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Item 1A. Risk Factors

2026-02-25 compared with 2025-02-25 · 198 added, 170 removed, 808 unchanged (31% of the section changed)

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Our business and operating results are subject to macroeconomic conditions and trends and their direct and indirect impacts on consumer discretionary spending in the markets in which we operate.

Some of the factors and events that have negatively influenced consumer spending, and may do so in the future, include inflationary pressures, fluctuating interest rates and credit availability, public health crises, high levels of unemployment, high consumer debt levels, reductions in net worth, declines in asset values and related market uncertainty, reductions in home values, home foreclosures, resumption of student loan payments, increases in mortgage rates and rents, adverse developments affecting the financial services industry, labor strikes, fluctuating currency exchange rates, fluctuating fuel and other energy costs, fluctuating commodity prices, wars and conflicts in Ukraine/Russia, Israel/Gaza and the Middle East, other geopolitical tensions, general uncertainty regarding the overall future political and economic environment, and social unrest.

Some of the factors and events that have negatively influenced consumer spending, and may do so in the future, include inflationary pressures, fluctuating interest rates and credit availability, increased tariffs and global trade instability, public health crises, high levels of unemployment, high consumer debt levels, reductions in net worth, declines in asset values and related market uncertainty, reductions in home values, home foreclosures, resumption of student loan payments, increases in mortgage rates and rents, adverse developments affecting the financial services industry, government shutdowns, labor strikes, fears of recession, fluctuating currency exchange rates, fluctuating fuel and other energy costs, fluctuating commodity prices, wars and conflicts, other geopolitical tensions, negative consumer sentiment toward U.S.-made products in our international markets, general uncertainty regarding the overall future political and economic environment, and social unrest.

Economic conditions in certain regions may also be affected by natural disasters, such as earthquakes, hurricanes, tropical storms and wildfires.

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Furthermore, economic downturns could lead to reduced liquidity, decreases in the market price of our Class A common stock and decreases in the fair market value of our financial or other assets, any of which could have a material adverse effect on our business, operating results and financial condition.

Tariffs imposed by the U.S.

or foreign governments have increased and may in the future continue to increase the cost of our products, which could ignite a global trade war and have a material adverse effect on our business, financial condition and results of operations.

government has in the past made, and may in the future make, significant changes in U.S.

trade policy and has taken certain actions that could negatively impact our business, including imposing tariffs on certain goods we import into the United States.

In retaliation, China and other countries have in the past also implemented, and may in the future implement, their own tariffs or other trade restrictions on a wide range of American products.

For example, since February 2025, the U.S.

government has imposed incremental tariffs on most goods imported from China, from which we source a significant portion of our products, subject to certain exceptions.

At various points in 2025, the total tariff rate on our goods imported from China reached 152.5%.

These tariffs are in addition to a pre-existing Section 301 tariff of 7.5% and baseline Harmonized Tariff Schedule, or HTS, tariffs, which vary by product.

In addition, U.S.

tariffs on goods imported from certain other countries from which we source products included an incremental reciprocal tariff of 10% imposed since April 2025.

Since August 7, 2025, higher reciprocal tariff rates for many U.S.

trading partners, including countries such as Japan, Turkey, Indonesia and India, had been imposed pursuant to additional executive orders modifying the reciprocal tariff rates for certain countries.

Products of India also have been targeted since August 2025 with a current rate of 18%.

On February 20, 2026, the Supreme Court of the United States of America ruled against President Trump’s use of the International Emergency Economic Powers Act, or IEEPA, to impose tariffs on global trade partners, effective immediately.

The impact of this decision on previous tariffs that we have paid is undetermined while the case is returned to the Court of International Trade for reconsideration in accordance with the Supreme Court ruling.

Heightened tariffs, particularly on Chinese goods, directly impact our owned brand products and, to a lesser extent, a limited number of third-party branded products for which we are the importer of record.

In addition, we face various indirect exposures to the effects of heightened tariffs from other third-party brands.

tariffs on China or other countries from which we source products are reinstated or are increased further, it will increase our cost of sales and may also increase the price of our products.

Raising prices of our products could adversely impact customer demand.

In addition, heightened tariffs may adversely impact our ability to acquire products on acceptable terms and may also adversely impact global logistics, which may result in our inability to purchase sufficient inventory to meet customer demand and in turn materially and adversely impact our net sales.

Furthermore, these and future changes in trade policy may adversely impact the macroeconomic environment, consumer sentiment and international demand if consumers outside of the United States boycott U.S.

If we are not able to adjust our inventory levels and our inventory assortment in response to reduced customer demand, our gross margin may be adversely impacted.

We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and China or other countries, what products may be subject to such actions or what actions may be taken by the other countries in retaliation.

Any further deterioration in the relations between the United States and China or other countries could exacerbate these actions and other governmental intervention.

Our efforts to mitigate the impact of heightened tariffs and to further diversify our supply chain may be costly and may not yield near-term results or be as effective as we intend, or at all, and may have other negative impacts on our business, operations and financial condition.

or foreign governments may take additional administrative, legislative, or regulatory action that could materially interfere with our ability to sell products in certain countries.

Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the United States and its trading partners, especially China, could result in a global economic slowdown and long-term changes to global trade, including trade restrictions that restrict our international operations.

Any alterations to our business strategy or operations made in order to adapt to or comply with any such changes could be time-consuming and expensive and certain of our competitors may be better suited to withstand or react to these changes.

We purchase inventory in anticipation of sales, and if we are unable to manage our inventory effectively, our operating results could be adversely affected.

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We add new products to our sites every week and we depend on our forecasts of demand for and popularity of various products to make purchase decisions and to manage our inventory.

Demand for products, however, is difficult to forecast and can change significantly between the time inventory is ordered and the date of sale, resulting in higher inventory levels that may adversely impact our operating results, or insufficient inventory that may adversely impact the conversion of demand for our merchandise.

Demand may be affected by macroeconomic factors such as high inflation and low consumer confidence, public health crises, wars and other geopolitical tensions, seasonality, new product launches, rapid changes in product cycles and pricing, product defects, promotions, changes in consumer spending patterns, changes in consumer tastes with respect to our products, and various other factors, such as political instability and social unrest, and our consumers may not purchase products in the quantities that we expect.

Seasonality in our business has not historically followed that of traditional retailers which typically experience concentration of net sales in the fourth quarter in connection with the holidays.

For information about the seasonality of our business, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Performance—Seasonality.” If we are unable to manage inventory at the right

levels and with the appropriate assortment during these seasonal fluctuations or if the seasonality of our business changes, the conversion of consumer demand may be adversely impacted.

Demand for products, however, is difficult to forecast and can change significantly between the time inventory is ordered and the date of sale, resulting in higher inventory levels that may

adversely impact our operating results, or insufficient inventory that may adversely impact the conversion of demand for our merchandise.

Demand may be affected by macroeconomic factors such as high inflation and low consumer confidence, public health crises, wars and other geopolitical tensions, new product launches, rapid changes in product cycles and pricing, product defects, promotions, changes in consumer spending patterns, changes in consumer tastes with respect to our products, and various other factors, such as political instability and social unrest, and our consumers may not purchase products in the quantities that we expect.

We generally do not have the right to return unsold products to our suppliers.

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In addition, if we are required to lower sale prices in order to reduce inventory levels or to pay higher prices to our suppliers, our profit margins might be negatively affected.

We source a significant portion of our products, directly or indirectly, from China.

The imposition of significant tariffs on imports from China or other countries that we source from, if reinstated at heightened levels, may result in our inability to cost-effectively source products.

If we are unable to cost-effectively source inventory, whether from China or other countries, we may not be able to meet consumer demand, which could have a material adverse effect on our business, operating results and financial condition.

Any failure to manage owned brand expansion or accurately forecast demand for owned brands could adversely affect growth, margins and inventory levels.

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Historically, a majority of our owned brand products and a substantial portion of the products we source from third parties have been manufactured in China.

Various factors and events outside of our control impact our supply chain and may delay or prevent our manufacturing and may also increase the cost to manufacture or transport product that is sourced in China.

In addition, the worsening of U.S.-China relations could also impact our supply chain and negatively impact the cost to source from China.

While we seek to further diversify our supply chain and sourcing, we may not be able to diversify in a cost-effective manner, or at all, which may materially and adversely affect our business, financial condition and operating results.

In addition, the supply chain worldwide has in the past been, and may in the future be, negatively impacted by events such as wars and geopolitical tensions, public health crises, labor shortages, tariffs and other factors, and diversification of the supply chain and sourcing therefore may not yield the targeted benefits.

Merchandise returns could harm our business.

In addition, the worsening of U.S.

relations with China or other countries, increased tariffs and global trade instability could also negatively impact our supply chain and cost to source from China and other countries.

While we seek to further diversify our supply chain and sourcing, we may not be able to diversify in a cost-effective manner, or at all, for example as a result of the imposition of future tariffs, which may materially and adversely affect our business, financial condition and operating results.

In addition, the supply chain worldwide has in the past been, and may in the future be, negatively impacted by events such as wars and geopolitical tensions, tariffs, public health crises, labor shortages and other factors, and diversification of the supply chain and sourcing therefore may not yield the targeted benefits.

Elevated merchandise returns may adversely affect our operating results and financial condition.

We allow our customers to return products, subject to our return policy.

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Due to our liberal return policy and consumer behavior, we have experienced and may in the future experience heightened levels of returns, which have and may continue to negatively impact our operating results and financial position.

We have also experienced and may in the future experience increased levels of returns due to changes in consumer shopping behavior and discretionary spending as a result of changes in macroeconomic conditions or consumer confidence, including levels of unemployment, the size and timing of federal stimulus programs, salaries and wage rates, high inflation, high interest rates, recession or fears of recession, housing costs, energy and fuel costs, the resumption of student loan repayments, income tax rates and the timing of tax refunds, consumer perceptions of personal well-being and security, availability of consumer credit and consumer debt levels.

We have also experienced and may in the future experience increased levels of returns due to changes in consumer shopping behavior and discretionary spending as a result of changes in macroeconomic conditions or consumer confidence, including levels of unemployment, salaries and wage rates, high inflation, high interest rates, recession or fears of recession, housing costs, energy and fuel costs, the resumption of student loan repayments, income tax rates and the timing of tax refunds, consumer perceptions of personal well-being and security, availability of consumer credit and consumer debt levels.

If we are unable to anticipate and respond to changing customer preferences and shifts in fashion and industry trends in a timely and cost-effective manner, our business, financial condition and operating results could be harmed.

The retail apparel industry is driven in part by fashion and beauty trends, which may shift quickly.

Our continued success depends on our ability to anticipate, gauge and react in a timely and cost-effective manner to changes in consumer preferences for products, consumer attitudes toward our industry and brand and where and how consumers shop for those products.

Our continued success depends on our ability to anticipate, gauge and react in a timely and cost-effective manner to changes in

consumer preferences for products, consumer attitudes toward our industry and brand and where and how consumers shop for those products.

We must continually work to develop, produce and market new products, maintain and enhance the recognition of our brands, maintain a favorable mix of products and develop our approach as to how and where we market and sell our products.

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For example, sales of our new products may not be as high as we anticipate, due to lack of acceptance of the products themselves or their price or limited effectiveness of our marketing strategies.

In addition, our ability to launch new products may be limited by delays or difficulties affecting the ability of our suppliers or manufacturers to timely

manufacture, distribute and ship new products.

In addition, our ability to launch new products may be limited by delays or difficulties affecting the ability of our suppliers or manufacturers to timely manufacture, distribute and ship new products.

Sales of new products may also be affected by inventory management.

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We continue to balance our inventory levels based on shifts in demand, but we may not be able to respond quickly enough to adjust our inventory position accordingly, which may have an adverse impact on our operating results.

As part of our ongoing business strategy, we expect we will need to continue to introduce new products in our traditional product categories of apparel, footwear, beauty, accessories and home products, while also expanding our product launches into adjacent categories in which we may have little to no operating experience.

As part of our ongoing business strategy, we expect we will need to continue to introduce new products in our traditional product categories of apparel, footwear, beauty and accessories, while also expanding our product launches into adjacent categories in which we may have little to no operating experience.

The success of product launches in adjacent categories could be hampered by our relative inexperience operating in such categories, the strength of our competitors or any of the other risks referred to above.

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We are also required to manage numerous relationships with various suppliers, vendors and other third parties.

Changes in our operations, vendor base, fulfillment centers, information technology systems or internal controls and procedures may not be adequate to support our operations.

Changes in our operations, vendor base, fulfillment centers, information technology systems or internal controls and

procedures may not be adequate to support our operations.

If we are unable to manage growth of our organization effectively, our business, financial condition and operating results may be adversely affected.

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Over the course of 2025, we offered over 1,200 emerging and established brands through REVOLVE, including 28 owned brands, and over 500 brands through FWRD.

Our ability to identify new brands and maintain and enhance our relationships with our existing brands is critical to expanding our base of customers and retaining our existing

Our ability to identify new brands and maintain and enhance our relationships with our existing brands is critical to expanding our base of customers and retaining our existing customers.

Third-party brands, particularly in the luxury sector, are increasingly limiting wholesale distribution, shifting to selling directly to the consumer.

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Over the long term, if we are not able to develop and maintain positive relationships with our large network of influencers, our ability to promote and maintain awareness of our sites and brands and leverage social media platforms to drive visits to our sites may be adversely affected.

Use of social media and influencers may materially and adversely affect our reputation or subject us to regulatory and tax obligations, fines or other penalties.

Use of social media and influencers may materially and adversely affect our reputation or subject us to regulatory and tax obligations, fines, lawsuits or other penalties.

We use third-party social media platforms as, among other things, marketing tools.

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In addition, social media platforms we use have and may continue to change their policies or algorithms, leading to shifts in the level of video and recommended content, which may impact our ability to fully optimize such platforms.

Furthermore, as laws and regulations and public opinion rapidly evolve to govern the use of social media platforms, our ability to use certain platforms, including TikTok in particular, as marketing tools may become limited, restricted or more expensive or complicated, which could adversely impact our business and operating results.

For example, on April 24, 2024, President Biden signed into law certain measures requiring TikTok’s parent company to sell TikTok by January 2025 or face a total ban in the United States.

President Trump issued an executive order to delay the ban until April 2025.

The failure by us, our employees, our network of social media influencers, our sponsors or third parties acting at our direction to abide by applicable laws and regulations in the use of social media platforms or otherwise, including intellectual property laws and tax reporting and compliance requirements, could subject us to regulatory investigations, class action lawsuits, liability, taxes, fines or other penalties and have a material adverse effect on our business, financial condition and operating results.

restricted or more expensive or complicated, which could adversely impact our business and operating results.

For example, on April 24, 2024, President Biden signed into law legislation that would have required TikTok’s parent company to divest TikTok or face a ban in the United States.

Subsequent executive actions delayed the effectiveness of such restrictions.

After months of negotiations, in January 2026, a deal was seemingly struck between the Trump Administration and TikTok that would allow TikTok to continue to operate in the United States.

The failure by us, our employees, our network of social media influencers, our sponsors or third parties acting at our direction to abide by applicable laws and regulations in the use of social media platforms or otherwise, including intellectual property and consumer protection laws as well as tax reporting and compliance requirements, could subject us to regulatory investigations, class action lawsuits, liability, taxes, fines or other penalties and have a material adverse effect on our business, financial condition and operating results.

In addition, an increase in the use of social media for product promotion and marketing may increase the risk that such content could contain problematic product or marketing claims in violation of applicable regulations.

For example, in some cases, the Federal Trade Commission, or the FTC, has sought enforcement action where an

endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser.

For example, in some cases, the Federal Trade Commission, or the FTC, has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser.

Private parties have in the past and may in the future bring claims on a similar basis.

We do not prescribe what our influencers post and if we were held responsible for the content of their posts or their actions, we could be fined or forced to alter our practices, which could have an adverse impact on our business.

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Failure to continue to obtain or maintain high-quality endorsers of our products could harm our business.

We establish and maintain relationships with both celebrity endorsers and design, celebrity and brand collaborators in order to develop, evaluate and promote our products as well as strengthen our brand.

We establish and maintain relationships with influencer and celebrity endorsers as well as design, celebrity and brand collaborators in order to develop, evaluate and promote our products as well as strengthen our brand.

In a competitive environment, the costs associated with the establishment and retention of these relationships may increase and there can be no assurance that our investments and efforts will ultimately result in new customers or increased sales to existing customers.

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If we fail to deliver a quality shopping experience, or if consumers do not perceive the products we offer to be of high value and quality, we may not be able to acquire new customers.

If we are unable to acquire new customers who purchase products in numbers sufficient to grow our business, we may not be able to generate the scale necessary to drive leverage and efficiency with our suppliers, our net sales may decrease, and our business, financial condition and operating results may be materially adversely affected.

materially adversely affected.

The market for social media and influencer-based marketing has become increasingly competitive.

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In an effort to further engage with our customers and build awareness of our brands, we sponsor unique events and experiences, including short-term pop-up retail experiences.

We also recently opened our first permanent brick-and-mortar store, are in process of opening a second physical store and may open additional physical stores in the future.

In 2024, we opened our first permanent brick-and-mortar store in Aspen, Colorado and in 2025, we opened a second physical store in Los Angeles, California and may open additional physical stores in the future.

We have limited experience in brick-and-mortar retail.

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Our marketing initiatives have and may continue to become increasingly expensive as competition increases and generating a meaningful return on those initiatives may be difficult.

If our marketing efforts are not successful in promoting awareness of our brands and products, driving customer engagement or attracting new

customers, or if we are not able to cost-effectively manage our marketing expenses, our operating results will be adversely affected.

If our marketing efforts are not successful in promoting awareness of our brands and products, driving customer engagement or attracting new customers, or if we are not able to cost-effectively manage our marketing expenses, our operating results will be adversely affected.

We obtain a significant amount of traffic via social networking websites or other channels used by our current and prospective customers.

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We acquire and retain customers through paid search and product listing ads, affiliate marketing, paid social media marketing, retargeting, personalized email and SMS marketing and mobile “push” communications through our mobile apps.

The recent introduction of AI and LLMs within search and other marketing channels may change consumer search behavior and our ability to cost effectively acquire and retain customers.

For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality.

If we are unable to adapt to this and similar changes, our net sales growth and profitability may be adversely affected.

If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers and our financial condition would suffer.

Our ability to acquire customers in a cost-effective manner also depends on the rates we are charged by various third parties on which we rely, including vendors, suppliers and logistics providers such as UPS, FedEx and DHL.

Our ability to acquire customers in a cost-effective manner also depends on the rates we are charged by various third parties on which we rely, including vendors, suppliers and logistics providers.

When these third parties increase their rates or add incremental surcharges, it increases our costs.

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We may not be able to pass increased prices on to customers, which could adversely affect our operating results.

As a result of supply chain challenges caused by a number of factors and events, such as public health crises, wars and geopolitical tensions in Ukraine/Russia, Israel/Gaza and the Middle East, port closures, strikes and labor shortages, we have in the past experienced, and may in the future experience, delays in the manufacturing and delivery of goods to us.

As a result of supply chain challenges caused by a number of factors and events, such as public health crises, wars and geopolitical tensions,

trade wars with China and other countries, port closures, extreme weather events, strikes and labor shortages, we have in the past experienced, and may in the future experience, delays in the manufacturing and delivery of goods to us.

In the event of an extended and significant disruption in the supply of the fabrics or raw materials used in the manufacture of the merchandise we offer, we and the vendors that we work with might not be able to locate alternative suppliers of materials of comparable quality at the right time and at an acceptable price.

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Public health crises have in the past led to, and may in the future lead to, the temporary closure and reduced capacity of our manufacturing partners for a period of time, which results in delayed delivery of product to us.

In addition, the worsening of U.S.-China relations has and may continue to negatively impact our supply chain and our cost to source from China.

In addition, the worsening of U.S.-China relations, including the U.S.

government’s imposition of increased tariffs at various points in time on imports from China, has and may continue to negatively impact our supply chain and our cost to source from China.

While we have maintained long-standing relationships with many of our largest suppliers, we engage our third-party suppliers and manufacturers on a purchase order basis and are not party to long-term contracts with any of them.

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If we are not able to negotiate acceptable pricing and other terms with these entities or if they experience capacity constraints, performance problems or other difficulties, it could negatively impact our operating results and our customer experience.

Furthermore, volatility in the global oil markets, including as a consequence of wars and geopolitical tension in the Middle East, has in the past resulted, and may in the future result, in higher fuel prices, which many shipping companies pass on to their customers by increasing fuel surcharges.

Furthermore, volatility in the global oil markets, including as a consequence of wars and geopolitical tensions, has in the past resulted, and may in the future result, in higher fuel prices, which many shipping companies pass on to their customers by increasing fuel surcharges.

We have experienced such increased shipping costs, and may experience increasing shipping costs in the future.

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Future strikes, including at shipping ports or logistics providers may adversely impact our inventory supply and ability to ship merchandise to customers.

Increased tensions and trade disputes between the United States and China have and may continue to lead to increased tariffs on our goods, restrict our use of the de minimis exemption on imported goods and restrict the flow of our goods between the United States and China.

Increased tensions and trade disputes between the United States and its trading partners have and may continue to lead to increased tariffs on our goods, elimination of the de minimis exemption on imported goods, and restrictions in the international flow of our goods and supplies.

As an example, the de minimis exemption for products from China was eliminated on May 2, 2025, and certain international postal items that were eligible for de minimis treatment are now subject to a unique tariff structure with significantly heightened and variable ad valorem or specific duties.

These policies may result in adverse or unknown effects, including a potential disruption in the flow of goods between the United States and China.

The de minimis exemption for products from other countries was similarly eliminated on August 29, 2025.

We are also subject to risks of damage, theft or loss during delivery by our shipping vendors.

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These reasons include those described in these risk factors as well as the following:

• fluctuations in net sales generated from the brands on our sites, including as a result of macroeconomic factors, seasonality trends and the timing and success of large, in-person events that we host;

• fluctuations in net sales generated from the brands on our sites, including as a result of macroeconomic factors and the timing and success of large, in-person events that we host;

• fluctuations in product mix, including between sites and between product categories;

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• fluctuations in the percentage of returns, full price sales, levels of markdowns and gross margins;

• fluctuations in the rate of U.S.

tariffs imposed on goods imported from China and other countries;

• fluctuations in capacity as we expand our operations;

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• our ability to manage our existing business and future growth;

• inflation levels and our ability to control our costs, including employee wages and benefits, shipping costs, other selling costs and other operating expenses;

• inflation levels and our ability to control our costs, including employee wages and benefits, shipping costs, other variable selling costs, marketing costs and other operating expenses;

• disruptions or defects in our sites, or actual or perceived privacy or data security breaches or incidents;

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Fluctuations in our results could also cause a number of other problems.

For example, analysts or investors might change their models for valuing our

Class A common stock, we could experience short-term liquidity issues, our ability to retain or attract key personnel may diminish and other unanticipated issues may arise.

For example, analysts or investors might change their models for valuing our Class A common stock, we could experience short-term liquidity issues, our ability to retain or attract key personnel may diminish and other unanticipated issues may arise.

In addition, we believe that our quarterly operating results may vary in the future and that period-to-period comparisons of our operating results may not be meaningful.

For example, our historical growth may have overshadowed the seasonal effects on our historical operating results.

These seasonal effects may become more pronounced over time, which could also cause our operating results to fluctuate.

You should not rely on the results of one quarter as an indication of future performance.

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In addition, we cannot be sure the same growth rates, trends and other key performance metrics are meaningful predictors of future growth.

Our business is affected by general economic and business conditions in the United States and in our international markets.

In addition, we experience seasonal trends in our business and our mix of product offerings is highly variable from day-to-day and quarter-to-quarter.

business is affected by general economic and business conditions in the United States and in our international markets.

The rapid changes and uncertainty in global trade practices, including tariff rates, make it difficult to predict sales, inventory levels and gross margin.

In addition, our mix of product offerings is highly variable from day-to-day and quarter-to-quarter.

This variability makes it difficult to predict sales and could result in significant fluctuations in our net sales, margins and profitability from period-to-period.

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• enhance and scale the systems our consumers use to interact with our sites and invest in our infrastructure platform;

• target additional categories and price points beyond premium apparel for Millennial and Generation Z consumers, such as luxury, beauty and home products, and men’s apparel;

• target additional categories and price points beyond premium apparel for Millennial and Generation Z consumers, such as luxury, beauty products, and men’s apparel;

• expand internationally;

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Over the long term, we cannot assure you that we will be able to locate suitable facilities on commercially acceptable terms in accordance with our expansion plans, nor can we assure you that we will be able to recruit qualified managerial and operational personnel to support our expansion plans.

If we are unable to secure new facilities for the expansion of our fulfillment operations or to effectively control

expansion-related expenses, our business, prospects, financial condition and operating results could be materially and adversely affected.

If we are unable to secure new facilities for the expansion of our fulfillment operations or to effectively control expansion-related expenses, our business, prospects, financial condition and operating results could be materially and adversely affected.

If we grow faster than we anticipate, we may exceed our fulfillment center capacity sooner than we anticipate, we may experience problems fulfilling orders in a timely manner or our customers may experience delays in receiving their purchases, which could harm our reputation and our relationship with our customers, and we would need to increase our capital expenditures more than anticipated.

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We may incur such expenses or make such investments in advance of expected sales and such expected sales may not occur.

Our failure to adequately and effectively staff our fulfillment centers, through third parties or with our own employees, could adversely affect our customer experience and operating results.

Our failure to adequately and effectively staff our fulfillment centers, with our own employees or through third parties, could adversely affect our customer experience and operating results.

We operate three fulfillment centers located in California and Pennsylvania.

If we are unable to adequately staff our fulfillment centers to meet demand or if the cost of such staffing is higher than historical or projected costs due to mandated wage increases, regulatory changes and other business limitations and restrictions, international expansion or other factors, our operating results could be harmed.

If we are unable to adequately staff our fulfillment centers to meet demand or if the cost of such staffing is higher than historical or projected costs due to mandated wage increases, labor shortages, regulatory changes and other business limitations and restrictions, international expansion or other factors, our operating results could be harmed.

In addition, operating fulfillment centers comes with potential risks, such as workplace safety issues and employment claims for the failure or alleged failure to comply with labor laws or laws respecting union organizing activities.

Various health and safety restrictions imposed by state and local authorities in response to public health crises have in the past adversely impacted our ability to staff our Los Angeles fulfillment center.

If government authorities impose new restrictions on businesses due to future public health crises or otherwise, including ones that would require closure of our fulfillment centers, we may not be able to meet customer demand in a timely way which would have a materially adverse impact on our business, operating results, financial condition and prospects.

Various health and safety restrictions imposed by state and local authorities in response to public health crises have in the past and may in the future, adversely impacted our ability to staff our fulfillment centers.

If government authorities increase regulation or impose new restrictions on businesses due to public health crises or otherwise, including ones that would require closure of our fulfillment centers or adversely impact our ability to hire and retain sufficient staff, we may not be able to meet customer demand in a timely way which would have a materially adverse impact on our business, operating results, financial condition and prospects.

Any such issues may result in delays in shipping times or packing quality and our reputation and operating results may be harmed.

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Labor is a significant portion of our cost structure and is subject to many external factors, including unemployment levels, inflation, prevailing wage rates, minimum wage laws, potential collective bargaining arrangements, health insurance costs and other insurance costs, and changes in employment and labor legislation or other workplace regulation.

From time to time, legislative proposals are made to increase the federal minimum wage in the United States, as well as the minimum wage in California and a number of other states and municipalities, and to reform entitlement programs, such as health insurance and paid leave programs.

to reform entitlement programs, such as health insurance and paid leave programs.

As minimum wage rates increase or related laws and regulations change, we have and may need to continue to increase not only the wage rates of our minimum wage employees, but also the wages paid to our other hourly or salaried employees.

Changes in immigration enforcement may also impact wages and the cost of recruiting and retaining employees.

Any increase in the cost of our labor could have an adverse effect on our business, financial condition and results of operations or if we fail to pay such higher wages, we could suffer increased employee turnover.

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We do not have long-term employment or non-competition agreements with any of our personnel.

If we are unable to retain, attract and motivate talented employees with the appropriate skills at cost-effective compensation levels or if changes to our business adversely affect morale or retention, we may not achieve our objectives and our business and

operating results could be adversely affected.

In addition, the loss of one or more of our key personnel or the inability to promptly identify a suitable successor to a key role could have an adverse effect on our business.

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We do not currently maintain key-person life insurance policies on any member of our senior management team or other key employees.

Increased scrutiny and changing expectations from investors, customers, employees and others regarding our environmental, social and governance practices and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could adversely impact our reputation, customer acquisition and retention, access to capital and employee retention.

Companies across many industries are facing scrutiny related to their environmental, social and governance, or ESG, practices and reporting.

Investors, customers, employees and other stakeholders have focused increasingly on ESG practices and placed increasing importance on the implications and social cost of their investments, purchases and other interactions with companies.

For example, many investment funds focus on positive ESG business practices and sustainability scores when making investments and may consider a company’s ESG or sustainability scores as a reputational or other factor in making an investment decision.

In addition, investors, particularly institutional investors, use these scores to benchmark companies against their peers and if a company is perceived as lagging, these investors may engage with that company to improve ESG disclosure or performance and may also make voting decisions on this basis.

A growing number of our customers also want to shop more sustainable fashion.

With this increased focus and demand, public reporting regarding ESG practices is becoming more broadly expected.

If our ESG practices and reporting do not meet investor, customer or employee expectations, which continue to evolve, our brand, reputation and customer retention may be negatively impacted.

The Social Impact section of our website and other ESG disclosure we make include our policies and practices on a variety of ESG matters, including corporate governance, environmental compliance, employee health and safety practices, human capital management, product quality, supply chain management and workforce inclusion and diversity.

It is possible that stakeholders may not be satisfied with our ESG reporting and disclosure, our ESG practices or our speed of adoption.

We could also incur additional costs and devote additional resources to monitor, report and implement various ESG practices.

If we fail, or are perceived to be failing, to meet the standards included in any sustainability disclosure or the expectations of our various stakeholders, it could negatively impact our reputation, customer acquisition and retention, access to capital and employee retention.

In addition, new sustainability rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions, and our failure to comply with any applicable rules or regulations could lead to penalties and adversely impact our reputation, customer acquisition and retention, access to capital and employee retention.

Our operating results could be adversely affected by natural disasters, such as wildfires and earthquakes, public health crises, political crises, terrorist attacks, wars and geopolitical tensions, social unrest and other catastrophic events.

Our principal offices and data centers and two of our fulfillment centers, including our largest fulfillment center, are located in Southern California, an area which has a history of earthquakes and wildfires, and are thus vulnerable to damage.

Our operating results could be adversely affected by natural disasters, such as wildfires, floods and earthquakes, public health crises, political crises, terrorist attacks, wars and geopolitical tensions, social unrest and other catastrophic events.

Natural disasters, such as earthquakes, wildfires, hurricanes, tornadoes, floods and other adverse weather and climate conditions;

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To optimize the mobile shopping experience, we are dependent on our customers downloading our specific mobile applications for their particular device or accessing our sites from an Internet browser on their mobile device.

As new mobile devices and platforms are released, it is difficult to predict the problems we may encounter in developing applications for these alternative devices and platforms and we may

need to devote significant resources to the creation, support and maintenance of such applications.

As new mobile devices and platforms are released, it is difficult to predict the problems we may encounter in developing applications for these alternative devices and platforms and we may need to devote significant resources to the creation, support and maintenance of such applications.

In addition, our future growth and our results of operations could suffer if we experience difficulties in integrating our mobile applications into mobile devices, if problems arise with our relationships with providers of mobile operating systems or mobile application download stores, such as those of Apple Inc.

or Alphabet Inc., if those providers impose restrictions on the data collection or use practices or other functionality of our applications, if our applications receive unfavorable treatment compared to competing applications, such as the order of our products in the Apple App Store, or if we face increased costs to distribute or have customers use our mobile applications.

or if we face increased costs to distribute or have customers use our mobile applications.

For example, Apple has imposed requirements for consumer disclosures regarding privacy practices and has implemented an application tracking transparency framework that requires opt-in consent for certain types of tracking.

This transparency framework was launched in April 2021 and has negatively impacted the effectiveness of our advertising practices.

Additionally, in June 2023, Apple announced new SDK privacy controls that it integrated into iOS 17, which was released in September 2023, including new protections designed to limit tracking or identification of user devices.

In June 2023, Apple announced new SDK privacy controls that it integrated into iOS 17, which was released in September 2023, including new protections designed to limit tracking or identification of user devices.

Additionally, Apple Inc.

recently updated Apple Mail, including automated inbox categorization, sender-level grouping, and AI-generated email previews.

These changes may reduce the visibility and engagement rates of our email communications and may adversely impact our ability to reach customers effectively through the email channel.

In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers’ ability to collect app and user data across Android devices.

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If we fail to maintain effective internal controls over financial reporting or disclosure controls and procedures, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.

We are subject to the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require our management to certify financial and other information in our quarterly and annual reports and provide an annual

management report on the effectiveness of internal controls over financial reporting.

Additionally, we are required to obtain an annual audit of our internal controls over financial reporting from our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act.

Our compliance with applicable provisions of Section 404 requires that we incur substantial accounting expense and expend significant management time on compliance-related issues as we implement additional practices and comply with expanded reporting requirements.

Our compliance with applicable provisions of Section

404 requires that we incur substantial accounting expense and expend significant management time on compliance-related issues as we implement additional practices and comply with expanded reporting requirements.

Our testing of key controls over financial reporting, or the testing by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.

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In addition, any such changes do not guarantee that we will be effective in maintaining the adequacy of our internal controls and any failure to maintain that adequacy could prevent us from accurately reporting our financial results.

We may expand our business through acquisitions, strategic investments and commercial collaborations, which may divert management’s attention, be difficult to integrate, disrupt our business, dilute stockholder value, prove to be unsuccessful and adversely affect our business, operating results and financial condition.

As part of our long-term growth plans, we may continue to acquire, invest in or partner with additional businesses, assets and technologies, and enter into commercial collaborations, which we believe could further complement or expand our business.

We may expand our business through acquisitions, joint ventures, strategic investments and commercial collaborations, which may divert management’s attention, be difficult to integrate, disrupt our business, dilute stockholder value, prove to be unsuccessful and adversely affect our business, operating results and financial condition.

As part of our long-term growth plans, we have and may continue to acquire, invest in or partner with additional businesses, assets and technologies, and enter into commercial collaborations, which we believe could further complement or expand our business.

Such transactions may divert management’s time and focus from operating our business, whether or not they are ultimately completed, and they also may require us to spend a substantial portion of our available cash, incur debt or other liabilities, amortize expenses related to intangible assets or incur write-offs of goodwill or other assets.

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• incorporating new businesses and technologies into our infrastructure;

• the allocation of resources;

• consolidating operational and administrative functions;

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We also may issue additional equity securities in connection with such transactions, which could cause dilution to our stockholders.

Furthermore, our partners affiliated with such transactions could engage in behavior or use their platforms to communicate in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect us.

Negative commentary regarding our partners affiliated with such transactions may be adverse to our reputation or

It is not possible to prevent such behavior and the precautions we take to detect and respond to this activity may not be effective in all cases.

Finally, our acquisitions and other strategic transactions could be viewed negatively by analysts, investors or customers and cause our stock price to decline.

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Any inability to make scheduled payments or meet the financial covenants on our credit facility would adversely affect our business.

Our participation in duty drawback and other programs may result in variability in the timing of cash recoveries.

We participate in duty drawback programs that allows us to recover customs duties paid on certain products imported into the U.S.

and subsequently exported to another country.

In addition, for merchandise returned by customers in certain countries, we refund the full amount of the customers purchase to the customer, including applicable duties and taxes and separately recover the amount of duties and taxes from the relevant government

The amounts eligible for recovery under these programs has increased over time as our international operations have grown.

Although we have historically recovered the full available amounts under the duty drawback program, the availability and timing of recovery depends on our continued compliance with program requirements and the administrative processing of claims by customs authorities.

Delays in claim processing, changes in administrative practices, or changes in program requirements could result in extended recovery periods or reduced recoveries, which could adversely affect our working capital and operating cash flows.

Risks Related to Regulation and Taxation

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Product safety, labeling and licensing regulations, including consumer disclosure and warning regarding chemical exposure, may require us to remove selected merchandise from our inventory.

Such recalls or removal of merchandise can result in, among other things, lost sales, diverted resources, potential harm to our

reputation and increased customer service costs and legal expenses, which could have a material adverse effect on our operating results.

Such recalls or removal of merchandise can result in, among other things, lost sales, diverted resources, potential harm to our reputation and increased customer service costs and legal expenses, which could have a material adverse effect on our operating results.

In addition, our failure to comply with such regulations has in the past, and may in the future, subject us to investigations, enforcement actions and the imposition of significant penalties and claims, which could harm our results of operations or our ability to conduct business.

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Failure of our vendors to comply with applicable laws and regulations and contractual requirements could lead to litigation against us, resulting in increased legal expenses and costs.

In addition, the failure of any such vendors to provide safe and humane factory conditions and oversight at their facilities could damage our reputation with customers or result in legal claims against us.

If our suppliers fail to use ethical business practices and fail to comply with changing laws and regulations, our brand image could be harmed due to negative publicity.

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Government regulation of the Internet and eCommerce is evolving and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.

We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and eCommerce.

Existing and future regulations and laws could impede the growth of the Internet, eCommerce or mobile commerce.

These regulations and laws may involve online payments, taxes, tariffs, privacy, data protection, data security, anti-spam, content protection, website accessibility, Internet neutrality, artificial intelligence, automated decision making, electronic contracts and communications, consumer protection, and gift cards.

Additional examples include limitations on marketplace scope or ownership, intermediary liability protections, online platform liability, content moderation, online child safety, marketplace seller regulation, packaging and recycling requirements, seller certification and representative requirements, and know-your-customer/business regulations.

We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and eCommerce, including but not limited to regulations and laws involving pricing practices and online payments, taxes, privacy, data protection, data security, anti-spam, content protection, website accessibility, Internet neutrality, AI, automated decision-making, electronic contracts and communications, consumer protection, gift cards, marketplace scope or ownership, intermediary liability protections, online platform liability, content moderation, online child safety, marketplace seller regulation, packaging and recycling requirements, seller certification and representative requirements, and know-your-customer/business.

Compliance or failure to comply with applicable laws and regulations could impede the growth of our eCommerce or mobile commerce operations.

These laws and regulations are continuously evolving, and compliance is costly and can require changes to our business practices and significant management time and effort.

It is not clear how existing laws governing issues such as property ownership, libel, consumer protection, sales and other taxes, and consumer privacy apply to the Internet as many of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or eCommerce.

It is not always clear how existing laws governing issues such as property ownership, libel, consumer protection, sales and other taxes, and consumer privacy apply to the Internet as many of these laws were adopted prior to the advent of the Internet and do not contemplate or address

the unique issues raised by the Internet or eCommerce.

It is possible that general business regulations and laws, or those specifically governing the Internet or eCommerce, may subject us to inconsistent obligations across jurisdictions.

We strive to comply with all applicable laws, and compliance is often complex and/or operationally challenging.

We strive to comply with all applicable laws, and compliance is often complex and operationally challenging.

In addition, applicable laws may conflict with each other or our practices and by complying with the laws or regulations of one jurisdiction, we may find that we are violating the laws or regulations of another jurisdiction.

We cannot be sure that our practices have complied, comply or will comply fully with all such laws and regulations.

Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business and proceedings or actions against us by governmental entities or others.

Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our sites by consumers and suppliers and may result in the imposition of monetary liability.

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We may experience fluctuations in our tax obligations and effective tax rate, which could adversely affect our operating results.

We are subject to taxes in the United States and the UK.

We are subject to taxes in several jurisdictions, including the United States and the UK.

We record tax expense based on current tax liabilities and our estimates of future tax liabilities, which may include reserves for estimates of probable settlements of tax audits.

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For example, the Inflation Reduction Act of 2022, among other things, imposed a one percent excise tax on certain stock repurchases by public companies.

The Organization of Economic Cooperation and Development proposed implementing a global minimum tax of fifteen percent, which has been adopted by many jurisdictions, including the UK, and is being considered by others for implementation.

There are numerous other factors that could affect our tax rate, including, among others, intercompany transactions, losses incurred in jurisdictions for which we are not able to realize the related tax benefits, exercises of stock options and vesting of restricted stock units, and entry into new businesses and geographies.

The Organization of Economic Cooperation and Development, or OECD, proposed implementing a global minimum tax of fifteen percent, which has been adopted by many jurisdictions, including the UK, and is being considered by others for implementation.

Although these rules are not currently applicable to us, we operate in participating countries that have implemented or are expected to implement these rules.

On January 5, 2026, the OECD announced a “side-by-side” elective safe harbor that would exempt electing U.S.-parented multinational entities from the fifteen percent global minimum tax for taxable years

beginning on or after January 1, 2026.

We continue to evaluate the impact of these tax developments and those under other OECD and non-U.S.

rules as new guidance and regulations are published and become applicable.

Further, legislation commonly known as the One Big Beautiful Bill Act enacted in July 2025 modifies certain tax provisions that could impact our tax liability and financial condition.

There are numerous other factors that could affect our effective tax rate, including, among others, intercompany transactions, losses incurred in jurisdictions for which we are not able to realize the related tax benefits, exercises of stock options and vesting of restricted stock units, and entry into new businesses and geographies.

Fluctuations in our tax obligations and effective tax rate could adversely affect our business, financial condition and operating results.

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Risks Related to Our International Operations

Tariffs imposed by the U.S.

government or a global trade war could increase the cost of our products, which could have a material adverse effect on our business, financial condition and results of operations.

government has in the past made, and may in the future make, significant changes in U.S.

trade policy and has taken certain actions that could negatively impact U.S.

trade, including imposing tariffs on certain goods imported into the United States.

In retaliation, China has in the past implemented, and may in the future implement, tariffs on a wide range of American products.

There is also a concern that the imposition of tariffs by the United States could result in the adoption of tariffs by other countries as well, leading to a global trade war.

More specifically, the U.S.

government has from time to time imposed significant tariffs on certain product categories imported from China, including apparel, footwear, beauty and accessories.

For example, President Trump increased tariffs on all goods imported from China by 10% in February 2025.

Such tariffs could have a significant impact on our business, particularly the REVOLVE segment, within which a large portion of the merchandise offered for sale is manufactured in China.

While we attempt to renegotiate prices with suppliers or diversify our supply chain in response to tariffs, such efforts may not yield immediate results or may be ineffective.

We might also consider increasing prices to the end consumer;

however, this could reduce the competitiveness of our products and adversely affect net sales.

If we fail to manage these dynamics successfully, gross margins and profitability could be adversely affected.

As of the date of this report, tariffs have not had a material impact on our business, but increased tariffs or trade restrictions implemented by the United States or other countries could have a material adverse effect on our business, financial condition and results of operations.

Any further deterioration in the relations between the United States and China could exacerbate these actions and other governmental intervention.

For example, the implementation of China’s national-security law in Hong Kong created additional U.S.-China tensions and similar events could potentially increase the risks associated with the business and operations of U.S.-based technology companies in China.

or foreign governments may take additional administrative, legislative, or regulatory action that could materially interfere with our ability to sell products in certain countries.

Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the United States and its trading partners, especially China, could result in a global economic slowdown and long-term changes to global trade, including retaliatory trade restrictions that restrict our ability to operate in China.

Any alterations to our business strategy or operations made in order to adapt to or comply with any such changes would be time-consuming and expensive and certain of our competitors may be better suited to withstand or react to these changes.

We have operations and do business in China, which exposes us to risks inherent in doing business there.

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We also sell our merchandise to customers in China and use Chinese-owned social media and payment platforms such as TikTok, WeChat and AliPay to market to and transact with customers inside and outside of China.

In addition, imports into the United States of products from China may be subject to increased risk of seizure by Customs and Border Protection in light of enforcement directives established by the Uighur Forced Labor Prevention Act, or UFLPA, and regulations issued pursuant to UFLPA.

Operating and doing business in China and using Chinese-owned social media platforms as tools for marketing, messaging and transacting with our customers in China exposes us to political, legal and economic risks.

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Furthermore, the third parties we rely on in China may disclose our confidential information or intellectual property to competitors or third parties, which could result in the illegal distribution and sale of counterfeit versions of our products.

If any of these events occur, our business, financial condition and results

of operations could be materially and adversely affected.

If any of these events occur, our business, financial condition and results of operations could be materially and adversely affected.

See also “—Tariffs imposed by the U.S.

government or a global trade war could increase the cost of our products, which could have a material adverse effect on our business, financial condition and results of operations.”

In addition, the U.S.

government has in the past implemented restrictions, and may implement still further restrictions, which affect conducting business with certain Chinese companies, including TikTok.

For example, on April 24, 2024, President Biden signed into law certain measures requiring TikTok’s parent company to sell TikTok by January 2025 or face a total ban in the United States.

President Trump issued an executive order to delay the ban until April 2025.

Due to the uncertainty regarding the timing, content and extent of any changes in policy and regulatory restrictions, we cannot assure you that we will successfully mitigate any negative impact, including any ability to continue to procure items or services from entities linked to China or other designated countries.

Depending upon their duration and implementation, such executive or regulatory actions could result in a material adverse effect on our business, financial condition and results of operations.

government has in the past implemented restrictions, and may in the future implement additional restrictions, that affect conducting business with certain Chinese companies, including TikTok.

example, on April 24, 2024, President Biden signed into law legislation that would have required TikTok’s parent company to divest TikTok or face a ban in the United States.

Subsequent executive actions delayed the effectiveness of such restrictions.

After months of negotiations, in January 2026, a deal was seemingly struck between the Trump Administration and TikTok that would allow TikTok to continue to operate in the United States.

However, the regulatory and political environment surrounding TikTok and other China-linked companies remains subject to ongoing review and potential change.

Future legislative, executive, or regulatory actions could impose new restrictions, conditions, or compliance requirements, or could limit or prohibit certain business relationships.

Due to the uncertainty regarding the timing, content, and extent of any future policy or regulatory changes, we cannot assure you that we will be able to successfully mitigate any negative impact, including any impact on our ability to procure items or services from entities linked to China or other designated countries.

Depending on their scope and implementation, such actions could have a material adverse effect on our business, financial condition, and results of operations.

We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results.

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There is inherent risk associated with operating in regions outside of the United States.

We recently opened an office in the Philippines to support our customer service and certain administrative functions and a small number of our employees are working remotely in other regions outside the United States.

We recently opened an office in the Philippines to support our customer service and certain administrative functions and a small number of our employees and contractors are working remotely in other regions outside the United States.

If we choose to expand further internationally, we would need to adapt to different local cultures, laws, regulations, standards and policies.

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We collect and maintain significant amounts of personal data and other data relating to our customers and employees.

A variety of federal, state and international laws and regulations, and certain industry standards, govern or apply to our collection, use, retention, sharing and security of consumer data.

A variety of federal, state and international laws and regulations, and certain industry standards, govern or apply to our collection, use, retention, sharing, transfer and security of consumer data.

We are subject to certain laws, regulations, contractual obligations and industry standards (including, for example, the PCI-DSS) relating to privacy, data protection, information security and consumer protection, including California’s Consumer Legal Remedies Act and unfair competition and false advertising laws, which are evolving and subject to potentially differing interpretations.

These requirements may be interpreted and applied in a manner that is inconsistent from one

jurisdiction to another or may conflict with other rules or our practices.

Separately, for example, the Department of Justice has issued a final rule that took effect in

April 2025 and imposes limitations, and in some cases prohibitions, on certain transfers of sensitive personal data to business partners located in China and other designated countries, or with other specified links to China and other designated countries.

These requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices.

As a result, our practices likely have not complied or may not comply in the future with all such laws, regulations, requirements and obligations.

Any failure, or perceived failure, by us to comply with our privacy policies or with any federal, state or international laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other actual or alleged legal or contractual obligations relating to privacy, data protection, information security or consumer protection could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities or others or other liabilities or require us to change our operations and/or cease or modify our use of certain data sets.

Any failure, or perceived failure, by us to comply with our privacy policies or with any federal, state or international laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other actual or alleged legal or contractual obligations relating to privacy, data protection, information security, consumer protection or the collection, use, retention, sharing, transfer and security of consumer data could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities or others or other liabilities or require us to change our operations and/or cease or modify our use of certain data sets.

Any actual or alleged claim, proceeding or action could hurt our reputation, brand and business, force us to incur significant expenses in defense of such proceedings, distract our management, increase our costs of doing business, result in a loss of customers and suppliers or an inability to process credit card payments and may result in the imposition of monetary penalties.

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This transparency framework has and may continue to negatively impact the effectiveness of our advertising practices.

introduced new SDK privacy controls in 2023 that it integrated into iOS 17, including new protections designed to limit tracking or identification of user devices.

has also updated Apple Mail, including automated inbox categorization, sender-level grouping, and AI-generated email previews.

These changes may reduce the visibility and engagement rates of our email communications and may adversely impact our ability to reach customers effectively through the email channel.

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European privacy and data protection laws, including the GDPR, regulate the transfer of personal data from Europe, including the European Economic Area, or EEA, the UK, and Switzerland, to third countries that have not been found to provide adequate protection to such personal data, including the United States, unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information.

The safeguard on which we have primarily relied for such transfers has been use of the European Commission’s standard contractual clauses,

The safeguard on which we have primarily relied for such transfers has been use of the European Commission’s standard contractual clauses, or SCCs.

We have undertaken certain efforts to conform transfers of personal data from the EEA to the United States based on our understanding of current regulatory obligations and the guidance of data protection authorities.

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On June 28, 2021, the European Commission announced a decision of “adequacy” concluding that the UK ensures an equivalent level of data protection to the GDPR, which generally permits continued personal data flows from the EEA to the UK.

Some uncertainty remains, however, as this adequacy determination must be renewed in 2025 and may be modified or revoked.

The UK enacted the UK Data (Use and Access) Act 2025, or DUAA, on June 19, 2025, which made targeted amendments to the UK GDPR and the Data Protection Act.

The European Commission has renewed the UK’s adequacy decision after assessing the DUAA, but some uncertainty remains in the long term regarding the UK’s adequacy determination.

We cannot fully predict how the Data Protection Act, the UK GDPR, and other UK data protection laws or regulations may develop in the medium to longer term nor the effects of divergent laws and guidance regarding how data transfers to and from the UK will be regulated.

Further, the GDPR and other similar regulations require companies to give specific types of notice and in some cases seek consent from consumers and other data subjects before collecting or using their data for certain purposes, including some marketing activities.

The European Commission also has a draft regulation in the approval process that focuses on a person’s right to conduct a private life.

The proposed legislation, known as the Regulation of Privacy and Electronic Communications, or ePrivacy Regulation, would replace the current ePrivacy Directive.

Originally planned to be adopted and implemented at the same time as the GDPR, the ePrivacy Regulation is still being negotiated.

If adopted, the ePrivacy Regulation is expected to have a broad potential impact on the use of internet-based services and tracking technologies, such as cookies.

Aspects of the ePrivacy Regulation remain for negotiation between the European Commission and the Council.

We expect to incur additional costs to comply with the requirements of the ePrivacy Regulation as it is finalized for implementation.

Further, on January 13, 2022, the Austrian data protection authority published a decision ruling that the collection of personal data and transfer to the United States through Google Analytics and other analytics and tracking tools used by website operators violates the GDPR.

Further, data protection authorities in the EU increasingly are focused on the use of online analytics and tracking tools, with some contending that the use of these tools may violate EU data protection laws.

Interpretation of the ePrivacy Directive’s requirements regarding the use of cookies and similar technologies may lead to regulators imposing measures that could impact our use of such technologies or lead to significant penalties for actual or alleged non-compliance.

On January 13, 2022, the Austrian data protection authority published a decision ruling that the collection of personal data and transfer to the United States through Google Analytics and other analytics and tracking tools used by website operators violates the GDPR.

On February 10, 2022, the French data protection authority issued a press release announcing that the French data protection authority had issued a similar decision.

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We may find it necessary or appropriate to develop or use alternative methods to replace the functionality of cookies.

Outside of the EU, many countries and territories have laws, regulations, or other requirements relating to privacy, data protection, information security, localized storage of data, and consumer protection, and new countries and territories are adopting such legislation or other obligations with increasing frequency.

retention, sharing, transfer and security of consumer data, and new countries and territories are adopting such legislation or other obligations with increasing frequency.

In China, for example, the Personal Information Protection Law, or PIPL, was adopted on August 20, 2021 and went into effect on November 1, 2021.

The PIPL shares similarities with the GDPR, including extraterritorial application, data minimization, data

localization and purpose limitation requirements, as well as obligations to provide certain notices and rights to citizens of China.

The PIPL shares similarities with the GDPR, including extraterritorial application, data minimization, data localization and purpose limitation requirements, as well as obligations to provide certain notices and rights to citizens of China.

The PIPL allows for fines of up to 50 million renminbi, or 5% of a covered company’s revenue in the prior year.

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We may need to change and limit the way we use personal information in operating our business, may be required to make additional investments in compliance programs, may be required to update our policies and procedures and may have difficulty maintaining a single operating model that is compliant.

In addition, various federal, state and foreign legislative and regulatory bodies, or self-regulatory organizations, may expand current laws or regulations, enact new laws or regulations or issue revised rules or guidance regarding privacy, data protection, information security and consumer protection.

For example, in 2018, California enacted the California Consumer Privacy Act, or CCPA, which, among other things, requires certain disclosures to California consumers and affords such consumers new abilities to opt out of certain sales of personal information.

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Numerous other states have proposed, and in certain cases enacted, legislation addressing privacy or cybersecurity matters, many of which are comprehensive privacy laws that share similarities with the CCPA and the CPRA.

Aspects of these privacy statutes remain unclear, resulting in further uncertainty and potentially requiring us to modify our data practices and policies and to incur substantial additional costs and expenses in an effort to comply.

As a general matter, compliance with laws, regulations, and any applicable rules or guidance from self-regulatory organizations relating to privacy, data protection, information security and consumer protection may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to acquire customers, and otherwise adversely affect our business, financial condition and operating results.

Aspects of these privacy statutes remain unclear, resulting in further uncertainty and potentially requiring us to modify our practices and policies and to incur substantial additional costs and expenses in an effort to comply.

As a general matter, compliance with laws, regulations, and any applicable rules or guidance from self-regulatory organizations relating to privacy, data protection, information security, consumer protection, and the collection, use, retention, sharing, transfer and security may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to acquire customers, and otherwise adversely affect our business, financial condition and operating results.

If sensitive information, including such information about our customers, is disclosed or accessed without authorization, or if we or our third-party providers are subject to real or perceived cyberattacks or other security breaches or incidents, our customers may curtail use of our platform, we may be exposed to liability and our reputation would suffer.

We collect, transmit, store and otherwise process personal and financial information provided by our customers, such as names, email addresses, the details of transactions and credit card and other financial information.

We collect, transmit, store and otherwise process personal and financial information provided by our customers, such as names, phone numbers, email addresses, the details of transactions and credit card and other financial information.

Some of our third-party service providers, such as identity verification and payment processing providers, also regularly have access to customer data.

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Any of these incidents could lead to interruptions or shutdowns of our platform, loss, unavailability or corruption of data, or unauthorized access to or alteration, use, acquisition or disclosure of personal data or other sensitive information.

Cyberattacks could also result in the theft of our intellectual property.

Cyberattacks could also result in the theft of

our intellectual property.

We have been subject to phishing and social engineering attacks in the past and may continue to be subject to such attacks in the future.

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Advances in computer capabilities, new technological discoveries or other developments may result in cyberattacks becoming more sophisticated and more difficult to detect.

We and our third-party service providers may not have the resources or technical sophistication to anticipate or prevent all such cyberattacks, and we or they may

face difficulties or delays in identifying and responding to cyberattacks and data security breaches and incidents.

We and our third-party service providers may not have the resources or technical sophistication to anticipate or prevent all such cyberattacks, and we or they may face difficulties or delays in identifying and responding to cyberattacks and data security breaches and incidents.

In particular, our vendors and service providers may also be the targets of cyberattacks, malicious software, phishing schemes, and fraud, and our third-party vendors’ and service providers’ systems and networks may be, or may have been, breached or contain exploitable defects or bugs that could result in a breach of or disruption to our or their systems and networks.

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Each of these could require us to divert substantial resources.

We and our third-party service providers regularly experience cyberattacks aimed at disrupting our and their services.

We and our third-party service providers regularly experience cyberattacks aimed at disrupting our and their services, and both we and certain of our third-party service providers have suffered from system disruptions resulting from cyberattacks or other causes.

If we or our third-party service providers experience, or are believed to have experienced, security breaches or incidents that result in marketplace performance or availability problems or the loss or corruption of, or unauthorized access to or disclosure of, personal data or confidential information, people may become unwilling to provide us the information necessary to make purchases on our sites and our reputation and market position could be harmed.

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If the facilities where the computer and communications hardware are located fail, or if we suffer an interruption or degradation of services at our main facility, we could lose customer data and miss order fulfillment deadlines, which could harm our business.

Our systems and operations are vulnerable to damage or interruption from fire, flood, power

loss, telecommunications failure, terrorist attacks, cyberattacks, data loss, acts of war, break-ins, earthquakes and similar events.

Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, cyberattacks, data loss, acts of war, break-ins, earthquakes and similar events.

For example, in September 2018, a distributed denial of service, or DDoS, attack caused our sites to be down for several hours, and we could be the subject of similar attacks in the future.

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We may experience periodic system interruptions from time to time.

In addition, continued growth in our transaction volume, as well as surges in online traffic and orders associated with promotional activities or seasonal trends in our business, place additional demands on our technology platform and could cause or exacerbate slowdowns or interruptions.

In addition, continued growth in our transaction volume, as well as surges in online traffic and orders associated with promotional activities, place additional demands on our technology platform and could cause or exacerbate slowdowns or interruptions.

If there is a substantial increase in the volume of traffic on our sites or the number of orders placed by customers, we will be required to further expand, scale and upgrade our technology, transaction processing systems and network infrastructure.

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We depend on a variety of information systems to effectively process customer orders and we depend on our information technology infrastructure for digital marketing activities and for electronic communications among our personnel, customers, manufacturers and suppliers around the world.

These information technology systems, some of which are managed by third parties, may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components, power outages, hardware failures, computer viruses, attacks by computer hackers, other security breaches and incidents, telecommunication failures, user errors or catastrophic events.

These information technology systems, some of which are managed by third parties, may be susceptible to damage,

disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components, power outages, hardware failures, computer viruses, attacks by computer hackers, other security breaches and incidents, telecommunication failures, user errors or catastrophic events.

Any material disruption of our systems or the systems of our third-party service providers could disrupt our ability to track, record and analyze the products that we sell and could negatively impact our operations, shipment of goods, ability to process financial information and transactions, and our ability to receive and process retail customers’ orders and eCommerce orders or engage in normal business activities.

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In addition, our use of open source software may present additional security risks because the source code for open source software is publicly available, which may make it easier for hackers and other third parties to determine how to breach our website and systems that rely on open source software.

For example, in December 2021, a vulnerability in a popular logging software, Log4j, was publicly announced.

For example, in December 2021, a vulnerability in a popular

logging software, Log4j, was publicly announced.

Any of these risks could be difficult to eliminate or manage and, if not addressed, could have an adverse effect on our business and operating results.

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This practice may result in the more frequent introduction of errors or vulnerabilities into the software underlying our platform.

Any errors or vulnerabilities discovered in our code after release could result in damage to our reputation,

loss of customers, disruption to our eCommerce channels, loss of net sales or liability for damages, any of which could adversely affect our growth prospects and our business.

Any errors or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of customers, disruption to our eCommerce channels, loss of net sales or liability for damages, any of which could adversely affect our growth prospects and our business.

Our business may be adversely affected if we are unable to provide our customers a cost-effective shopping platform that is able to respond and adapt to rapid changes in technology.

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In the event that it is more difficult for our customers to buy products from us on their mobile devices, or if our customers choose not to buy products from us on their mobile devices or to use mobile products that do not offer access to our websites, our customer growth could be harmed and our business, financial condition and operating results may be materially adversely affected.

Our use of artificial intelligence and machine learning could adversely affect our business and operating results.

Our use of AI and machine learning could adversely affect our business and operating results.

We use AI and machine learning in our business to, among other things, optimize our product assortment and personalize our website experience through advanced search and product recommendations.

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If we are unable to protect our trademarks or domain names in the United States or in other jurisdictions in which we may ultimately operate, our brand recognition and reputation would suffer, we would incur significant expense establishing new brands and our operating results would be adversely impacted.

We expend substantial resources in the development of new high-quality products but are susceptible to counterfeiting, which may harm our

reputation for producing such products and force us to incur expenses in enforcing our intellectual property rights.

We expend substantial resources in the development of new high-quality products but are susceptible to counterfeiting, which may harm our reputation for producing such products and force us to incur expenses in enforcing our intellectual property rights.

Counterfeiting of our products may be difficult or costly to detect and any related claims or lawsuits to enforce our rights can be expensive to resolve, require management time and resources, and may not provide a satisfactory or timely result.

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Any registered copyrights or patents that may be issued in the future may not provide us with any competitive advantages or may be challenged by third parties, and future registered copyrights or patent applications may never be granted.

Even if issued, there can be no assurance that these registered copyrights or patents will adequately protect our intellectual property or survive a legal challenge, as the legal standards relating to the validity, enforceability and scope of protection of registered copyright, patent and other intellectual property rights are uncertain.

Even if issued, there can be no assurance that these registered copyrights or patents will adequately protect our intellectual property or survive an actual or alleged legal challenge, as the legal standards relating to the validity, enforceability and scope of protection of registered copyright, patent and other intellectual property rights are uncertain.

Our limited registered copyright and patent protection may restrict our ability to protect our technologies and processes from competition.

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Furthermore, the regulations governing domain names and laws protecting marks and similar proprietary rights could change in ways that block or interfere with our ability to use relevant domains or our current brand.

Also, we might not be able to prevent third parties from registering, using or retaining domain names that interfere with our consumer communications or infringe or otherwise decrease the value of our marks, domain names and other proprietary rights.

Also, we might not be able to prevent third parties from registering, using or retaining domain names that interfere with our

consumer communications or infringe or otherwise decrease the value of our marks, domain names and other proprietary rights.

Regulatory bodies also may establish additional generic or country-code top-level domains or may allow modifications of the requirements for registering, holding or using domain names.

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If any such claim is valid, we may be compelled to cease our use of such intellectual property or other proprietary rights and pay damages, including statutory damages of up to $150,000 per work infringed in the event of willful copyright infringement.

We could also

be subject to actual damages, the amounts of which may be difficult to quantify.

We could also be subject to actual damages, the amounts of which may be difficult to quantify.

In addition, in some cases we may be obligated to pay the attorneys’ fees for a plaintiff in a lawsuit filed against us.

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Factors that could cause fluctuations in the market price of our Class A common stock include the following:

• market volatility and economic disruption caused by macroeconomic factors, including but not limited to inflation, consumer confidence and events such as natural disasters and public health crises;

• market volatility and economic disruption caused by macroeconomic factors, including but not limited to inflation, consumer confidence, tariffs and global trade instability, and events such as natural disasters and public health crises;

• actual or anticipated fluctuations in our customer base, the level of customer engagement, net sales or other operating results;

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Future sales of shares could cause our stock price to decline.

Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers and principal stockholders, or the perception that such sales might occur, could cause our stock price to decline.

cause our stock price to decline.

These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

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Our Class A common stock has one vote per share and our Class B common stock has ten votes per share.

As of December 31, 2024, our co-chief executive officers and MMMK Development, Inc., an entity controlled by our

co-chief executive officers, collectively beneficially owned approximately 45% of the outstanding shares of common stock and collectively controlled approximately 89% of the voting power of our outstanding common stock.

As of December 31, 2025, our co-chief executive officers and MMMK Development, Inc., an entity controlled by our co-chief executive officers, collectively beneficially owned approximately 43% of the outstanding shares of common stock and collectively controlled approximately 88% of the voting power of our outstanding common stock.

Our co-chief executive officers therefore are able to control all matters submitted to our stockholders for approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or our assets, even though their stockholdings represent less than 50% of the number of outstanding shares of our capital stock.

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If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they adversely change their recommendations regarding our Class A common stock, the trading price or trading volume of our Class A common stock could decline.

The trading market for our Class A common stock will be influenced in part by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors.

With a limited history operating as a public company, the impact of analyst research and reports on the trading market for our Class A common stock may be greater than on that of other companies in our sector.

The trading market for our Class A common stock is influenced in part by the research and reports that securities or industry analysts publish about us, our business, our market or our competitors.

The impact of analyst research and reports on the trading market for our Class A common stock may be greater than on that of other companies in our sector.

If one or more of the analysts initiate research with an unfavorable rating or downgrade our Class A common stock, provide a more favorable recommendation about our competitors or publish inaccurate or unfavorable research about our business, our Class A common stock price would likely decline.

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Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, and also provide that the federal district courts are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction.

breach of a fiduciary duty owed by any of our directors, stockholders, officers or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction.

This provision does not apply to any action brought to enforce a duty or liability created by the Exchange Act and the rules and regulations thereunder.

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We have established a cybersecurity committee, composed of members of senior management, to provide guidance, management and oversight of our cybersecurity and data responsibility initiatives and risk assessment and mitigation protocols, including those described in the “Risk Management and Strategy” section above.

Our chief architect, who has over 15 years of experience in software engineering and has served as our chief architect for eight years, is a member of our cybersecurity committee and works to manage our cybersecurity policies and processes.

Our chief architect, who has over 16 years of experience in software engineering and has served as our chief architect for nine years, is a member of our cybersecurity committee and works to manage our cybersecurity policies and processes.

Our chief architect and cybersecurity committee stay informed and manage how we identify, address, prevent and resolve cybersecurity issues and related matters.

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Los Angeles, California

Lipa City, Philippines

Los Angeles, California

Office and studio space

Aspen, Colorado

Paris, France

Approximately 30,000 square feet is sublet to a third-party on a month-to-month basis.

We believe that our facilities are adequate for our needs and believe that we should be able to renew any of the above leases or secure similar property without an adverse impact on our operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors