Wayfair (W) Q4 2025 earnings summary

Executive summary

• Full year 2025 net revenue reached $12.5 billion, up 5.1% year-over-year, with Q4 revenue up 6.9% and U.S. revenue up 7.4%.

• 80% of 2025 orders came from repeat customers, with active customers totaling 21.3 million and Wayfair Rewards membership surpassing 1 million.

• Strategic focus for 2026 includes technology, physical retail expansion, and the Wayfair Rewards loyalty program.

• Physical retail stores and loyalty initiatives are driving increased customer engagement and share of wallet.

• Adjusted EBITDA margin improved to 6.0% in 2025, up from 2.5% in 2023, reflecting cost actions and operational efficiencies.

Financial highlights

• Q4 gross profit was $1.0 billion (30.3% margin); full year gross profit was $3.8 billion (30.2% margin).

• Q4 Adjusted EBITDA was $224 million (6.7% margin); full year Adjusted EBITDA was $743 million (6.0% margin), more than double Q4 2024.

• Contribution margin reached 15.3% in Q4 and 15.2% for the year, up from 14.0% in 2024.

• Free cash flow for Q4 was $145 million; full year free cash flow was $329 million, a 40% year-over-year improvement.

• Ended Q4 with $1.5 billion in cash and $1.9 billion in total liquidity.

Outlook and guidance

• Q1 2026 guided to mid-single-digit revenue growth year-over-year, with continued robust share capture.

• Gross margin expected in the 30%-31% range, likely at the low end; contribution margin targeted at ~15%.

• Adjusted EBITDA expected at 4.5%-5.5% of net revenue for Q1, showing strong year-over-year improvement.

• Targeting over 10% Adjusted EBITDA margin and sustained strong free cash flow in the long term.

• Continued focus on growing Adjusted EBITDA and free cash flow in 2026.