What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-04-30 · 249 added, 108 removed, 365 unchanged (49% of the section changed)

3 unchanged sentences

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 plans for growth, including customer growth;

our plans for growth, including customer and revenue growth and growth rates;

our future results of operations and financial position ;

available liquidity and access to financing sources;

performance across our brands and segments;

anticipated cost-cutting and liability and dilution management exercises and the expected results of such exercises;

our business strategy;

anticipated benefits of our strategic initiatives;

plans and objectives of management for future operations, including regarding our physical retail stores and omni-channel strategy;

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• risks relating to our liability and dilution management exercises;

• risks relating to achieving the anticipated benefits of strategic initiatives and investments in our technology and systems, including generative AI

• our ability to manage the impacts of our restructurings and workforce reductions;

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

• our ability to increase our net revenue per active customer;

• our ability to curate, market, grow and maintain strong brands;

• our ability to increase our net revenue;

• our ability to curate, market, grow and maintain strong brands and to grow our customer base;

• our ability to manage our growth initiatives;

12 unchanged sentences

We complement our e-commerce experience with a growing physical retail presence, designed to strengthen our brands, deepen customer engagement, and enhance the end-to-end shopping experience

During the three months ended March 31, 2026, net revenue increased by 7.4% compared to the same period in 2025.

As of March 31, 2026, we had 21 million active customers and during the three months ended March 31, 2026, 79.8% of orders came from repeat buyers.

During the three months ended June 30, 2026, net revenue increased by 7.5% compared to the same period in 2025.

As of June 30, 2026, we had 22 million active customers and during the three months ended June 30, 2026, 80.2% of orders came from repeat buyers.

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

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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.

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, home goods, that is largely unbranded and highly substitutable.

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

Three Months Ended March 31,

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

2026 2025 2026 2025

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

2 unchanged sentences

Gross profit $ 1,054 $ 984 $ 1,934 $ 1,821

Loss from operations $ (11) $ (122)

Net loss $ (105) $ (113)

Loss per share

Income (loss) from operations $ 104 $ 17 $ 93 $ (105)

Net (loss) income $ (1) $ 15 $ (106) $ (98)

(Loss) earnings per share

Basic $ (0.01) $ 0.11 $ (0.81) $ (0.77)

Diluted $ (0.01) $ 0.11 $ (0.81) $ (0.77)

Net cash used in operating activities $ (52) $ (96)

Net cash provided by operating activities $ 360 $ 273 $ 308 $ 177

Key Operating Metrics:

Active customers (1)

21.7 21.0 21.7 21.0

LTM net revenue per active customer (2)

$ 596 $ 572 $ 596 $ 572

Orders delivered (3)

10.6 10.0 20.0 19.1

Average order value (4)

$ 332 $ 328 $ 322 $ 315

Non-GAAP Financial Measures:

17 unchanged sentences

Results of Consolidated Operations

Comparison of the three months ended March 31, 2026 and 2025

During the three months ended March 31, 2026, net revenue increased by $201 million, or 7.4%, compared to the same period in 2025, 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 in addition to higher order volume resulting from brand and consumer mix shifts, compared to the same period in 2025.

During the three months ended March 31, 2026, our U.S.

net revenue increased by 7.5%.

During the three months ended March 31, 2026, our International net revenue increased by 6.0% compared to the same period in 2025.

During the three months ended March 31, 2026, International Net Revenue Constant Currency Growth was 1.7% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Three Months Ended March 31,

Comparison of the three months ended June 30, 2026 and 2025

During the three months ended June 30, 2026, net revenue increased by $246 million, or 7.5%, compared to the same period in 2025, which reflects our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers.

The increase in net revenue is due primarily to higher order volume in addition to higher average order value, compared to the same period in 2025.

During the three months ended June 30, 2026, our U.S.

net revenue increased by 8.7% compared to the same period in 2025.

During the three months ended June 30, 2026, our International net revenue decreased by 1.3% compared to the same period in 2025.

During the three months ended June 30, 2026, International Net Revenue Constant Currency Growth was (2.0)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Three Months Ended June 30,

2026 2025 % Change

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

During the three months ended March 31, 2026, cost of goods sold increased by $158 million, or 8.3%, compared to the same period in 2025.

The increase in cost of goods sold is driven by higher net revenue, in addition to the absence of a one-time benefit of $38 million related to a resolution on the valuation of duties, partially offset by $5 million of expense related to duties assessments recognized during the three months ended March 31, 2025.

As a percentage of net revenue, cost of goods sold increased to 70.0% for the three months ended March 31, 2026 compared to 69.3% in the same period in 2025, due to investments in the customer experience and a one-time benefit recognized during the three months ended March 31, 2025 related to a resolution on the valuation of duties, partially offset by the growth of our supplier services.

Three Months Ended March 31,

During the three months ended June 30, 2026, cost of goods sold increased by $176 million, or 7.7%, compared to the same period in 2025.

The increase in cost of goods sold is driven by higher net revenue, compared to the same period in 2025.

As a percentage of net revenue, cost of goods sold increased to 70.0% for the three months ended June 30, 2026 compared to 69.9% in the same period in 2025, due to investments in the customer experience, partially offset by the growth of our supplier services.

Three Months Ended June 30,

2026 2025 % Change

6 unchanged sentences

impairment and other related net charges and restructuring and other charges, net.

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

Three Months Ended March 31,

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

Three Months Ended June 30,

2026 2025 % Change

17 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30,

(in millions)

1 unchanged sentence

Selling, operations, technology, general and administrative $ 67 $ 95

During the three months ended March 31, 2026, 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 6.1%, compared to the same period in 2025, due to expense recognized during the three months ended March 31, 2026 related to the PSUs, partially offset by variability in our stock price around the grant date of restricted stock units.

During the three months ended June 30, 2026, equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $29 million, or 29.3%, compared to the same period in 2025, due to variability in our stock price on the grant dates of the restricted stock units granted during the three months ended June 30, 2025, partially offset by the expense recognized during the three months ended June 30, 2026 related to the PSUs.

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

Three Months Ended March 31,

Three Months Ended June 30,

Customer service and merchant fees 3.6 % 3.6 %

1 unchanged sentence

Customer Service and Merchant Fees

During the three months ended March 31, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for customer service and merchant fees increased by $8 million, or 7.7%, compared to the same period in 2025.

The increase in customer service and merchant fees is primarily due to increased net revenue.

As a percentage of net revenue, total customer service and merchant fees remained relatively constant at 3.9% for the three months ended March 31, 2026 compared to the same period in 2025.

During the three months ended March 31, 2026, our advertising expenses decreased by $15 million, or 4.4%, compared to the same period in 2025.

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 11.2% for the three months ended March 31, 2026 compared to 12.6% in the same period in 2025 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

During the three months ended June 30, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for customer service and merchant fees increased by $8 million, or 6.8%, compared to the same period in 2025.

The increase in customer service and merchant fees is due primarily to increased net revenue.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.6% for the three months ended June 30, 2026 compared to 3.7% in the same period in 2025 due to increased net revenue and decreased compensation costs.

During the three months ended June 30, 2026, advertising expenses increased by $20 million, or 5.4%, compared to the same period in 2025.

The increase 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 11.1% for the three months ended June 30, 2026 compared to 11.4% in the same period in 2025 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

Selling, operations, technology, general and administrative

During the three months ended March 31, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $10 million, or 2.7%, compared to the same period in 2025.

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

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 14.5% for the three months ended March 31, 2026, compared to 15.7% in the same period in 2025, primarily due to the increase in net revenue.

During the three months ended June 30, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $9 million, or 2.4%, compared to the same period in 2025.

The decrease is due primarily to amortization expenses and capitalized labor costs, partially offset by increases in technology spend.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 12.2% for the three months ended June 30, 2026, compared to 14.2% in the same period in 2025, primarily due to decreased compensation costs and increased net revenue.

Impairment and other related net charges

During the three months ended March 31, 2026, impairment and other related charges decreased by $23 million, or 100.0%, compared to the same period in 2025.

The decrease is due to impairment charges recognized in the prior year related to the Germany Restructuring and weakened macroeconomic conditions in connection with the German operations.

No impairment charges were recorded during the three months ended March 31, 2026.

During the three months ended June 30, 2026, impairment and other related charges increased by $2 million, or 100.0%, compared to the same period in 2025.

The increase is due to the exit of a customer service center in the U.S.

No impairment charges were recorded during the three months ended June 30, 2025.

Restructuring and other charges, net

During the three months ended March 31, 2026, restructuring and other charges, net decreased by $32 million, or 57.1%, compared to the same period in 2025.

As a percentage of net revenue, restructuring and other charges, net decreased to 0.8% from 2.1% in the same period in 2025.

During the three months ended March 31, 2026, we incurred $24 million of charges related to a loss on termination of an operating lease for a logistics facility.

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

During the three months ended June 30, 2026, restructuring and other charges, net decreased by $9 million, or 100.0%, compared to the same period in 2025.

As a percentage of net revenue, restructuring and other charges, net decreased by 0.30% compared to the same period in 2025.

During the three months ended June 30, 2026, we incurred no charges related to restructuring and other charges, net.

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

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

Interest expense, net

During the three months ended March 31, 2026, interest expense, net increased by $16 million compared to the same period in 2025, primarily driven by the issuances of the 2032 Secured Notes in November 2025 and of the 2030 Secured Notes in March 2025.

Three Months Ended March 31,

During the three months ended June 30, 2026, interest expense, net increased by $10 million compared to the same period in 2025, primarily driven by the issuances of the 2032 Secured Notes in November 2025 and of the 2034 Secured Notes in May 2026, partially offset by redemptions of the 2027 Notes in March 2026 and all of the 2028 Notes in June 2026.

Three Months Ended June 30,

2026 2025 % Change

2 unchanged sentences

Other (expense) income, net

During the three months ended March 31, 2026, we incurred $11 million of other (expense) income, net primarily driven by foreign currency translation losses.

During the three months ended March 31, 2025, we recognized $10 million of other (expense) income, net primarily attributable to fluctuations between the U.S.

Dollar and the Euro.

During the three months ended June 30, 2026, we incurred $4 million of other (expense), net primarily driven by foreign currency translation losses.

During the three months ended June 30, 2025, we recognized $23 million of other (expense) income, net, primarily attributable to 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.

Three Months Ended March 31,

Three Months Ended June 30,

2026 2025 % Change

(in millions)

Other (expense) income, net $ (4) $ 23 NM

Loss on debt extinguishment

During the three months ended June 30, 2026, loss on debt extinguishment increased by $65 million compared to the same period in 2025.

During the three months ended June 30, 2026, we recorded a $59 million loss on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $148 million and the net carrying value of the 2028 Notes of $89 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,

2026 2025 % Change

(in millions)

(Loss) gain on debt extinguishment $ (59) $ 6 NM

NM - Not Meaningful

Provision for income taxes, net

During the three months ended June 30, 2026, our provision for income taxes, net increased by $1 million, or 50.0% compared to the same period in 2025.

Three Months Ended June 30,

2026 2025 % Change

(in millions)

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

Results of Consolidated Operations

Comparison of the six months ended June 30, 2026 and 2025

During the six months ended June 30, 2026, net revenue increased by $447 million, or 7.4%, compared to the same period in 2025, which reflects our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers.

The increase in net revenue is due primarily to higher order volume in addition to higher average order value, compared to the same period in 2025.

During the six months ended June 30, 2026, our U.S.

net revenue increased by 8.2% and International net revenue increased by 1.9% compared to the same period in 2025.

During the six months ended June 30, 2026, International Net Revenue Constant Currency Growth was (0.3)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Six Months Ended June 30,

2026 2025 % Change

(in millions)

net revenue $ 5,737 $ 5,303 8.2 %

International net revenue 713 700 1.9 %

Net revenue $ 6,450 $ 6,003 7.4 %

For more information on our segments, see Note 9, Segment and Geographic Information , included in Part I, Item 1, Financial Statements , in this Quarterly Report on Form 10-Q.

Cost of goods sold

During the six months ended June 30, 2026, cost of goods sold increased by $334 million, or 8.0%, compared to the same period in 2025.

As a percentage of net revenue, cost of goods sold increased to 70.0% for the six months ended June 30, 2026 compared to 69.7% in the same period in 2025, due to investments in the customer experience and a one-time benefit recognized during the three months ended March 31, 2025, related to the resolution on the valuation of duties, partially offset by growth of our supplier services.

Six Months Ended June 30,

2026 2025 % Change

(in millions)

Cost of goods sold $ 4,516 $ 4,182 8.0 %

As a percentage of net revenue 70.0 % 69.7 %

Operating expenses

Operating expenses consist of customer service and merchant fees;

selling, operations, technology, general and administrative expenses;

impairment and other related net charges;

and restructuring and other charges, net.

Six Months Ended June 30,

2026 2025 % Change

(in millions, except percentages)

Customer service and merchant fees (1)

$ 242 $ 228 6.1 %

Advertising 721 716 0.7 %

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

852 894 (4.7) %

Impairment and other related net charges 2 23 (91.3) %

Restructuring and other charges, net

24 65 (63.1) %

Total operating expenses $ 1,841 $ 1,926 (4.4) %

As a percentage of net revenue:

Customer service and merchant fees (1)

Advertising 11.2 % 11.9 %

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

13.2 % 14.9 %

Impairment and other related net charges — % 0.4 %

Restructuring and other charges, net

28.6 % 32.1 %

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

Six Months Ended June 30,

(in millions)

Customer service and merchant fees $ 5 $ 7

Selling, operations, technology, general and administrative $ 135 $ 158

During the six months ended June 30, 2026, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $25 million, or 15.2%, compared to the same period in 2025, due to variability in our stock price on the grant dates of restricted stock units granted during the six months ended June 30, 2025, partially offset by the expense recognized during the six months ended June 30, 2026 related to the PSUs.

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

Six Months Ended June 30,

Customer service and merchant fees 3.7 % 3.7 %

Selling, operations, technology, general and administrative 11.1 % 12.3 %

Customer Service and Merchant Fees

During the six months ended June 30, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for customer service and merchant fees increased by $16 million, or 7.2% compared to the same period in 2025.

The increase in customer service and merchant fees is due primarily to increased net revenue.

As a percentage of net revenue, total customer service and merchant fees remained relatively constant at 3.8% for the six months ended June 30, 2026 compared to the same period in 2025.

During the six months ended June 30, 2026, our advertising expenses increased by $5 million, or 0.7%, compared to the same period in 2025.

The increase 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 11.2% for the six months ended June 30, 2026 compared to 11.9% in the same period in 2025 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, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $19 million, or 2.6% compared to the same period in 2025.

The decrease is due primarily to amortization expenses and compensation costs, partially offset by increases in technology spend.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 13.2% for the six months ended June 30, 2026, compared to 14.9% in the same period in 2025, due to increased net revenue and decreased compensation costs.

Impairment and other related net charges

During the six months ended June 30, 2026, impairment and other related charges decreased by $21 million compared to the same period in 2025.

As a percentage of net revenue, impairment and other related net charges decreased by 0.4% compared to the same period in 2025.

During the six months ended June 30, 2026, we recorded net charges of $2 million to impairment and other net charges related to the exit of a customer service center in the U.S.

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 Germany operations, and $3 million associated with changes in sublease market conditions for a technology center in the U.S.

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

Restructuring and other charges, net

During the six months ended June 30, 2026, restructuring and other charges, net decreased by $41 million, or 63.1%, compared to the same period in 2025.

As a percentage of net revenue, restructuring and other charges, net decreased to 0.4% from 1.1% in the same period in 2025.

During the six months ended June 30, 2026, Wayfair incurred $24 million of charges related to a loss on termination of an operating lease for a logistics facility.

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

This is inclusive of $46 million related to the Germany Restructuring and $19 million related to the March 2025 workforce reduction.

Interest expense, net

During the six months ended June 30, 2026, interest expense, net increased to $78 million, compared to $52 million in the same period in 2025, driven by the issuances of the 2030 Secured Notes in March 2025, the issuances of the 2032 Secured Notes in November 2025 and of the 2034 Secured Notes in May 2026, partially offset by redemptions of the 2027 Notes in March 2026 and all of the 2028 Notes in June 2026.

Six Months Ended June 30,

2026 2025 % Change

(in millions)

Interest expense, net $ (78) $ (52) 50.0 %

Other (expense) income, net

During the six months ended June 30, 2026, we incurred $15 million of other (expense), net primarily driven by foreign currency translation losses.

During the six months ended June 30, 2025, we recognized $33 million of other (expense) income, net primarily attributable to 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,

2026 2025 % Change

(in millions)

Other (expense) income, net $ (15) $ 33 NM

NM - Not Meaningful

Loss on debt extinguishment

During the three months ended March 31, 2026, loss on debt extinguishment increased by $68 million compared to the same period in 2025.

During the three months ended March 31, 2026, we recorded a $43 million loss on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $99 million and the net carrying value of the 2028 Notes of $56 million.

During the six months ended June 30, 2026, loss on debt extinguishment increased by $133 million compared to the same period in 2025.

During the six months ended June 30, 2026, Wayfair recorded a $102 million loss on debt extinguishment upon repurchase of $145 million in aggregate principal amount of the 2028 Notes.

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

Three Months Ended March 31,

Six Months Ended June 30,

2026 2025 % Change

(in millions)

(Loss) gain on debt extinguishment

$ (43) $ 25 NM

(Loss) gain on debt extinguishment $ (102) $ 31 NM

NM - Not Meaningful

Provision for income taxes, net

During the three months ended March 31, 2026, our provision for income taxes, net decreased by $2 million, or 66.7% compared to the same period in 2025.

Three Months Ended March 31,

During the six months ended June 30, 2026, our provision for income taxes, net decreased by $1 million, or 20.0% compared to the same period in 2025.

Six Months Ended June 30,

2026 2025 % Change

(in millions)

Provision for income taxes $ 1 $ 3 (66.7) %

Provision for income taxes, net $ 4 $ 5 (20.0) %

Liquidity and Capital Resources

Sources of Liquidity

As of March 31, 2026, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.1 billion.

As of June 30, 2026, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.1 billion.

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

As of March 31, 2026, there were no revolving loans outstanding under the Revolver.

We had outstanding letters of credit, primarily as security for certain lease agreements, for $90 million as of March 31, 2026, which reduced the availability of credit under the Revolver.

As of June 30, 2026, there were no revolving loans outstanding under the Revolver.

We had outstanding letters of credit, primarily as security for certain lease agreements, for $82 million as of June 30, 2026, which reduced the availability of credit under the Revolver.

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

March 31, December 31,

June 30, December 31,

(in millions)

14 unchanged sentences

Credit Agreement and Debt Arrangements

As of March 31, 2026, we had $3.0 billion principal amount of indebtedness outstanding.

As of June 30, 2026, we had $2.9 billion principal amount of indebtedness outstanding.

Our indebtedness includes:

1 unchanged sentence

• 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 2026 Notes and 2027 Notes, the “Convertible Notes”);

and, together with the 2026 Notes, the “Convertible Notes”);

• 7.250% Senior Secured Notes due 2029 (the “2029 Secured Notes”);

• 7.750% Senior Secured Notes due 2030 (the “2030 Secured Notes”);

• 6.750% Senior Secured Notes due 2032 (the “2032 Secured Notes”and, together with the 2029 Secured Notes and the 2030 Secured Notes, the “Senior Secured Notes”, and the Senior Secured Notes, together with the Convertible Notes, the “Notes”).

• 6.750% Senior Secured Notes due 2032 (the “2032 Secured Notes”);

• 7.125% Senior Secured Notes due 2034 ( the “2034 Secured Notes” and, together with the 2029 Secured Notes, 2030 Secured Notes, and 2032 Secured Notes, the “Senior Secured Notes”, and the Senior Secured Notes, together with the Convertible Notes, the “Notes”).

Under the terms of our Revolver, we may use proceeds to finance working capital and for other general corporate purposes.

Any amounts outstanding under the Revolver are due at maturity.

Between February 25, 2026 and March 4, 2026, we repurchased $56 million in aggregate principal amount of the 2028 Notes.

Between February 25, 2026 and March 4, 2026, we repurchased $56 million in aggregate principal amount of the unsecured 3.50% Convertible Senior Notes due 2028 (the “2028 Notes”).

Between April 1, 2026 and May 1, 2026, we repurchased $89 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.

On February 6, 2026, we issued a notice to holders of the 2027 Notes calling for redemption of $250 million principal amount of the outstanding 2027 Notes on or prior to March 23, 2026 (the “Redemption Date”).

On February 6, 2026, we issued a notice to holders of the Company’s 2027 Notes calling for redemption of $250 million principal amount of the outstanding 2027 Notes on March 23, 2026 (the “2027 Notes Redemption Date”).

On May 14, 2026, we issued a notice to holders of the Company’s 2028 Notes calling for redemption of the remaining $444 million principal amount of the outstanding 2028 Notes on June 29, 2026 (the “2028 Notes Redemption Date”).

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 2028 Notes were triggered during the calendar quarter ended March 31, 2026, therefore the 2028 Notes are convertible during the calendar quarter ended June 30, 2026.

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

There were no conversions during the three months ended March 31, 2026 other than the conversion of the 2027 Notes on or prior to the Redemption Date.

On May 18, 2026, Wayfair LLC (the “Issuer”), a subsidiary of Wayfair Inc., issued $400 million aggregate principal amount of 2034 Secured Notes.

The 2034 Secured Notes will mature on May 31, 2034, unless earlier redeemed, in accordance with their terms or repurchased.

The indenture contains covenants that restrict the Issuer’s ability and the ability of its restricted subsidiaries to, among other things, incur additional indebtedness, declare or pay dividends, redeem stock or make other distributions or restricted payments, make certain investments, create certain liens, enter into certain transactions with affiliates, agree to certain restrictions on the ability of the Issuer’s restricted subsidiaries to make certain payments, sell or transfer certain assets and consolidate, merge, sell or otherwise dispose of all or substantially all of the Issuer’s or its restricted subsidiaries’ assets.

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

There were no conversions during the six months ended June 30, 2026 other than the conversion of the 2027 Notes and 2028 Notes on or prior to the 2027 Notes Redemption Date and 2028 Notes Redemption Date, respectively.

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

For instance, we are required to maintain a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the credit agreement governing the Revolver) of no more than 4.0 to 1.0, subject to a 0.5 step-up following certain permitted acquisitions.

0.5 step-up following certain permitted acquisitions.

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, 2025.

As of March 31, 2026 we were in compliance with all the terms and conditions of our debt agreements.

As of June 30, 2026 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 March 31, 2026, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs.

As of June 30, 2026, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs.

Trends and Historical Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(in millions)

Net loss $ (106) $ (98)

Net cash used in operating activities $ (52) $ (96)

Net cash provided by operating activities $ 308 $ 177

Net cash used in investing activities $ (125) $ (83)

Net cash (used in) provided by financing activities $ (378) $ 140

Net cash used in financing activities $ (599) $ (60)

Operating Activities

Cash flows in connection with operating activities consisted of net loss adjusted for certain non-cash items including depreciation and amortization, equity-based compensation and certain other non-cash expenses, as well as the effect of changes in working capital and other activities.

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

Cash flows used in operating activities decreased by $44 million during the three months ended March 31, 2026, compared to the same period in 2025, due to a decrease of $25 million for cash changes in operating assets and liabilities and an increase in net loss adjusted for non-cash items of $19 million.

The decrease in cash flows used in operating activities was primarily driven by higher net revenue, and lower impairment and other restructuring costs from the prior year workforce reductions.

Cash flows in connection with operating activities consisted of net (loss) income adjusted for certain non-cash items including depreciation and amortization, equity-based compensation and certain other non-cash expenses, as well as the effect of changes in working capital and other activities.

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

Cash flows provided by operating activities increased by $131 million during the six months ended June 30, 2026, compared to the same period in 2025, due to an increase of $131 million for cash changes in operating assets and liabilities.

The increase in cash flows provided by operating activities was primarily driven by higher net revenue, and lower impairment and other restructuring costs from the prior year workforce reductions.

Investing Activities

Cash flows used in investing activities increased by $29 million during the three months ended March 31, 2026, compared to the same period in 2025, due to decreases in sales and maturities of short- and long-term investments of $31 million and increases in purchases of property and equipment and site and software development costs of $11 million, partially offset by a decrease in purchases of short- and long-term investments of $13 million.

Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 1.8% of net revenue for the three months ended March 31, 2026 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 increased by $42 million during the six months ended June 30, 2026, compared to the same period in 2025, due to decreases in sales and maturities of short- and long-term investments of $27 million and increases in purchases of property and equipment and site and software development costs of $27 million, partially offset by decreases in purchases of short- and long-term investments of $12 million.

Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 1.8% of net revenue for the six months ended June 30, 2026 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 $518 million during the three months ended March 31, 2026, compared to the same period in 2025.

The increase in cash used is primarily due to decreases in proceeds from the issuance of debt of $691 million, increase in settlement of long-term debt of $250 million and payments of taxes related to net share settlement of equity awards of $29 million.

Cash flows used in financing activities increased by $539 million during the six months ended June 30, 2026, compared to the same period in 2025.

The increase in cash used is due primarily to increases in settlement of long-term debt of $701 million, decreases in proceeds from the issuance of debt of $296 million and increases in payments of taxes related to net share settlement of equity awards of $39 million.

These increases are partially offset by decreases in payments to extinguish debt of $497 million.

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Contractual Obligations

During the three months ended March 31, 2026, we repurchased $56 million in aggregate principal amount of the 2028 Notes and called for the redemption of $250 million in aggregate principal of the 2027 Notes.

During the six months ended June 30, 2026, we issued $400 million aggregate principal amount of the 2034 Secured Notes, repurchased $145 million in aggregate principal amount of the 2028 Notes and called for the redemptions of $250 million in aggregate principal of the 2027 Notes and $444 million in aggregate principal 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.

During the three and six months ended June 30, 2026, we entered into contractual obligations of $91 million for future minimum lease payments under non-cancellable operating leases that have not yet commenced.

See 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.

Other than these financing transactions, there have been no material changes to our contractual obligations and estimates as compared to the contractual obligations described in Contractual Obligations included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the year ended December 31, 2025.

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The following table provides a reconciliation of gross profit to Adjusted Gross Profit:

Three Months Ended March 31,

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

2026 2025 2026 2025

(in millions, except percentages)

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The following table provides a reconciliation of Adjusted Gross Profit to Contribution Profit:

Three Months Ended March 31,

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

2026 2025 2026 2025

(in millions, except percentages)

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Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income or loss and our other GAAP results.

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

Three Months Ended March 31,

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

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

2026 2025 2026 2025

(in millions, except percentages)

Reconciliation of Adjusted EBITDA:

Net loss $ (105) $ (113)

Net (loss) income $ (1) $ 15 $ (106) $ (98)

Depreciation and amortization 64 78 131 159

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Loss (gain) on debt extinguishment (3)

59 (6) 102 (31)

Adjusted EBITDA $ 242 $ 205 $ 393 $ 311

Net revenue $ 3,519 $ 3,273 $ 6,450 $ 6,003

Net loss margin (3.6) % (4.1) %

Net (loss) income margin — % 0.5 % (1.6) % (1.6) %

Adjusted EBITDA Margin 6.9 % 6.3 % 6.1 % 5.2 %

During the three months ended March 31, 2026, we recorded no impairment or other related charges.

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

During the three months ended March 31, 2026, we incurred $24 million of charges related to a loss on termination of an operating lease for a logistics facility.

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

During the three and six months ended June 30, 2026, we recorded $2 million impairment associated with our decision to exit a customer service center in the U.S.

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 Germany operations and, $3 million related to changes in sublease market conditions for a technology center in the U.S.

During the six months ended June 30, 2026, we incurred $24 million of charges related to a loss on termination of an operating lease for a logistics facility.

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

This is inclusive of $46 million related to the Germany Restructuring and $19 million related to the March 2025 workforce reduction.

During the three months ended March 31, 2026, we recorded a $43 million loss on debt extinguishment upon repurchase of $56 million in aggregate principal amount of the 2028 Notes.

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

We do not expect to incur any further material charges related to this workforce reduction.

During the three and six months ended June 30, 2026, we recorded a $59 million and $102 million, respectively, loss on debt extinguishment upon repurchase of $145 million in aggregate principal amount of the 2028 Notes.

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

Free Cash Flow

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Accordingly, you should not consider Free Cash Flow in isolation or as a substitute for analysis of our results as reported under GAAP.

Because of these limitations, you should consider Free Cash Flow

alongside other financial performance measures, including net cash provided by or used in operating activities, capital expenditures, and our other GAAP results.

Because of these limitations, you should consider Free Cash Flow alongside other financial performance measures, including net cash provided by or used in operating activities, capital expenditures, and our other GAAP results.

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

Three Months Ended March 31,

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

2026 2025 2026 2025

(in millions)

Net cash used in operating activities $ (52) $ (96)

Net cash provided by operating activities $ 360 $ 273 $ 308 $ 177

Purchase of property and equipment (26) (13) (51) (18)

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

Three Months Ended March 31,

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

2026 2025 2026 2025

(in millions, except per share data)

Numerator for basic and diluted loss per share - net loss

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

$ (1) $ 15 $ (106) $ (98)

Adjustments to net loss

Adjustments to net (loss) income

Interest expense associated with convertible debt instruments 4 13 11 27

Equity-based compensation and related taxes 72 101 143 169

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Loss (gain) on debt extinguishment 59 (6) 102 (31)

Numerator for Adjusted Diluted Earnings per Share - Adjusted net income

Denominator for basic and diluted loss per share - weighted-average number of shares of common stock outstanding 131 127

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

$ 139 $ 134 $ 180 $ 160

Denominator for basic (loss) earnings per share - weighted-average number of shares of common stock outstanding 132 128 131 127

Effect of dilutive securities:

Restricted stock units — 1 — —

Denominator for diluted (loss) earnings per share - weighted-average number of shares of common stock outstanding after the effect of dilutive securities 132 129 131 127

Adjustments to effect of dilutive securities:

Performance stock units 2 —

Restricted stock units 1 — — —

Convertible debt instruments 14 27 16 30

Denominator for Adjusted Diluted Earnings per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 147 156 147 157

Diluted Loss per Share $ (0.80) $ (0.89)

Diluted (loss) earnings per share $ (0.01) $ 0.11 $ (0.81) $ (0.77)

Adjusted Diluted Earnings per Share $ 0.95 $ 0.87 $ 1.22 $ 1.02

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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