Wayfair (W) Q1 2025 earnings summary

Executive summary

• Net revenue for Q1 2025 was $2.73 billion, nearly flat year-over-year, with U.S. segment up 1.6% and international down 10.9% due to the German business exit.

• Net loss narrowed to $113 million from $248 million year-over-year, driven by cost controls, workforce reductions, and a $25 million gain on debt extinguishment.

• Adjusted EBITDA improved to $106 million from $75 million, with margin rising to 3.9%.

• Active customers totaled 21 million, with 80.2% of orders from repeat buyers; net revenue per active customer rose to $562.

• Outperformed peers and gained market share despite ongoing category contraction and macroeconomic volatility.

Financial highlights

• Gross profit was $837 million, with gross margin at 30.7%, reflecting a refund from the Canada Border Services Agency and investments in customer experience.

• Adjusted EBITDA was $106 million, up from $75 million in Q1 2024.

• Free cash flow for Q1 was -$139 million, a $60 million improvement year-over-year.

• Ended quarter with $1.4 billion in cash and $1.8 billion in total liquidity.

• Operating loss reduced to $122 million from $235 million year-over-year.

Outlook and guidance

• Gross margin for Q2 expected in the 30%-31% range, likely at the lower end.

• Management remains cautious due to persistent macroeconomic headwinds, including inflation, interest rates, and global trade uncertainty.

• SOT G&A expected at $360M-$370M, showing continued cost compression.

• Adjusted EBITDA margin anticipated in the 4%-5% range if revenue remains flat year-over-year.

• Long-term outlook for online home goods remains positive, with ongoing focus on cost discipline and market share growth.