Wayfair Announces Second Quarter 2024 Results, Reports Best Quarter of Profitability and Cash Flow in Three Years
Wayfair Inc. (NYSE: W) reported its Q2 2024 financial results, showcasing $3.1 billion in net revenue, a slight decrease of 1.7% year-over-year. Despite challenging macro conditions, the company achieved its best quarter of profitability and cash flow in three years. Key highlights include:
- Gross profit of $941 million (30.2% of total net revenue)
- Net loss of $42 million
- Non-GAAP Adjusted EBITDA of $163 million
- 22.0 million active customers, up 0.9% year-over-year
- Average order value increased to $313
CEO Niraj Shah emphasized the company's focus on profitability and operational discipline amidst cautious consumer spending in the home furnishings category.
Wayfair Inc. (NYSE: W) ha riportato i risultati finanziari del Q2 2024, mostrando $3,1 miliardi di ricavi netti, con una leggera diminuzione dell'1,7% rispetto all'anno precedente. Nonostante le condizioni macroeconomiche sfavorevoli, l'azienda ha registrato il suo miglior trimestre di redditività e flusso di cassa degli ultimi tre anni. Tra i punti salienti:
- Utile lordo di $941 milioni (30,2% del ricavo netto totale)
- Perdita netta di $42 milioni
- EBITDA rettificato Non-GAAP di $163 milioni
- 22,0 milioni di clienti attivi, in aumento dello 0,9% rispetto all'anno precedente
- Valore medio degli ordini aumentato a $313
Il CEO Niraj Shah ha sottolineato l'attenzione dell'azienda sulla redditività e sulla disciplina operativa in un contesto di spesa cauta da parte dei consumatori nel settore dell'arredamento per la casa.
Wayfair Inc. (NYSE: W) informó sus resultados financieros del Q2 2024, mostrando $3.1 mil millones en ingresos netos, una ligera disminución del 1.7% en comparación con el año anterior. A pesar de las difíciles condiciones macroeconómicas, la compañía logró su mejor trimestre de rentabilidad y flujo de efectivo en tres años. Los aspectos más destacados incluyen:
- Ganancia bruta de $941 millones (30.2% del ingreso neto total)
- Pérdida neta de $42 millones
- EBITDA Ajustado No-GAAP de $163 millones
- 22.0 millones de clientes activos, un aumento del 0.9% en comparación con el año anterior
- Valor promedio de pedido aumentó a $313
El CEO Niraj Shah enfatizó el enfoque de la compañía en la rentabilidad y la disciplina operativa en medio del gasto cauteloso de los consumidores en la categoría de muebles para el hogar.
Wayfair Inc. (NYSE: W)가 2024년 2분기 재무 결과를 발표하며 31억 달러의 순수익을 기록했다고 밝혔습니다. 이는 전년 대비 1.7% 감소한 수치입니다. 어려운 매크로 여건 속에서도, 회사는 지난 3년간 최고의 수익성 및 현금 흐름을 기록했습니다. 주요 내용은 다음과 같습니다:
- 총 이익 9억 4100만 달러 (총 순수익의 30.2%)
- 순손실 4200만 달러
- 비GAAP 조정 EBITDA 1억 6300만 달러
- 활성 고객 2200만 명, 전년 대비 0.9% 증가
- 평균 주문 금액 313달러로 증가
CEO 니라즈 샤는 가전 구매 카테고리에서 소비자 지출이 조심스러운 가운데 회사의 수익성과 운영 규율에 대한 초점을 강조했습니다.
Wayfair Inc. (NYSE: W) a annoncé ses résultats financiers pour le T2 2024, affichant 3,1 milliards de dollars de revenus nets, une légère baisse de 1,7 % par rapport à l'année précédente. Malgré des conditions macroéconomiques difficiles, la société a enregistré son meilleur trimestre en termes de rentabilité et de flux de trésorerie depuis trois ans. Les points clés incluent :
- Bénéfice brut de 941 millions de dollars (30,2 % du revenu net total)
- Perte nette de 42 millions de dollars
- EBITDA ajusté Non-GAAP de 163 millions de dollars
- 22,0 millions de clients actifs, en hausse de 0,9 % par rapport à l'année précédente
- Valeur moyenne des commandes passée à 313 dollars
Le CEO Niraj Shah a souligné l'accent mis par l'entreprise sur la rentabilité et la discipline opérationnelle dans un contexte de consommation prudente dans la catégorie des meubles pour la maison.
Wayfair Inc. (NYSE: W) hat die Finanzergebnisse für das Q2 2024 veröffentlicht und einen Nettoerlös von 3,1 Milliarden Dollar erzielt, was einem leichten Rückgang von 1,7 % im Vergleich zum Vorjahr entspricht. Trotz herausfordernder makroökonomischer Bedingungen erzielte das Unternehmen das beste Quartal hinsichtlich Rentabilität und Cashflow seit drei Jahren. Die wichtigsten Punkte umfassen:
- Bruttogewinn von 941 Millionen Dollar (30,2 % des gesamten Nettoerlöses)
- Nettoverlust von 42 Millionen Dollar
- Non-GAAP Adjusted EBITDA von 163 Millionen Dollar
- 22,0 Millionen aktive Kunden, ein Anstieg von 0,9 % im Vergleich zum Vorjahr
- Durchschnittlicher Bestellwert auf 313 Dollar gestiegen
CEO Niraj Shah betonte den Fokus des Unternehmens auf Rentabilität und operative Disziplin in Zeiten vorsichtiger Konsumausgaben im Bereich Haushaltsmöbel.
- Best quarter of Adjusted EBITDA and Free Cash Flow generation in three years
- Gross profit margin of 30.2%
- Non-GAAP Adjusted EBITDA of $163 million
- Net cash provided by operating activities increased to $245 million
- Active customers increased by 0.9% year-over-year to 22.0 million
- Average order value increased to $313 from $307 in Q2 2023
- Total net revenue decreased by 1.7% year-over-year to $3.1 billion
- U.S. net revenue decreased by 2.0% year-over-year
- Net loss of $42 million
- LTM net revenue per active customer decreased by 0.9% to $540
- Orders delivered decreased by 2.9% year-over-year to 10.0 million
Insights
Wayfair's Q2 2024 results present a mixed picture, with some positive financial metrics amid challenging market conditions. The company reported
Key highlights include:
- Gross profit of
$941 million , representing30.2% of total net revenue - Non-GAAP Adjusted EBITDA of
$163 million - Free Cash Flow of
$183 million
The company's focus on profitability is evident, with CEO Niraj Shah emphasizing strict operating discipline. This strategy appears to be paying off, as evidenced by the improved Adjusted EBITDA and Free Cash Flow figures.
However, challenges remain. The
Interestingly, Wayfair's active customer base grew slightly by
The company's liquidity position remains strong, with
Overall, while Wayfair faces top-line challenges, its focus on profitability and cash flow generation appears to be yielding results. The company's ability to maintain this balance will be important for its performance in the coming quarters.
Wayfair's Q2 2024 results offer valuable insights into the current state of the home furnishings market. The company's performance suggests a sector grappling with significant headwinds, potentially mirroring the severity of the great financial crisis.
Key market trends observed:
- Continued pressure on consumer spending in the home category
- Shift towards mobile shopping, with
63.7% of orders placed via mobile devices - High customer retention, with
81.7% of orders from repeat customers
The
The slight increase in average order value from
The increase in orders per customer (1.85 vs 1.82 year-over-year) coupled with the decrease in total orders delivered indicates a consolidation of the customer base. Wayfair seems to be retaining and extracting more value from its core customers while struggling to expand its overall market reach.
These trends point to a market in flux, with consumers becoming more selective in their home furnishing purchases. Companies in this space may need to focus on customer retention, mobile optimization and potentially explore international markets to navigate the current challenging environment.
Q2 Net Revenue of
Second Quarter 2024 Financial Highlights
- Total net revenue of
$3.1 billion $54 million 1.7% year over year U.S. net revenue of$2.7 billion $55 million 2.0% year over year- International net revenue of
$387 million $1 million 0.3% year over year. International Net Revenue Constant Currency Growth was1.3% - Gross profit was
$941 million 30.2% of total net revenue - Net loss was
$42 million $163 million - Diluted loss per share was
$0.34 $0.47 - Net cash provided by operating activities was
$245 million $183 million - Cash, cash equivalents and short-term investments totaled
$1.3 billion $1.9 billion
"Q2 was a dynamic quarter that resulted in another period of share gain, amid continued macro headwinds that are pressuring the ways customers are shopping the category. Customers remain cautious in their spending on the home, and our credit card data suggests that the category correction now mirrors the magnitude of the peak to trough decline the home furnishing space experienced during the great financial crisis," said Niraj Shah, CEO, co-founder and co-chairman, Wayfair.
Shah continued, "Every action we've taken, every goal we've prioritized, and every dollar we've spent has been considered under the intense scrutiny of our high expectations for return-on-investment. Even with the challenging macro, this was our best quarter of Adjusted EBITDA and Free Cash Flow generation in three years, clear evidence of our strict operating discipline. We are running the business with the goal of demonstrating substantial growth in profitability this year, even as the top line remains challenging. And that will be our mindset every year going forward as well."
Other Second Quarter Highlights
- Active customers totaled 22.0 million as of June 30, 2024, an increase of
0.9% year over year - LTM net revenue per active customer was
$540 0.9% year over year - Orders per customer, measured as LTM orders divided by active customers, was 1.85 for the second quarter of 2024, compared to 1.82 for the second quarter of 2023
- Orders delivered in the second quarter of 2024 were 10.0 million, a decrease of
2.9% year over year - Repeat customers placed
81.7% of total orders delivered in the second quarter of 2024, compared to80.1% in the second quarter of 2023 - Repeat customers placed 8.1 million orders in the second quarter of 2024, a decrease of
2.4% year over year - Average order value was
$313 $307 63.7% of total orders delivered were placed via a mobile device in the second quarter of 2024, compared to61.6% in the second quarter of 2023
Key Financial Statement and Operating Metrics | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions, except LTM net revenue per active customer, average order | ||||||||
Key Financial Statement Metrics: | ||||||||
Net revenue | $ 3,117 | $ 3,171 | $ 5,846 | $ 5,945 | ||||
Gross profit | $ 941 | $ 985 | $ 1,760 | $ 1,806 | ||||
Loss from operations | $ (35) | $ (142) | $ (270) | $ (489) | ||||
Net loss | $ (42) | $ (46) | $ (290) | $ (401) | ||||
Loss per share: | ||||||||
Basic | $ (0.34) | $ (0.41) | $ (2.39) | $ (3.60) | ||||
Diluted | $ (0.34) | $ (0.41) | $ (2.39) | $ (3.60) | ||||
Net cash provided by operating activities | $ 245 | $ 217 | $ 106 | $ 70 | ||||
Key Operating Metrics: | ||||||||
Active customers (1) | 22 | 22 | 22 | 22 | ||||
LTM net revenue per active customer (2) | $ 540 | $ 545 | $ 540 | $ 545 | ||||
Orders delivered (3) | 10 | 10 | 20 | 20 | ||||
Average order value (4) | $ 313 | $ 307 | $ 299 | $ 297 | ||||
Non-GAAP Financial Measures: | ||||||||
Adjusted EBITDA | $ 163 | $ 128 | $ 238 | $ 114 | ||||
Free Cash Flow | $ 183 | $ 128 | $ (10) | $ (106) | ||||
Adjusted Diluted Earnings (Loss) per Share | $ 0.47 | $ 0.21 | $ 0.16 | $ (0.90) | ||||
(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. The change in active customers in a reported period captures both the inflow of new customers as well as the outflow of existing customers who have not made a purchase in the last twelve months. We view the number of active customers as a key indicator of our growth. |
(2) | LTM net revenue per active customer represents our total net revenue in the last twelve months divided by our total number of active customers for the same preceding twelve-month period. We view LTM net revenue per active customer as a key indicator of our customers' purchasing patterns, including their initial and repeat purchase behavior. |
(3) | Orders delivered represent the total orders delivered in any period, inclusive of orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available, and as such we estimate delivery dates based on historical data. We recognize net revenue when an order is delivered, and therefore orders delivered, together with average order value, is an indicator of the net revenue we expect to recognize in a given period. We view orders delivered as a key indicator of our growth. |
(4) | We define average order value as total net revenue in a given period divided by the orders delivered in that period. We view average order value as a key indicator of the mix of products on our sites, the mix of offers and promotions and the purchasing behavior of our customers. |
Webcast and Conference Call
Wayfair will host a conference call and webcast to discuss its second quarter 2024 financial results today at 8 a.m. (ET). Investors and participants should register for the call in advance by visiting https://bit.ly/4exc4Dz. After registering, instructions will be shared on how to join the call. The call will also be available via live webcast at https://bit.ly/3KXgAxx. An archive of the webcast conference call will be available shortly after the call ends on Wayfair's Investor website at investor.wayfair.com. Important information may be disseminated initially or exclusively via the Investor website; investors should consult the site to access this information.
About Wayfair
Wayfair is the destination for all things home, in one inspiring place. With quality finds for every style and budget, and a convenient experience from inspiration to installation, Wayfair empowers everyone, everywhere to create a space that is just right for them.
The Wayfair family of brands includes:
- Wayfair: Every style. Every home.
- AllModern: All of modern, made simple.
- Birch Lane: Classic style for joyful living.
- Joss & Main: The ultimate style edit for home.
- Perigold: The destination for luxury home.
- Wayfair Professional: A one-stop Pro shop.
Wayfair generated
Media Relations Contact:
Tara Lambropoulos
PR@wayfair.com
Investor Relations Contact:
James Lamb
IR@wayfair.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal and state securities laws. All statements other than statements of historical fact contained in this press release, including statements regarding our investment plans and anticipated returns on those investments, our future customer growth, our future results of operations and financial position, including our financial outlook, profitability goals, business strategy, plans and objectives of management for future operations, and, the impact of macroeconomic events and our response to such events, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "continues," "could," "intends," "goals," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or the negative of these terms or other similar expressions.
Forward-looking statements are based on current expectations of future events. 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 our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. We believe that these risks and uncertainties include, but are not limited to, adverse macroeconomic conditions, including rising and fluctuating interest rates and inflation, slower growth or the potential for recession, disruptions in the global supply chain, conditions affecting the retail environment for products we sell, and other matters that influence consumer spending and preferences, as well as our ability to plan for and respond to the impact of these conditions; our ability to acquire and retain customers in a cost-effective manner; our ability to increase our net revenue per active customer; our ability to build and maintain strong brands; our ability to manage our growth and expansion initiatives; and our ability to expand our business and compete successfully. A further list and description of risks, uncertainties and other factors that could cause or contribute to differences in our future results include the cautionary statements herein and in our most recent Annual Report on Form 10-K and in our other filings and reports with the Securities and Exchange Commission. We qualify all of our forward-looking statements by these cautionary statements.
These forward-looking statements speak only as of the date of this press release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
WAYFAIR INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||
June 30, | December 31, | |||
2024 | 2023 | |||
(in millions, except share and per | ||||
Assets: | ||||
Current assets | ||||
Cash and cash equivalents | $ 1,304 | $ 1,322 | ||
Short-term investments | 39 | 29 | ||
Accounts receivable, net | 161 | 140 | ||
Inventories | 78 | 75 | ||
Prepaid expenses and other current assets | 240 | 289 | ||
Total current assets | 1,822 | 1,855 | ||
Operating lease right-of-use assets | 880 | 820 | ||
Property and equipment, net | 680 | 748 | ||
Other non-current assets | 54 | 51 | ||
Total assets | $ 3,436 | $ 3,474 | ||
Liabilities and Stockholders' Deficit: | ||||
Current liabilities | ||||
Accounts payable | $ 1,168 | $ 1,234 | ||
Other current liabilities | 1,039 | 949 | ||
Total current liabilities | 2,207 | 2,183 | ||
Long-term debt | 3,059 | 3,092 | ||
Operating lease liabilities, net of current | 893 | 862 | ||
Other non-current liabilities | 37 | 44 | ||
Total liabilities | 6,196 | 6,181 | ||
Stockholders' deficit: | ||||
Convertible preferred stock, | — | — | ||
Class A common stock, par value | — | — | ||
Class B common stock, par value | — | — | ||
Additional paid-in capital | 1,552 | 1,316 | ||
Accumulated deficit | (4,308) | (4,018) | ||
Accumulated other comprehensive loss | (4) | (5) | ||
Total stockholders' deficit | (2,760) | (2,707) | ||
Total liabilities and stockholders' deficit | $ 3,436 | $ 3,474 | ||
WAYFAIR INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions, except per share data) | ||||||||
Net revenue (1) | $ 3,117 | $ 3,171 | $ 5,846 | $ 5,945 | ||||
Cost of goods sold (2) | 2,176 | 2,186 | 4,086 | 4,139 | ||||
Gross profit | 941 | 985 | 1,760 | 1,806 | ||||
Operating expenses: | ||||||||
Customer service and merchant fees (2) | 121 | 144 | 238 | 283 | ||||
Advertising | 365 | 352 | 689 | 679 | ||||
Selling, operations, technology, general and administrative (2) | 489 | 630 | 1,023 | 1,254 | ||||
Impairment and other related net charges | 1 | 1 | 1 | 14 | ||||
Restructuring charges | — | — | 79 | 65 | ||||
Total operating expenses | 976 | 1,127 | 2,030 | 2,295 | ||||
Loss from operations | (35) | (142) | (270) | (489) | ||||
Interest expense, net | (4) | (5) | (10) | (10) | ||||
Other (expense) income, net | (1) | 3 | (5) | 2 | ||||
Gain on debt extinguishment | — | 100 | — | 100 | ||||
Loss before income taxes | (40) | (44) | (285) | (397) | ||||
Provision for income taxes, net | 2 | 2 | 5 | 4 | ||||
Net loss | $ (42) | $ (46) | $ (290) | $ (401) | ||||
Loss per share: | ||||||||
Basic | $ (0.34) | $ (0.41) | $ (2.39) | $ (3.60) | ||||
Diluted | $ (0.34) | $ (0.41) | $ (2.39) | $ (3.60) | ||||
Weighted-average number of shares of common stock | ||||||||
Basic | 122 | 112 | 121 | 111 | ||||
Diluted | 122 | 112 | 121 | 111 | ||||
(1) The following tables present net revenue attributable to our reportable segments for the periods indicated: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions) | ||||||||
$ 2,730 | $ 2,785 | $ 5,121 | $ 5,200 | |||||
International net revenue | 387 | 386 | 725 | 745 | ||||
Total net revenue | $ 3,117 | $ 3,171 | $ 5,846 | $ 5,945 | ||||
(2) Includes equity-based compensation and related taxes as follows: |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions) | ||||||||
Cost of goods sold | $ 3 | $ 2 | $ 6 | $ 5 | ||||
Customer service and merchant fees | 5 | 8 | 11 | 16 | ||||
Selling, operations, technology, general and administrative | 90 | 157 | 208 | 297 | ||||
Total equity-based compensation and related taxes | $ 98 | $ 167 | $ 225 | $ 318 | ||||
WAYFAIR INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||
Six Months Ended June 30, | ||||
2024 | 2023 | |||
(in millions) | ||||
Cash flows from operating activities: | ||||
Net loss | $ (290) | $ (401) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 203 | 206 | ||
Equity-based compensation expense | 214 | 308 | ||
Amortization of discount and issuance costs on convertible notes | 5 | 3 | ||
Impairment and other related net charges | 1 | 14 | ||
Gain on debt extinguishment | — | (100) | ||
Other non-cash adjustments | (8) | (3) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | (37) | 144 | ||
Inventories | (4) | 13 | ||
Prepaid expenses and other assets | 11 | (8) | ||
Accounts payable and other liabilities | 11 | (106) | ||
Net cash provided by operating activities | 106 | 70 | ||
Cash flows (for) from investing activities: | ||||
Purchase of short- and long-term investments | (38) | — | ||
Sale and maturities of short- and long-term investments | 27 | 225 | ||
Purchase of property and equipment | (36) | (71) | ||
Site and software development costs | (80) | (105) | ||
Net cash (used in) provided by investing activities | (127) | 49 | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of convertible notes, net of issuance costs | — | 678 | ||
Premiums paid for capped call confirmations | — | (87) | ||
Payments to extinguish convertible debt | — | (514) | ||
Other financing activities, net | 3 | — | ||
Net cash provided by financing activities | 3 | 77 | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | — | 3 | ||
Net (decrease) increase in cash, cash equivalents and restricted cash | (18) | 199 | ||
Cash, cash equivalents and restricted cash | ||||
Beginning of period | $ 1,326 | $ 1,050 | ||
End of period | $ 1,308 | $ 1,249 | ||
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), this earnings release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Diluted Earnings or Loss per Share and Net Revenue Constant Currency Growth. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We have provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure in this earnings release.
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. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by Net Revenue. We disclose Adjusted EBITDA because it is a key measure used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis as these costs may vary independent of business performance. For instance, we exclude the impact of equity-based compensation and related taxes as we do not consider this item to be indicative of our core operating performance. Investors should, however, understand that equity-based compensation and related taxes will be a significant recurring expense in our business and an important part of the compensation provided to our employees. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
We calculate Free Cash Flow as net cash provided by or used in operating activities less net cash used to purchase property and equipment and site and software development costs (collectively, "Capital Expenditures"). We disclose Free Cash Flow because it is an important indicator of our business performance as it measures the amount of cash we generate. Accordingly, we believe that Free Cash Flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
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.
We calculate Net Revenue Constant Currency Growth by translating the current period local currency net revenue by the currency exchange rates used to translate the financial statements in the comparable prior-year period. We disclose Net Revenue Constant Currency Growth because it is an important indicator of our operating results. Accordingly, we believe that Net Revenue Constant Currency Growth provides useful information to investors and others in understanding and evaluating trends in our operating results in the same manner as our management.
We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in forward-looking GAAP financial measures. We do not attempt to provide a reconciliation of forward-looking non-GAAP financial measures to forward looking GAAP financial measures because forecasting the timing or amount of items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable efforts. Further, we believe that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
The non-GAAP financial measures have limitations as analytical tools. We do not, nor do we suggest that investors should consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors should also note that the non-GAAP financial measures we use may not be the same non-GAAP financial measures and may not be calculated in the same manner as that of other companies, including other companies in our industry.
The following table reflects the reconciliation of net income or loss to Adjusted EBITDA and Adjusted EBITDA margin for each of the periods indicated:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||
(in millions) | |||||||||
Reconciliation of Adjusted EBITDA: | |||||||||
Net loss | $ (42) | $ (46) | $ (290) | $ (401) | |||||
Depreciation and amortization | 99 | 102 | 203 | 206 | |||||
Equity-based compensation and related taxes | 98 | 167 | 225 | 318 | |||||
Interest expense, net | 4 | 5 | 10 | 10 | |||||
Other expense (income), net | 1 | (3) | 5 | (2) | |||||
Provision for income taxes, net | 2 | 2 | 5 | 4 | |||||
Other: | |||||||||
Impairment and other related net charges (1) | 1 | 1 | 1 | 14 | |||||
Restructuring charges (2) | — | — | 79 | 65 | |||||
Gain on debt extinguishment (3) | — | (100) | — | (100) | |||||
Adjusted EBITDA | $ 163 | $ 128 | $ 238 | $ 114 | |||||
Net revenue | $ 3,117 | $ 3,171 | $ 5,846 | $ 5,945 | |||||
Net loss margin | (1.3) % | (1.5) % | (5.0) % | (6.7) % | |||||
Adjusted EBITDA Margin | 5.2 % | 4.0 % | 4.1 % | 1.9 % | |||||
(1) | During the three and six months ended June 30, 2024, we recorded charges of | |||||||||
(2) | During the six months ended June 30, 2024, we incurred | |||||||||
(3) | During the three and six months ended June 30, 2023, we recorded a | |||||||||
The following table presents Adjusted EBITDA attributable to our segments, and the reconciliation of net income or loss to Adjusted EBITDA is presented in the preceding table:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions) | ||||||||
Segment Adjusted EBITDA: | ||||||||
$ 199 | $ 161 | $ 320 | $ 190 | |||||
International | (36) | (33) | (82) | (76) | ||||
Adjusted EBITDA | $ 163 | $ 128 | $ 238 | $ 114 | ||||
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, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions) | ||||||||
Net cash provided by operating activities | $ 245 | $ 217 | $ 106 | $ 70 | ||||
Purchase of property and equipment | (23) | (37) | (36) | (71) | ||||
Site and software development costs | (39) | (52) | (80) | (105) | ||||
Free Cash Flow | $ 183 | $ 128 | $ (10) | $ (106) | ||||
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, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions, except per share data) | ||||||||
Numerator: | ||||||||
Numerator for basic and diluted loss per share - net loss | $ (42) | $ (46) | $ (290) | $ (401) | ||||
Adjustments to net loss | ||||||||
Interest expense associated with convertible debt instruments | 10 | — | — | — | ||||
Equity-based compensation and related taxes | 98 | 167 | 225 | 318 | ||||
Provision for income taxes, net | 2 | 2 | 5 | 4 | ||||
Other: | ||||||||
Impairment and other related net charges | 1 | 1 | 1 | 14 | ||||
Restructuring charges | — | — | 79 | 65 | ||||
Gain on debt extinguishment | — | (100) | — | (100) | ||||
Numerator for Adjusted Diluted Earnings (Loss) per | $ 69 | $ 24 | $ 20 | $ (100) | ||||
Denominator: | ||||||||
Denominator for basic and diluted loss per share - | 122 | 112 | 121 | 111 | ||||
Adjustments to effect of dilutive securities: | ||||||||
Restricted stock units | — | 1 | 1 | — | ||||
Convertible debt instruments | 22 | — | — | — | ||||
Denominator for Adjusted Diluted Earnings (Loss) per | 144 | 113 | 122 | 111 | ||||
Diluted Loss per Share | $ (0.34) | $ (0.41) | $ (2.39) | $ (3.60) | ||||
Adjusted Diluted Earnings (Loss) per Share | $ 0.47 | $ 0.21 | $ 0.16 | $ (0.90) | ||||
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SOURCE Wayfair Inc.
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