Wayfair (W) Q2 2024 earnings summary

Executive summary

• Achieved best quarter of Adjusted EBITDA and Free Cash Flow in three years, with Q2 2024 net revenue down 1.7% year-over-year to $3.12 billion amid ongoing macro headwinds.

• Net loss for Q2 2024 was $42 million, a slight improvement from $46 million in Q2 2023.

• Active customers reached 22 million, with 81.7% of orders from repeat buyers in Q2 2024.

• Continued to gain market share for the seventh consecutive quarter, outperforming peers in a declining market.

• Strong performance during promotional events like Way Day and Black Friday in July, but softer results in non-promo periods.

Financial highlights

• Gross profit for Q2 2024 was $941 million (30.2% margin), down from $985 million in Q2 2023.

• Adjusted EBITDA reached $163 million (5.2% of net revenue), the highest in three years.

• Free cash flow was $183 million, also a three-year high.

• Operating loss improved to $35 million in Q2 2024 from $142 million in Q2 2023.

• Stock-based compensation dropped over 40% year-over-year to $98 million, the lowest since 2021.

Outlook and guidance

• Q3 revenue expected to decline low single digits year-over-year, reflecting similar seasonality as last year.

• Gross margin targeted at 30%-31%, with Q3 and Q4 at the lower end due to competitive pricing.

• SOTG&A expected at $400-$410 million for Q3, with continued cost efficiency.

• Adjusted EBITDA margin projected in the mid-single digits, slightly below Q2 due to seasonal revenue compression.

• Management remains cautious due to ongoing macroeconomic uncertainty, including inflation and interest rates, but maintains a positive long-term outlook for online home goods retail.