What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-08-04 · 150 added, 144 removed, 357 unchanged (45% of the section changed)

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

All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our investment plans and anticipated returns on those investments;

All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q are forward-looking statements, including statements regarding our investment plans and anticipated returns on those investments;

our future customer growth;

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

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

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

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

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We cannot guarantee that any forward-looking statement will be accurate, although we believe that we have been reasonable in our expectations and assumptions.

Investors should realize that if underlying assumptions prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially from Wayfair’s expectations and projections.

Investors should realize that if underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from Wayfair’s forward-looking statements, including our expectations and projections.

Investors are therefore cautioned not to place undue reliance on any forward-looking statements.

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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 and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, unless otherwise noted.

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

Wayfair is the destination for all things home.

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

We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity for acquiring more market share.

We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity to acquire more market share.

Our business model is designed to grow our net revenue by acquiring new customers as well as stimulating repeat purchases from our existing customers.

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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 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.

During the three months ended September 30, 2025, net revenue increased by 8.1% compared to the same period in 2024.

As of September 30, 2025, we had 21 million active customers and during the three months ended September 30, 2025, 80.1% of orders came from repeat buyers.

The increased sales represents our ongoing execution of business initiatives amid persistent macroeconomic 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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government announced additional tariffs on goods imported into the U.S.

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

While some trade deals have been reached, trade negotiations are ongoing, and overall the global trade environment remains fluid and highly uncertain.

from numerous countries, including the home goods category, and starting in the fourth quarter of 2025, the U.S.

government began imposing additional tariffs applicable to certain home goods, which as of the date of this report are scheduled to increase in January 2026.

Multiple nations have announced tariffs and other actions in response.

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

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.

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

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

We continue 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.

results of operations.

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

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

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

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Key Financial Statement and Operating Metrics

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

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

We measure our business using the key financial statement, operating metrics and non-GAAP financial measures that are reflected in the below table.

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

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

All other key financial statement and operating metrics are derived and reported from our consolidated net revenue.

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

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

We use the following metrics to assess the performance of our overall business:

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

2025 2024 2025 2024

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Income (Loss) from operations $ 38 $ (74) $ (67) $ (344)

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

Earnings (Loss) per share:

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

Loss per share

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

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Free Cash Flow $ 93 $ (9) $ 184 $ (19)

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

Adjusted Diluted Earnings per Share $ 0.70 $ 0.22 $ 1.73 $ 0.38

(1) The number of active customers represents the total number of individual customers who have purchased at least once directly from our sites during the preceding twelve-month period.

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Results of Consolidated Operations

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.

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

During the three months ended September 30, 2025, net revenue increased by $233 million, or 8.1%, compared to the same period in 2024, which reflects our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers.

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

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

net revenue increased by 8.6%.

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,

During the three months ended September 30, 2025, our International net revenue increased by 4.6% 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 September 30, 2025, International Net Revenue Constant Currency Growth was 3.5% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Three Months Ended September 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 June 30, 2025, cost of goods sold increased by $113 million, or 5.2%, compared to the same period in 2024.

During the three months ended September 30, 2025, cost of goods sold increased by $172 million, or 8.6%, 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,

As a percentage of net revenue, cost of goods sold increased to 70.0% for the three months ended September 30, 2025 compared to 69.7% 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 September 30,

2025 2024 % Change

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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 June 30,

Three Months Ended September 30,

2025 2024 % Change

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

Three Months Ended June 30,

Three Months Ended September 30,

(in millions)

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Selling, operations, technology, general and administrative $ 85 $ 92

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.

During the three months ended September 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 $7 million, or 7.3%, compared to the same period in 2024, as a result of a decrease in restricted stock units awarded during the three months ended September 30, 2025.

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

Three Months Ended June 30,

Three Months Ended September 30,

Customer service and merchant fees 3.7 % 3.7 %

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Customer Service and Merchant Fees

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.

During the three months ended September 30, 2025, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees increased by $6 million, or 5.6%, 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 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.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.8% for the three months ended September 30, 2025 compared to 3.9% in the same period in 2024 primarily due to increased net revenue during the period.

During the three months ended September 30, 2025, our advertising expenses decreased by $24 million, or 6.8%, compared to the same period in 2024.

The decrease reflects our response to changing market conditions and changes in our advertising channel mix, as we seek to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses decreased to 10.6% for the three months ended September 30, 2025 compared to 12.3% 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 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.

During the three months ended September 30, 2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $28 million, or 7.2%, 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 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.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 14.3% for the three months ended September 30, 2025, compared to 16.6% in the same period in 2024, primarily due to decreased compensation costs.

Impairment and other related net charges

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

During the three months ended September 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.

During the three months ended September 30, 2025, restructuring charges increased by $3 million, or 100.0%, compared to the same period in 2024.

As a percentage of net revenue, restructuring charges increased to 0.1% 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.

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

This is inclusive of $2 million related to the Germany Restructuring and $1 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,

During the three months ended September 30, 2025, interest expense, net increased by $26 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 September 30,

2025 2024 % Change

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Interest expense, net $ (31) $ (5) NM

NM - Not Meaningful

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.

During the three months ended September 30, 2025, other (expense) income, net increased by $13 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,

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

Three Months Ended September 30,

2025 2024 % Change

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Other income (expense), net $ (5) $ 8 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.

NM - Not Meaningful

Loss on debt extinguishment

During the three months ended September 30, 2025, loss on debt extinguishment increased by $99 million, or 100.0%, compared to the same period in 2024.

During the three months ended September 30, 2025, we 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.

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,

Three Months Ended September 30,

2025 2024 % Change

(in millions)

Gain on debt extinguishment

Loss on debt extinguishment

$ (99) $ — 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,

Provision for income taxes, net

During the three months ended September 30, 2025, our provision for income taxes, net decreased by $1 million, or 33.3% compared to the same period in 2024.

Three Months Ended September 30,

2025 2024 % Change

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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.

Comparison of the nine months ended September 30, 2025 and 2024

During the nine months ended September 30, 2025, net revenue increased by $390 million, or 4.5%, compared to the same period in 2024, which reflects our ongoing execution of business initiatives amid persistent macroeconomic 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.

During the nine months ended September 30, 2025, our U.S.

net revenue increased by 5.2% and International net revenue decreased by 0.7% 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,

During the nine months ended September 30, 2025, International Net Revenue Constant Currency Growth was (0.2)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Nine Months Ended September 30,

2025 2024 % Change

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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.

During the nine months ended September 30, 2025, cost of goods sold increased by $268 million, or 4.4%, 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,

As a percentage of net revenue, cost of goods sold remained relatively constant at 69.8% for the nine months ended September 30, 2025, compared the same period in 2024.

Nine Months Ended September 30,

2025 2024 % Change

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Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 % Change

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31.0 % 34.0 %

NM - Not Meaningful

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

1 unchanged sentence

Selling, operations, technology, general and administrative $ 243 $ 300

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.

During the nine months ended September 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 $61 million, or 19.4%, 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,

Nine Months Ended September 30,

Customer service and merchant fees 3.7 % 3.8 %

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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.

During the nine months ended September 30, 2025, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees remained constant compared to the same period in 2024.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.8% for the nine months ended September 30, 2025, compared to 4.0% in the same period in 2024 due to increased net revenue during the period.

During the nine months ended September 30, 2025, our advertising expenses increased by $3 million, or 0.3% , 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.

As a percentage of net revenue, advertising expense s decreased to 11.5% for the nine months ended September 30, 2025 compared to 11.9% in the same period in 2024 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

Selling, operations, technology, general and administrative

During the 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.

During the nine months ended September 30, 2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $107 million, or 8.9% 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.

As a percentage of net revenue, total selling, operations, technology, general and administrative expens es decreased to 14.7% f or the nine months ended September 30, 2025, compared to 17.2% 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.

During the nine months ended September 30, 2025, impairment and other related charge s increased by $21 million compared to the same period in 2024.

As a percentage of net revenue, impairment and other related net charge s increased to 0.3% 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.

During the nine months ended September 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.

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

office location.

Restructuring charges

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

During the nine months ended September 30, 2025, restructuring charges decreased by $11 million, or 13.9%, compared to the same period in 2024.

As a percentage of net revenue, restructuring charges decreased to 0.7% from 0.9% in the same period in 2024.

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.

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

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.

Interest expense, net

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,

During the nine months ended September 30, 2025, interest expense, net increased to $83 million , co mpared to $15 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.

Nine Months Ended September 30,

2025 2024 % Change

2 unchanged sentences

Other income (expense), net

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.

During the nine months ended September 30, 2025, other (expense) income, net increased by $25 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,

Nine Months Ended September 30,

2025 2024 % Change

1 unchanged sentence

Other income (expense), net $ 28 $ 3 NM

Gain on debt extinguishment

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.

NM - Not Meaningful

Loss on debt extinguishment

During the nine months ended September 30, 2025, loss on debt extinguishment increased by $68 million, or 100.0%, compared to the same period in 2024.

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

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.

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 % Change

(in millions)

Gain on debt extinguishment $ 31 $ — 100.0 %

Provision for income taxes

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,

Loss on debt extinguishment $ (68) $ — 100.0 %

Provision for income taxes, net

During the nine months ended September 30, 2025, our provision for income taxes, net decreased by $1 million, or 12.5% compared to the same period in 2024.

Nine Months Ended September 30,

2025 2024 % Change

(in millions)

Provision for income taxes $ 5 $ 5 — %

Provision for income taxes, net $ 7 $ 8 (12.5) %

Liquidity and Capital Resources

Sources of Liquidity

As of June 30, 2025, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.4 billion.

As of September 30, 2025, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.2 billion.

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

As of September 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 September 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:

June 30, December 31,

September 30, December 31,

(in millions)

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However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect.

In addition, we may elect to raise additional funds at any time through equity, equity-linked or debt financing arrangements.

Further, we may from time to time seek to retire, restructure, repurchase or redeem, or otherwise mitigate the equity dilution associated with our outstanding convertible debt through cash purchases, stock buybacks of some or all of the shares underlying convertible notes and/or exchanges for equity or debt in open-market purchases, privately negotiated transactions or otherwise.

We may elect to raise additional funds at any time through equity, equity-linked or debt financing arrangements.

Further, we have and may from time to time seek to retire, restructure, repurchase or redeem, or otherwise mitigate the equity dilution associated with our outstanding convertible debt through cash purchases, stock buybacks of some or all of the shares underlying convertible notes and/or exchanges for equity or debt in open-market purchases, privately negotiated transactions or otherwise.

Such repurchases, exchanges or liability management exercises, if any, will be upon such terms and at such prices and sizes as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

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

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

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

If we raise additional funds through the issuance of equity, equity-linked or debt financing arrangements, those securities and instruments may have rights, preferences or privileges senior to the rights of our common stock, and the holders of our equity securities may experience dilution.

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Credit Agreement and Debt Arrangements

As of June 30, 2025, we had $3.1 billion principal amount of indebtedness outstanding.

As of September 30, 2025, we had $3.0 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”).

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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.

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

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

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.

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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 June 30, 2025, we were in compliance with all the terms and conditions of our debt agreements.

As of September 30, 2025, we were in compliance with all the terms and conditions of our debt agreements.

Stock Repurchase Program

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

As of September 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

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions)

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Net cash used in investing activities $ (150) $ (178)

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

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

Operating Activities

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

Cash flows provided by operating activities 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.

Cash flows provided by operating activities increased by $177 million during the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to a decrease in net loss adjusted for non-cash items of $162 million, partially offset by an increase of $15 million for cash changes in operating assets and liabilities.

Investing Activities

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.

Cash flows used in investing activities decreased by $28 million during the nine months ended September 30, 2025, compared to the same period in 2024, due to an increase in purchases of short- and long-term investments of $39 million, increases in sales and maturities of short- and long-term investments of $41 million, decreases in purchases of property and equipment and site and software development costs of $26 million.

Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 1.6% of net revenue for the nine months ended September 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 used in financing activities increased by $63 million during the six months ended June 30, 2025, compared to the same period in 2024.

Cash flows used in financing activities increased by $306 million during the nine months ended September 30, 2025, compared to the same period in 2024.

The increase in cash used is primarily due to payments to extinguish debt of $940 million, partially offset by proceeds from the issuance of debt of $691 million.

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Contractual Obligations

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.

During the nine months ended September 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, $696 million in aggregate principal amount of the 2026 Notes, and $101 million in aggregate principal amount of the 2028 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.

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To provide investors with additional information regarding our financial results, we have disclosed in this Quarterly Report on Form 10-Q the following non-GAAP financial measures:

Adjusted EBITDA, Free Cash Flow, Adjusted Diluted Earnings or Loss per Share and Net Revenue Constant Currency Growth.

Adjusted EBITDA, Free Cash Flow, Net Revenue Constant Currency Growth and Adjusted Diluted Earnings or Loss per Share.

Adjusted EBITDA

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

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

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

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

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

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

2025 2024 2025 2024

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Reconciliation of Adjusted EBITDA:

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

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

Depreciation and amortization 75 94 234 297

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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 (1)

Restructuring charges (2)

Gain on debt extinguishment (3)

Loss on debt extinguishment (3)

Adjusted EBITDA $ 208 $ 119 $ 519 $ 357

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.

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.

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

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, 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.

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

During the three and nine months ended September 30, 2025, we recorded a $99 million and $68 million, respectively, 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.

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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

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Adjusted Diluted Earnings or Loss per Share

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

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

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

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

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

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

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

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

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

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)

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

Adjustments to net income (loss)

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Equity-based compensation and related taxes 92 98 261 323

Provision for income taxes 2 2 5 5

Provision for income taxes, net 2 3 7 8

Impairment and other related net charges — 1 23 2

Restructuring charges 3 — 68 79

Gain on debt extinguishment (6) — (31) —

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

$ 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

Loss on debt extinguishment, net 99 — 68 —

Numerator for Adjusted Diluted Earnings per Share - Adjusted net income $ 110 $ 28 $ 270 $ 48

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

Adjustments to effect of dilutive securities:

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Convertible debt instruments 26 — 27 —

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 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

Denominator for Adjusted Diluted Earnings per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 156 123 155 123

Diluted Loss per Share $ (0.76) $ (0.60) $ (1.54) $ (2.98)

Adjusted Diluted Earnings per Share $ 0.70 $ 0.22 $ 1.73 $ 0.38

Critical Accounting Policies and Estimates

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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