What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-01 compared with 2024-11-01 · 143 added, 219 removed, 237 unchanged (60% of the section changed)

1 unchanged sentence

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our investment plans and anticipated returns on those investments, our future customer growth, our future results of operations and financial position, including our financial outlook and profitability goals, the financial impact and expected savings of our January 2024 reduction in workforce, available liquidity and access to financing sources, our business strategy, plans and objectives of management for future operations, including our international expansion and omni-channel strategy, consumer activity and behaviors, developments in our technology and systems and anticipated results of those developments, and the impact of macroeconomic events, including interest rates and inflation, and our response to such events, are forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “continues,” “could,” “intends,” “goals,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

our future customer growth;

our future results of operations and financial position;

including our exit from the German market;

available liquidity and access to financing sources;

our business strategy, plans and objectives of management for future operations, including our international growth and omni-channel strategy;

consumer activity and behaviors;

developments in our technology and systems and anticipated results of those developments;

and the impact of macroeconomic events, including tariffs, interest rates, inflation and changes in tariffs and global trade relations, and our response to such events, are forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “aim,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “continues,” “could,” “intends,” “goals,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts” or “potential” or the negative of these terms or other similar expressions.

Forward-looking statements are based on current expectations of future events.

4 unchanged sentences

Factors that could cause or contribute to differences in our future results include, without limitation, the following:

• adverse macroeconomic conditions, including fluctuating interest rates, inflation, slower growth or the potential for recession, disruptions in the global supply chain and other conditions affecting the retail environment for products we sell, and other matters that influence consumer spending and preferences, as well as our ability to plan for and respond to the impact of these conditions;

• our ability to manage our growth and the impacts of our internal restructuring and workforce reduction;

• adverse macroeconomic conditions, including:

economic instability;

changes in laws and regulations and other governmental actions or policies, including those related to taxes and new or increased tariffs, and the uncertainty surrounding potential changes in such laws and regulations or other potential governmental actions or policies;

export controls;

sustained higher interest rates and inflation;

slower growth or the potential for recession;

disruptions in the global supply chain and other conditions affecting the retail environment for products we sell;

and other matters that influence consumer spending and preferences, as well as our ability to plan for and respond to the impact of these conditions;

• our ability to manage the impacts of our restructurings and workforce reductions, including our exit from the German market;

• our ability to acquire and retain customers in a cost-effective manner;

1 unchanged sentence

• our ability to build and maintain strong brands;

• our ability to manage our growth and expansion initiatives;

• our ability to expand our business and compete successfully;

• disruptions, capacity constraints or inefficiencies in our information systems network, or any potential cybersecurity incident;

• geopolitical events, including the 2024 United States (“U.S.”) presidential election, natural disasters, public health emergencies, civil disturbances and terrorist attacks;

• geopolitical events, natural disasters, public health emergencies, civil disturbances and terrorist attacks;

• developments in, and the outcome of, legal and regulatory proceedings and investigations to which we are a party or are subject, and the liabilities, obligations and expenses, if any, that we may incur in connection therewith.

1 unchanged sentence

We qualify all of our forward-looking statements by these cautionary statements.

All dollar and percentage comparisons made herein refer to the three and nine months ended September 30, 2024, compared with the three and nine months ended September 30, 2023, unless otherwise noted.

Wayfair is one of the world’s largest online destinations for the home.

All dollar and percentage comparisons made herein refer to the three months ended March 31, 2025 compared to the three months ended March 31, 2024, unless otherwise noted.

Wayfair is the destination for all things home.

Through our e-commerce business model, we offer visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over 30 million products from over 20 thousand suppliers.

2 unchanged sentences

Through increasing brand awareness as well as paid and unpaid advertising, we attract new and repeat customers to our family of sites.

We turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey — offering best-in-class product discovery, purchasing, fulfillment and customer service.

During the three months ended September 30, 2024, net revenue decreased by 2.0% compared to the same period in 2023.

As of September 30, 2024, we had 22 million active customers and during the three months ended September 30, 2024, 79.9% of orders came from repeat buyers.

The lower sales were due to lower order volume, which was driven by challenges in the category, compared to the same period in 2023.

We aim to turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey — offering best-in-class product discovery, purchasing, fulfillment and customer service.

During the three months ended March 31, 2025, net revenue increased by 0.04% compared to the same period in 2024.

As of March 31, 2025, we had 21 million active customers and during the three months ended March 31, 2025, 80.2% of orders came from repeat buyers.

The increased sales were due to higher average order value, partially offset by lower volume, which was driven by challenges in the category such as macroeconomic pressures, including consumer spending patterns and housing market conditions, compared to the same period in 2024.

We also continued to manage our advertising spend according to a return on investment-oriented approach that carefully tracks and monitors the results of advertising campaigns as we seek to maintain appropriate return targets.

Global Considerations

We are continuing to closely monitor macroeconomic impacts, including, but not limited to, geopolitical events and fluctuating interest rates and inflationary pressures on our business, results of operations and financial results.

As disclosed in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2024, our business is subject to risks related to trade policy, including new or increased tariffs by the United States (“U.S.”) and/or other foreign governments.

Starting in the first quarter of 2025, the U.S.

government announced additional tariffs on goods imported into the U.S.

from numerous countries, including the home goods category, and multiple nations have announced tariffs and other actions in response.

Trade negotiations are ongoing, but overall the global trade environment remains fluid and highly uncertain.

Despite this uncertainty, we believe the structural characteristics of our retail platform position us to capture incremental market share within a category that is largely unbranded and highly substitutable.

We have and will continue to partner with our suppliers to help them strategize and deliver value for our customers.

Further, we continue to closely monitor additional macroeconomic conditions, including, but not limited to, general economic instability, changes in tax laws or regulations or other governmental actions or policies, sustained higher interest rates and inflationary pressures, on our business, results of operations and financial results.

These developments have and may continue to negatively impact global economic activity and consumer behavior, which have and may continue to adversely affect our business and our results of operations.

As our customers react to these global economic conditions, we may take additional precautionary measures to limit or delay expenditures and preserve capital and liquidity.

While it is difficult to quantify and predict all of the impacts these global economic events, including fluctuating interest rates and inflationary pressures, will have on our business and to predict consumer spending in the near term, we believe the long-term opportunity that we see for shopping for the home online remains unchanged.

While it is difficult to quantify and predict the impacts of these global and domestic economic events, including fluctuating interest rates, inflationary pressures and changes in global trade policy on our business and to predict consumer spending in the near term, we believe the long-term opportunity that we see for shopping for the home online remains unchanged.

We will continue to monitor economic conditions as we work to manage our business to meet the evolving needs of our customers, employees, suppliers, partners, stockholders and communities.

3 unchanged sentences

We measure our business using the key financial statement and operating metrics that are reflected in the below table.

See “Non-GAAP Financial Measures” below for more information regarding our use of Adjusted EBITDA, Free Cash Flow and Adjusted Diluted Earnings or Loss per Share and a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure that is prepared in accordance with accounting principles generally accepted in the United States of America or “GAAP.”

Our Free Cash Flow and Adjusted Diluted Earnings or Loss per Share are measured on a consolidated basis, while our Adjusted EBITDA is measured on a consolidated and reportable segment basis.

1 unchanged sentence

We use the following metrics to assess the near and longer-term performance of our overall business:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(in millions, except LTM net revenue per active customer, average order value and per share data)

7 unchanged sentences

Diluted $ (0.89) $ (2.06)

Net cash provided by operating activities $ 49 $ 121 $ 155 $ 191

Net cash used in operating activities $ (96) $ (139)

Key Operating Metrics:

1 unchanged sentence

LTM net revenue per active customer (2)

$ 545 $ 538 $ 545 $ 538

Orders delivered (3)

Average order value (4)

$ 310 $ 297 $ 303 $ 297

Non-GAAP Financial Measures:

14 unchanged sentences

Results of Consolidated Operations

Comparison of the three months ended September 30, 2024 and 2023

During the three months ended September 30, 2024, net revenue decreased by $60 million, or 2.0%, compared to the same period in 2023, which reflects continued macroeconomic pressures felt by consumers.

The decrease in net revenue is due to lower order volume, which was driven by challenges in the category, compared to the same period in 2023.

During the three months ended September 30, 2024, our U.S.

net revenue decreased by 2.3%.

International net revenue and International Net Revenue Constant Currency Growth remained constant year over year (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Three Months Ended September 30,

Comparison of the three months ended March 31, 2025 and 2024

During the three months ended March 31, 2025, net revenue increased by $1 million, or was close to flat, compared to the same period in 2024, representing a marginal increase amid persistent macroeconomics pressures on consumers.

The increase in net revenue is due to higher average order value, partially offset by lower order volume, which was driven by challenges in the category such as macroeconomic pressures, including consumer spending patterns and housing market conditions, compared to the same period in 2024.

During the three months ended March 31, 2025, our U.S.

net revenue increased by 1.6%.

During the three months ended March 31, 2025, our International net revenue decreased by 10.9% compared to the same period in 2024, primarily due to the exit of our German business.

During the three months ended March 31, 2025, International Net Revenue Constant Currency Growth was (7.1)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Three Months Ended March 31,

2025 2024 % Change

6 unchanged sentences

Cost of goods sold is sensitive to many factors, including quarter-to-quarter variability in product mix, pricing strategies, changes in wholesale, shipping and fulfillment costs, including associated applicable customs duties and fees earned for supplier services rendered.

During the three months ended September 30, 2024, cost of goods sold decreased by $16 million, or 0.8%, compared to the same period in 2023.

The decrease in cost of goods sold is driven by a combination of operational cost savings initiatives and lower order volume, which was driven by challenges in the category compared to the same period in 2023.

As a percentage of net revenue, cost of goods sold increased to 69.7% for the three months ended September 30, 2024 compared to 68.9% in the same period in 2023, primarily due to mix shifts.

Three Months Ended September 30,

During the three months ended March 31, 2025, cost of goods sold decreased by $17 million, or 0.9%, compared to the same period in 2024.

The decrease in cost of goods sold is driven by lower order volume and a benefit recognized during the three months ended March 31, 2025 related to a resolution on the valuation of duties, compared to the same period in 2024.

As a percentage of net revenue, cost of goods sold decreased to 69.3% for the three months ended March 31, 2025 compared to 70.0% in the same period in 2024, primarily due to lower order volume.

Three Months Ended March 31,

2025 2024 % Change

5 unchanged sentences

We disclose separately the equity-based compensation and related taxes that are included in customer service and merchant fees and selling, operations, technology and general and administrative expenses.

Three Months Ended September 30,

2024 2023 % Change

(in millions)

Customer service and merchant fees (1)

$ 112 $ 136 (17.6) %

Advertising 354 337 5.0 %

Selling, operations, technology, general and administrative (1)

480 596 (19.5) %

Impairment and other related net charges 1 — 100.0 %

Total operating expenses $ 947 $ 1,069 (11.4) %

As a percentage of net revenue:

Customer service and merchant fees (1)

Advertising 12.3 % 11.4 %

Selling, operations, technology, general and administrative (1)

16.6 % 20.2 %

Impairment and other related net charges — % — %

32.8 % 36.2 %

(1) Includes equity-based compensation and related taxes as follows:

Three Months Ended September 30,

(in millions)

Customer service and merchant fees $ 4 $ 7

Selling, operations, technology, general and administrative $ 92 $ 137

During the three months ended September 30, 2024, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $48 million, or 33.3%, compared to the same period in 2023, primarily driven by a decrease in vested restricted stock units in 2024 compared to the same period in 2023.

The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes:

Three Months Ended September 30,

Customer service and merchant fees 3.7 % 4.4 %

Selling, operations, technology, general and administrative 13.5 % 15.6 %

Customer Service and Merchant Fees

During the three months ended September 30, 2024, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $21 million, or 16.3%, compared to the same period in 2023.

The decrease in customer service and merchant fees is primarily due to decreased compensation costs in 2024 compared to the same period in 2023.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.9% for the three months ended September 30, 2024 compared to 4.6% in the same period in 2023 primarily due to decreased compensation costs.

During the three months ended September 30, 2024, our advertising expenses increased by $17 million, or 5.0%, compared to the same period in 2023.

The increase reflects our response to changing market conditions and renewed investment opportunities as we sought to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses increased to 12.3% for the three months ended September 30, 2024 compared to 11.4% in the same period in 2023 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

Selling, operations, technology, general and administrative

During the three months ended September 30, 2024, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $71 million, or 15.5%, compared to the same period in 2023.

The decrease is primarily due to decreased compensation costs.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 16.6% for the three months ended September 30, 2024, compared to 20.2% in the same period in 2023, primarily due to decreased compensation costs.

Impairment and other related net charges

During the three months ended September 30, 2024, impairment and other related charges increased by $1 million or 100.0%, compared to the same period in 2023.

During the three months ended September 30, 2024, we recorded charges of $1 million related to changes in sublease market conditions for an identified U.S.

office location.

Interest expense, net

During the three months ended September 30, 2024, interest expense, net remained constant at $5 million, compared to the same period in 2023.

Three Months Ended September 30,

2024 2023 % Change

(in millions)

Interest expense, net $ (5) $ (5) — %

Other income (expense), net

During the three months ended September 30, 2024, other income (expense), net increased by $12 million or 300.0%, compared to the same period in 2023, primarily driven by foreign currency transaction gains.

Included in other income (expense), net are changes in foreign currency transaction gains and losses and long-term investment income or losses.

Three Months Ended September 30,

2024 2023 % Change

(in millions)

Other income (expense), net $ 8 $ (4) (300.0) %

Provision for income taxes, net

During the three months ended September 30, 2024, our provision for income taxes, net increased by $1 million or 50.0% compared to the same period in 2023, primarily related to the level and mix of income earned in the U.S.

and certain foreign jurisdictions and U.S.

state income taxes.

Refer to Note 8, Income Taxes , included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information.

Three Months Ended September 30,

2024 2023 % Change

(in millions)

Provision for income taxes, net $ 3 $ 2 50.0 %

Comparison of the nine months ended September 30, 2024 and 2023

During the nine months ended September 30, 2024, net revenue decreased by $159 million, or 1.8%, compared to the same period in 2023, which reflects continued macroeconomic pressures felt by consumers.

The decrease in net revenue is due to lower order volume, which was driven by challenges in the category, compared to the same period in 2023.

During the nine months ended September 30, 2024, our U.S.

net revenue decreased by 1.8% and International net revenue decreased by 1.8% compared to the same period in 2023.

During the nine months ended September 30, 2024, International Net Revenue Constant Currency Growth was (1.9)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Nine Months Ended September 30,

2024 2023 % Change

(in millions)

net revenue $ 7,633 $ 7,772 (1.8) %

International net revenue 1,097 1,117 (1.8) %

Net revenue $ 8,730 $ 8,889 (1.8) %

For more information on our segments, see Note 10, Segment and Geographic Information , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q.

Cost of goods sold

During the nine months ended September 30, 2024, cost of goods sold decreased by $69 million, or 1.1%, compared to the same period in 2023.

As a percentage of net revenue, cost of goods sold increased to 69.8% for the nine months ended September 30, 2024, compared to 69.4% in the same period in 2023 due to mix shifts and lower net revenue.

Nine Months Ended September 30,

2024 2023 % Change

(in millions)

Cost of goods sold $ 6,097 $ 6,166 (1.1) %

As a percentage of net revenue 69.8 % 69.4 %

Operating expenses

Operating expenses are comprised of customer service and merchant fees, advertising, selling, operations, technology, general and administrative expenses, impairment and other related net charges and restructuring charges.

Nine Months Ended September 30,

Three Months Ended March 31,

2025 2024 % Change

17 unchanged sentences

(1) Includes equity-based compensation and related taxes as follows:

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions)

1 unchanged sentence

Selling, operations, technology, general and administrative $ 63 $ 118

During the nine months ended September 30, 2024, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $142 million, or 31.1%, compared to the same period in 2023, driven by a decrease in vested restricted stock units in 2024 compared to the same period in 2023.

During the three months ended March 31, 2025, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $58 million, or 46.8%, compared to the same period in 2024.

The decrease is driven by workforce reductions.

The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes:

Nine Months Ended September 30,

Three Months Ended March 31,

Customer service and merchant fees 3.8 % 4.1 %

1 unchanged sentence

Customer Service and Merchant Fees

During the nine months ended September 30, 2024, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $61 million, or 15.4%, compared to the same period in 2023.

The decrease in customer service and merchant fees is primarily due to decreased compensation costs during the nine months ended September 30, 2024 compared to the same period in 2023.

As a percentage of net revenue, total customer service and merchant fees decreased to 4.0% for the nine months ended September 30, 2024, compared to 4.7% in the same period in 2023 due to decreased compensation costs.

During the nine months ended September 30, 2024, our advertising expenses increased by $27 million, or 2.7%, compared to the same period in 2023.

The increase reflects our response to changing market conditions and renewed investment opportunities, as we sought to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses increased to 11.9% for the nine months ended September 30, 2024 compared to 11.4% in the same period in 2023 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

During the three months ended March 31, 2025, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $7 million, or 6.3%, compared to the same period in 2024.

The decrease in customer service and merchant fees is primarily due to decreased compensation costs, driven by workforce reductions.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.9% for the three months ended March 31, 2025 compared to 4.3% in the same period in 2024 primarily due to decreased compensation costs.

During the three months ended March 31, 2025, our advertising expenses increased by $20 million, or 6.2%, compared to the same period in 2024.

The increase reflects our response to changing market conditions and renewed investment opportunities as we seek to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses increased to 12.6% for the three months ended March 31, 2025 compared to 11.9% in the same period in 2024 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

Selling, operations, technology, general and administrative

During the nine months ended September 30, 2024, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $213 million, or 15.0% compared to the same period in 2023.

The decrease is primarily due to decreased compensation costs.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 17.2% for the nine months ended September 30, 2024, compared to 20.8% in the same period in 2023, primarily due to decreased compensation costs.

During the three months ended March 31, 2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $50 million, or 12.0%, compared to the same period in 2024.

The decrease is primarily due to decreased compensation costs, driven by workforce reductions.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 15.7% for the three months ended March 31, 2025, compared to 19.6% in the same period in 2024, primarily due to decreased compensation costs.

Impairment and other related net charges

During the nine months ended September 30, 2024, impairment and other related charges decreased by $12 million, or 85.7%.

compared to the same period in 2023.

As a percentage of net revenue, impairment and other related net charges decreased to 0.0% from 0.2% in the same period in 2023.

During the nine months ended September 30, 2024, we recorded charges of $2 million related to changes in sublease market conditions for U.S.

office locations.

During the nine months ended September 30, 2023, we recorded charges of $14 million, inclusive of $5 million related to consolidation of certain customer service centers and $9 million related to construction in progress assets at identified U.S.

During the three months ended March 31, 2025, impairment and other related charges increased by $23 million or 100.0%, compared to the same period in 2024.

As a percentage of net revenue, impairment and other related charges increased to 0.8% from 0.0% in the same period in 2024.

During the three months ended March 31, 2025, we recorded net charges of $23 million, inclusive of $20 million associated with the Germany Restructuring and weakened macroeconomic conditions in connection with our German operations and $3 million associated with changes in sublease market conditions for a technology center in the U.S.

Refer to Note 2, Supplemental Financial Statement Disclosures , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q for additional information.

Restructuring charges

During the nine months ended September 30, 2024, restructuring charges increased by $14 million, or 21.5%, compared to the same period in 2023.

As a percentage of net revenue, restructuring charges increased to 0.9% from 0.7% in the same period in 2023.

During the nine months ended September 30, 2024, we incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reductions.

During the nine months ended September 30, 2023, we incurred $65 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2023 workforce reductions.

During the three months ended March 31, 2025, restructuring charges decreased by $23 million or 29.1% as compared to the same period in 2024.

As a percentage of net revenue, restructuring charges decreased to 2.1% from 2.9% in the same period in 2024.

During the three months ended March 31, 2025, we incurred $56 million of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs.

This is inclusive of $40 million related to the Germany Restructuring and $16 million related to the March 2025 workforce reduction.

During the three months ended March 31, 2024, we incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reduction.

Interest expense, net

During the nine months ended September 30, 2024, interest expense, net remained constant compared to the same period in 2023.

Nine Months Ended September 30,

During the three months ended March 31, 2025, interest expense, net increased by $17 million or 283.3%, compared to the same period in 2024, primarily driven by the issuance of the 2029 Secured Notes (as defined below) in October 2024.

Three Months Ended March 31,

2025 2024 % Change

2 unchanged sentences

Other income (expense), net

During the nine months ended September 30, 2024, other income (expense), net increased by $5 million, or 250.0%, compared to the same period in 2023, primarily driven by foreign currency transaction gains.

During the three months ended March 31, 2025, other income (expense), net increased by $14 million or 350.0%, compared to the same period in 2024, primarily driven by foreign currency transaction gains.

Included in other income (expense), net are changes in foreign currency transaction gains and losses and long-term investment income or losses.

Nine Months Ended September 30,

Three Months Ended March 31,

2025 2024 % Change

2 unchanged sentences

Gain on debt extinguishment

During the nine months ended September 30, 2024, gain on debt extinguishment decreased by $100 million, or 100.0%, compared to the same period in 2023.

During the nine months ended September 30, 2023, we recorded a $100 million gain on debt extinguishment, representing the difference between the cash paid for principal of $514 million and the combined net carrying value of the 2024 Notes and 2025 Notes of $614 million.

Nine Months Ended September 30,

During the three months ended March 31, 2025, gain on debt extinguishment increased by $25 million, or 100.0%.

During the three months ended March 31, 2025, and in connection with the issuance of the 2030 Secured Notes (as defined below), we recorded a $25 million gain on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $551 million and the net carrying value of the 2026 Notes (as defined below) of $576 million.

Refer to Note 4, Debt and Other Financing , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q for additional information.

Three Months Ended March 31,

2025 2024 % Change

1 unchanged sentence

Gain on debt extinguishment

Provision for income taxes, net

During the nine months ended September 30, 2024, our provision for income taxes, net increased by $2 million, or 33.3%, compared to the same period in 2023, primarily related to the level and mix of income earned in the U.S.

$ 25 $ — 100.0 %

Provision for income taxes

During the three months ended March 31, 2025, our provision for income taxes remained constant at $3 million compared to the same period in 2024, primarily related to the level and mix of income earned in the U.S.

and certain foreign jurisdictions and U.S.

state income taxes.

Refer to Note 8, Income Taxes , included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information.

Nine Months Ended September 30,

Three Months Ended March 31,

2025 2024 % Change

(in millions)

Provision for income taxes, net $ 8 $ 6 33.3 %

Provision for income taxes $ 3 $ 3 — %

Liquidity and Capital Resources

Sources of Liquidity

As of September 30, 2024, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.3 billion.

As of March 31, 2025, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.4 billion.

Additionally, we have a $500 million senior secured revolving credit facility that matures on March 13, 2030 (the “Revolver”).

As of September 30, 2024, there were no revolving loans outstanding under the Revolver.

We had outstanding letters of credit, primarily as security for certain lease agreements, for $72 million as of September 30, 2024, which reduced the availability of credit under the Revolver.

As of March 31, 2025, there were no revolving loans outstanding under the Revolver.

We had outstanding letters of credit, primarily as security for certain lease agreements, fo r $71 million a s of March 31, 2025, which reduced the availability of credit under the Revolver.

Excluding liquidity available through our Revolver, the following table shows sources of liquidity for the periods presented:

September 30, December 31,

March 31, December 31,

(in millions)

8 unchanged sentences

The amounts involved may be material.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those described herein and in our other filings with the SEC, including those set forth in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2023.

In addition, macroeconomic events have caused disruption in the capital markets, fluctuating interest rates and moderate inflation, which could make obtaining financing more difficult and/or expensive.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those described herein and in our other filings with the SEC, including those set forth in Part I, Item 1A, Risk Factors in our Annual Report on 10-K for the year ended December 31, 2024.

In addition, macroeconomic events have caused disruption in the capital markets, including increased inflation and interest rates, which could make obtaining financing more difficult and/or expensive.

As a consequence, we may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all.

2 unchanged sentences

Credit Agreement and Debt Arrangements

As of September 30, 2024, we had $3.2 billion principal amount of indebtedness outstanding.

As of March 31, 2025, we had $3.3 billion principal amount of indebtedness outstanding.

Our indebtedness includes unsecured 0.625% Convertible Senior Notes due 2025 (the “2025 Notes”), unsecured 1.00% Convertible Senior Notes due 2026 (the “2026 Notes”), unsecured 3.25% Convertible Senior Notes due 2027 (the “2027 Notes”), unsecured 3.50% Convertible Senior Notes due 2028 (the “2028 Notes”, and together with the 2025 Notes, 2026 Notes and 2027 Notes, the “Convertible Notes”), 7.250% Senior Secured Notes due 2029 (the “2029 Secured Notes”) and 7.750% Senior Secured Notes due 2030 (the “2030 Secured Notes”, together with the 2029 Secured Notes, the “Senior Secured Notes” and together with the Convertible Notes, the “Notes”).

Under the terms of our Revolver, we may use proceeds to finance working capital, to refinance existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes.

Any amounts outstanding under the Revolver are due at maturity.

On October 8, 2024, we issued $800 million aggregate principal amount of 7.250% senior secured notes due 2029.

Interest on the notes is payable semi-annually, in arrears, on April 15 and October 15 of each year, commencing on April 15, 2025, until their maturity date of October 31, 2029.

We intend to use the net proceeds from the senior secured notes offering, together with cash on hand, for the repayment, at or prior to maturity, of a portion of the Notes and general corporate purposes.

The conditional conversion features of the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes were not triggered during the calendar quarter ended September 30, 2024, therefore, the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes are not convertible during the calendar quarter ended December 31, 2024 pursuant to the applicable last reported sales price conditions.

As of August 1, 2024, the 2024 Notes were freely convertible and the holders of the 2024 Notes could have converted all or a portion of their 2024 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date;

however, no holders converted their 2024 Notes during this time period.

On November 1, 2024, the 2024 Notes matured and Wayfair paid in cash the remaining outstanding principal of $117 million to the holders of the 2024 Notes.

Whether any of the Non-Accreting Notes will be convertible in future quarters will depend on the satisfaction of the applicable last reported sales price condition or another conversion condition in the future.

If one or more holders elect to convert their Non-Accreting Notes at a time when any such Non-Accreting Notes are convertible, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.

On March 13, 2025, Wayfair LLC (the “Issuer”), a subsidiary of Wayfair, issued $700 million aggregate principal amount of the 2030 Secured Notes.

The 2030 Secured Notes will mature on September 15, 2030, unless earlier redeemed, in accordance with their terms or repurchased.

The indenture contains covenants that restrict the Issuer’s ability and the ability of its restricted subsidiaries to, among other things, incur additional indebtedness, declare or pay dividends, redeem stock or make other

distributions or restricted payments, make certain investments, create certain liens, enter into certain transactions with affiliates, agree to certain restrictions on the ability of the Issuer’s restricted subsidiaries to make certain payments, sell or transfer certain assets and consolidate, merge, sell or otherwise dispose of all or substantially all of the Issuer’s or its restricted subsidiaries’ assets.

On March 14, 2025, in connection with the issuance of the 2030 Secured Notes, we repurchased $578 million aggregate principal amount of the 2026 Notes.

See Note 4, Debt and Other Financing , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q for additional information on debt and other financing transactions.

The conditional conversion features of the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes were not triggered during the calendar quarter ended March 31, 2025, therefore, the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes are not convertible during the calendar quarter ended June 30, 2025 pursuant to the applicable last reported sales price conditions.

Whether any of the Convertible Notes will be convertible in future quarters will depend on the satisfaction of the applicable last reported sales price condition or another conversion condition in the future.

If one or more holders elect to convert their Convertible Notes at a time when any such Convertible Notes are convertible, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.

The credit agreement and indentures governing our convertible notes contain restrictions and covenants that may limit our operating flexibility.

1 unchanged sentence

The Revolver also requires us to maintain certain levels of performance in order to maintain our access to the Revolver.

For instance, we are required to maintain a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the credit agreement governing the Revolver) of 4.0 to 1.0, subject to a 0.5 step-up

following certain permitted acquisitions.

For information regarding our credit agreement and convertible notes, see Note 4, Debt and Other Financing , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q and Note 6, Debt and Other Financing , included in Part II, Item 8, Financial Statements and Supplementary Data , in our Annual Report on Form 10-K for the year ended December 31, 2023.

As of September 30, 2024, we were in compliance with all the terms and conditions of our debt agreements.

For information regarding our credit agreement and debt agreements, see Note 4, Debt and Other Financing , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q and Note 6, Debt and Other Financing , included in Part II, Item 8, Financial Statements and Supplementary Data , in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of March 31, 2025, we were in compliance with all the terms and conditions of our debt agreements.

Stock Repurchase Program

5 unchanged sentences

The actual timing, number and value of shares repurchased under the Repurchase Programs in the future will be determined by us in our discretion and will depend on a number of factors, including market conditions, applicable legal requirements, our capital needs and whether there is a better alternative use of capital.

As of September 30, 2024, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs.

As of March 31, 2025, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs.

Trends and Historical Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions)

Net loss $ (113) $ (248)

Net cash provided by operating activities $ 155 $ 191

Net cash used in investing activities $ (178) $ (30)

Net cash used in operating activities $ (96) $ (139)

Net cash used in by investing activities $ (17) $ (75)

Net cash provided by financing activities $ 140 $ —

2 unchanged sentences

Operating cash flows can be volatile and are sensitive to many factors, including changes in working capital and our net loss.

Cash flows provided by operating activities decreased by $36 million during the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to a decrease of $167 million for cash changes in operating assets and liabilities partially offset by an increase in net loss adjusted for non-cash items of $131 million.

Cash flows used in by operating activities decreased by $43 million during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a decrease in net loss adjusted for non-cash items of $68 million, partially offset by an increase of $25 million for cash changes in operating assets and liabilities.

Investing Activities

Cash flows used in investing activities increased by $148 million during the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to decreases in sales and maturities of short- and long-term investments of $196 million and increases in purchases of short- and long-term investments of $33 million, partially offset by decreases in purchases of property and equipment and site and software development costs of $81 million.

Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 2.0% of net revenue for the nine months ended September 30, 2024 and related primarily to equipment purchases and improvements for leased warehouses within our expanding logistics network and ongoing investments, including in our proprietary technology and operational platform.

Cash flows used in investing activities decreased by $58 million during the three months ended March 31, 2025, compared to the same period in 2024, due to increases in sales and maturities of short- and long-term investments of $29 million, decreases in purchases of short- and long-term investments of $18 million and decreases in purchases of property and equipment and site and software development costs of $11 million.

Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 1.6% of net revenue for the three months ended March 31, 2025 and related primarily to equipment purchases and improvements for leased warehouses within our expanding logistics network and ongoing investments, including our physical retail store expansion, proprietary technology and operational platform.

Financing Activities

Cash flows provided by financing activities decreased by $74 million during the nine months ended September 30, 2024, compared to the same period in 2023.

The decrease was primarily due to the net impact of debt and other financing transactions that occurred during the nine months ended September 30, 2023.

Cash flows provided by financing activities increased by $140 million during the three months ended March 31, 2025, compared to the same period in 2024.

The increase in cash provided by is due to net proceeds from the issuance of debt of $691 million, partially offset by payments to extinguish debt of $551 million.

Off-Balance Sheet Arrangements

2 unchanged sentences

Contractual Obligations

During the nine months ended September 30, 2024, there have been no material changes to our contractual obligations and estimates as compared to the contractual obligations described in Contractual Obligations included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the year ended December 31, 2023 .

During the three months ended March 31, 2025, we issued $700 million aggregate principal amount of the 2030 Secured Notes and repurchased $578 million aggregate principal amount of the 2026 Notes.

See Note 4, Debt and Other Financing , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q for additional information.

Other than these financing transactions, there have been no material changes to our contractual obligations and estimates as compared to the contractual obligations described in Contractual Obligations included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the year ended December 31, 2024.

Non-GAAP Financial Measures

2 unchanged sentences

Adjusted EBITDA

We calculate Adjusted EBITDA as net income or loss before depreciation and amortization, equity-based compensation and related taxes, interest income or expense, net, other income or expense, net, provision or benefit for income taxes, net, non-recurring items and other items not indicative of our ongoing operating performance.

We calculate Adjusted EBITDA as net income or loss before depreciation and amortization, equity-based compensation and related taxes, interest income or expense, net, other income or expense, net, provision or benefit for income taxes, non-recurring items and other items not indicative of our ongoing operating performance.

We have provided a reconciliation below of Adjusted EBITDA to net income or loss, the most directly comparable GAAP financial measure.

15 unchanged sentences

The following table reflects the reconciliation of net income or loss to Adjusted EBITDA for each of the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(in millions)

5 unchanged sentences

Other (income) expense, net (10) 4

Provision for income taxes, net 3 2 8 6

Provision for income taxes 3 3

Impairment and other related net charges (1)

2 unchanged sentences

Adjusted EBITDA $ 106 $ 75

During the three and nine months ended September 30, 2024, we recorded charges of $1 million and $2 million, respectively, related to changes in sublease market conditions for U.S.

office locations.

During the nine months ended September 30, 2023, we recorded a $100 million gain on debt extinguishment upon repurchase of $83 million in aggregate principal amount of our 2024 Notes and $535 million in aggregate principal amount of our 2025 Notes.

See Note 2, Supplemental Financial Statement Disclosures , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q

During the three months ended March 31, 2025, we incurred $56 million of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs.

This is inclusive of $40 million related to the Germany Restructuring and $16 million related to the March 2025 workforce reduction.

During the three months ended March 31, 2025, we recorded a $25 million gain on debt extinguishment upon repurchase of $578 million in aggregate principal amount of the 2026 Notes.

Free Cash Flow

8 unchanged sentences

The following table presents a reconciliation of net cash provided by or used in operating activities to Free Cash Flow for each of the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(in millions)

Net cash provided by operating activities $ 49 $ 121 $ 155 $ 191

Net cash used in operating activities $ (96) $ (139)

Purchase of property and equipment (5) (13)

1 unchanged sentence

Free Cash Flow $ (139) $ (193)

Net Revenue Constant Currency Growth

We calculate Net Revenue Constant Currency Growth by translating the current period local currency net revenue by the currency exchange rates used to translate our financial statements in the comparable prior-year period.

We disclose Net Revenue Constant Currency Growth because it is an important indicator of our operating results.

Accordingly, we believe that Net Revenue Constant Currency Growth provides useful information to investors and others in understanding and evaluating trends in our operating results in the same manner as our management.

Net Revenue Constant Currency Growth has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

For example, Net Revenue Constant Currency Growth rates, by their nature, exclude the impact of foreign exchange, which may have a material impact on net revenue.

Adjusted Diluted Earnings or Loss per Share

We calculate Adjusted Diluted Earnings or Loss per Share as net income or loss plus equity-based compensation and related taxes, provision or benefit for income taxes, net, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method divided by the weighted-average number of shares of common stock used in the computation of diluted earnings or loss per share.

We calculate Adjusted Diluted Earnings or Loss per Share as net income or loss plus equity-based compensation and related taxes, provision or benefit for income taxes, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method divided by the weighted-average number of shares of common stock used in the computation of diluted earnings or loss per share.

Accordingly, we believe that these adjustments to our adjusted diluted net income or loss before calculating per share amounts for all periods presented provide a more meaningful comparison between our operating results from period to period.

Adjusted Diluted Earnings or Loss per Share has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

For example, Adjusted Diluted Earnings or Loss per Share, by their nature, excludes equity-based compensation and related taxes, provision or benefit for income taxes, net, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method.

For example, Adjusted Diluted Earnings or Loss per Share, by their nature, excludes equity-based compensation and related taxes, provision or benefit for income taxes, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method.

Because of these limitations, you should consider Adjusted Diluted Earnings or Loss per Share alongside other financial performance measures.

A reconciliation of the numerator and denominator for diluted earnings or loss per share, the most directly comparable GAAP financial measure, to the numerator and denominator for Adjusted Diluted Earnings or Loss per Share in order to calculate Adjusted Diluted Earnings or Loss per Share, is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(in millions, except per share data)

3 unchanged sentences

Equity-based compensation and related taxes 68 127

Provision for income taxes, net 3 2 8 6

Provision for income taxes 3 3

Impairment and other related net charges 23 —

2 unchanged sentences

Numerator for Adjusted Diluted Earnings (Loss) per Share - Adjusted net income (loss)

$ 28 $ (15) $ 48 $ (115)

Denominator for basic and diluted loss per share - weighted-average number of shares of common stock outstanding 127 120

Adjustments to effect of dilutive securities:

Restricted stock units — — 1 —

Denominator for Adjusted Diluted Earnings (Loss) per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 127 120

1 unchanged sentence

Adjusted Diluted Earnings (Loss) per Share $ 0.10 $ (0.32)

Net Revenue Constant Currency Growth

We disclose Net Revenue Constant Currency Growth because it is an important indicator of our operating results.

Net Revenue Constant Currency Growth has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

For example, Net Revenue Constant Currency Growth rates, by their nature, exclude the impact of foreign exchange, which may have a material impact on net revenue.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S.

Our financial statements are prepared in accordance with accounting principles generally accepted in the U.S.

The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, net revenue, costs and expenses and related disclosures.

We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on our financial statements and, therefore, we consider these to be our critical accounting policies.

Accordingly, we evaluate our estimates and assumptions on an ongoing basis.

3 unchanged sentences

Recent Accounting Pronouncements

The information called for by this section is incorporated herein by reference to Note 1, Summary of Significant Accounting Policies , included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q.

Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in our exposures to market risk since December 31, 2023.

See Part II, Item 7A, Q uantitative and Qualitative Disclosures about Market Risk included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion on our exposures to market risk.

For information about recent accounting pronouncements, see Note 1, Summary of Significant Accounting Policies , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q.

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-Q

Item 2. Management’s Discussion and Analysis