.9 million, with margin improving to 8.7% from 7.3% year-over-year, reflecting operational excellence and sales leverage.

• Net income improved to $6.3 million (net income margin 3.9%), reversing a net loss of $0.1 million last year.

• Broad-based strength was seen across categories, styles, and geographies, with both core and new product launches performing well.

• Free cash flow was negative $5.6 million, primarily due to timing of payments and increased capital expenditures.

Financial highlights

• Gross margin was 67.7%, up 10 basis points year-over-year, reflecting pricing and efficiency gains, partially offset by tariffs.

• Operating expenses rose 22.6% to $103.8 million, with marketing expense up 62.4% due to a Winter Olympics campaign.

• U.S. net revenues grew 24% to $131.6 million; international net revenues rose 50% to $28.3 million, now representing 18% of total.

• Scrubwear accounted for $126.6 million (79% of net revenues), up 27%; non-scrubwear was $33.3 million (21%), up 31%.

• Ended Q1 with $277 million in cash, cash equivalents, and short-term investments; $8.8 million in share repurchases.

Outlook and guidance

• Full-year 2026 net revenue growth outlook raised to 14%-16%, with Q2 growth expected in the low 20% range.

• Adjusted EBITDA margin guidance increased to 13%-13.2%; operating margin outlook raised to 7.8%-8%.

• Gross margin expected to improve modestly for the year, with Q2 showing a slight year-over-year decline due to tariff impacts.

• Effective tax rate for the year now expected at 20%, down from 25%.

• Management expects existing cash, cash flows, and credit facility to be sufficient for at least the next 12 months.