WRBY Warby Parker Inc

Net revenue increased 13.3% year over year to $192.4 million; Company raises FY outlook

Active Customers increased 5.6% on a trailing 12-month basis; Average Revenue per Customer increased 7.5%

Warby Parker Inc. (NYSE: WRBY) (“Warby Parker” or the “Company”), a direct-to-consumer lifestyle brand focused on vision for all, today announced financial results for the third quarter ended September 30, 2024.

“Warby Parker’s Q3 performance is a direct result of our team’s commitment to making progress on our strategic initiatives, in particular expanding our marketing efforts, investing in store expansion, and enhancing our holistic vision care offering,” shared Co-Founder and Co-CEO Neil Blumenthal.

“We’re particularly encouraged by the momentum we’re seeing in early Q4. As we close out the year, we’re focused on continuing to capture market share, bring new customers to the brand, and deliver on our commitment to accelerate growth and improve profitability year over year,” said Co-Founder and Co-CEO Dave Gilboa.

Third Quarter 2024 Highlights

• Net revenue increased $22.6 million, or 13.3%, to $192.4 million, as compared to the prior year period.
• Active Customers increased 5.6% to 2.43 million on a trailing 12-month basis, and Average Revenue per Customer increased 7.5% to $305.
• GAAP net loss of $4.1 million.
• Adjusted EBITDA Margin(1) increased 2.5 points to 9.0%.
• Net cash provided by operating activities of $27.3 million.
• Free Cash Flow(1) of $13.1 million.
• Opened 13 net new stores during the quarter, ending Q3 with 269 stores.

Third Quarter 2024 Year Over Year Financial Results

• Net revenue increased $22.6 million, or 13.3%, to $192.4 million.
• Active Customers increased 5.6% to 2.43 million on a trailing 12-month basis, and Average Revenue per Customer increased 7.5% to $305.
• Gross margin was 54.5% compared to 54.6% in the prior year. The decrease in gross margin was primarily driven by the sales growth of contact lenses and increased doctor headcount, partially offset by efficiencies in our owned optical laboratories and lower outbound customer shipping costs as a percent of revenue, which were both driven by higher glasses growth.
• Selling, general, and administrative expenses (“SG&A”) were $111.5 million, down $1.0 million from the prior year, and represented 57.9% of revenue, down from 66.2% in the prior year. The primary drivers of decreased SG&A were reduced stock-based compensation costs and lower corporate expenses, partially offset by higher payroll-related costs from growth in our retail team associated with store expansion, and investments in marketing. Adjusted SG&A(1) was $100.6 million, or 52.3% of revenue, compared to $93.4 million, or 55.0% of revenue in the prior year.
• GAAP net loss improved $13.3 million to $4.1 million, primarily as a result of leveraging our expense base on higher revenue.
• Adjusted EBITDA(1) increased $6.3 million to $17.3 million, and Adjusted EBITDA Margin(1) increased 2.5 points to 9.0%.

Balance Sheet Highlights

Warby Parker ended the third quarter of 2024 with $251.0 million in cash and cash equivalents.

2024 Outlook

For the full year 2024, Warby Parker is raising its guidance as follows:

• Net revenue of $765 to $768 million, representing growth of approximately 14% to 15% versus full year 2023.
• Adjusted EBITDA(1) of approximately $73 million at the midpoint of our revenue range, based on an Adjusted EBITDA Margin(1) of 9.5%.
• On track to open 40 new stores this year.

“We’re pleased that we delivered continued revenue growth and adjusted EBITDA margin expansion in the third quarter. Given outperformance year-to-date, we are raising our full year revenue and adjusted EBITDA guidance, which we anticipate will set the stage for a strong 2025,” said Chief Financial Officer Steve Miller.

The guidance and forward-looking statements made in this press release and on our conference call are based on management's expectations as of the date of this press release.

(1) Please see the reconciliation of non-GAAP financial measures to the most comparable GAAP financial measure in the section titled “Non-GAAP Financial Measures” below.

Webcast and Conference Call

A conference call to discuss Warby Parker’s third quarter 2024 results, as well as fourth quarter and full year 2024 outlook, is scheduled for 8:00 a.m. ET on November 7, 2024. To participate, please dial 833-470-1428 from the U.S. or 404-975-4839 from international locations. The conference passcode is 681992. A live webcast of the conference call will be available on the investors section of the Company’s website at investors.warbyparker.com where presentation materials will also be posted prior to the conference call. A replay will be made available online approximately two hours following the live call for a period of 90 days.

Forward-Looking Statements

This press release and the related conference call, webcast and presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, including expectations regarding achieving profitability and growth in our e-commerce channel, delivering stakeholder value, growing market share, and our guidance for the quarter and year ending December 31, 2024; expectations regarding the number of new store openings during the year ending December 31, 2024; management’s plans, priorities, initiatives and strategies; and expectations regarding growth of our business. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all.

Forward-looking statements are based on information available at the time those statements are made and are based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to manage our future growth effectively; our expectations regarding cost of goods sold, gross margin, channel mix, customer mix, and selling, general, and administrative expenses; increases in component and shipping costs and changes in supply chain; our reliance on our information technology systems and enterprise resource planning systems for our business to effectively operate and safeguard confidential information; our ability to invest in and incorporate new technologies into our products and services; our ability to engage our existing customers and obtain new customers; our ability to expand in-network access with insurance providers; planned new retail stores in 2024 and going forward; an overall decline in the health of the economy and other factors impacting consumer spending, such as recessionary conditions, inflation, government instability, and geopolitical unrest; our ability to compete successfully; our ability to manage our inventory balances and shrinkage; the growth of our brand awareness; our ability to recruit and retain optometrists, opticians, and other vision care professionals; the spread of new infectious diseases; the effects of seasonal trends on our results of operations; our ability to stay in compliance with extensive laws and regulations that apply to our business and operations; our ability to adequately maintain and protect our intellectual property and proprietary rights; our reliance on third parties for our products, operation and infrastructure; our duties related to being a public benefit corporation; the ability of our Co-Founders and Co-CEOs to exercise significant influence over all matters submitted to stockholders for approval; the effect of our multi-class structure on the trading price of our Class A common stock; and the increased expenses associated with being a public company. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the Company's expectations is included in our most recent reports filed with the SEC on Form 10-K and Form 10-Q. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.

Additional information regarding these and other factors that could affect the Company’s results is included in the Company’s SEC filings, which may be obtained by visiting the SEC's website at www.sec.gov. Information contained on, or that is referenced or can be accessed through, our website does not constitute part of this document and inclusions of any website addresses herein are inactive textual references only.

Glossary

Active Customers is defined as unique customer accounts that have made at least one purchase in the preceding 12-month period.

Average Revenue per Customer is defined as the sum of the total net revenues in the preceding 12-month period divided by the current period Active Customers.

Non-GAAP Financial Measures

We use Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cost of Goods Sold (“Adjusted COGS”), Adjusted Gross Margin, Adjusted Gross Profit, Adjusted Selling, General, and Administrative Expenses (“Adjusted SG&A”), and Free Cash Flow as important indicators of our operating performance. Collectively, we refer to these non-GAAP financial measures as our “Non-GAAP Measures.” The Non-GAAP Measures, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.

Adjusted EBITDA is defined as net income (loss) before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment costs, stock-based compensation expense and related employer payroll taxes, amortization of cloud-based software implementation costs, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs, major system implementation costs, and transaction costs. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net revenue.

Adjusted COGS is defined as cost of goods sold adjusted for stock-based compensation expense and related employer payroll taxes.

Adjusted Gross Profit is defined as net revenue minus Adjusted COGS. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net revenue.

Adjusted SG&A is defined as SG&A adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs, major system implementation costs, and transaction costs.

Free Cash Flow is defined as net cash provided by operating activities minus purchases of property and equipment.

The Non-GAAP Measures are presented for supplemental informational purposes only. A reconciliation of historical GAAP to Non-GAAP financial information is included under “Selected Financial Information” below.

We have not reconciled our Adjusted EBITDA Margin guidance to GAAP net income (loss) margin, or net margin, or Adjusted EBITDA guidance to GAAP net income (loss) because we do not provide guidance for GAAP net margin or GAAP net income (loss) due to the uncertainty and potential variability of stock-based compensation and taxes, which are reconciling items between GAAP net margin and Adjusted EBITDA Margin and GAAP net income (loss) and Adjusted EBITDA, respectively. Because such items cannot be reasonably provided without unreasonable efforts, we are unable to provide a reconciliation of the Adjusted EBITDA Margin guidance to GAAP net margin and Adjusted EBITDA guidance to GAAP net income (loss). However, such items could have a significant impact on GAAP net margin and GAAP net income (loss).

About Warby Parker

Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to inspire and impact the world with vision, purpose, and style–without charging a premium for it. Headquartered in New York City, the co-founder-led lifestyle brand pioneers ideas, designs products, and develops technologies that help people see, from designer-quality prescription glasses (starting at $95) and contacts, to eye exams and vision tests available online and in our 269 retail stores across the U.S. and Canada.

Warby Parker aims to demonstrate that businesses can scale, do well, and do good in the world. Ultimately, the Company believes in vision for all, which is why for every pair of glasses or sunglasses sold, it distributes a pair to someone in need through its Buy a Pair, Give a Pair program. To date, Warby Parker has worked alongside its nonprofit partners to distribute more than 15 million glasses to people in need.

Selected Financial Information

 

Warby Parker Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) (Amounts in thousands, except share data)

   

 

September 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

251,032

 

 

$

216,894

 

Accounts receivable, net

 

1,094

 

 

 

1,779

 

Inventory

 

52,766

 

 

 

62,234

 

Prepaid expenses and other current assets

 

16,317

 

 

 

17,712

 

Total current assets

 

321,209

 

 

 

298,619

 

 

 

 

 

Property and equipment, net

 

166,500

 

 

 

152,332

 

Right-of-use lease assets

 

141,552

 

 

 

122,305

 

Other assets

 

8,729

 

 

 

7,056

 

Total assets

$

637,990

 

 

$

580,312

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

36,663

 

 

$

22,456

 

Accrued expenses

 

46,015

 

 

 

46,320

 

Deferred revenue

 

19,216

 

 

 

31,617

 

Current lease liabilities

 

26,068

 

 

 

24,286

 

Other current liabilities

 

2,155

 

 

 

2,411

 

Total current liabilities

 

130,117

 

 

 

127,090

 

 

 

 

 

Non-current lease liabilities

 

170,104

 

 

 

150,171

 

Other liabilities

 

1,019

 

 

 

1,264

 

Total liabilities

 

301,240

 

 

 

278,525

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Common stock, $0.0001 par value; Class A: 750,000,000 shares authorized at September 30, 2024 and December 31, 2023, 101,590,781 and 98,368,239 issued and outstanding at September 30, 2024 and December 31, 2023, respectively; Class B: 150,000,000 shares authorized at September 30, 2024 and December 31, 2023, 18,674,743 and 19,788,682 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively, convertible to Class A on a one-to-one basis

 

12

 

 

 

12

 

Additional paid-in capital

 

1,018,751

 

 

 

970,135

 

Accumulated deficit

 

(680,344

)

 

 

(666,831

)

Accumulated other comprehensive loss

 

(1,669

)

 

 

(1,529

)

Total stockholders’ equity

 

336,750

 

 

 

301,787

 

Total liabilities and stockholders’ equity

$

637,990

 

 

$

580,312

 

 

Warby Parker Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) (Amounts in thousands, except share and per share data)

   

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net revenue

$

192,447

 

 

$

169,849

 

 

$

580,672

 

 

$

507,910

 

Cost of goods sold

 

87,580

 

 

 

77,117

 

 

 

256,964

 

 

 

229,752

 

Gross profit

 

104,867

 

 

 

92,732

 

 

 

323,708

 

 

 

278,158

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

111,480

 

 

 

112,499

 

 

 

344,404

 

 

 

328,585

 

Loss from operations

 

(6,613

)

 

 

(19,767

)

 

 

(20,696

)

 

 

(50,427

)

 

 

 

 

 

 

 

 

Interest and other income, net

 

2,842

 

 

 

2,655

 

 

 

7,965

 

 

 

6,815

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(3,771

)

 

 

(17,112

)

 

 

(12,731

)

 

 

(43,612

)

Provision for income taxes

 

301

 

 

 

301

 

 

 

782

 

 

 

538

 

Net loss

$

(4,072

)

 

$

(17,413

)

 

$

(13,513

)

 

$

(44,150

)

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders, basic and diluted

$

(0.03

)

 

$

(0.15

)

 

$

(0.11

)

 

$

(0.38

)

Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted

 

120,885,913

 

 

 

118,003,640

 

 

 

120,041,740

 

 

 

116,995,545

 

 

Warby Parker Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) (Amounts in thousands)

   

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities

 

 

 

Net loss

$

(13,513

)

 

$

(44,150

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

33,533

 

 

 

28,184

 

Stock-based compensation

 

38,664

 

 

 

54,083

 

Non-cash charitable contribution

 

2,196

 

 

 

3,191

 

Asset impairment charges

 

522

 

 

 

1,407

 

Amortization of cloud-based software implementation costs

 

2,862

 

 

 

1,679

 

Change in operating assets and liabilities:

 

 

 

Accounts receivable, net

 

686

 

 

 

714

 

Inventory

 

9,468

 

 

 

5,231

 

Prepaid expenses and other assets

 

(1,148

)

 

 

410

 

Accounts payable

 

13,267

 

 

 

2,756

 

Accrued expenses

 

2,728

 

 

 

(1,207

)

Deferred revenue

 

(12,401

)

 

 

(8,005

)

Other current liabilities

 

(256

)

 

 

(116

)

Right-of-use lease assets and current and non-current lease liabilities

 

2,469

 

 

 

3,458

 

Other liabilities

 

(245

)

 

 

(309

)

Net cash provided by operating activities

 

78,832

 

 

 

47,326

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

 

(46,311

)

 

 

(40,098

)

Investment in optical equipment company

 

(2,000

)

 

 

(1,000

)

Net cash used in investing activities

 

(48,311

)

 

 

(41,098

)

Cash flows from financing activities

 

 

 

Proceeds from stock option exercises

 

2,686

 

 

 

1,017

 

Proceeds from shares issued in connection with employee stock purchase plan

 

1,068

 

 

 

1,124

 

Net cash provided by financing activities

 

3,754

 

 

 

2,141

 

Effect of exchange rates on cash

 

(137

)

 

 

(989

)

Net change in cash and cash equivalents

 

34,138

 

 

 

7,380

 

Cash and cash equivalents, beginning of period

 

216,894

 

 

 

208,585

 

Cash and cash equivalents, end of period

$

251,032

 

 

$

215,965

 

Supplemental disclosures

 

 

 

Cash paid for income taxes

$

782

 

 

$

400

 

Cash paid for interest

 

169

 

 

 

155

 

Cash paid for amounts included in the measurement of lease liabilities

 

21,668

 

 

 

27,124

 

Non-cash investing and financing activities:

 

 

 

Purchases of property and equipment included in accounts payable and accrued expenses

$

5,553

 

 

$

5,941

 

   

Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measure, which is net loss:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

(unaudited, in thousands)

 

(unaudited, in thousands)

Net loss

$

(4,072

)

 

$

(17,413

)

 

$

(13,513

)

 

$

(44,150

)

Adjusted to exclude the following:

 

 

 

 

 

 

 

Interest and other income, net

 

(2,842

)

 

 

(2,655

)

 

 

(7,965

)

 

 

(6,815

)

Provision for income taxes

 

301

 

 

 

301

 

 

 

782

 

 

 

538

 

Depreciation and amortization expense

 

11,829

 

 

 

9,760

 

 

 

33,533

 

 

 

28,184

 

Asset impairment charges

 

101

 

 

 

757

 

 

 

522

 

 

 

1,407

 

Stock-based compensation expense(1)

 

10,961

 

 

 

16,466

 

 

 

39,373

 

 

 

54,496

 

Non-cash charitable donation(2)

 

—

 

 

 

2,591

 

 

 

2,196

 

 

 

3,191

 

Amortization of cloud-based software implementation costs(3)

 

854

 

 

 

853

 

 

 

2,862

 

 

 

1,679

 

ERP implementation costs(4)

 

—

 

 

 

371

 

 

 

—

 

 

 

4,413

 

Other costs(5)

 

176

 

 

 

—

 

 

 

1,479

 

 

 

—

 

Adjusted EBITDA

$

17,308

 

 

$

11,031

 

 

$

59,269

 

 

$

42,943

 

Adjusted EBITDA Margin

 

9.0

%

 

 

6.5

%

 

 

10.2

%

 

 

8.5

%

(1)

Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions, as well as the issuance of 48,486 Class A common stock to charitable donor advised funds in February 2024. For both of the three months ended September 30, 2024 and 2023, the amount includes $0.2 million of employer payroll taxes associated with releases of RSUs and option exercises. For the nine months ended September 30, 2024 and 2023, the amount includes $0.7 million and $0.4 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.

(2)

Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both May 2024 and August 2023 to the Warby Parker Impact Foundation and 56,938 shares of Class A common stock to charitable donor advised funds in June 2023.

(3)

Represents the amortization of costs capitalized in connection with the implementation of cloud-based software.

(4)

Represents internal and external non-capitalized costs related to the implementation of our new Enterprise Resource Planning (“ERP”) system.

(5)

Represents charges for certain legal matters outside the ordinary course of business.

   

Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table presents our non-GAAP, or adjusted, financial measures for the periods presented as a percentage of revenue. Each cost and operating expense is adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs, major system implementation costs, and transaction costs.

 

Reported

 

Adjusted

 

Reported

 

Adjusted

 

Three Months Ended September 30,

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

(unaudited, in thousands)

 

(unaudited, in thousands)

 

(unaudited, in thousands)

 

(unaudited, in thousands)

Cost of goods sold

$

87,580

 

 

$

77,117

 

 

$

87,299

 

 

$

76,835

 

 

$

256,964

 

 

$

229,752

 

 

$

256,154

 

 

$

228,976

 

% of Revenue

 

45.5

%

 

 

45.4

%

 

 

45.4

%

 

 

45.2

%

 

 

44.3

%

 

 

45.2

%

 

 

44.1

%

 

 

45.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

$

104,867

 

 

$

92,732

 

 

$

105,148

 

 

$

93,014

 

 

$

323,708

 

 

$

278,158

 

 

$

324,518

 

 

$

278,934

 

% of Revenue

 

54.5

%

 

 

54.6

%

 

 

54.6

%

 

 

54.8

%

 

 

55.7

%

 

 

54.8

%

 

 

55.9

%

 

 

54.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

$

111,480

 

 

$

112,499

 

 

$

100,624

 

 

$

93,353

 

 

$

344,404

 

 

$

328,585

 

 

$

302,166

 

 

$

267,261

 

 

% of Revenue

 

57.9

%

 

 

66.2

%

 

 

52.3

%

 

 

55.0

%

 

 

59.3

%

 

 

64.7

%

 

 

52.0

%

 

 

52.6

%

   

Warby Parker Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table reflects a reconciliation of each non-GAAP, or adjusted, financial measure to its most directly comparable financial measure prepared in accordance with GAAP:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

(unaudited, in thousands)

 

(unaudited, in thousands)

Cost of goods sold

$

87,580

 

 

$

77,117

 

 

$

256,964

 

 

$

229,752

 

Adjusted to exclude the following:

 

 

 

 

 

 

 

Stock-based compensation expense(1)

 

281

 

 

 

282

 

 

 

810

 

 

 

776

 

Adjusted Cost of Goods Sold

$

87,299

 

 

$

76,835

 

 

$

256,154

 

 

$

228,976

 

 

 

 

 

 

 

 

 

Gross profit

$

104,867

 

 

$

92,732

 

 

$

323,708

 

 

$

278,158

 

Adjusted to exclude the following:

 

 

 

 

 

 

 

Stock-based compensation expense(1)

 

281

 

 

 

282

 

 

 

810

 

 

 

776

 

Adjusted Gross Profit

$

105,148

 

 

$

93,014

 

 

$

324,518

 

 

$

278,934

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

$

111,480

 

 

$

112,499

 

 

$

344,404

 

 

$

328,585

 

Adjusted to exclude the following:

 

 

 

 

 

 

 

Stock-based compensation expense(1)

 

10,680

 

 

 

16,184

 

 

 

38,563

 

 

 

53,720

 

Non-cash charitable donation(2)

 

—

 

 

 

2,591

 

 

 

2,196

 

 

 

3,191

 

ERP implementation costs(3)

 

—

 

 

 

371

 

 

 

—

 

 

 

4,413

 

Other costs(4)

 

176

 

 

 

—

 

 

 

1,479

 

 

 

—

 

Adjusted Selling, General, and Administrative Expenses

$

100,624

 

 

$

93,353

 

 

$

302,166

 

 

$

267,261

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

27,282

 

 

$

19,931

 

 

$

78,832

 

 

$

47,326

 

Purchases of property and equipment

 

(14,223

)

 

 

(15,488

)

 

 

(46,311

)

 

 

(40,098

)

Free Cash Flow

$

13,059

 

 

$

4,443

 

 

$

32,521

 

 

$

7,228

 

(1)

Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions, as well as the issuance of 48,486 Class A common stock to charitable donor advised funds in February 2024. For both of the three months ended September 30, 2024 and 2023, the amount includes $0.2 million of employer payroll taxes associated with releases of RSUs and option exercises. For the nine months ended September 30, 2024 and 2023, the amount includes $0.7 million and $0.4 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.

(2)

Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both May 2024 and August 2023 to the Warby Parker Impact Foundation and 56,938 shares of Class A common stock to charitable donor advised funds in June 2023.

(3)

Represents internal and external non-capitalized costs related to the implementation of our new ERP system.

(4)

Represents charges for certain legal matters outside the ordinary course of business.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107952951/en/

Investor Relations: Jaclyn Berkley, Head of Investor Relations Brendon Frey, ICR investors@warbyparker.com

Media: Ali Weltman ali@derris.com