Purple Innovation (NASDAQ: PRPL) extends loan maturity and posts positive 2025 adjusted EBITDA
Rhea-AI Filing Summary
Purple Innovation, Inc. amended its existing credit agreement and reported improved fourth quarter and full year 2025 results. The Third Amendment extends the loan maturity date from December 31, 2026 to April 30, 2027 and waives a requirement that 2025 financial statements be free of any “going concern” qualification, in exchange for an approximately $1.6 million amendment fee and about $253,000 of reimbursed expenses. In the fourth quarter, revenue rose to $140.7 million, gross profit reached $59.0 million with a 41.9% margin, and net loss narrowed to $3.2 million while adjusted EBITDA improved to $8.8 million. For full year 2025, revenue was $468.7 million, gross margin increased to 40.2%, net loss attributable to Purple improved to $51.4 million, and adjusted EBITDA turned positive at $1.9 million. The company ended 2025 with $24.3 million in cash and guided 2026 revenue to $500–$520 million and adjusted EBITDA to $20–$30 million.
Positive
- None.
Negative
- None.
Insights
Debt maturity is extended as profitability metrics improve, but leverage and losses remain.
Purple Innovation secured a Third Amendment that pushes its credit facility maturity to April 30, 2027 and waives a covenant tied to any “going concern” qualification on its 2025 financials. In return, it agreed to an approximately $1.6 million amendment fee plus about $253,000 of reimbursed expenses, partly paid in kind, which adds to related party debt.
Operationally, Q4 net revenue grew to $140.7 million (up about 9.1% year over year) and adjusted EBITDA rose to $8.8 million, while full year adjusted EBITDA swung from a $20.8 million loss to a $1.9 million gain. However, the company still reported a $51.4 million GAAP net loss for 2025 and a stockholders’ equity deficit of $29.7 million alongside related party debt of $111.3 million as of December 31, 2025.
The 2026 outlook targets revenue of $500–$520 million and adjusted EBITDA of $20–$30 million, implying a substantial step-up from 2025 if achieved. Future filings will indicate how actual results compare with this guidance and whether cash generation improves relative to the $33.8 million net cash used in operating activities in 2025.
8-K Event Classification
Key Figures
Key Terms
Third Amendment to the Amended and Restated Credit Agreement financial
going concern qualification financial
Adjusted EBITDA financial
warrant liabilities financial
non-GAAP financial measures financial
Earnings Snapshot
For 2026, the company expects full year revenue of $500–$520 million and adjusted EBITDA of $20–$30 million; for Q1 2026, revenue of $100–$105 million and adjusted EBITDA of approximately $(7) to $(4) million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Third Amendment to Amended and Restated Credit Agreement
As previously disclosed, on January 23, 2024, Purple Innovation, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “Loan Parties”), entered into an amended and restated credit agreement with Coliseum Capital Partners, L.P. (“CCP”), Blackwell Partners LLC – Series A (“Blackwell” and together with CCP, the “Coliseum Lenders”) and other lenders (collectively, the “Lenders”) and CSC Delaware Trust Company, as administrative agent, which was amended on March 12, 2025, and May 2, 2025 (as amended, the “Amended and Restated Credit Agreement”).
On March 24, 2026, the Loan Parties entered into a Third Amendment to the Amended and Restated Credit Agreement (the “Third Amendment”) with the Lenders, which (i) revised the maturity date under the Amended and Restated Credit Agreement from December 31, 2026, to April 30, 2027 and (ii) waived the requirement, and related events of default, that the Company’s financial statements for the fiscal year ending December 31, 2025 be delivered without being subject to any “going concern” qualification. In connection with the Third Amendment, the Loan Parties agreed to pay to the Lenders an amendment fee in the aggregate amount of approximately $1.6 million, equal to 1.25% pro rata based on each Lender’s outstanding principal amount (the “Amendment Fee”). Of the Amendment Fee, approximately $1.3 million is payable-in-kind by adding such amount to such Coliseum Lenders’ outstanding principal amount. The remaining approximately $346,000 of the Amendment Fee was paid in cash. In connection with the Third Amendment, the Loan Parties also agreed to reimburse the Coliseum Lenders for certain expenses in the amount of approximately $253,000, payable in cash.
The representations, warranties and covenants contained in the Third Amendment were made only for purposes of the Third Amendment and as of specific dates; are solely for the benefit of the parties to the Third Amendment; and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company or the Lenders or any of their respective subsidiaries, affiliates, businesses or stockholders. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Amendment, which subsequent information may or may not be fully reflected in public disclosures or statements by the Company or the Lenders. Accordingly, investors should read the representations and warranties in the Third Amendment not in isolation but only in conjunction with the other information about the Company or the Lenders and their respective subsidiaries that the respective companies include in reports, statements and other filings made with the U.S. Securities and Exchange Commission (the “SEC”).
The foregoing summary of the Third Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Third Amendment, which is attached as Exhibit 10.1 to this report and is incorporated herein by reference.
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 31, 2026, Purple Innovation, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and calendar year ended December 31, 2025. A copy of this press release is furnished as Exhibit 99.1 to this report and incorporated by reference herein.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The press release furnished herewith in Exhibit 99.1 contains non-GAAP financial measures. Management believes non-GAAP financial measures assist management and investors in evaluating and comparing period-to-period results and projections in a more meaningful and consistent manner. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the press release.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The disclosure under Item 1.01 above describing the Third Amendment which amends the Amended and Restated Credit Agreement is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1 | Third Amendment to Amended and Restated Credit Agreement, dated as of March 24, 2026, by and among the Loan Parties and the Lenders. | |
| 99.1 | Press Release dated March 31, 2026, regarding financial results for the fourth quarter and calendar year ended December 31, 2025. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: March 31, 2026 | PURPLE INNOVATION, INC. | |
| By: | /s/ Todd Vogensen | |
| Todd Vogensen | ||
| Chief Financial Officer | ||
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Exhibit 99.1
Purple Innovation Reports Fourth Quarter and Full Year 2025 Results
Revenue Increases 9% in Fourth Quarter
GAAP Net Loss of $3.2 Million in Fourth Quarter
Delivers $8.8 Million in Adjusted EBITDA in Fourth Quarter
Full Year Adjusted EBITDA Positive; Gross Margin Exceeds 40% Target
Lehi, Utah, March 25, 2026 – Purple Innovation, Inc. (NASDAQ: PRPL) (“Purple”), a comfort innovation company whose mattresses promise to give you “less pain, better sleep,” today announced results for the fourth quarter and full year ended December 31, 2025.
“2025 marked an important inflection point for Purple,” said Rob DeMartini, CEO of Purple Innovation. “In the fourth quarter, we delivered revenue growth of approximately 9%, delivered gross profit expansion, and generated $8.8 million in adjusted EBITDA. We also finished the year profitable on an adjusted EBITDA basis, a significant milestone that reflects the structural improvements we have made across the business.”
DeMartini continued, “Over the past year, we strengthened our foundation through disciplined cost actions and manufacturing consolidation, while reinforcing our premium positioning. Rejuvenate 2.0 continued to outperform, our expanded Mattress Firm partnership and Costco programs drove meaningful wholesale growth, and our showroom fleet delivered improved profitability. As we enter 2026, we are operating from a stronger margin profile and a more efficient cost structure, supported by what we believe is a clear and disciplined strategy to scale profitably.”
Fourth Quarter 2025 Financial Results
Fourth quarter 2025 net revenue was $140.7 million, representing growth of approximately 9.1% compared to the fourth quarter of 2024. Growth was driven primarily by the wholesale channel, reflecting a full quarter of expanded Mattress Firm placements and continued momentum with Costco, partially offset by a decline in e-commerce.
Gross profit for the fourth quarter increased to $59.0 million or 41.9% of net revenue, compared to $55.3 million or 42.9% in the prior-year period. Gross margin was up against a period when it rose 970 basis points, driven by sourcing initiatives and the profitable liquidation of inventories. On a two-year basis, gross margin rose 870 basis points, reflecting direct material savings, plant efficiencies, restructuring benefits, and volume leverage.
Fourth quarter operating expenses were $61.2 million, down 2.9% from $63.0 million in the prior year quarter. The improvement was primarily driven by ongoing benefits from restructuring and cost-saving initiatives, partially offset by strategic alternatives costs.
Net loss attributable to Purple Innovation, Inc. for the fourth quarter was $3.2 million, an improvement from $(8.5) in the prior year.
Adjusted EBITDA for the fourth quarter was $8.8 million, an improvement from $2.9 million last year, driven primarily by revenue growth and disciplined cost management.
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Full Year 2025 Financial Results
Full year 2025 net revenue was $468.7 million, a decline of 3.9% compared to the full year 2024. The reduction was driven primarily by ecommerce headwinds, partially offset by expanded partnerships in the wholesale channel.
Gross profit for the full year increased to $188.6 million, compared to $181.1 million in the prior-year period. Gross margin was 40.2%, up 310 basis points from last year, reflecting the continued impact of our restructuring initiatives, sourcing savings, and manufacturing efficiencies.
Full year operating expenses were $231.6 million, down 15.3% from $273.3 million in the prior year, driven by restructuring actions and productivity initiatives.
Net loss attributable to Purple Innovation, Inc. for the full year was $(51.4) million, an improvement from $(97.9) in the prior year.
Adjusted EBITDA for the full year was $1.9 million, a significant improvement from $(20.8) million last year.
Balance Sheet
As of December 31, 2025, the Company had cash and cash equivalents of $24.3 million compared to $29.0 million as of December 31, 2024.
Net inventories as of December 31, 2025, totaled $59.7 million, down 9.2% compared to September 30, 2025, and an increase of 5.0% compared to December 31, 2024.
2026 Outlook
For 2026, the Company currently expects full year revenue to be in the range of $500 to $520 million and adjusted EBITDA in the range of $20 to $30 million.
For the first quarter, the Company anticipates total revenue to be in the range of $100 to $105 million and adjusted EBITDA to be approximately $(7) to $(4) million.
Conference Call and Webcast Information
Purple Innovation, Inc. will host a live conference call to discuss financial results today, March 25, 2026, at 8:30 a.m. Eastern Time. To access the call dial 800-715-9871 (domestic) or 646-307-1963 (international). The call is also being webcast and can be accessed on the investor relations section of the Company’s website, investors.purple.com. After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for 30 days.
About Purple
Purple exists to help people get the best sleep of their lives — by reducing pain, deepening sleep, and unlocking the potential for brighter dawns and better days. At the center of that mission is our signature innovation, the GelFlex Grid®. Originally developed in medical settings to support the body in its most vulnerable moments, the GelFlex Grid delivers a one-of-a-kind combination of pressure relief, alignment, and temperature balance that helps people fall asleep easier, stay asleep longer, and wake up with less pain.
That same comfort technology extends beyond mattresses into pillows, bedding, and cushions designed to make everyday life feel a little lighter and a lot more comfortable. Because when pain eases and sleep improves, everything else gets better too — your energy, your outlook, and your ability to show up for the moments that matter.
Less pain. Better sleep.
Learn more at www.purple.com
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Forward Looking Statements
Certain statements made in this release that are not historical facts are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These statements include, but are not limited to, statements regarding our innovation pipeline, the timing of new product collection launches, our ability to improve profitability and optimize our business, the expansion of and benefits to us from our commercial relationship with Mattress Firm, the impact of other commercial relationships, including those with Walmart, Costco, and other traditional and non-traditional partners, our ability to drive profitable growth and create shareholder value, and our outlook for revenue and adjusted EBITDA for the first quarter and full year 2026. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Factors that could influence the realization of forward-looking statements include, among others: changes in economic, financial and end-market conditions in the markets in which we operate; fluctuations in raw material prices and cost of labor; the financial condition of our customers and suppliers; competitive pressures, including the need for technology improvement, successful new product development and introduction; changes in consumer demand, including pullbacks in consumer spending; disruptions to our manufacturing processes; and the risk factors outlined in the “Risk Factors” section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2026, and in our other filings made with the SEC. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Financial Measures
EBITDA, adjusted EBITDA, adjusted gross profit, adjusted operating expenses, adjusted net income, and adjusted net income per diluted share are non-GAAP financial measures that remove the impact of certain non-cash and non-recurring costs. Management believes that the use of such non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments, which we view as a better measure of our operating performance. Refer to the attached table for the reconciliation of such non-GAAP financial measures to the most comparable GAAP financial measure.
With respect to the Company’s Adjusted EBITDA outlook for the first quarter and full year 2026, a quantitative reconciliation to the corresponding GAAP information cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted, including but not limited to warrant liabilities and stock based compensation. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results.
Investor Contact:
Stacy Turnof, Edelman Smithfield
stacy.turnof@edelmansmithfield.com
917-362-2581
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PURPLE INNOVATION, INC.
Consolidated Balance Sheets
(in thousands, except for par value)
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 24,345 | $ | 29,011 | ||||
| Accounts receivable, net | 41,272 | 33,057 | ||||||
| Inventories | 59,725 | 56,863 | ||||||
| Prepaid expenses | 5,487 | 6,023 | ||||||
| Other current assets | 5,891 | 1,414 | ||||||
| Total current assets | 136,720 | 126,368 | ||||||
| Property and equipment, net | 77,961 | 93,874 | ||||||
| Operating lease right-of-use assets | 67,271 | 75,516 | ||||||
| Intangible assets, net | 6,346 | 8,890 | ||||||
| Other long-term assets | 7,961 | 3,197 | ||||||
| Total assets | $ | 296,259 | $ | 307,845 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 40,312 | $ | 40,639 | ||||
| Accrued compensation | 7,673 | 9,415 | ||||||
| Customer prepayments | 5,276 | 6,411 | ||||||
| Accrued rebates and allowances | 13,416 | 10,013 | ||||||
| Accrued warranty liabilities – current portion | 7,141 | 6,114 | ||||||
| Operating lease obligations – current portion | 17,366 | 15,661 | ||||||
| Other current liabilities | 10,339 | 12,750 | ||||||
| Total current liabilities | 101,523 | 101,003 | ||||||
| Related party debt | 111,305 | 55,394 | ||||||
| Accrued warranty liabilities, net of current portion | 19,570 | 26,091 | ||||||
| Operating lease obligations, net of current portion | 75,616 | 87,072 | ||||||
| Warrant liabilities | 16,150 | 16,067 | ||||||
| Other long-term liabilities | 1,764 | 2,009 | ||||||
| Total liabilities | 325,928 | 287,636 | ||||||
| Commitments and contingencies (Note 13) | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Class A common stock; $0.0001 par value, 210,000 shares authorized; 108,246 and 107,545 issued and outstanding at December 31, 2025 and 2024, respectively | 11 | 11 | ||||||
| Class B common stock; $0.0001 par value, 90,000 shares authorized; 163 and 165 issued and outstanding at December 31, 2025 and 2024, respectively | — | — | ||||||
| Additional paid-in capital | 595,582 | 594,053 | ||||||
| Accumulated deficit | (625,280 | ) | (573,866 | ) | ||||
| Total stockholders’ equity (deficit) attributable to Purple Innovation, Inc. | (29,687 | ) | 20,198 | |||||
| Noncontrolling interest | 18 | 11 | ||||||
| Total stockholders’ equity (deficit) | (29,669 | ) | 20,209 | |||||
| Total liabilities and stockholders’ equity (deficit) | $ | 296,259 | $ | 307,845 | ||||
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PURPLE INNOVATION, INC.
Consolidated Statements of Operations
(in thousands, except per share amounts)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues, net | $ | 140,688 | $ | 128,975 | $ | 468,725 | $ | 487,877 | ||||||||
| Cost of revenues: | ||||||||||||||||
| Cost of revenues | 81,709 | 71,113 | 279,171 | 291,303 | ||||||||||||
| Cost of revenues - restructuring related charges | — | 2,583 | 995 | 15,442 | ||||||||||||
| Total cost of revenues | 81,709 | 73,696 | 280,166 | 306,745 | ||||||||||||
| Gross profit | 58,979 | 55,279 | 188,559 | 181,132 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Marketing and sales | 39,678 | 45,485 | 147,040 | 171,263 | ||||||||||||
| General and administrative | 18,879 | 14,006 | 63,557 | 69,117 | ||||||||||||
| Research and development | 2,607 | 2,390 | 9,604 | 12,962 | ||||||||||||
| Restructuring, impairment and other related charges | — | 1,092 | 11,387 | 19,973 | ||||||||||||
| Total operating expenses | 61,164 | 62,973 | 231,588 | 273,315 | ||||||||||||
| Operating loss | (2,185 | ) | (7,694 | ) | (43,029 | ) | (92,183 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (8,342 | ) | (4,481 | ) | (28,766 | ) | (17,510 | ) | ||||||||
| Other income, net | 1,477 | (64 | ) | 3,289 | 11,548 | |||||||||||
| Loss on extinguishment of debt | — | — | — | (3,394 | ) | |||||||||||
| Change in fair value – warrant liabilities | 5,883 | 3,615 | 17,202 | 3,504 | ||||||||||||
| Total other income (expense), net | (982 | ) | (930 | ) | (8,275 | ) | (5,852 | ) | ||||||||
| Net loss before income taxes | (3,167 | ) | (8,624 | ) | (51,304 | ) | (98,035 | ) | ||||||||
| Income tax benefit (expense) | (59 | ) | 113 | (207 | ) | (63 | ) | |||||||||
| Net loss | (3,226 | ) | (8,511 | ) | (51,511 | ) | (98,098 | ) | ||||||||
| Net loss attributable to noncontrolling interest | (14 | ) | (32 | ) | (97 | ) | (201 | ) | ||||||||
| Net loss attributable to Purple Innovation, Inc. | $ | (3,212 | ) | $ | (8,479 | ) | $ | (51,414 | ) | $ | (97,897 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.48 | ) | $ | (0.91 | ) | ||||
| Diluted | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.48 | ) | $ | (0.91 | ) | ||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 108,246 | 107,528 | 108,081 | 107,139 | ||||||||||||
| Diluted | 108,409 | 107,710 | 108,245 | 107,324 | ||||||||||||
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PURPLE INNOVATION, INC.
Consolidated Statements of Cash Flows
(in thousands)
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (51,511 | ) | $ | (98,098 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 24,064 | 35,355 | ||||||
| Non-cash interest | 13,416 | 7,229 | ||||||
| Paid-in-kind interest | 15,804 | 9,679 | ||||||
| Non-cash restructuring, impairment and other related charges | 3,775 | 20,238 | ||||||
| Loss on extinguishment of debt | — | 3,394 | ||||||
| Loss on disposal of property and equipment | 318 | 770 | ||||||
| Change in fair value – warrant liabilities | (17,202 | ) | (3,504 | ) | ||||
| Stock-based compensation | 1,729 | 2,815 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (8,215 | ) | 4,745 | |||||
| Inventories | (2,862 | ) | 5,989 | |||||
| Prepaid expenses and other assets | 3,141 | 2,345 | ||||||
| Operating leases, net | (2,917 | ) | (2,412 | ) | ||||
| Accounts payable | 61 | (6,376 | ) | |||||
| Accrued compensation | (1,742 | ) | 4,351 | |||||
| Customer prepayments | (1,135 | ) | 693 | |||||
| Accrued rebates and allowances | (97 | ) | (3,230 | ) | ||||
| Accrued warranty liabilities | (5,494 | ) | (3,386 | ) | ||||
| Other accrued liabilities | (4,963 | ) | 1,553 | |||||
| Net cash used in operating activities | (33,830 | ) | (17,850 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Sale of property and equipment | 464 | — | ||||||
| Purchase of property and equipment | (8,079 | ) | (7,244 | ) | ||||
| Investment in intangible assets | (664 | ) | (286 | ) | ||||
| Net cash used in investing activities | (8,279 | ) | (7,530 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from related party loan | 39,000 | 61,000 | ||||||
| Payments on term loan | — | (25,000 | ) | |||||
| Payments on revolving line of credit | — | (5,000 | ) | |||||
| Payments for debt issuance costs | (1,557 | ) | (3,466 | ) | ||||
| Net cash provided by financing activities | 37,443 | 27,534 | ||||||
| Net increase (decrease) in cash and cash equivalents | (4,666 | ) | (2,154 | ) | ||||
| Cash and cash equivalents, beginning of the year | 29,011 | 26,857 | ||||||
| Cash and cash equivalents, end of the period | $ | 24,345 | $ | 29,011 | ||||
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PURPLE INNOVATION, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands)
Management believes that the use of the following non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments, which we view as a better measure of our operating performance. These non-GAAP financial measures are EBITDA, adjusted EBITDA, adjusted gross profit, adjusted operating expenses, adjusted net loss and adjusted net loss per diluted share. Other companies may calculate these non-GAAP measures differently than we do. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for our financial results prepared in accordance with GAAP.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA
A reconciliation of GAAP net income (loss) to the non-GAAP measures of EBITDA and adjusted EBITDA is provided below. EBITDA represents net income (loss) before interest expense, income tax expense, other income, net, and depreciation and amortization. Adjusted EBITDA represents EBITDA excluding costs incurred due to changes in the fair value of the warrant liability, debt extinguishment, stock-based compensation expense, restructuring related expenses, loss on project write-off, nonrecurring legal fees, strategic alternative costs, executive interim and search costs, severance cost, showroom opening and closing costs and non-operating facility expense. We believe EBITDA and Adjusted EBITDA provide additional useful information with respect to the impact of various adjustments and provide meaningful measures of our operating performance.
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| GAAP net loss | $ | (3,226 | ) | (8,511 | ) | (51,511 | ) | (98,098 | ) | |||||||
| Interest expense | 8,342 | 4,481 | 28,766 | 17,510 | ||||||||||||
| Income tax expense | 59 | 113 | 207 | 63 | ||||||||||||
| Other income, net | (1,477 | ) | 64 | (3,289 | ) | (11,548 | ) | |||||||||
| Depreciation and amortization | 4,406 | 7,907 | 24,064 | 35,355 | ||||||||||||
| EBITDA | 8,104 | 3,828 | (1,763 | ) | (56,718 | ) | ||||||||||
| Adjustments: | ||||||||||||||||
| Change in fair value - warrant liability | (5,883 | ) | (3,615 | ) | (17,202 | ) | (3,504 | ) | ||||||||
| Loss on extinguishment of debt | — | — | — | 3,394 | ||||||||||||
| Stock-based compensation expense | 464 | 685 | 1,729 | 2,815 | ||||||||||||
| Restructuring related charges | — | 1,378 | 6,850 | 25,047 | ||||||||||||
| Loss on project write-off | — | — | — | 1,355 | ||||||||||||
| Non-recurring legal fees | 81 | 42 | 1,531 | 982 | ||||||||||||
| Strategic alternative costs | 5,317 | — | 7,275 | — | ||||||||||||
| Executive interim and search costs | — | 233 | — | 3,616 | ||||||||||||
| Severance costs | 148 | 146 | 1,800 | 1,232 | ||||||||||||
| Showroom opening and closing costs | — | 174 | 147 | 956 | ||||||||||||
| Non-operating facility expense | 614 | — | 1,578 | — | ||||||||||||
| Adjusted EBITDA | $ | 8,845 | $ | 2,871 | $ | 1,945 | $ | (20,825 | ) | |||||||
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Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
A reconciliation of GAAP gross profit to the non-GAAP measures of adjusted gross profit is provided below. Adjusted gross profit represents net revenue less adjusted cost of revenue. Adjusted cost of revenues represents cost of revenues excluding restructuring charges recorded in cost of revenues. We believe adjusted gross margin provides additional useful information with respect to the impact of the restructuring and provides meaningful measures of our operating performance.
| (in thousands) | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues, net | $ | 140,688 | $ | 128,975 | $ | 468,725 | $ | 487,877 | ||||||||
| Total cost of revenues | 81,709 | 73,696 | 280,166 | 306,745 | ||||||||||||
| Restructuring charges in cost of revenues | — | (2,583 | ) | (995 | ) | (15,442 | ) | |||||||||
| Adjusted cost of revenues | 81,709 | 71,113 | 279,171 | 291,303 | ||||||||||||
| Adjusted gross profit | $ | 58,979 | $ | 57,862 | $ | 189,554 | $ | 196,574 | ||||||||
| Adjusted gross profit % | 41.9 | % | 44.9 | % | 40.4 | % | 40.3 | % | ||||||||
Reconciliation of GAAP Operating Expenses to non-GAAP Adjusted Operating Expenses
Our presentation of adjusted operating expenses assumes adjustments for certain nonrecurring items that we do not believe directly reflects our current core operations. Adjusted operating expenses is a supplemental measure of operating performance that does not represent, and should not be considered, alternatives to net loss and earnings per share, as calculated in accordance with GAAP. We believe adjusted operating expenses supplements GAAP measures and enables us to more effectively evaluate our performance period-over-period. A reconciliation of operating expenses, the most directly comparable GAAP measure, to adjusted operating expenses is set forth below:
| (in thousands, except per share amounts) | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Total operating expenses | $ | 61,164 | $ | 62,973 | $ | 231,588 | $ | 273,315 | ||||||||
| Restructuring, impairment and other related charges | — | (1,092 | ) | (11,387 | ) | (19,973 | ) | |||||||||
| Strategic alternative costs | (5,317 | ) | — | (7,275 | ) | — | ||||||||||
| Adjusted operating expenses | $ | 55,847 | $ | 61,881 | $ | 212,926 | $ | 253,342 | ||||||||
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Reconciliation of GAAP Net Loss to non-GAAP Adjusted Net Loss and Adjusted Net Loss per Diluted Share
Our presentation of adjusted net loss assumes that all net loss is attributable to Purple Innovation, Inc. (i.e. there is no allocation of net loss to noncontrolling interests), which assumes the full exchange at the beginning of the period of all outstanding Paired Securities for shares of Class A common stock of Purple Innovation, Inc., adjusted for certain nonrecurring items that we do not believe directly reflect our core operations. Adjusted net loss per share, diluted, is calculated by dividing adjusted net loss by the total shares of Class A common stock outstanding plus any dilutive warrants, options and restricted stock as calculated in accordance with GAAP and assuming the full exchange of all outstanding Paired Securities as of the beginning of each period presented. Adjusted net loss and adjusted net loss per diluted share, are supplemental measures of operating performance that do not represent, and should not be considered, alternatives to net loss and earnings per share, as calculated in accordance with GAAP. We believe adjusted net loss and adjusted net loss per diluted share, supplement GAAP measures and enable us to more effectively evaluate our performance period-over-period. A reconciliation of net loss, the most directly comparable GAAP measure, to adjusted net loss and the computation of adjusted net loss per diluted share, are set forth below:
| (in thousands, except per share amounts) | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net loss | $ | (3,226 | ) | $ | (8,511 | ) | $ | (51,511 | ) | $ | (98,098 | ) | ||||
| Income tax expense, as reported | 59 | 113 | 207 | 63 | ||||||||||||
| Revenue reduction due to SGI Contract | 941 | — | 2,508 | — | ||||||||||||
| Change in fair value – warrant liabilities | (5,883 | ) | (3,615 | ) | (17,202 | ) | (3,504 | ) | ||||||||
| Loss on extinguishment of debt | — | — | — | 3,394 | ||||||||||||
| Restructuring related charges | — | 3,675 | 12,382 | 35,415 | ||||||||||||
| Gain on insurance proceeds | — | (7,301 | ) | — | (11,601 | ) | ||||||||||
| Strategic alternative costs | 5,317 | — | 7,275 | — | ||||||||||||
| Adjusted net loss before income taxes | (2,792 | ) | (15,639 | ) | (46,341 | ) | (74,331 | ) | ||||||||
| Adjusted income tax benefit(1) | 723 | 4,051 | 12,002 | 19,252 | ||||||||||||
| Adjusted net loss | $ | (2,069 | ) | $ | (11,588 | ) | $ | (34,339 | ) | $ | (55,079 | ) | ||||
| Adjusted net loss per share, diluted | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.32 | ) | $ | (0.51 | ) | ||||
| Adjusted weighted-average shares outstanding, diluted(2) | 108,409 | 107,710 | 108,245 | 107,324 | ||||||||||||
| (1) | Represents the estimated effective tax rate of 25.9% for the three and twelve months ended December 31, 2025 and 2024, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company’s blended state tax rates. |
| (2) | Assumes options and restricted stock units calculated in accordance with GAAP and the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period. |
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A reconciliation of net income (loss) per share, diluted, to adjusted net loss per diluted share is set forth below for the three and twelve months ended December 31, 2025 and 2024:
| For the Three Months Ended | ||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Net Loss | Weighted Average Shares, Diluted | Net Income per Share, Diluted | Net Loss | Weighted Average Shares, Diluted | Net Income per Share, Diluted | |||||||||||||||||||
| Net loss attributable to Purple Innovation Inc.(1) | $ | (3,212 | ) | 108,409 | (0.03 | ) | $ | (8,479 | ) | 107,710 | $ | (0.08 | ) | |||||||||||
| Assumed exchange of shares(2) | (14 | ) | — | (32 | ) | — | ||||||||||||||||||
| Net loss | (3,226 | ) | (8,511 | ) | ||||||||||||||||||||
| Adjustments to arrive at adjusted loss before taxes(3) | 434 | (7,128 | ) | |||||||||||||||||||||
| Adjusted loss before taxes | (2,792 | ) | (15,639 | ) | ||||||||||||||||||||
| Adjusted income tax benefit(4) | 723 | 4,051 | ||||||||||||||||||||||
| Adjusted net loss | $ | (2,069 | ) | 108,409 | (0.02 | ) | $ | (11,588 | ) | 107,710 | $ | (0.11 | ) | |||||||||||
| (1) | Represents net loss attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding. For the three months ended December 31, 2025, the Paired Securities are included in the beginning weighted average shares, diluted. |
| (2) | Assumes the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period if not already included in weighted average diluted shares in footnote (1) above. Also assumes the addition of net income attributable to noncontrolling interests corresponding with the assumed exchange of the Paired Securities for shares of Class A common stock. |
| (3) | Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes. Also assumes the dilutive warrants, options and restricted stock as calculated in accordance with GAAP. |
| (4) | Represents the estimated effective tax rate of 25.9% for the three months ended December 31, 2025 and 2024, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company’s blended state tax rates assuming no valuation allowance. |
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| For the Year Ended | ||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Net Income | Weighted Average Shares, Diluted | Net Income per Share, Diluted | Net Income | Weighted Average Shares, Diluted | Net Income per Share, Diluted | |||||||||||||||||||
| Net loss attributable to Purple Innovation Inc.(1) | $ | (51,414 | ) | 108,245 | (0.48 | ) | $ | (97,897 | ) | 107,324 | $ | (0.91 | ) | |||||||||||
| Assumed exchange of shares(2) | (97 | ) | — | (201 | ) | — | ||||||||||||||||||
| Net loss | (51,511 | ) | (98,098 | ) | ||||||||||||||||||||
| Adjustments to arrive at adjusted loss before taxes(3) | 5,170 | 23,767 | ||||||||||||||||||||||
| Adjusted loss before taxes | (46,341 | ) | (74,331 | ) | ||||||||||||||||||||
| Adjusted income tax benefit(4) | 12,002 | 19,252 | ||||||||||||||||||||||
| Adjusted net loss | $ | (34,339 | ) | 108,245 | (0.32 | ) | $ | (55,079 | ) | 107,324 | $ | (0.51 | ) | |||||||||||
| (1) | Represents net loss attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding. For the year ended December 31, 2025, the Paired Securities are included in the beginning weighted average shares, diluted. |
| (2) | Assumes the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period if not already included in weighted average diluted shares in footnote (1) above. Also assumes the addition of net income attributable to noncontrolling interests corresponding with the assumed exchange of the Paired Securities for shares of Class A common stock. |
| (3) | Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes. Also assumes the dilutive warrants, options and restricted stock as calculated in accordance with GAAP. |
| (4) | Represents the estimated effective tax rate of 25.9% for the year ended December 31, 2025 and 2024, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company’s blended state tax rates assuming no valuation allowance. |
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