FIGS Releases Second Quarter 2022 Financial Results
FIGS, Inc. announced a 20.9% year-over-year growth in net revenues, reaching $122.2 million in Q2 2022. The company achieved a net income of $4.9 million and an Adjusted EBITDA margin of 17.6%, although this was a decline from the previous year. Operating expenses decreased by 27.6% to $76.9 million. The company maintained its revenue outlook of $510 to $530 million for the year. Leadership changes were announced, with Trina Spear becoming the sole CEO and Heather Hasson assuming the role of Executive Chair.
- Net revenues increased by 20.9% YoY to $122.2 million.
- Net income of $4.9 million, diluted EPS of $0.03.
- Operating expenses decreased by 27.6% YoY.
- Gross margin decreased by 270 basis points to 70.6%.
- Adjusted EBITDA decreased by $5.3 million YoY.
Net Revenues Growth of
Heather Hasson Named Executive Chair; Trina Spear Becomes Sole Chief Executive Officer
Second Quarter 2022 Financial Highlights
-
Net revenues were
, an increase of$122.2 million 20.9% year over year, driven by an increase in orders as a result of strong retention of existing customers and new customer acquisition and, to a lesser extent, an increase in AOV. -
Gross margin was
70.6% , a decrease of 270 basis points year over year, driven by increased ocean and air freight rates, an increase in freight-in driven by higher utilization of more expensive air freight, and product mix shift. -
Operating expenses were
, a decrease of$76.9 million 27.6% year over year. As a percentage of net revenues, operating expenses decreased to62.8% from105.0% in the prior year period, primarily driven by lower stock-based compensation expense. -
Net income was
and diluted earnings per share was$4.9 million .$0.03 -
Net income, as adjusted(1) was
and diluted earnings per share, as adjusted(1) was$6.3 million .$0.03 -
Adjusted EBITDA(1) was
, a decrease of$21.5 million year over year.$5.3 million -
Adjusted EBITDA margin(1) was
17.6% , a decrease of 890 basis points year over year.
Key Operating Metrics
-
Active customers(2) as of
June 30, 2022 increased26.2% to 2.0 million. -
Net revenues per active customer(2) was
, an increase of$227 3.7% year over year. -
Average Order Value (“AOV”)(2) was
, an increase of$109 5.8% year over year primarily driven by higher units per transaction and average unit retail.
Comments from FIGS’ Co-Founder and Chief Executive Officer,
“We are thrilled to deliver both net revenues and adjusted EBITDA results ahead of our expectations,” said
2022 Financial Outlook
-
Maintaining Net revenues outlook in the range of
to$510 , representing year over year growth of approximately$530 million 22% to26% . -
Maintaining Adjusted EBITDA margin(3) outlook in the range of
16% to18% .
(1) “Net income, as adjusted,” “diluted earnings per share, as adjusted,” “adjusted EBITDA” and “adjusted EBITDA margin” are non-GAAP financial measures. Please see the sections titled “Non-GAAP Financial Measures and Key Operating Metrics” and “Reconciliations of GAAP to Non-GAAP Measures” below for more information regarding the Company’s use of non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net revenues. |
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(2) “Active customers,” “net revenues per active customer” and “average order value” are key operational and business metrics that are important to understanding the Company's performance. For information regarding how the Company calculates its key operational and business metrics, please see the section titled “Non-GAAP Financial Measures and Key Operating Metrics.” |
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(3) The Company has not provided a quantitative reconciliation of its adjusted EBITDA margin outlook to a GAAP net income margin outlook because it is unable, without making unreasonable efforts, to project certain reconciling items. These items include, but are not limited to, future stock-based compensation expense, income taxes, expenses related to non-ordinary course disputes, and transaction costs. These items are inherently variable and uncertain and depend on various factors, some of which are outside of the Company’s control or ability to predict. For more information regarding the Company’s use of non-GAAP financial measures, please see the section titled “Non-GAAP Financial Measures and Key Operating Metrics.” |
Changes to Leadership Titles
FIGS announced new titles for co-Chief Executive Officers,
“It’s been almost a decade since we founded FIGS to bring innovative products to the highly overlooked healthcare community and celebrate their incredible commitment to humanity,” said
“Heather’s exceptional vision, creativity and deep understanding of the healthcare community led us to build FIGS into what it is today,” said
Conference Call Details
FIGS management will host a conference call and webcast today at
Non-GAAP Financial Measures and Key Operating Metrics
In addition to the GAAP financial measures set forth in this press release, the Company has included non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K.
The Company uses “net income, as adjusted,” “diluted earnings per share, as adjusted,” “adjusted EBITDA” and “adjusted EBITDA margin” to provide useful supplemental measures that assist in evaluating its ability to generate earnings, provide consistency and comparability with its past financial performance and facilitate period-to-period comparisons of its core operating results as well as the results of its peer companies. The Company calculates “net income, as adjusted,” as net income adjusted to exclude transaction costs, expenses related to non-ordinary course disputes, stock-based compensation, including expense related to award modifications, accelerated performance awards and ambassador grants in connection with the IPO, and expense resulting from the retirement of the Company's previous CFO, and the income tax impact of these adjustments. The Company calculates “diluted earnings per share, as adjusted” as net income, as adjusted divided by diluted shares outstanding. The Company calculates “adjusted EBITDA” as net income adjusted to exclude: other income (loss), net; gain/loss on disposal of assets; provision for income taxes; depreciation and amortization expense; stock-based compensation and related expense; transaction costs; and expenses related to non-ordinary course disputes. The Company calculates “adjusted EBITDA margin” by dividing adjusted EBITDA by net revenues.
Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included below under the heading “Reconciliations of GAAP to Non-GAAP Measures.”
About FIGS
FIGS is a founder-led, direct-to-consumer healthcare apparel and lifestyle brand that seeks to celebrate, empower, and serve current and future generations of healthcare professionals. We create technically advanced apparel and products for healthcare professionals that feature an unmatched combination of comfort, durability, function, and style. We market and sell our products directly through our digital platform to provide a seamless experience for healthcare professionals.
Forward Looking Statements
This press release contains various forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are based on current management expectations, and which involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, such forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking. These forward-looking statements generally are identified by the words “anticipate”, “believe”, “contemplate”, “continue”, “could”, “estimate”, “expect”, “forecast”, “future”, “intend”, “may”, “might”, “opportunity”, “outlook”, “plan”, “possible”, “potential”, “predict”, “project,” “should”, “strategy”, “strive”, “target”, “will” or “would”, the negative of these words or other similar terms or expressions. The absence of these words does not mean that a statement is not forward-looking. These forward-looking statements address various matters, including expectations regarding long-term growth and the Company’s outlook as to net revenues and adjusted EBITDA margin for the full year ending
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BALANCE SHEETS |
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(In thousands, except share and per share data) |
||||||||
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As of |
|||||||
|
|
|
|
|||||
Assets |
(Unaudited) |
|
|
|||||
Current assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
170,220 |
|
$ |
195,374 |
|||
Restricted cash |
|
— |
|
|
|
2,056 |
|
|
Accounts receivable |
|
5,078 |
|
|
|
2,441 |
|
|
Due from related party |
|
631 |
|
|
|
— |
|
|
Inventory, net |
|
127,646 |
|
|
|
86,068 |
|
|
Prepaid expenses and other current assets |
|
12,329 |
|
|
|
7,400 |
|
|
Total current assets |
|
315,904 |
|
|
|
293,339 |
|
|
Non-current assets |
|
|
|
|||||
Property and equipment, net |
|
8,809 |
|
|
|
7,613 |
|
|
Operating lease right-of-use assets |
|
16,632 |
|
|
|
— |
|
|
Deferred tax assets |
|
10,554 |
|
|
|
10,239 |
|
|
Other assets |
|
1,747 |
|
|
|
560 |
|
|
Total non-current assets |
|
37,742 |
|
|
|
18,412 |
|
|
Total assets |
$ |
353,646 |
|
|
$ |
311,751 |
|
|
Liabilities and stockholders’ equity |
|
|
|
|||||
Current liabilities |
|
|
|
|||||
Accounts payable |
$ |
10,608 |
|
|
$ |
14,604 |
|
|
Operating lease liabilities |
|
3,004 |
|
|
|
— |
|
|
Accrued expenses |
|
27,839 |
|
|
|
24,677 |
|
|
Accrued compensation and benefits |
|
3,470 |
|
|
|
6,464 |
|
|
Sales tax payable |
|
3,786 |
|
|
|
3,728 |
|
|
Gift card liability |
|
5,909 |
|
|
|
5,590 |
|
|
Deferred revenue |
|
1,044 |
|
|
|
596 |
|
|
Returns reserve |
|
2,374 |
|
|
|
2,761 |
|
|
Income tax payable |
|
— |
|
|
|
3,973 |
|
|
Total current liabilities |
|
58,034 |
|
|
|
62,393 |
|
|
Non-current liabilities |
|
|
|
|||||
Operating lease liabilities, non-current |
|
17,267 |
|
|
|
— |
|
|
Deferred rent and lease incentive |
|
— |
|
|
|
3,542 |
|
|
Other non-current liabilities |
|
215 |
|
|
|
243 |
|
|
Total liabilities |
$ |
75,516 |
|
|
|
66,178 |
|
|
Commitments and contingencies (Note 9) |
|
|
|
|||||
Stockholders’ equity |
|
|
|
|||||
Class A Common stock — par value |
|
15 |
|
|
|
15 |
|
|
Class |
|
1 |
|
|
|
1 |
|
|
Preferred stock — par value |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
246,432 |
|
|
|
227,626 |
|
|
Retained earnings |
|
31,682 |
|
|
|
17,931 |
|
|
Total stockholders’ equity |
|
278,130 |
|
|
|
245,573 |
|
|
Total liabilities and stockholders’ equity |
$ |
353,646 |
|
|
$ |
311,751 |
|
|
||||||||||||||||
|
||||||||||||||||
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
(In thousands, except share and per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three months ended |
Six months ended |
||||||||||||||
|
2022 |
2021 |
2022 |
2021 |
||||||||||||
Net revenues |
$ |
122,247 |
$ |
101,117 |
|
$ |
232,348 |
|
$ |
188,196 |
|
|||||
Cost of goods sold |
|
35,899 |
|
|
26,964 |
|
|
67,569 |
|
|
51,683 |
|
||||
Gross profit |
|
86,348 |
|
|
74,153 |
|
|
164,779 |
|
|
136,513 |
|
||||
Operating expenses |
|
|
|
|
||||||||||||
Selling |
|
26,803 |
|
|
19,222 |
|
|
48,861 |
|
|
36,337 |
|
||||
Marketing |
|
20,824 |
|
|
15,488 |
|
|
36,232 |
|
|
26,327 |
|
||||
General and administrative |
|
29,270 |
|
|
71,504 |
|
|
56,490 |
|
|
89,850 |
|
||||
Total operating expenses |
|
76,897 |
|
|
106,214 |
|
|
141,583 |
|
|
152,514 |
|
||||
Net income (loss) from operations |
|
9,451 |
|
|
(32,061 |
) |
|
23,196 |
|
|
(16,001 |
) |
||||
Other income (loss), net |
|
|
|
|
||||||||||||
Interest income (expense) |
|
70 |
|
|
(31 |
) |
|
79 |
|
|
(67 |
) |
||||
Other expense |
|
— |
|
|
— |
|
|
(1 |
) |
|
(2 |
) |
||||
Total other income (loss), net |
|
70 |
|
|
(31 |
) |
|
78 |
|
|
(69 |
) |
||||
Net income (loss) before provision for income taxes |
|
9,521 |
|
|
(32,092 |
) |
|
23,274 |
|
|
(16,070 |
) |
||||
Provision for income taxes |
|
4,669 |
|
|
8,454 |
|
|
9,523 |
|
|
13,036 |
|
||||
Net income (loss) and comprehensive income (loss) |
$ |
4,852 |
|
$ |
(40,546 |
) |
$ |
13,751 |
|
$ |
(29,106 |
) |
||||
Earnings (loss) attributable to Class A and Class B common stockholders |
|
|
|
|
||||||||||||
Basic earnings (loss) per share |
$ |
0.03 |
|
$ |
(0.26 |
) |
$ |
0.08 |
|
$ |
(0.19 |
) |
||||
Diluted earnings (loss) per share |
$ |
0.03 |
|
$ |
(0.26 |
) |
$ |
0.07 |
|
$ |
(0.19 |
) |
||||
Weighted-average shares outstanding—basic |
|
164,919,979 |
|
|
156,867,484 |
|
|
164,664,480 |
|
|
155,725,959 |
|
||||
Weighted-average shares outstanding—diluted |
|
188,903,553 |
|
|
156,867,484 |
|
|
191,142,834 |
|
|
155,725,959 |
|
|
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|
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STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
Six months ended
|
|||||||
|
2022 |
2021 |
||||||
Cash flows from operating activities: |
|
|
||||||
Net income (loss) |
$ |
13,751 |
|
$ |
(29,106 |
) |
||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
||||||
Depreciation and amortization expense |
|
808 |
|
|
666 |
|
||
Deferred income taxes |
|
(315 |
) |
|
3,153 |
|
||
Non-cash operating lease cost |
|
1,061 |
|
|
— |
|
||
Stock-based compensation |
|
17,254 |
|
|
61,027 |
|
||
Changes in operating assets and liabilities: |
|
|
||||||
Accounts receivable |
|
(2,637 |
) |
|
1,846 |
|
||
Due from related party |
|
(631 |
) |
|
(4,875 |
) |
||
Inventory |
|
(41,578 |
) |
|
(12,639 |
) |
||
Prepaid expenses and other current assets |
|
(4,929 |
) |
|
(1,674 |
) |
||
Other assets |
|
(687 |
) |
|
(6 |
) |
||
Accounts payable |
|
(4,081 |
) |
|
4,575 |
|
||
Accrued expenses |
|
2,970 |
|
|
8,553 |
|
||
Deferred revenue |
|
448 |
|
|
(1,102 |
) |
||
Accrued compensation and benefits |
|
(2,994 |
) |
|
(70 |
) |
||
Returns reserve |
|
(387 |
) |
|
451 |
|
||
Sales tax payable |
|
58 |
|
|
836 |
|
||
Income tax payable |
|
(3,973 |
) |
|
805 |
|
||
Gift card liability |
|
319 |
|
|
350 |
|
||
Deferred rent and lease incentive |
|
— |
|
|
(49 |
) |
||
Operating lease liabilities |
|
(964 |
) |
|
— |
|
||
Other non-current liabilities |
|
(28 |
) |
|
— |
|
||
Net cash (used in) provided by operating activities |
|
(26,535 |
) |
|
32,741 |
|
||
Cash flows from investing activities: |
|
|
||||||
Purchases of property and equipment |
|
(1,727 |
) |
|
(1,023 |
) |
||
Purchases of held-to-maturity securities |
|
(500 |
) |
|
— |
|
||
Net cash used in investing activities |
|
(2,227 |
) |
|
(1,023 |
) |
||
Cash flows from financing activities: |
|
|
||||||
Proceeds from issuance of Class A common stock in initial public offering, net of underwriting discounts |
|
— |
|
|
95,881 |
|
||
Payments of initial public offering issuance costs, net of reimbursements |
|
— |
|
|
(780 |
) |
||
Proceeds from stock option exercises and employee stock purchases |
|
1,073 |
|
|
572 |
|
||
Tax payments related to net share settlements on restricted stock units |
|
— |
|
|
(21,556 |
) |
||
Capital contributions |
|
479 |
|
|
— |
|
||
Net cash provided by financing activities |
|
1,552 |
|
|
74,117 |
|
||
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
(27,210 |
) |
|
105,835 |
|
||
Cash, cash equivalents, and restricted cash, beginning of period |
|
197,430 |
|
|
58,133 |
|
||
Cash, cash equivalents, and restricted cash, end of period |
$ |
170,220 |
|
$ |
163,968 |
|
||
Supplemental disclosures: |
|
|
||||||
Property and equipment included in accounts payable and accrued expenses |
$ |
309 |
|
$ |
247 |
|
||
Deferred offering costs included in accounts payable and accrued expenses |
$ |
— |
|
$ |
780 |
|
||
|
|
|
|
|
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES |
(Unaudited) |
The following table presents a reconciliation of net income, as adjusted and diluted earnings per share, as adjusted to net income, which is the most directly comparable financial measure calculated in accordance with GAAP:
|
Three months ended
|
|
|
Six months ended
|
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|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
(in thousands, except per share data) |
||||||||||||||||
Net income (loss) |
$ |
4,852 |
|
|
$ |
(40,546 |
) |
|
|
$ |
13,751 |
|
|
$ |
(29,106 |
) |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|||||||||
Transaction costs |
|
145 |
|
|
|
(186 |
) |
|
|
|
145 |
|
|
|
339 |
|
|
Expenses related to non-ordinary course disputes(1) |
|
2,787 |
|
|
|
1,980 |
|
|
|
|
5,204 |
|
|
|
4,416 |
|
|
Stock-based compensation expense in connection with the IPO and other(2) |
|
— |
|
|
|
50,384 |
|
|
|
|
— |
|
|
|
50,384 |
|
|
Income tax impacts of items above |
|
(1,438 |
) |
|
|
2,710 |
|
|
|
|
(2,291 |
) |
|
|
1,863 |
|
|
Net income, as adjusted |
$ |
6,346 |
|
|
$ |
14,342 |
|
|
|
$ |
16,809 |
|
|
$ |
27,896 |
|
|
Diluted EPS, as adjusted |
$ |
0.03 |
|
|
$ |
0.08 |
|
|
|
$ |
0.09 |
|
|
$ |
0.15 |
|
|
Weighted-average shares used to compute Diluted EPS, as adjusted(3) |
|
188,903,553 |
|
|
|
190,758,131 |
|
|
|
|
191,142,834 |
|
|
|
185,408,438 |
|
(1) Represents certain legal fees incurred in connection with the litigation claims described in the section titled “Legal Proceedings” appearing in the Company’s Quarterly Report on Form 10-Q for the quarter ended |
|
(2) Includes stock-based compensation expense and payroll taxes related to equity award activity. |
|
(3) We adjust the weighted-average number of shares outstanding for the dilutive effect of potential common equivalent shares in each period presented. |
The following table presents a reconciliation of adjusted EBITDA to net income, which is the most directly comparable financial measure calculated in accordance with GAAP:
|
Three months ended
|
|
|
Six months ended
|
|||||||||||||
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|||||||||
|
(in thousands, except margin) |
||||||||||||||||
Net income (loss) |
$ |
4,852 |
|
|
$ |
(40,546 |
) |
|
|
$ |
13,751 |
|
|
$ |
(29,106 |
) |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|||||||||
Other income (loss), net |
|
(70 |
) |
|
|
31 |
|
|
|
|
(78 |
) |
|
|
69 |
|
|
Provision for income taxes |
|
4,669 |
|
|
|
8,454 |
|
|
|
|
9,523 |
|
|
|
13,036 |
|
|
Depreciation and amortization expense(1) |
|
433 |
|
|
|
344 |
|
|
|
|
808 |
|
|
|
656 |
|
|
Stock-based compensation and related expense(2) |
|
8,808 |
|
|
|
56,716 |
|
|
|
|
17,254 |
|
|
|
61,731 |
|
|
Transaction costs |
|
— |
|
|
|
(186 |
) |
|
|
|
— |
|
|
|
339 |
|
|
Expenses related to non-ordinary course disputes(3) |
|
2,787 |
|
|
|
1,980 |
|
|
|
|
5,204 |
|
|
|
4,416 |
|
|
Adjusted EBITDA |
$ |
21,479 |
|
|
$ |
26,793 |
|
|
|
$ |
46,462 |
|
|
$ |
51,141 |
|
|
Adjusted EBITDA Margin |
|
17.6 |
% |
|
|
26.5 |
% |
|
|
|
20.0 |
% |
|
|
27.2 |
% |
(1) Excludes amortization of debt issuance costs included in “Other income (loss), net.” |
|
(2) Includes stock-based compensation expense and payroll taxes related to equity award activity. |
|
(3) Represents certain legal fees incurred in connection with the litigation claims described in the section titled “Legal Proceedings” appearing in the Company’s Quarterly Report on Form 10-Q for the quarter ended |
|
|
KEY OPERATING METRICS |
(Unaudited) |
Active customers as of
|
As of |
|||||||
|
2022 |
2021 |
||||||
|
(in thousands) |
|||||||
Active customers |
2,047 |
1,622 |
|
As of |
|||||||
|
2022 |
|
2021 |
|||||
Net revenues per active customer |
$ |
227 |
|
$ |
219 |
|
Three months ended
|
|
Six months ended
|
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
Average order value |
$ |
109 |
|
$ |
103 |
|
$ |
112 |
|
$ |
101 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005925/en/
Investors:
IR@wearfigs.com
IR@wearfigs.com
Media:
press@wearfigs.com
Source:
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