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Item 1. Financial Statements

2025-10-28 compared with 2025-08-04 · 153 added, 117 removed, 445 unchanged (38% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,

September 30, December 31,

(in millions, except share and per share data)

22 unchanged sentences

Convertible preferred stock, $ 0.001 par value per share:

10,000,000 shares authorized and none issued at June 30, 2025 and December 31, 2024

Class A common stock, par value $ 0.001 per share, 500,000,000 shares authorized, 103,728,787 and 100,762,581 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Class B common stock, par value $ 0.001 per share, 164,000,000 shares authorized, 24,658,295 shares issued and outstanding at June 30, 2025 and December 31, 2024

10,000,000 shares authorized and none issued at September 30, 2025 and December 31, 2024

Class A common stock, par value $ 0.001 per share, 500,000,000 shares authorized, 106,255,970 and 100,762,581 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Class B common stock, par value $ 0.001 per share, 164,000,000 shares authorized, 23,458,295 and 24,658,295 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively.

Additional paid-in capital 1,971 1,751

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

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

2025 2024 2025 2024

12 unchanged sentences

Interest expense, net ( 31 ) ( 5 ) ( 83 ) ( 15 )

Other income (expense), net 23 ( 1 ) 33 ( 5 )

Gain on debt extinguishment 6 — 31 —

Income (Loss) before income taxes 17 ( 40 ) ( 93 ) ( 285 )

Provision for income taxes 2 2 5 5

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

Earnings (Loss) per share:

Other (expense) income, net ( 5 ) 8 28 3

Loss on debt extinguishment, net ( 99 ) — ( 68 ) —

Loss before income taxes ( 97 ) ( 71 ) ( 190 ) ( 356 )

Provision for income taxes, net 2 3 7 8

Net loss $ ( 99 ) $ ( 74 ) $ ( 197 ) $ ( 364 )

Loss per share

Basic $ ( 0.76 ) $ ( 0.60 ) $ ( 1.54 ) $ ( 2.98 )

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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

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

2025 2024 2025 2024

(in millions)

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

Net loss $ ( 99 ) $ ( 74 ) $ ( 197 ) $ ( 364 )

Other comprehensive loss:

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(in millions)

Balance at March 31, 2024

Balance at June 30, 2024

122 $ — $ 1,552 $ ( 4,308 ) $ ( 4 ) $ ( 2,760 )

Net loss — — — ( 74 ) — ( 74 )

Other comprehensive income — — — — 1 1

Other comprehensive loss — — — — ( 4 ) ( 4 )

Issuance of common stock upon vesting of RSUs 2 — — — — —

Equity-based compensation — — 105 — — 105

Unwind of capped calls — — 3 — — 3

Balance at June 30, 2024

Balance at September 30, 2024

124 $ — $ 1,657 $ ( 4,382 ) $ ( 8 ) $ ( 2,733 )

Balance at March 31, 2025

Balance at June 30, 2025

128 $ — $ 1,921 $ ( 4,608 ) $ ( 32 ) $ ( 2,719 )

Net income — — — 15 — 15

Net loss — — — ( 99 ) — ( 99 )

Other comprehensive loss — — — — — —

2 unchanged sentences

Equity-based compensation — — 95 — — 95

Balance at June 30, 2025

Balance at September 30, 2025

130 $ — $ 1,971 $ ( 4,707 ) $ ( 32 ) $ ( 2,768 )

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

Six Months Ended

Nine Months Ended

Class A and Class B Common Stock

8 unchanged sentences

Net loss — — — ( 364 ) — ( 364 )

Other comprehensive income — — — — 1 1

Other comprehensive loss — — — — ( 3 ) ( 3 )

Issuance of common stock upon vesting of RSUs 6 — — — — —

1 unchanged sentence

Unwind of capped calls — — 3 — — 3

Balance at June 30, 2024

Balance at September 30, 2024

124 $ — $ 1,657 $ ( 4,382 ) $ ( 8 ) $ ( 2,733 )

6 unchanged sentences

Equity-based compensation — — 274 — — 274

Balance at June 30, 2025

Balance at September 30, 2025

130 $ — $ 1,971 $ ( 4,707 ) $ ( 32 ) $ ( 2,768 )

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

Cash flows for operating activities:

Cash flows from operating activities

Net loss $ ( 197 ) $ ( 364 )

4 unchanged sentences

Impairment and other related net charges 23 2

Gain on debt extinguishment ( 31 ) —

Loss on debt extinguishment, net 68 —

Other non-cash adjustments 21 ( 5 )

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Net cash provided by operating activities 332 155

Cash flows for investing activities:

Cash flows from investing activities

Purchase of short- and long-term investments ( 76 ) ( 37 )

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Net cash (used in) provided by financing activities ( 303 ) 3

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 28 ) —

Net increase (decrease) in cash, cash equivalents and restricted cash 6 ( 18 )

Effect of exchange rate changes on cash and cash equivalents ( 28 ) ( 6 )

Net decrease in cash, cash equivalents and restricted cash ( 149 ) ( 26 )

Cash, cash equivalents and restricted cash

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

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The Company has identified significant accounting policies that are critical to understanding its business and results of operations.

Wayfair believes that there have been no significant changes during the three and six months ended June 30, 2025 to the items disclosed in Note 1, Summary of Significant Accounting Policies , included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Wayfair believes that there have been no significant changes during the three and nine months ended September 30, 2025 to the items disclosed in Note 1, Summary of Significant Accounting Policies , included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Issued Accounting Pronouncements

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Wayfair is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes the accounting for costs related to internal-use software, and clarifies the threshold entities apply to begin capitalizing costs.

The amendment is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years.

The amendment can be applied on a fully prospective basis, a modified basis for in-process projects, or on a retrospective basis.

Wayfair is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

Supplemental Financial Statement Disclosures

Accounts Receivable, Net

As of June 30, 2025, accounts receivable was $ 110 million, net of allowance for credit losses of $ 21 million.

As of September 30, 2025, accounts receivable was $ 129 million, net of allowance for credit losses of $ 25 million.

As of December 31, 2024, accounts receivable was $ 155 million, net of allowance for credit losses of $ 18 million.

The changes in the allowance for credit losses were not material for the three and six months ended June 30, 2025.

Management believes credit risk is mitigated for the three and six months ended June 30, 2025, as approximately 98.9 % and 98.8 %, respectively, of the net revenue recognized was collected in advance of recognition.

The changes in the allowance for credit losses were not material for the three and nine months ended September 30, 2025.

Management believes credit risk is mitigated for the three and nine months ended September 30, 2025, as approximately 98.6 % and 98.7 %, respectively, of the net revenue recognized was collected in advance of recognition.

Contract Liabilities

Contract liabilities included in other current liabilities were $ 229 million at June 30, 2025 and $ 224 million at December 31, 2024.

During the six months ended June 30, 2025, Wayfair recognized $ 158 million of net revenue that was included within other current liabilities as of December 31, 2024.

During the six months ended June 30, 2024, Wayfair recognized $ 134 million of net revenue that was included within other current liabilities as of December 31, 2023.

Contract liabilities included in other current liabilities were $ 236 million at September 30, 2025 and $ 224 million at December 31, 2024.

During the nine months ended September 30, 2025, Wayfair recognized $ 163 million of net revenue that was included within other current liabilities as of December 31, 2024.

During the nine months ended September 30, 2024, Wayfair recognized $ 139 million of net revenue that was included within other current liabilities as of December 31, 2023.

Net revenue from contracts with customers is disaggregated by geographic region because this manner of disaggregation best depicts how the nature, amount, timing and uncertainty of net revenue and cash flows are affected by economic factors.

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Impairment and Other Related Net Charges

During the six months ended June 30, 2025, Wayfair recorded net charges of $ 23 million, inclusive of $ 20 million associated with its decision to exit the German market (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.

During the nine months ended September 30, 2025, Wayfair recorded net charges of $ 23 million, inclusive of $ 20 million associated with its decision to exit the German market (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.

The $ 20 million of charges associated with the Germany Restructuring is inclusive of $ 9 million related to operating lease right-of-use (“ROU”) assets, $ 19 million related to property, plant and equipment, partially offset by a recovery of $ 8 million related to the termination of its office lease in Germany.

Restructuring Charges

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

During the three and six months ended June 30, 2025, this includes $ 6 million and $ 46 million, respectively, related to the Germany Restructuring and $ 3 million and $ 19 million, respectively, related to the March 2025 workforce reduction, which impacted members of the technology team.

As of June 30, 2025, Wayfair expects the total cost to be incurred under both actions to be $ 79 million, of which $ 65 million has been recorded to date.

During the three and nine months ended September 30, 2025, Wayfair incurred $ 3 million and $ 68 million, respectively, of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs.

During the three and nine months ended September 30, 2025, this includes $ 2 million and $ 48 million, respectively, related to the Germany Restructuring and $ 1 million and $ 20 million, respectively, related to the March 2025 workforce reduction, which impacted members of the technology team.

As of September 30, 2025, Wayfair expects the total cost to be incurred under both actions to be $ 73 million, of which $ 68 million has been recorded to date.

Wayfair expects to incur the remainder of the charges through the year ended December 31, 2025.

As of June 30, 2025, $ 24 million and $ 3 million, is accrued within other current liabilities, for employee severance benefits for the Germany Restructuring and the March 2025 workforce reduction, respectively.

As of September 30, 2025, $ 19 million and $ 1 million, is accrued within other current liabilities, for employee severance benefits for the Germany Restructuring and the March 2025 workforce reduction, respectively.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses.

We are evaluating the full effects of the legislation on our estimated annual effective tax rate and cash tax position, but we expect that the legislation will likely not have a material impact on our financial statements.

As the legislation was signed into law after the close of our second quarter, the impacts are not included in our operating results for the six months ended June 30, 2025.

Wayfair continues to evaluate the full effects on the full year income tax provision and cash tax position, but the legislation is not expected to have a material impact on the financial statements.

The impacts are not material to operating results for the nine months ended September 30, 2025.

Equity-based Compensation

In September 2025, under the 2023 Plan, the Company granted 5,000,000 performance stock units ("PSUs") to the Company’s Chief Executive Officer (the “CEO Award”).

The CEO Award consists of six tranches of PSUs over specified performance periods that each vest based upon the satisfaction of both:

(i) the CEO’s continued employment as CEO through the applicable vesting date, and (ii) the achievement of certain stock price hurdles.

If the stock price hurdle for a particular tranche of PSUs is not met during the applicable performance period for such tranche, or if the CEO’s service is terminated before achieving such stock price hurdle, no portion of that tranche will vest.

The Company recognizes stock-based compensation expense for awards with market conditions over the derived service period of the awards.

The estimated fair value and derived service period for the awards with market conditions are calculated using a Monte Carlo simulation.

Assumptions used in valuing awards with market conditions include expected volatility.

Cash, Cash Equivalents and Restricted Cash, Investments and Fair Value Measurements

As of June 30, 2025 and December 31, 2024, Wayfair’s marketable securities, which primarily consisted of corporate bonds and other government obligations that are priced at fair value, were classified as available-for-sale investments.

During the three and six months ended June 30, 2025 and 2024, Wayfair did not have any realized gains or losses.

As of September 30, 2025 and December 31, 2024, Wayfair’s marketable securities, which primarily consisted of corporate bonds and other government obligations that are priced at fair value, were classified as available-for-sale investments.

During the three and nine months ended September 30, 2025 and 2024, Wayfair did not have any realized gains or losses.

Interest income includes interest earned from cash and cash equivalents and marketable securities.

During the three and six months ended June 30, 2025, Wayfair recorde d $ 13 million and $ 23 million of interest income, respectively.

During the three and six months ended June 30, 2024, Wayfair recorded $ 14 million and $ 26 million of interest income, respectively.

The following table presents details of Wayfair’s investment securities as of June 30, 2025 and December 31, 2024:

June 30, 2025

During the three and nine months ended September 30, 2025, Wayfair recorde d $ 11 million and $ 34 million of interest income, respectively.

During the three and nine months ended September 30, 2024, Wayfair recorded $ 13 million and $ 39 million of interest income, respectively.

The following table presents details of Wayfair’s investment securities as of September 30, 2025 and December 31, 2024:

September 30, 2025

Losses Estimated

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Wayfair does not have assets that are classified as Level 3.

The following tables set forth the fair value of Wayfair's financial assets measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

June 30, 2025

The following tables set forth the fair value of Wayfair's financial assets measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

September 30, 2025

Level 1 Level 2 Level 3 Total

22 unchanged sentences

The following table presents the outstanding principal amount and carrying value of debt and other financing:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Debt Instrument Principal Amount Unamortized Debt Discount Net Carrying Amount Principal Amount Unamortized Debt Discount Net Carrying Amount

10 unchanged sentences

Long-term debt $ 2,748 $ 2,882

(1) Short-term debt consists of $ 157 million for the 2025 Notes (as defined below) as of June 30, 2025 and $ 236 million for the 2025 Notes as of December 31, 2024.

(1) Short-term debt consists of $ 157 million for the 2025 Notes and $ 39 million for the 2026 Notes (as defined below) as of September 30, 2025 and $ 236 million for the 2025 Notes as of December 31, 2024.

Short-term debt is presented within other current liabilities in the condensed consolidated balance sheets.

2 unchanged sentences

Wayfair has a five-year senior secured revolving credit facility (the “Revolver”), which matures on March 13, 2030, and provides for revolving loans in an aggregate amount of $ 500 million.

As of June 30, 2025, there were no revolving loans outstanding under the Revolver.

As of September 30, 2025, there were no revolving loans outstanding under the Revolver.

Under the Revolver, Wayfair may, from time to time, request letters of credit, which reduce the availability of credit under the Revolver.

Wayfair had $ 74 million outstanding letters of credit as of June 30, 2025, primarily as security for lease agreements, which reduced the availability of credit under the Revolver.

Wayfair had $ 74 million outstanding letters of credit as of September 30, 2025, primarily as security for lease agreements, which reduced the availability of credit under the Revolver.

Senior Secured Notes

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Conversion and Redemption Terms of the Notes

Wayfair's Convertible Notes will mature at their maturity date unless earlier purchased, redeemed or converted.

Wayfair's Convertible Notes will mature at their maturity date unless earlier repurchased, redeemed or converted.

The Convertible Notes’ initial conversion terms are summarized below:

8 unchanged sentences

• during any calendar quarter (and only during such calendar quarter), if the last reported sale price of Wayfair’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

measurement period was less than 98 % of the product of the last reported sale price of Wayfair’s Class A common stock and the conversion rate on each such trading day;

• during the five -business day period after any ten consecutive trading day period (the “measurement period") in which the trading price (as defined in the applicable indenture) per $ 1,000 principal amount of the notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of Wayfair’s Class A common stock and the conversion rate on each such trading day;

• if Wayfair calls the notes for redemption, at any time prior to 5:00 p.m.

2 unchanged sentences

On or after the applicable Free Convertibility Date until the close of business on the second scheduled trading day immediately preceding the applicable maturity date, holders of the Convertible Notes may convert their Convertible Notes at any time.

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.

The conditional conversion features of the 2028 Notes were triggered during the calendar quarter ended September 30, 2025, therefore the 2028 Notes are convertible during the calendar quarter ended December 31, 2025.

The conditional conversion features of the 2026 Notes and 2027 Notes were not triggered during the calendar quarter ended September 30, 2025, therefore, the 2026 Notes and 2027 Notes are not convertible during the calendar quarter ended December 31, 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 could have converted 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.

On October 1, 2025, the 2025 Notes matured and Wayfair paid in cash the remaining outstanding principal of $ 157 million to the holders of the 2025 Notes.

Upon the occurrence of a fundamental change (as defined in the applicable indenture), holders of the applicable series of the Convertible Notes may require Wayfair to repurchase all or a portion of such Notes for cash at a price equal to 100 % of the principal amount of such Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date.

3 unchanged sentences

The redemption price will be either 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, or the if-converted value if the holder elects to convert their Convertible Notes upon receiving notice of redemption.

The Company has not called for redemption or redeemed any of the Convertible Notes as of September 30, 2025.

Partial Extinguishment of Convertible Notes

3 unchanged sentences

In accounting for these repurchases, Wayfair 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 combined net carrying value of the 2025 Notes and the 2026 Notes of $ 197 million.

On August 20, 2025, Wayfair repurchased $ 101 million in aggregate principal amount of the 2028 Notes.

In accounting for the repurchases, Wayfair recorded a $ 99 million loss on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $ 200 million and the net carrying value of the 2028 Notes of $ 101 million.

Conversions of Convertible Notes

During the three and six months ended June 30, 2025, there were no conversions of the Convertible Notes.

During the three and nine months ended September 30, 2025, there were no conversions of the Convertible Notes.

Interest Expense

During the three months ended June 30, 2025, Wayfair recognized contractual interest expense and debt discount amortization of $ 41 million and $ 2 million, respectively, and during the six months ended June 30, 2025, contractual interest expense and debt discount amortization of $ 73 million and $ 5 million, respectively.

During the three months ended June 30, 2024, Wayfair recognized contractual interest expense and debt discount amortization of $ 16 million and $ 2 million, respectively, and during the six months ended June 30, 2024, contractual interest expense and debt discount amortization of $ 31 million and $ 5 million, respectively.

During the three months ended September 30, 2025, Wayfair recognized contractual interest expense and debt discount amortization of $ 41 million and $ 4 million, respectively, and during the nine months ended September 30, 2025, contractual interest expense and debt discount amortization of $ 114 million and $ 9 million, respectively.

During the three months ended September 30, 2024, Wayfair recognized contractual interest expense and debt discount amortization of $ 17 million and $ 2 million, respectively, and during the nine months ended September 30, 2024, contractual interest expense and debt discount amortization of $ 48 million and $ 7 million, respectively.

Fair Value of the Notes

As of June 30, 2025, the estimated fair value of the 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 2029 Secured Notes and 2030 Secured Notes was $ 155 million, $ 37 million, $ 788 million, $ 931 million, $ 802 million and $ 707 million, respectively.

The estimated fair values of the Notes was determined through consideration of quoted market prices.

As of September 30, 2025, the estimated fair value of each of the 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, 2029 Secured Notes and 2030 Secured Notes was $ 156 million, $ 38 million, $ 1,046 million, $ 1,222 million, $ 827 million and $ 736 million, respectively.

The estimated fair values of the Notes were determined through consideration of quoted market prices.

The fair values of the Notes are classified as Level 2 as defined in Note 3, Cash, Cash Equivalents and Restricted Cash, Investments and Fair Value Measurements .

As of June 30, 2025, the if-converted value of the 2028 Notes exceeded the principal value by $ 80 million.

As of June 30, 2025, the if-converted value of the 2025 Notes, 2026 Notes, and 2027 Notes did not exceed the principal value.

As of September 30, 2025, the if-converted value of the 2027 Notes and of the 2028 Notes exceeded the principal value by $ 281 million and $ 560 million, respectively.

As of September 30, 2025, the if-converted value of the 2025 Notes and 2026 Notes did not exceed the principal value.

The 2025 Capped Calls, 2026 Capped Calls, 2027 Capped Calls and 2028 Capped Calls (collectively, the “Capped Calls”) are expected generally to reduce the potential dilution and/or offset the cash payments Wayfair is required to make in excess of the principal amount of the Convertible Notes upon conversion of the Convertible Notes if the market price per share of Wayfair’s Class A common stock is greater than the strike price of the applicable Capped Call (which corresponds to the initial conversion price of the applicable Convertible Notes and is subject to certain adjustments under the terms of the applicable Capped Call), with such reduction and/or offset subject to a cap based on the cap price of the applicable Capped Calls (the “Initial Cap Price”).

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The Capped Calls do not meet the criteria for separate accounting as a derivative as they are indexed to Wayfair's stock and meet the requirements to be classified in equity.

The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within stockholders’ deficit when they were entered.

The premiums paid for the Capped Calls were

included as a net reduction to additional paid-in capital within stockholders’ deficit when they were entered.

The Capped Calls for the 2025 Notes expired on October 1, 2025.

Commitments and Contingencies

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Litigation and legal claims are inherently unpredictable and claims cannot be predicted with certainty.

An unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s results of operations or financial condition, and regardless of the outcome, these matters can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting Wayfair's overall operations.

An unfavorable resolution of one or more legal matters could have a material adverse effect on the Company’s results of operations or financial condition, and regardless of the outcome, these matters can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting Wayfair's overall operations.

In addition, Wayfair may also find itself at greater risk to outside party claims as it increases its operations in jurisdictions where the laws with respect to the potential liability of online retailers are uncertain, unfavorable, or unclear.

However, Wayfair does not currently believe that the outcome of any legal matters will have a material adverse effect on Wayfair’s results of operations or financial condition.

However, as of the date of this report, Wayfair does not believe that the outcome of any current legal matters will have a material adverse effect on Wayfair’s results of operations or financial condition.

Canada Border Services Agency

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Wayfair believes there are substantial factual and legal grounds to appeal and partially recuperate these amounts and is exploring other options to mitigate exposure.

During the three and six months ended June 30, 2025, in connection with the CBSA Review, Wayfair incurred approximately $ 9 million and $ 14 million, respectively, to cost of goods sold within the condensed consolidated statements of operations and made payments of approximately $ 3 million and $ 8 million of duties based on assessments received during the three and six months ended June 30, 2025, respectively, related to the year ended December 31, 2023.

As of June 30, 2025, approximately $ 11 million was recorded within other current liabilities in the condensed consolidated balance sheets.

During the nine months ended September 30, 2025, in connection with the CBSA Review, Wayfair incurred approximately $ 14 million to cost of goods sold within the condensed consolidated statements of operations and made payments of approximately $ 11 million and $ 19 million of duties based on assessments received during the three and nine months ended September 30, 2025, respectively, related to the year ended December 31, 2023.

No costs were incurred during the three months ended September 30, 2025.

As of September 30, 2025, there were no costs recorded within other current liabilities in the condensed consolidated balance sheets.

The CBSA is also examining Wayfair’s valuation of duties under the Customs Act for goods imported into Canada for the years ended December 31, 2025, 2024, 2023, 2022, 2021 and 2020.

During the three months ended June 30, 2025, Wayfair recorded a benefit of $ 7 million to cost of goods sold within the condensed consolidated statements of operations related to the examinations for the three months ended December 31, 2024 and March 31, 2025.

The examinations for part of the year ended December 31, 2024 and the years ended December 31, 2023 and 2022 resulted in a benefit of $ 38 million recorded during the three months ended March 31, 2025 to cost of good sold within the condensed consolidated statement of operations.

The examinations for part of the year ended December 31, 2024 and the years ended December 31, 2023 and 2022 resulted in a benefit of $ 38 million recorded during the three months ended March 31, 2025 to cost of goods sold within the condensed consolidated statement of operations.

This was related to an overpayment of duties during those years, and the refunds from this audit will primarily be used to offset future normal course custom duties payments and payments due under the CBSA Review.

Stockholders’ Deficit

Since Wayfair's initial public offering through June 30, 2025, 57,380,119 shares of Class B common stock were converted to Class A common stock.

Since Wayfair's initial public offering through September 30, 2025, 58,580,119 shares of Class B common stock were converted to Class A common stock.

Stock Repurchase Programs

During the three and six months ended June 30, 2025 and 2024, Wayfair did not repurchase any shares of Class A Common stock under the authorized repurchase programs.

During the three and nine months ended September 30, 2025 and 2024, Wayfair did not repurchase any shares of Class A Common stock under the authorized repurchase programs.

Equity-Based Compensation

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Shares subject to awards that are forfeited, expire or are otherwise terminated without shares being issued, or shares withheld to satisfy tax withholding obligations, will be returned to the pool of shares available for grant and issuance under the 2023 Plan.

As of June 30, 2025, 7,176,749 shares of Class A common stock remained available for future grant under the 2023 Plan.

The following table presents activity relating to RSUs for the six months ended June 30, 2025:

As of September 30, 2025, 7,095,187 shares of Class A common stock remained available for future grant under the 2023 Plan.

Restricted Stock Units

The following table presents activity relating to RSUs for the nine months ended September 30, 2025:

Shares Weighted-Average

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RSUs forfeited/canceled ( 255,645 ) $ 76.89

Unvested at June 30, 2025

Unvested at September 30, 2025

1,335,152 $ 83.73

(1) The amount of RSUs vested includes shares withheld by Wayfair to cover taxes.

As of June 30, 2025, unrecognized equity-based compensation expense related to RSUs expected to vest over time is $ 42 million with a weighted-average remaining vesting term of 0.1 years.

The following table summarizes activity for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

As of September 30, 2025, unrecognized equity-based compensation expense related to RSUs expected to vest over time is $ 30 million with a weighted-average remaining vesting term of 0.1 years.

The following table summarizes activity for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

Weighted average grant date fair value of RSUs $ 50.88 $ 54.67

1 unchanged sentence

Intrinsic value of RSUs vested (in millions) $ 240 $ 310

As of June 30, 2025, the aggregate intrinsic value of unvested RSUs was $ 132 million.

Equity-based compensation was classified as follows in the condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024:

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

As of September 30, 2025, the aggregate intrinsic value of unvested RSUs was $ 119 million.

Performance Stock Units with Market-Based Conditions

In September 2025, under the 2023 Plan, the Company granted 5,000,000 performance stock units ("PSUs") to the Company’s Chief Executive Officer (the “CEO Award”).

The CEO Award consists of six tranches of PSUs over specified performance periods that each vest based upon the satisfaction of both:

(i) the CEO’s continued employment as CEO through the applicable vesting date, and (ii) the achievement of certain stock price hurdles.

The estimated fair value and derived service period for awards with market conditions are calculated using a Monte Carlo simulation.

Expected volatility assumptions applied within the valuation model are derived from the market-based implied volatility levels of the Company’s options at the time of grant.

The expected volatility used to estimate the fair value of the CEO Award was 60 %.

The following table summarizes activity for the nine months ended September 30, 2025:

Shares Weighted-Average

Unvested at December 31, 2024

PSUs granted 5,000,000 $ 56.11

PSUs vested — $ —

PSUs forfeited/cancelled — $ —

Unvested at September 30, 2025

5,000,000 $ 56.11

As of September 30, 2025, there was $ 278.3 million of unrecognized stock-based compensation expense related to PSUs.

The Company expects to recognize this amount over a remaining weighted-average period of 4.3 years.

As of September 30, 2025, the aggregate intrinsic value of unvested PSUs was $ 447 million.

Equity-based compensation was classified as follows in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024:

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

2025 2024 2025 2024

(in millions)

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Total equity-based compensation expense $ 88 $ 95 $ 252 $ 309

Equity-based compensation costs capitalized as software costs wer e $ 9 million and $ 15 million for the three and six months ended June 30, 2025, respectively, and $ 8 million and $ 19 million for the three and six months ended June 30, 2024, respectively.

Earnings (Loss) per Share

Equity-based compensation costs capitalized as software costs wer e $ 7 million and $ 22 million for the three and nine months ended September 30, 2025, respectively, and $ 10 million and $ 29 million for the three and nine months ended September 30, 2024, respectively.

Loss per Share

Wayfair follows the two-class method when computing earnings or loss per share for its two issued classes of common stock - Class A and Class B.

1 unchanged sentence

Diluted earnings or loss per share is computed using the weighted-average number of shares of common stock outstanding during the period plus, if dilutive, common stock equivalents outstanding during the period and stock issuable upon conversion of the convertible debt instruments.

Wayfair's common stock equivalents consist of shares issuable upon the release of restricted stock units.

Wayfair's common stock equivalents consist of shares issuable upon the release of restricted stock units and performance stock units.

The dilutive effect of these common stock equivalents is reflected in diluted earnings or loss per share by application of the treasury stock method.

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As a result, basic and diluted earnings or loss per share per Class A and Class B shares are equivalent.

The following table presents the calculation of basic and diluted earnings (loss) per share:

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

The following table presents the calculation of basic and diluted loss per share:

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

2025 2024 2025 2024

(in millions, except per share data)

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

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

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 after the effect of dilutive securities

129 122 127 121

Earnings (Loss) per share

Numerator for basic and diluted loss per share - net loss $ ( 99 ) $ ( 74 ) $ ( 197 ) $ ( 364 )

Denominator for basic loss per share - weighted-average number of shares of common stock outstanding 130 123 128 122

Denominator for diluted loss per share - weighted-average number of shares of common stock outstanding after the effect of dilutive securities 130 123 128 122

Loss per share

Basic $ ( 0.76 ) $ ( 0.60 ) $ ( 1.54 ) $ ( 2.98 )

Diluted $ ( 0.76 ) $ ( 0.60 ) $ ( 1.54 ) $ ( 2.98 )

The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted earnings (loss) per share were as follows:

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

The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted loss per share were as follows:

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

2025 2024 2025 2024

1 unchanged sentence

Unvested restricted stock units 1 3 1 3

Unvested performance stock units 5 — 5 —

Shares related to convertible debt instruments 24 36 24 36

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These segments reflect the way the CODM allocates resources and evaluates financial performance, which is based upon each segment's Adjusted EBITDA.

Adjusted EBITDA is defined 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 ongoing operating performance.

Adjusted EBITDA is defined 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 ongoing operating performance.

These charges are excluded from the evaluation of segment performance because it facilitates reportable segment performance comparisons on a period-to-period basis as these costs may vary independent of business performance.

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Wayfair allocates certain operating expenses to the operating and reportable segments, including customer service and merchant fees and selling, operations, technology, general and administrative expenses based on the usage and relative contribution provided to the segments.

It excludes from the allocations certain operating expense lines, including depreciation and amortization, equity-based compensation and related taxes, impairment and other related net charges and restructuring charges, as well as interest income or expense, net, other income or expense, net, gain or loss on debt extinguishment and provision or benefit for income taxes.

There are no net revenue transactions between Wayfair's reportable segments.

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The following tables present net revenue, significant segment expenses and Adjusted EBITDA attributable to Wayfair’s reportable segments for the periods presented:

Three Months Ended June 30,

Three Months Ended September 30,

(in millions)

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reconciling items (3)

Net income (loss) $ 15 $ ( 42 )

Six Months Ended June 30,

Net loss $ ( 99 ) $ ( 74 )

Nine Months Ended September 30,

(in millions)

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Excluded from Wayfair's evaluation of segment performance and from other segment items are 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 ongoing operating performance.

(3) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net income (loss):

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

(3) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net loss:

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

2025 2024 2025 2024

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Interest expense, net 31 5 83 15

Other (income) expense, net ( 23 ) 1 ( 33 ) 5

Provision for income taxes 2 2 5 5

Other (expense) income, net 5 ( 8 ) ( 28 ) ( 3 )

Provision for income taxes, net 2 3 7 8

Impairment and other related net charges (a)

Restructuring charges (b)

Gain on debt extinguishment (c)

( 6 ) — ( 31 ) —

Loss on debt extinguishment, net (c)

Total reconciling items $ 307 $ 193 $ 716 $ 721

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.

During the nine months ended September 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.

This is inclusive of $ 48 million related to the Germany Restructuring and $ 20 million related to the March 2025 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.

During the nine months ended September 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.

Refer to Note 2, Supplemental Financial Statement Disclosures , for additional information.

During the three and six months ended June 30, 2025, Wayfair recorded a $ 6 million and $ 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.

During the three and nine months ended September 30, 2025, Wayfair recorded a $ 99 million and $ 68 million loss on debt extinguishment upon repurchase of $ 101 million in aggregate principal amount of the 2028 Notes, $ 80 million in aggregate principal amount of the 2025 Notes and $ 696 million in aggregate principal amount of the 2026 Notes.

The following table presents long-lived assets attributable to Wayfair's reportable segments reconciled to the consolidated amounts:

September 30,

2025 December 31,

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The following table presents total assets attributable to Wayfair's reportable segments reconciled to consolidated amounts:

September 30,

2025 December 31,

9 unchanged sentences

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 1. Financial Statements