Q2 Net Revenue of $3.9 billion
31.1 million Active Customers, up 20% Year over
Year
Wayfair Inc. (NYSE: W), one of the world’s largest online
destinations for the home, today reported financial results for its
second quarter ended June 30, 2021.
Second Quarter 2021 Financial
Highlights
- Total net revenue of $3.9 billion decreased $0.4 billion, down
10.4% year over year
- U.S. net revenue of $3.1 billion decreased $0.6 billion, down
15.2% year over year
- International net revenue of $0.8 billion increased $0.1
billion, up 16.3% year over year. International Net Revenue
Constant Currency Growth was 3.2%
- Gross profit was $1.1 billion or 29.2% of total net
revenue
- Net income was $130.4 million and Non-GAAP Adjusted EBITDA was
$310.8 million
- Diluted earnings per share was $1.14
- Non-GAAP Adjusted Diluted Earnings per Share was $1.89
- Net cash from operating activities was $275.4 million and
Non-GAAP Free Cash Flow was $206.9 million
- Cash, cash equivalents and short-term investments totaled $2.6
billion
“Wayfair delivered $3.9 billion in net revenue in Q2 — well
above pre-pandemic run-rates, even as we began to lap the early
heights of COVID-related lockdowns in 2020. While the current macro
environment is dynamic, the home remains a high priority for our
customers and longer term tailwinds to online category growth are
firmly in place,” said Niraj Shah, CEO, co-founder and co-chairman,
Wayfair. “Meaningful adjusted EBITDA and free cash flow in Q2 also
reflect strong returns from many years of thoughtful investments
behind each facet of our platform model. Even as we navigate any
near-term volatility, we remain most focused on the long-term and
further reinforcing Wayfair's position as the category leader for
home with both customers and suppliers alike.”
Other Second Quarter
Highlights
- The number of active customers reached 31.1 million as of June
30, 2021, an increase of 19.6% year over year
- LTM net revenue per active customer was $478 as of June 30,
2021, an increase of 8.6% year over year
- Orders per customer, measured as LTM orders divided by active
customers, was 1.96 for the second quarter of 2021, compared to
1.89 for the second quarter of 2020
- Repeat customers placed 75.6% of total orders in the second
quarter of 2021, compared to 67.4% in the second quarter of
2020
- Repeat customers placed 10.5 million orders in the second
quarter of 2021, a decrease of 17.6% year over year
- Orders delivered in the second quarter of 2021 were 13.9
million, a decrease of 26.5% year over year
- Average order value was $278 for the second quarter of 2021,
compared to $227 for the second quarter of 2020
- In the second quarter of 2021, 59.4% of total orders delivered
were placed via a mobile device, compared to 60.6% in the second
quarter of 2020
Key Financial and Operating
Metrics
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands, except LTM Net
Revenue per Active Customer, Average Order Value and per share
data)
Key Financial Statement
Metrics:
Net revenue
$
3,857,626
$
4,304,672
$
7,335,144
$
6,634,735
Gross profit
$
1,128,060
$
1,321,030
$
2,131,087
$
1,900,153
Income from operations
$
145,207
$
299,998
$
171,549
$
37,930
Net income (loss)
$
130,428
$
273,877
$
148,662
$
(11,988)
Earnings (loss) per share:
Basic
$
1.26
$
2.89
$
1.44
$
(0.13)
Diluted
$
1.14
$
2.54
$
1.33
$
(0.13)
Net cash from operating activities
$
275,439
$
1,135,251
$
452,035
$
878,961
Key Operating Metrics:
Active customers
31,067
25,979
31,067
25,979
LTM net revenue per active customer
$
478
$
440
$
478
$
440
Orders delivered
13,885
18,892
28,581
28,768
Average order value
$
278
$
227
$
257
$
230
Non-GAAP Financial Measures:
Adjusted EBITDA
$
310,840
$
439,813
$
516,607
$
312,536
Free Cash Flow
$
206,937
$
1,053,602
$
318,127
$
698,979
Adjusted Diluted Earnings per Share
$
1.89
$
3.13
$
2.89
$
1.33
Webcast and Conference
Call
Wayfair will host a conference call and webcast to discuss its
second quarter 2021 financial results today at 8 a.m. (ET).
Investors and participants should register for the call in advance
by visiting https://bit.ly/39M9PMA and entering the conference ID
number 2282245. 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/2TkLGYF and supporting slides will be
available at investor.wayfair.com. An archive of the webcast
conference call will be available shortly after the call ends at
investor.wayfair.com.
About Wayfair
Wayfair is the destination for all things home: helping
everyone, anywhere create their feeling of home. From expert
customer service, to the development of tools that make the
shopping process easier, to carrying one of the widest and deepest
selections of items for every space, style, and budget, Wayfair
gives everyone the power to create spaces that are just right for
them.
The Wayfair family of sites includes:
- Wayfair - Everything home for every budget.
- Joss & Main - Stylish designs to discover
daily.
- AllModern - The best of modern, priced for real
life.
- Birch Lane - Classic home. Comfortable cost.
- Perigold - The widest-ever selection of luxury home
furnishings.
Wayfair generated $14.8 billion in net revenue for the twelve
months ended June 30, 2021. Headquartered in Boston, Massachusetts
with operations throughout North America and Europe, Wayfair
employs approximately 16,000 people.
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,
available liquidity and access to financing sources, our business
strategy, plans and objectives of management for future operations,
consumer activity and behaviors, e-commerce adoption trends,
developments in our technology and systems, increased shipping
costs, our future real estate plans, and anticipated results of
those developments and the impact of the novel coronavirus
(COVID-19) pandemic and our response to it, are forward-looking
statements. In some cases, you can identify forward-looking
statements by terms such as "may," "will," "should," "expects,"
"plans," "anticipates," "could," "intends," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" 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. 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.
A list and description of risks, uncertainties and other factors
that could cause or contribute to differences in our results can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K and subsequent
filings. We qualify all of our forward-looking statements by these
cautionary statements.
WAYFAIR INC.
CONSOLIDATED AND CONDENSED
BALANCE SHEETS
(Unaudited)
June 30, 2021
December 31,
2020
(in thousands, except share
and per share data)
Assets:
Current assets
Cash and cash equivalents
$
2,078,451
$
2,129,440
Short-term investments
523,390
461,698
Accounts receivable, net
129,410
110,299
Inventories
59,914
52,152
Prepaid expenses and other current
assets
342,695
292,213
Total current assets
3,133,860
3,045,802
Operating lease right-of-use assets
842,670
808,375
Property and equipment, net
663,987
684,306
Other non-current assets
40,707
31,446
Total assets
$
4,681,224
$
4,569,929
Liabilities and Stockholders'
Deficit:
Current liabilities
Accounts payable
$
1,262,395
$
1,156,624
Other current liabilities
963,235
1,008,970
Total current liabilities
2,225,630
2,165,594
Long-term debt
3,047,983
2,659,243
Operating lease liabilities
899,431
869,958
Other non-current liabilities
50,058
67,031
Total liabilities
6,223,102
5,761,826
Stockholders’ deficit:
Convertible preferred stock, $0.001 par
value per share: 10,000,000 shares authorized and none issued at
June 30, 2021 and December 31, 2020
—
—
Class A common stock, par value $0.001 per
share: 500,000,000 shares authorized, 77,013,108 and 72,980,490
shares issued and outstanding at June 30, 2021 and December 31,
2020
77
73
Class B common stock, par value $0.001 per
share: 164,000,000 shares authorized, 26,563,837 and 26,564,234
shares issued and outstanding at June 30, 2021 and December 31,
2020
27
27
Additional paid-in capital
131,706
698,482
Accumulated deficit
(1,669,009
)
(1,885,950
)
Accumulated other comprehensive loss
(4,679
)
(4,529
)
Total stockholders’ deficit
(1,541,878
)
(1,191,897
)
Total liabilities and stockholders’
deficit
$
4,681,224
$
4,569,929
Note: Wayfair adopted a new accounting standards update for debt
effective January 1, 2021. The adoption of this standards update
had no effect on prior periods.
WAYFAIR INC.
CONSOLIDATED AND CONDENSED
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands, except per
share data)
Net revenue
$
3,857,626
$
4,304,672
$
7,335,144
$
6,634,735
Cost of goods sold (1)
2,729,566
2,983,642
5,204,057
4,734,582
Gross profit
1,128,060
1,321,030
2,131,087
1,900,153
Operating expenses:
Customer service and merchant fees (1)
144,630
143,773
291,871
233,236
Advertising
351,775
417,777
717,638
693,537
Selling, operations, technology, general
and administrative (1)
486,448
459,482
937,817
935,450
Customer service center impairment and
other charges
—
—
12,212
—
Total operating expenses
982,853
1,021,032
1,959,538
1,862,223
Income from operations
145,207
299,998
171,549
37,930
Interest expense, net
(8,402
)
(28,939
)
(15,214
)
(51,157
)
Other (expense) income, net
(2,248
)
3,110
(5,546
)
2,864
Income (loss) before income taxes
134,557
274,169
150,789
(10,363
)
Provision for income taxes, net
4,129
292
2,127
1,625
Net income (loss)
$
130,428
$
273,877
$
148,662
$
(11,988
)
Earnings (loss) per share:
Basic
$
1.26
$
2.89
$
1.44
$
(0.13
)
Diluted (2)
$
1.14
$
2.54
$
1.33
$
(0.13
)
Weighted-average number of shares of
common stock outstanding used in computing per share amounts:
Basic
103,829
94,834
103,337
94,461
Diluted
122,092
119,932
118,640
94,461
(1)
Includes equity-based compensation and
related taxes as follows:
Cost of goods sold
$
3,086
$
2,353
$
6,091
$
4,081
Customer service and merchant fees
6,201
4,313
12,095
6,432
Selling, operations, technology, general
and administrative
78,421
64,035
156,423
124,180
$
87,708
$
70,701
$
174,609
$
134,693
(2)
Wayfair adopted a new accounting standards
update for debt effective January 1, 2021. If Wayfair had not
adopted the standard January 1, 2021, Wayfair's diluted earnings
per share would have been $0.95 and $0.66 for the three and six
months ended June 30, 2021.
WAYFAIR INC.
CONSOLIDATED AND CONDENSED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June
30,
2021
2020
(in thousands)
Cash flows from operating
activities:
Net income (loss)
$
148,662
$
(11,988
)
Adjustments used to reconcile net income
(loss) to net cash from operating activities:
Depreciation and amortization
158,237
135,957
Equity-based compensation
153,883
127,081
Amortization of discount and issuance
costs on convertible notes
3,969
46,488
Loss on impairment
12,212
—
Other non-cash adjustments
498
(531
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(19,659
)
(24,693
)
Inventories
(7,458
)
18,828
Prepaid expenses and other current
assets
(51,782
)
(114,296
)
Other assets
(4,010
)
938
Accounts payable and other current
liabilities
56,707
677,536
Other liabilities
776
23,641
Cash flows from operating activities
452,035
878,961
Cash flows from investing
activities:
Purchase of short- and long-term
investments
(612,627
)
—
Sale and maturities of short- and
long-term investments
550,131
368,310
Purchase of property and equipment
(49,072
)
(104,810
)
Site and software development costs
(84,836
)
(75,172
)
Other investing activities, net
—
(124
)
Net cash (for) from investing
activities
(196,404
)
188,204
Cash flows from financing
activities:
Repurchase of common stock
(300,208
)
—
Proceeds from borrowings
—
200,000
Repayment of borrowings
—
(200,000
)
Proceeds from issuance of convertible
notes, net of issuance costs
—
527,423
Other financing activities, net
56
220
Net cash (for) from financing
activities
(300,152
)
527,643
Effect of exchange rate changes on cash
and cash equivalents
(6,468
)
3,910
Net (decrease) increase in cash and cash
equivalents
(50,989
)
1,598,718
Cash and cash equivalents:
Beginning of period
2,129,440
582,753
End of period
$
2,078,451
$
2,181,471
Non-GAAP Financial
Measures
To supplement our unaudited consolidated and condensed 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, Free Cash Flow, Adjusted Diluted Earnings 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.
Net Revenue Constant Currency Growth is a non-GAAP financial
measure that is calculated 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 believe Net Revenue Constant Currency Growth is an
important indicator of our business performance, as it provides
useful information to investors and others in understanding and
evaluating trends in our operating results in the same manner as
our management.
Adjusted EBITDA is a non-GAAP financial measure that is
calculated as net income (loss) before depreciation and
amortization, equity-based compensation and related taxes, interest
expense, net, other (expense) income, net, provision for income
taxes, net, non-recurring items and other items not indicative of
our ongoing operating performance. We have included Adjusted EBITDA
in this earnings release because it is a key measure used by our
management and our board of directors to evaluate our operating
performance, generate future operating plans and make strategic
decisions regarding the allocation of capital. In particular, 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.
Adjusted Diluted Earnings per Share is a non-GAAP financial
measure that is calculated as net income (loss) plus equity-based
compensation and related taxes, provision for income taxes, net,
non-recurring items and 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 (loss) per share.
We believe that these adjustments to our adjusted diluted net
income before calculating per share amounts for all periods
presented provides a more meaningful comparison between our
operating results from period to period.
Free Cash Flow is a non-GAAP financial measure that is
calculated as net cash from or for operating activities less net
cash used to purchase property and equipment and site and software
development costs (collectively, "Capital Expenditures"). We
believe Free Cash Flow 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 forward-looking non-GAAP Adjusted EBITDA based on
internal forecasts that omit certain amounts that would be included
in forward-looking GAAP net income (loss). We do not attempt to
provide a reconciliation of forward-looking non-GAAP Adjusted
EBITDA guidance to forward looking GAAP net income (loss) 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 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 tables present net revenues attributable to our
reportable segments for the periods indicated:
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(in thousands)
U.S. net revenue
$
3,098,157
$
3,651,704
$
5,918,843
$
5,626,687
International net revenue
759,469
652,968
1,416,301
1,008,048
Total net revenue
$
3,857,626
$
4,304,672
$
7,335,144
$
6,634,735
The following table reflects the reconciliation of net income
(loss) to Adjusted EBITDA for each of the periods indicated:
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands)
Reconciliation of Adjusted
EBITDA
Net income (loss)
$
130,428
$
273,877
$
148,662
$
(11,988
)
Depreciation and amortization
77,925
69,114
158,237
135,957
Equity-based compensation and related
taxes
87,708
70,701
174,609
134,693
Interest expense, net
8,402
28,939
15,214
51,157
Other expense (income), net
2,248
(3,110
)
5,546
(2,864
)
Provision for income taxes, net
4,129
292
2,127
1,625
Other (1)
—
—
12,212
3,956
Adjusted EBITDA
$
310,840
$
439,813
$
516,607
$
312,536
(1)
In the six months ended June 30, 2021, we
recorded $12.2 million of customer service center impairment and
other charges related to our plan to consolidate customer service
centers. During the six months ended June 30, 2020, we recorded
$4.0 million in selling, operations, technology, general and
administrative expenses for severance costs associated with
February 2020 workforce reductions.
The following table presents Adjusted EBITDA attributable to our
segments, and the reconciliation of net income (loss) to Adjusted
EBITDA is presented in the preceding table:
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands)
Segment Adjusted EBITDA
U.S.
$
322,561
$
434,574
$
549,796
$
389,479
International
(11,721
)
5,239
(33,189
)
(76,943
)
Adjusted EBITDA
$
310,840
$
439,813
$
516,607
$
312,536
A reconciliation of the numerator and denominator for diluted
earnings (loss) per share, the most directly comparable GAAP
financial measure, to the numerator and denominator for Adjusted
Diluted Earnings per Share, in order to calculate Adjusted Diluted
Earnings per Share is as follows:
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands, except per
share data)
Numerator:
Net income (loss)
$
130,428
$
273,877
$
148,662
$
(11,988
)
Effect of dilutive securities:
Interest expense associated with
convertible debt instruments
8,485
30,195
8,986
—
Numerator for diluted EPS - net income
(loss) available to common stockholders after the effect of
dilutive securities
138,913
304,072
157,648
(11,988
)
Adjustments to net income (loss):
Interest expense associated with
convertible debt instruments
—
—
6,438
—
Equity-based compensation and related
taxes
87,708
70,701
174,609
134,693
Provision for income taxes, net
4,129
292
2,127
1,625
Other
—
—
12,212
3,956
Numerator for Adjusted Diluted EPS -
Adjusted net income
$
230,750
$
375,065
$
353,034
$
128,286
Denominator:
Denominator for basic EPS -
weighted-average number of shares of common stock outstanding
103,829
94,834
103,337
94,461
Effect of dilutive securities:
Employee stock options
4
31
9
—
Restricted stock units
2,722
2,788
3,001
—
Convertible debt instruments
15,537
22,279
12,293
—
Dilutive potential common shares
18,263
25,098
15,303
—
Denominator for diluted EPS - adjusted
weighted-average number of shares of common stock outstanding after
the effect of dilutive securities
122,092
119,932
118,640
94,461
Adjustments to effect of dilutive
securities:
Employee stock options
—
—
—
36
Restricted stock units
—
—
—
2,078
Convertible debt instruments
—
—
3,639
—
Denominator for Adjusted Diluted EPS -
adjusted weighted-average number of shares of common stock
outstanding after the effect of dilutive securities
122,092
119,932
122,279
96,575
Diluted Earnings (Loss) per Share
$
1.14
$
2.54
$
1.33
$
(0.13
)
Adjusted Diluted Earnings per Share
$
1.89
$
3.13
$
2.89
$
1.33
The following table presents a reconciliation of net cash from
or for operating activities to Free Cash Flow for each of the
periods indicated:
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands)
Cash flows from operating activities
$
275,439
$
1,135,251
$
452,035
$
878,961
Purchase of property and equipment
(24,624
)
(44,846
)
(49,072
)
(104,810
)
Site and software development costs
(43,878
)
(36,803
)
(84,836
)
(75,172
)
Free Cash Flow
$
206,937
$
1,053,602
$
318,127
$
698,979
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005218/en/
Media Relations Contact: Jane Carpenter, 617-502-7595
PR@wayfair.com
Investor Relations Contact: Jane Gelfand
IR@wayfair.com
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