What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-04 compared with 2025-05-01 · 215 added, 94 removed, 286 unchanged (52% of the section changed)

5 unchanged sentences

our future results of operations and financial position;

including our exit from the German market;

including the exit of our German business;

available liquidity and access to financing sources;

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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 manage the impacts of our restructurings and workforce reductions, including the exit of our German business;

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

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

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.

All dollar and percentage comparisons made herein refer to the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, unless otherwise noted.

Wayfair is the destination for all things home.

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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.

During the three months ended June 30, 2025, net revenue increased by 5.0% compared to the same period in 2024.

As of June 30, 2025, we had 21 million active customers and during the three months ended June 30, 2025, 80.6% of orders came from repeat buyers.

The increased sales represents our ongoing execution of business initiatives amid persistent macroeconomics pressures on consumers.

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.

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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.

While some trade deals have been reached, trade negotiations are ongoing, and 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.

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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.

For example, on July 4, 2025, the OBBBA was signed into law, which contains a broad range of tax reform provisions affecting businesses.

While we continue to evaluate the full impact of this new legislation, we expect that the legislation will likely not have a material impact on our financial statements.

Nevertheless, these types of 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.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

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

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Gross profit $ 984 $ 941 $ 1,821 $ 1,760

Loss from operations $ (122) $ (235)

Net loss $ (113) $ (248)

Loss per share:

Income (Loss) from operations $ 17 $ (35) $ (105) $ (270)

Net income (loss) $ 15 $ (42) $ (98) $ (290)

Earnings (Loss) per share:

Basic $ 0.11 $ (0.34) $ (0.77) $ (2.39)

Diluted $ 0.11 $ (0.34) $ (0.77) $ (2.39)

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

Net cash provided by operating activities $ 273 $ 245 $ 177 $ 106

Key Operating Metrics:

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LTM net revenue per active customer (2)

$ 572 $ 540 $ 572 $ 540

Orders delivered (3)

Average order value (4)

$ 328 $ 313 $ 315 $ 299

Non-GAAP Financial Measures:

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Results of Consolidated Operations

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.

Comparison of the three months ended June 30, 2025 and 2024

During the three months ended June 30, 2025, net revenue increased by $156 million, or 5.0%, compared to the same period in 2024, which reflects our ongoing execution of business initiatives amid persistent macroeconomics pressures on consumers.

The increase in net revenue is primarily due to higher average order value resulting from brand and consumer mix shifts, compared to the same period in 2024.

During the three months ended June 30, 2025, our U.S.

net revenue increased by 5.3%.

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,

During the three months ended June 30, 2025, our International net revenue increased by 3.1% compared to the same period in 2024, driven by growth across our remaining international markets, partially offset by the exit of our German business.

During the three months ended June 30, 2025, International Net Revenue Constant Currency Growth was 2.1% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Three Months Ended June 30,

2025 2024 % Change

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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 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,

During the three months ended June 30, 2025, cost of goods sold increased by $113 million, or 5.2%, compared to the same period in 2024.

The increase in cost of goods sold is driven by higher net revenue, compared to the same period in 2024.

As a percentage of net revenue, cost of goods sold increased to 69.9% for the three months ended June 30, 2025 compared to 69.8% in the same period in 2024, due to investments in the customer experience, partially offset by the growth of our supplier services.

Three Months Ended June 30,

2025 2024 % Change

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Operating expenses

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

Operating expenses consist of customer service and merchant fees;

selling, operations, technology, general and administrative expenses;

impairment and other related net charges and restructuring charges.

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 March 31,

Three Months Ended June 30,

2025 2024 % Change

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

Three Months Ended March 31,

Three Months Ended June 30,

(in millions)

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Selling, operations, technology, general and administrative $ 95 $ 90

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.

During the three months ended June 30, 2025, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative increased by $4 million, or 4.2%, compared to the same period in 2024, as a result of restricted stock units awarded during the three months ended June 30, 2025.

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

Three Months Ended March 31,

Three Months Ended June 30,

Customer service and merchant fees 3.6 % 3.7 %

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Customer Service and Merchant Fees

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.

During the three months ended June 30, 2025, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees increased by $1 million, or 0.9%, compared to the same period in 2024.

The increase in customer service and merchant fees is primarily due to higher net revenue, partially offset by lower compensation costs.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.7% for the three months ended June 30, 2025 compared to 3.9% in the same period in 2024 primarily due to decreased compensation costs.

During the three months ended June 30, 2025, our advertising expenses increased by $7 million, or 1.9%, 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.

As a percentage of net revenue, advertising expenses decreased to 11.4% for the three months ended June 30, 2025 compared to 11.7% 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 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.

During the three months ended June 30, 2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $29 million, or 7.3%, 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.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 14.2% for the three months ended June 30, 2025, compared to 15.7% in the same period in 2024, primarily due to decreased compensation costs.

Impairment and other related net charges

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.

During the three months ended June 30, 2025, impairment and other related charges remained relatively flat compared to the same period in 2024.

Restructuring charges

During the three months ended June 30, 2025, restructuring charges increased by $9 million, or 100.0%, compared to the same period in 2024.

As a percentage of net revenue, restructuring charges increased to 0.3% from 0.0% in the same period in 2024.

During the three months ended June 30, 2025, we incurred $9 million of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs.

This is inclusive of $6 million related to the Germany Restructuring and $3 million related to the March 2025 workforce reduction.

Interest expense, net

During the three months ended June 30, 2025, interest expense, net increased by $25 million compared to the same period in 2024, primarily driven by the issuance of the 2029 Secured Notes in October 2024 and of the 2030 Secured Notes in March 2025.

Three Months Ended June 30,

2025 2024 % Change

(in millions)

Interest expense, net $ (29) $ (4) NM

Other income (expense), net

During the three months ended June 30, 2025, other income (expense), net increased by $24 million compared to the same period in 2024, primarily driven by foreign currency rate fluctuations between the U.S.

Dollar and the Canadian Dollar.

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 June 30,

2025 2024 % Change

(in millions)

Other income (expense), net $ 23 $ (1) NM

Gain on debt extinguishment

During the three months ended June 30, 2025, gain on debt extinguishment increased by $6 million, or 100.0%, compared to the same period in 2024.

During the three months ended June 30, 2025, we recorded a $6 million gain on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $191 million and the net carrying value of the 2026 Notes of $197 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 June 30,

2025 2024 % Change

(in millions)

Gain on debt extinguishment

$ 6 $ — 100.0 %

Provision for income taxes

During the three months ended June 30, 2025, our provision for income taxes remained constant at $2 million compared to the same period in 2024.

Three Months Ended June 30,

2025 2024 % Change

(in millions)

Provision for income taxes $ 2 $ 2 — %

Results of Consolidated Operations

Comparison of the six months ended June 30, 2025 and 2024

During the six months ended June 30, 2025, net revenue increased by $157 million, or 2.7%, compared to the same period in 2024, which reflects our ongoing execution of business initiatives amid persistent macroeconomics pressures on consumers.

The increase in net revenue is due to higher average order value resulting from brand and consumer mix shifts, compared to the same period in 2024.

During the six months ended June 30, 2025, our U.S.

net revenue increased by 3.6% and International net revenue decreased by 3.4% compared to the same period in 2024, primarily due to the exit of our German business.

During the six months ended June 30, 2025, International Net Revenue Constant Currency Growth was (2.1)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Six Months Ended June 30,

2025 2024 % Change

(in millions)

net revenue $ 5,303 $ 5,121 3.6 %

International net revenue 700 725 (3.4) %

Net revenue $ 6,003 $ 5,846 2.7 %

For more information on our segments, see Note 9, 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 six months ended June 30, 2025, cost of goods sold increased by $96 million, or 2.3%, compared to the same period in 2024.

The increase in cost of goods sold is driven by higher net revenue, compared to the same period in 2024.

As a percentage of net revenue, cost of goods sold decreased to 69.7% for the six months ended June 30, 2025, compared to 69.9% in the same period in 2024 due to growth of our supplier services partially offset by investments in the customer experience, 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.

Six Months Ended June 30,

2025 2024 % Change

(in millions)

Cost of goods sold $ 4,182 $ 4,086 2.3 %

As a percentage of net revenue 69.7 % 69.9 %

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.

Six Months Ended June 30,

2025 2024 % Change

(in millions)

Customer service and merchant fees (1)

$ 228 $ 238 (4.2) %

Advertising 716 689 3.9 %

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

894 1,023 (12.6) %

Impairment and other related net charges 23 1 NM

Restructuring charges 65 79 (17.7) %

Total operating expenses $ 1,926 $ 2,030 (5.1) %

As a percentage of net revenue:

Customer service and merchant fees (1)

Advertising 11.9 % 11.8 %

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

14.9 % 17.5 %

Impairment and other related net charges 0.4 % — %

Restructuring charges 1.1 % 1.4 %

32.1 % 34.8 %

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

Six Months Ended June 30,

(in millions)

Customer service and merchant fees $ 7 $ 11

Selling, operations, technology, general and administrative $ 158 $ 208

During the six months ended June 30, 2025, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $54 million, or 24.7%, compared to the same period in 2024, driven by workforce reductions.

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

Six Months Ended June 30,

Customer service and merchant fees 3.7 % 3.9 %

Selling, operations, technology, general and administrative 12.3 % 13.9 %

Customer Service and Merchant Fees

During the six months ended June 30, 2025, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $6 million, or 2.6% , compared to the same period in 2024.

The decrease in customer service and merchant fees is primarily due to decreased compensation costs.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.8% for the six months ended June 30, 2025, compared to 4.1% in the same period in 2024 due to decreased compensation costs.

During the six months ended June 30, 2025, our advertising expenses increased by $27 million, or 3.9% , c ompared to the same period in 2024.

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 expense s increased to 11.9% for the six months ended June 30, 2025 compared to 11.8% 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 six months ended June 30, 2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $79 million, or 9.7% co mpared 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 expens es decreased to 14.9% f or the six months ended June 30, 2025, compared to 17.5% in the same period in 2024, primarily due to decreased compensation costs.

Impairment and other related net charges

During the six months ended June 30, 2025, impairment and other related charge s increased by $22 million compared to the same period in 2024.

As a percentage of net revenue, impairment and other related net charge s increased to 0.4% from 0.0% in the same period in 2024.

During the six months ended June 30, 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.

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

office location.

Restructuring charges

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.

During the six months ended June 30, 2025, restructuring charges decreased by $14 million, or 17.7%, compared to the same period in 2024.

As a percentage of net revenue, restructuring charges decreased to 1.1% from 1.4% 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.

During the six months ended June 30, 2025, Wayfair incurred $65 million of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs.

This is inclusive of $46 million related to the Germany Restructuring and $19 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.

During the six months ended June 30, 2024, Wayfair 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 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,

During the six months ended June 30, 2025, interest expense, net increased to $52 million , co mpared to $10 million in the same period in 2024, primarily driven by the issuances of the 2029 Secured Notes in October 2024 and of the 2030 Secured Notes in March 2025.

Six Months Ended June 30,

2025 2024 % Change

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Other income (expense), net

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.

Three Months Ended March 31,

During the six months ended June 30, 2025, other (expense) income, net increased by $38 million compared to the same period in 2024 , primarily driven by foreign currency rate fluctuations between the U.S.

Dollar and the Canadian Dollar.

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

Six Months Ended June 30,

2025 2024 % Change

(in millions)

Other income (expense), net $ 10 $ (4) 350.0 %

Other income (expense), net $ 33 $ (5) NM

Gain on debt extinguishment

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.

During the six months ended June 30, 2025, gain on debt extinguishment increased by $31 million, or 100.0%, compared to the same period in 2024.

During the six months ended June 30, 2025, Wayfair recorded a $31 million gain on debt extinguishment upon repurchase of $80 million in aggregate principal amount of the 2025 Notes and $696 million in aggregate principal amount of the 2026 Notes.

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,

Six Months Ended June 30,

2025 2024 % Change

1 unchanged sentence

Gain on debt extinguishment $ 31 $ — 100.0 %

$ 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.

Three Months Ended March 31,

During the six months ended June 30, 2025, our provision for income taxes remained constant at $5 million compared to the same period in 2024.

Six Months Ended June 30,

2025 2024 % Change

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Sources of Liquidity

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

As of June 30, 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 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.

As of June 30, 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 $74 million a s of June 30, 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:

March 31, December 31,

June 30, December 31,

(in millions)

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Credit Agreement and Debt Arrangements

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

As of June 30, 2025, we had $3.1 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”).

1 unchanged sentence

Any amounts outstanding under the Revolver are due at maturity.

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.

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

On May 9, 2025, we used the remaining proceeds from the 2030 Secured Notes offering, together with cash on hand, to repurchase $80 million in aggregate principal amount of the 2025 Notes and $118 million in 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.

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

On July 1, 2025, the 2025 Notes became freely convertible and the holders of the 2025 Notes may convert all or a portion of their 2025 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

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.

5 unchanged sentences

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.

As of June 30, 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 March 31, 2025, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs.

As of June 30, 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

Three Months Ended March 31,

Six Months Ended June 30,

(in millions)

Net loss $ (98) $ (290)

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

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

Net cash provided by financing activities $ 140 $ —

Net cash provided by operating activities $ 177 $ 106

Net cash used in investing activities $ (83) $ (127)

Net cash provided by (used in) financing activities $ (60) $ 3

Operating Activities

1 unchanged sentence

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

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.

Cash flows provided by operating activities increased by $71 million during the six months ended June 30, 2025, compared to the same period in 2024, primarily due to a decrease in net loss adjusted for non-cash items of $129 million, partially offset by an increase of $58 million for cash changes in operating assets and liabilities.

Investing Activities

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.

Cash flows used in investing activities decreased by $44 million during the six months ended June 30, 2025, compared to the same period in 2024, due to increases in purchases of short- and long-term investments of $17 million, increases in sales and maturities of short- and long-term investments of $31 million, decreases in purchases of property and equipment and site and software development costs of $30 million.

Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 1.4% of net revenue for the six months ended June 30, 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 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.

Cash flows used in financing activities increased by $63 million during the six months ended June 30, 2025, compared to the same period in 2024.

The increase in cash used is primarily due to payments to extinguish debt of $742 million, partially offset by proceeds from the issuance of debt of $691 million.

Off-Balance Sheet Arrangements

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Contractual Obligations

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.

During the six months ended June 30, 2025, we issued $700 million in aggregate principal amount of the 2030 Secured Notes and repurchased $80 million in aggregate principal amount of the 2025 Notes and $696 million in 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.

22 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in millions)

Reconciliation of Adjusted EBITDA:

Net loss $ (113) $ (248)

Net income (loss) $ 15 $ (42) $ (98) $ (290)

Depreciation and amortization 78 99 159 203

7 unchanged sentences

Adjusted EBITDA $ 205 $ 163 $ 311 $ 238

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.

During the six months ended June 30, 2025, Wayfair recorded net charges of $23 million, inclusive of $20 million associated with the Germany Restructuring and weakened macroeconomic conditions in connection with its 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 , for additional information.

During the three and six months ended June 30, 2025, we incurred $9 million and $65 million, respectively, of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs.

This is inclusive of $46 million related to the Germany Restructuring and $19 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.

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

During the three and six months ended June 30, 2025, we recorded a $6 million and $31 million, respectively, gain on debt extinguishment upon repurchase of $80 million in aggregate principal amount of the 2025 Notes and $696 million in aggregate principal amount of the 2026 Notes.

Free Cash Flow

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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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in millions)

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

Net cash provided by operating activities $ 273 $ 245 $ 177 $ 106

Purchase of property and equipment (13) (23) (18) (36)

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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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in millions, except per share data)

Numerator for basic and diluted loss per share - net loss

Numerator for basic and diluted earnings (loss) per share - net income (loss)

$ 15 $ (42) $ (98) $ (290)

Adjustments to net loss

Adjustments to net income (loss)

Interest expense associated with convertible debt instruments 13 10 27 —

Equity-based compensation and related taxes 101 98 169 225

4 unchanged sentences

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

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

$ 134 $ 69 $ 160 $ 20

Denominator for basic earnings (loss) per share - weighted-average number of shares of common stock outstanding 128 122 127 121

Effect of dilutive securities:

Restricted stock units 1 — — —

Denominator for diluted earnings (loss) per share - weighted-average number of shares of common stock outstanding 129 122 127 121

Adjustments to effect of dilutive securities:

Restricted stock units — — — 1

Convertible debt instruments 27 22 30 —

Denominator for Adjusted Diluted Earnings (Loss) per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 156 144 157 122

Diluted Loss per Share $ (0.89) $ (2.06)

Diluted Earnings (Loss) per Share $ 0.11 $ (0.34) $ (0.77) $ (2.39)

Adjusted Diluted Earnings (Loss) per Share $ 0.87 $ 0.47 $ 1.02 $ 0.16

9 unchanged sentences

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.

Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in our exposures to market risk since December 31, 2024.

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, 2024 for a discussion on our exposures to market risk.

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