Revenue increased 8.3% to $148.8 million
Active customers increased 5.1% to 2.26
million
Warby Parker Inc. (NYSE: WRBY) (the “Company”), a
direct-to-consumer lifestyle brand focused on vision for all, today
announced financial results for the third quarter ended September
30, 2022.
“Thanks to our team’s hard work and execution, Warby Parker
delivered solid results in a quarter where inflationary concerns
and weakening consumer demand continue to impact our industry,”
said Co-Founder and Co-CEO Dave Gilboa. “Our team took important
steps to advance our mission and strategic growth initiatives, all
while maintaining our focus on exceeding customer expectations and
making it easier to choose Warby Parker. This quarter, we
meaningfully invested in our eye exam business, expanded our
contacts business, and opened 13 new stores, bringing our total
store count to 190.”
“Despite a challenging operational environment, our brand, value
proposition, and omnichannel model continue to resonate with
consumers and drive incremental demand. Warby Parker offers
customers more options and better value than ever before, and, in
turn, customers are spending more with us. As we approach the
holiday season, we aim to build on our loyal customer base, deliver
significant value to all our stakeholders, and execute on our
vision for reshaping the industry,” added Co-Founder and Co-CEO
Neil Blumenthal.
Third Quarter 2022
Highlights
- Net revenue increased $11.4 million, or 8.3%, to $148.8 million
compared to third quarter 2021 and increased 16.2% on a 3-year CAGR
basis compared to the third quarter of 2019.
- Active Customers increased 5.1% to 2.26 million year over
year.
- Average Revenue per Customer increased 6.8% year over year to
$258.
- Q3 2022 GAAP net loss of $23.8 million.
- Q3 2022 Adjusted EBITDA(1) of $11.9 million and an Adjusted
EBITDA margin of 8.0%, an increase of 400 basis points from Q2
2022.
- Opened 13 new stores during the quarter, ending the quarter
with 190 stores.
- Contact lens revenue increased by nearly 50% year over
year.
Third Quarter 2022 Financial
Results
For the third quarter of 2022, compared to the third quarter of
2021:
- Net revenue increased $11.4 million, or 8.3%, to $148.8
million.
- Active Customers increased by 110,000, or 5.1%, to 2.26
million.
- Gross profit dollars increased 6.0% to $84.4 million.
- Gross margin was 56.7% compared to 58.0% in the prior year. The
decline in gross margin was primarily driven by the impact of the
growth in the Company's store count driving higher store occupancy
and depreciation costs, the increased penetration of contact
lenses, which carry lower gross margins than eyeglasses, reflecting
Warby Parker’s strategy to grow its contact lens offering, and an
increase in salary and benefit costs associated with optometrists
as we scale our eye exam offering across our fleet, to 139 exam
locations, up from 95 in the prior year period. This was partially
offset by the scaling of higher margin progressive lenses and
leverage from the Company’s in-house optical laboratory
network.
- Selling, general and administrative expenses (“SG&A”)
decreased $63.6 million to $108.1 million, or 72.6% of revenue,
primarily driven by stock-based compensation and related payroll
taxes and professional costs incurred in 2021 related to the
Company’s direct listing. Also contributing to the decrease were
lower charitable expenses related to the donation of stock to the
Warby Parker Foundation, which was completed in the second quarter
in 2022, as compared to the third quarter in 2021. Excluding
one-time and non-cash costs in both years, adjusted SG&A(1)
increased $7.2 million to $82.2 million and increased 60 basis
points as a percentage of revenue to 55.2% from 54.6%, primarily
due to increased insurance costs related to operating as a public
company, higher compensation costs, mainly from growth in our
retail workforce, increased technology costs to support business
growth, and increased depreciation and amortization costs, mainly
related to capitalized software and office build outs, partially
offset by lower marketing costs and reduced costs of the Company’s
Home Try-On program as a result of reduced utilization. On a
sequential basis, adjusted SG&A(1) decreased from 59.2% of
revenue in Q2 2022 to 55.2% of revenue in Q3 2022.
- Net loss decreased $67.2 million to $23.8 million, primarily as
a result of the decrease in SG&A described above.
- Adjusted EBITDA(1) increased $0.7 million to $11.9
million.
- Adjusted EBITDA margin(1) decreased 10 basis points to 8.0%. On
a sequential basis, Adjusted EBITDA margin(1) increased 400 basis
points from Q2 2022.
Balance Sheet Highlights
Warby Parker ended the third quarter of 2022 with $197.9 million
in cash and cash equivalents.
Updated 2022 Outlook
For the full year 2022, Warby Parker is revising its outlook to
the following:
- Net revenue of $590 to $596 million, representing growth of
9.1% to 10.2% versus full year 2021.
- Adjusted EBITDA(1) of approximately $25 to $27 million, or
Adjusted EBITDA margin(1) of approximately 4.2% to 4.5%.
- 40 new store openings bringing the total projected store count
at year-end to 200.
“We continue to take a disciplined approach to actively managing
costs while prudently investing in the business, and our Q3 results
demonstrate those efforts,” said Chief Financial Officer Steve
Miller. “We are pleased to deliver net revenue above our revised
outlook despite the macroeconomic headwinds that continue to
pressure the market. As we enter our final quarter of the fiscal
year, we believe Warby Parker is well positioned to grow market
share, achieve its financial goals, and deliver value to
shareholders.”
The guidance and forward-looking statements made in this press
release and on our conference call are based on management's
expectations as of the date of this press release.
(1) Please see the reconciliation of non-GAAP financial measures
to the most comparable GAAP financial measure in the section titled
“Non-GAAP Financial Measures” below.
Webcast and Conference
Call
A conference call to discuss Warby Parker’s third quarter 2022
results as well as fourth quarter and full year 2022 outlook is
scheduled for 8:00 a.m. ET today. To participate, please dial
844-200-6205 from the U.S. or 929-526-1599 from international
locations. The conference passcode is 795291. A live webcast of the
conference call will be available on the investors section of the
Company’s website at investors.warbyparker.com where presentation
materials will also be posted prior to the conference call. A
replay will be made available online approximately two hours
following the live call for a period of 90 days.
Forward-Looking
Statements
This press release and the related conference call, webcast and
presentation contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements may relate to, but are not limited to,
expectations of future operating results or financial performance,
including expectations regarding achieving profitability,
delivering stakeholder value, growing market share, and our GAAP
and non-GAAP guidance for the quarter and year ending December 31,
2022; expectations regarding the number of new store openings
during the year ending December 31, 2022; management’s plans,
priorities, initiatives and strategies; and expectations regarding
growth of our business. Forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be
predicted or quantified. In some cases, you can identify
forward-looking statements because they contain words such as
“anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “target,” “toward,” “will,” or
“would,” or the negative of these words or other similar terms or
expressions. You should not put undue reliance on any
forward-looking statements. Forward-looking statements should not
be read as a guarantee of future performance or results and will
not necessarily be accurate indications of the times at, or by,
which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at
the time those statements are made and are based on current
expectations, estimates, forecasts, and projections as well as the
beliefs and assumptions of management as of that time with respect
to future events. These statements are subject to risks and
uncertainties, many of which involve factors or circumstances that
are beyond our control, that could cause actual performance or
results to differ materially from those expressed in or suggested
by the forward-looking statements. In light of these risks and
uncertainties, the forward-looking events and circumstances
discussed in this press release may not occur and actual results
could differ materially from those anticipated or implied in the
forward-looking statements. These risks and uncertainties include
our ability to manage our future growth effectively; our
expectations regarding cost of goods sold, gross margin, channel
mix, customer mix, and selling, general, and administrative
expenses; planned new retail stores in 2022 and going forward; an
overall decline in the health of the economy and other factors
impacting consumer spending, such as recessionary conditions,
inflation and government instability; increases in component and
shipping costs and changes in supply chain; our ability to compete
successfully; our ability to manage our inventory balances and
shrinkage; our ability to engage our existing customers and obtain
new customers; the growth of our brand awareness; the effects of
the ongoing COVID-19 pandemic; the effects of seasonal trends on
our results of operations; our ability to stay in compliance with
extensive laws and regulations that apply to our business and
operations; our ability to adequately maintain and protect our
intellectual property and proprietary rights; our reliance on third
parties for our products, operation and infrastructure; our duties
related to being a public benefit corporation; the ability of our
Co-Founders and Co-CEOs to exercise significant influence over all
matters submitted to stockholders for approval; the effect of our
multi-class structure on the trading price of our Class A common
stock; and the increased expenses associated with being a public
company. Additional information regarding these and other risks and
uncertainties that could cause actual results to differ materially
from the Company's expectations is included in our Annual Report on
Form 10-K for the year ended December 31, 2021, filed with the SEC
on March 18, 2022. Except as required by law, we do not undertake
any obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future
developments, or otherwise.
Additional information regarding these and other factors that
could affect the Company’s results is included in the Company’s SEC
filings, which may be obtained by visiting the SEC's website at
www.sec.gov. Information contained on, or that is referenced or can
be accessed through, our website does not constitute part of this
document and inclusions of any website addresses herein are
inactive textual references only.
Glossary
Active Customer is defined as a unique customer that has made at
least one purchase of any product or service in the preceding
12-month period.
Average Revenue per Customer is defined as net revenue for a
given period divided by the number of Active Customers as of the
end of that same period.
Non-GAAP Financial
Measures
We use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net
income, Adjusted earnings per share, Adjusted cost of goods sold
(“Adjusted COGS”), Adjusted gross profit, and Adjusted selling,
general, and administrative expenses (“Adjusted SG&A”) as
important indicators of our operating performance. Collectively, we
refer to these non-GAAP financial measures as our “Non-GAAP
Measures.” The Non-GAAP Measures, when taken collectively with our
GAAP results, may be helpful to investors because they provide
consistency and comparability with past financial performance and
assist in comparisons with other companies, some of which use
similar non-GAAP financial information to supplement their GAAP
results.
Adjusted EBITDA is defined as net income (loss) before interest
and other income, taxes, and depreciation and amortization as
further adjusted for asset impairment costs, stock-based
compensation expense and related employer payroll taxes,
amortization of cloud-based software implementation costs, non-cash
charitable donations, and non-recurring costs such as restructuring
costs, major system implementation costs, and direct listing or
other transaction costs. Adjusted EBITDA margin is defined as
Adjusted EBITDA divided by net revenue.
Adjusted net income is defined as net income (loss) adjusted for
stock-based compensation expense and related employer payroll
taxes, amortization of cloud-based software implementation costs,
non-cash charitable donations, and non-recurring costs such as
restructuring costs, major system implementation costs, and direct
listing or other transaction costs, and as further adjusted for
estimated income tax on such adjusted items.
Adjusted earnings per share is defined as Adjusted net income
(loss) divided by weighted average shares outstanding.
Adjusted COGS is defined as cost of goods sold adjusted for
stock-based compensation expense and related employer payroll
taxes.
Adjusted gross profit is defined as net revenue minus Adjusted
COGS.
Adjusted SG&A is defined as SG&A adjusted for
stock-based compensation expense and related employer payroll
taxes, amortization of cloud-based software implementation costs,
non-cash charitable donations, and non-recurring costs such as
restructuring costs, major system implementation costs, and direct
listing or other transaction costs.
The Non-GAAP Measures are presented for supplemental
informational purposes only. A reconciliation of historical GAAP to
Non-GAAP financial information is included under “Selected
Financial Information” below.
We have not reconciled our Adjusted EBITDA margin guidance to
GAAP net income (loss) margin, or Net Margin, or Adjusted EBITDA
guidance to GAAP net income (loss) because we do not provide
guidance for GAAP Net Margin or GAAP net income (loss) due to the
uncertainty and potential variability of stock-based compensation
and taxes, which are reconciling items between GAAP Net Margin and
Adjusted EBITDA margin and GAAP net income (loss) and Adjusted
EBITDA, respectively. Because such items cannot be reasonably
provided without unreasonable efforts, we are unable to provide a
reconciliation of the Adjusted EBITDA Margin guidance to GAAP Net
Margin and Adjusted EBITDA guidance to GAAP net income (loss).
However, such items could have a significant impact on GAAP Net
Margin and GAAP net income (loss).
About Warby Parker
Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to
inspire and impact the world with vision, purpose, and
style–without charging a premium for it. Headquartered in New York
City, the co-founder-led lifestyle brand pioneers ideas, designs
products, and develops technologies that help people see, from
designer-quality prescription glasses (starting at $95) and
contacts, to eye exams and vision tests available online and in
more than 190 retail stores across the U.S. and Canada.
Warby Parker aims to demonstrate that businesses can scale, do
well, and do good in the world. Ultimately, the brand believes in
vision for all, which is why for every pair of glasses or
sunglasses sold, they distribute a pair to someone in need through
their Buy a Pair, Give a Pair program. To date, Warby Parker has
worked alongside its nonprofit partners to distribute more than 10
million glasses to people in need.
Selected Financial Information
Warby Parker Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
(Amounts in thousands, except
share data)
September 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
197,885
$
256,416
Accounts receivable, net
1,109
992
Inventory
70,571
57,095
Prepaid expenses and other current
assets
12,645
13,477
Total current assets
282,210
327,980
Property and equipment, net
134,328
112,195
Right-of-use lease assets
127,812
—
Other assets
5,802
471
Total assets
$
550,152
$
440,646
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
20,220
$
30,890
Accrued expenses
52,842
60,840
Deferred revenue
16,255
22,073
Current lease liabilities
20,244
—
Other current liabilities
1,923
4,301
Total current liabilities
111,484
118,104
Deferred rent
—
36,544
Non-current lease liabilities
152,889
—
Other liabilities
1,820
—
Total liabilities
266,193
154,648
Commitments and contingencies (see Note
9)
Stockholders’ equity:
Common stock, $0.0001 par value; Class A:
750,000,000 shares authorized at September 30, 2022 and December
31, 2021, 95,756,249 and 94,901,623 issued and outstanding at
September 30, 2022 and December 31, 2021, respectively; Class B:
150,000,000 shares authorized at September 30, 2022 and December
31, 2021, 19,103,020 and 18,719,184 shares issued and outstanding
as of September 30, 2022 and December 31, 2021, respectively,
convertible to Class A on a one-to-one basis
11
11
Additional paid-in capital
867,754
779,212
Accumulated deficit
(583,383
)
(493,241
)
Accumulated other comprehensive (loss)
income
(423
)
16
Total stockholders’ equity
283,959
285,998
Total liabilities and stockholders’
equity
$
550,152
$
440,646
Warby Parker Inc. and
Subsidiaries
Condensed Consolidated
Statements of Operations (Unaudited)
(Amounts in thousands, except
share and per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Net revenue
$
148,777
$
137,373
$
451,619
$
407,906
Cost of goods sold
64,359
57,709
191,208
166,407
Gross profit
84,418
79,664
260,411
241,499
Selling, general, and administrative
expenses
108,090
171,643
349,904
339,264
Loss from operations
(23,672
)
(91,979
)
(89,493
)
(97,765
)
Interest and other loss, net
(183
)
(146
)
(75
)
(452
)
Loss before income taxes
(23,855
)
(92,125
)
(89,568
)
(98,217
)
Provision for income taxes
(12
)
(1,052
)
574
151
Net loss
$
(23,843
)
$
(91,073
)
$
(90,142
)
$
(98,368
)
Deemed dividend upon redemption of
redeemable convertible preferred stock
$
—
$
—
$
—
$
(13,137
)
Net loss attributable to common
stockholders
$
(23,843
)
$
(91,073
)
$
(90,142
)
$
(111,505
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.21
)
$
(1.45
)
$
(0.79
)
$
(1.96
)
Weighted average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
115,249,431
62,887,161
114,681,893
56,985,960
Warby Parker Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(Amounts in thousands)
Nine Months Ended
September 30,
2022
2021
Cash flows from operating activities
Net loss
$
(90,142
)
$
(98,368
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
22,947
15,185
Stock-based compensation
78,209
76,002
Non-cash charitable contribution
3,270
7,757
Asset impairment charges
1,509
137
Change in operating assets and
liabilities:
Accounts receivable, net
(126
)
(221
)
Inventory
(13,522
)
(12,971
)
Prepaid expenses and other assets
(4,546
)
(1,323
)
Accounts payable
(9,209
)
7,629
Accrued expenses
(4,319
)
11,724
Deferred revenue
(5,796
)
(9,774
)
Other current liabilities
90
578
Deferred rent
—
2,980
Right-of-use lease assets and current and
non-current lease liabilities
6,346
—
Other liabilities
1,820
530
Net cash used in operating activities
(13,469
)
(135
)
Cash flows from investing activities
Purchases of property and equipment
(45,966
)
(34,018
)
Net cash used in investing activities
(45,966
)
(34,018
)
Cash flows from financing activities
Proceeds from stock option exercises
295
10,087
Proceeds from shares issued in connection
with employee stock purchase plan
1,754
—
Employee tax withholding remitted in
connection with exercise or release of equity awards
—
(29,059
)
Proceeds from repayment of related party
loans
45
31,513
Stock repurchases
—
(8,085
)
Payment for Tender Offer
—
(18,031
)
Net cash provided by (used in) financing
activities
2,094
(13,575
)
Effect of exchange rates on cash
(1,190
)
(120
)
Net decrease in cash and cash
equivalents
(58,531
)
(47,848
)
Cash and cash equivalents, beginning of
period
256,416
314,085
Cash and cash equivalents, end of
period
$
197,885
$
266,237
Supplemental disclosures
Cash paid for income taxes
$
471
$
314
Cash paid for interest
89
94
Non-cash investing and financing
activities:
Purchases of property and equipment
included in accounts payable and accrued expenses
$
4,819
$
5,246
Related party loans issued in connection
with stock option exercises
—
13,827
Warby Parker Inc. and
Subsidiaries
Reconciliation of GAAP to
Non-GAAP Measures (Unaudited)
The following table reconciles
adjusted EBITDA and adjusted EBITDA margin to the most directly
comparable GAAP measure, which is net loss:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
(in thousands)
(in thousands)
Net loss
$
(23,843
)
$
(91,073
)
$
(90,142
)
$
(98,368
)
Adjusted to exclude the following:
Interest and other loss, net
183
146
75
452
Provision for income taxes
(12
)
(1,052
)
574
151
Depreciation and amortization expense
8,342
5,587
22,947
15,273
Asset impairment charges
1,097
—
1,509
137
Stock-based compensation expense(1)
24,358
65,929
78,603
77,599
Non-cash charitable donation(2)
—
7,757
3,270
7,757
Transaction costs(3)
—
23,893
—
28,262
Amortization of cloud-based software
implementation costs(4)
96
—
96
—
ERP implementation costs(5)
170
—
170
—
Restructuring costs(6)
1,535
—
1,535
—
Adjusted EBITDA
11,926
11,187
18,637
31,263
Adjusted EBITDA margin
8.0
%
8.1
%
4.1
%
7.7
%
(1)
Represents expenses related to
the Company’s equity-based compensation programs and related
employer payroll taxes, which may vary significantly from period to
period depending upon various factors including the timing, number,
and the valuation of awards granted, vesting of awards including
the satisfaction of performance conditions, and the impact of
repurchases of awards from employees. For the three and nine months
ended September 30, 2022, the amount includes $0.1 million and $0.4
million of employer payroll costs, respectively, associated with
releases of RSUs and option exercises. For the three and nine
months ended September 30, 2021, the amount includes $1.6 million
of employer payroll costs associated with releases of RSUs in
connection with our direct listing.
(2)
Represents charitable expense
recorded in connection with the donation of 178,572 shares of Class
A common stock to the Warby Parker Impact Foundation in each of
August 2021 and May 2022.
(3)
Represents (i) costs directly
attributable to the preparation for our Direct Listing and (ii)
expenses incurred in connection with the cash tender offer
completed in June 2021.
(4)
Represents the amortization of
costs capitalized in connection with the implementation of
cloud-based software.
(5)
Represents internal and external
non-capitalized costs related to the implementation of our new
Enterprise Resource Planning (“ERP”) system which is expected to be
live in 2023.
(6)
Represents employee severance and
related costs for our restructuring plan that was executed in
August 2022.
Warby Parker Inc. and
Subsidiaries
Reconciliation of GAAP to
Non-GAAP Measures (Unaudited)
The following table presents our
non-GAAP, or adjusted, financial measures for the periods presented
as a percentage of revenue. Each cost and operating expense is
adjusted for transaction costs and stock-based compensation expense
and related employer payroll taxes.
Reported
Adjusted
Reported
Adjusted
Three Months Ended
September 30,
Three Months Ended
September 30,
Nine Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
2022
2021
2022
2021
(unaudited, in
millions)
(unaudited, in
millions)
(unaudited, in
millions)
(unaudited, in
millions)
Cost of goods sold
$
64.4
$
57.7
$
64.1
$
56.8
$
191.2
$
166.4
$
190.5
$
165.5
% of Revenue
43.3
%
42.0
%
43.1
%
41.3
%
42.3
%
40.8
%
42.2
%
40.6
%
Gross profit
$
84.4
$
79.7
$
84.7
$
80.6
$
260.4
$
241.5
$
261.1
$
242.4
% of Revenue
56.7
%
58.0
%
56.9
%
58.7
%
57.7
%
59.2
%
57.8
%
59.4
%
Selling, general, and administrative
expenses
$
108.1
$
171.6
$
82.2
$
75.0
$
349.9
$
339.3
$
266.9
$
226.6
% of Revenue
72.6
%
124.9
%
55.3
%
54.6
%
77.5
%
83.2
%
59.1
%
55.6
%
Net (loss) income
$
(23.8
)
$
(91.1
)
$
1.6
$
3.9
$
(90.1
)
$
(98.4
)
$
(4.1
)
$
11.0
% of Revenue
(16.0
)%
(66.3
)%
1.1
%
2.8
%
(20.0
)%
(24.1
)%
(0.9
)%
2.7
%
Warby Parker Inc. and
Subsidiaries
Reconciliation of GAAP to
Non-GAAP Measures (Unaudited)
The following table reflects a
reconciliation of each non-GAAP, or adjusted, financial measure to
its most directly comparable financial measure prepared in
accordance with GAAP:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
(unaudited, in
thousands)
(unaudited, in
thousands)
Cost of goods sold
$
64,359
$
57,709
$
191,208
$
166,407
Adjusted to exclude the following:
Stock-based compensation expense(1)
239
923
709
923
Adjusted cost of goods sold
$
64,120
$
56,786
$
190,499
$
165,484
Gross profit
$
84,418
$
79,664
$
260,411
$
241,499
Adjusted to exclude the following:
Stock-based compensation expense(1)
239
923
709
923
Adjusted gross profit
$
84,657
$
80,587
$
261,120
$
242,422
Selling, general, and administrative
expenses
$
108,090
$
171,643
$
349,904
$
339,264
Adjusted to exclude the following:
Stock-based compensation expense(1)
24,119
65,006
77,894
76,676
Non-cash charitable donation(2)
—
7,757
3,270
7,757
Transaction costs(3)
—
23,893
—
28,262
Amortization of cloud-based software
implementation costs(4)
96
—
96
—
ERP implementation costs(5)
170
—
170
—
Restructuring costs(6)
1,535
—
1,535
—
Adjusted selling, general, and
administrative expenses
$
82,170
$
74,987
$
266,939
$
226,569
Net loss
$
(23,843
)
$
(91,073
)
$
(90,142
)
$
(98,368
)
Provision for income taxes
(12
)
(1,052
)
574
151
Loss before income taxes
(23,855
)
(92,125
)
(89,568
)
(98,217
)
Adjusted to exclude the following:
Stock-based compensation expense(1)
24,358
65,929
78,603
77,599
Non-cash charitable donation(2)
—
7,757
3,270
7,757
Transaction costs(3)
—
23,893
—
28,262
Amortization of cloud-based software
implementation costs(4)
96
—
96
—
ERP implementation costs(5)
170
—
170
—
Restructuring costs(6)
1,535
—
1,535
—
Adjusted provision for income taxes(7)
(690
)
(1,542
)
1,765
(4,355
)
Adjusted net income (loss)
$
1,614
$
3,912
$
(4,129
)
$
11,046
Deemed dividend upon redemption of
redeemable convertible preferred stock
—
(1,648
)
—
(5,221
)
Adjusted net income (loss) attributable to
common stock
$
1,614
$
2,264
$
(4,129
)
$
5,825
Weighted average shares - diluted
115,844,962
69,189,226
114,681,893
63,717,358
Adjusted diluted loss per share
$
0.01
$
0.03
$
(0.04
)
$
0.09
(1)
Represents expenses related to
the Company’s equity-based compensation programs and related
employer payroll taxes, which may vary significantly from period to
period depending upon various factors including the timing, number,
and the valuation of awards granted, vesting of awards including
the satisfaction of performance conditions, and the impact of
repurchases of awards from employees. For the three and nine months
ended September 30, 2022, the amount includes $0.1 million and $0.4
million of employer payroll costs, respectively, associated with
releases of RSUs and option exercises. For the three and nine
months ended September 30, 2021, the amount includes $1.6 million
of employer payroll costs associated with releases of RSUs in
connection with our direct listing.
(2)
Represents charitable expense
recorded in connection with the donation of 178,572 shares of Class
A common stock to the Warby Parker Impact Foundation in each of
August 2021 and May 2022.
(3)
Represents (i) costs directly
attributable to the preparation for our Direct Listing and (ii)
expenses incurred in connection with the cash tender offer
completed in June 2021.
(4)
Represents the amortization of
costs capitalized in connection with the implementation of
cloud-based software.
(5)
Represents internal and external
non-capitalized costs related to the implementation of our new ERP
system which is expected to be live in 2023.
(6)
Represents employee severance and
related costs for our restructuring plan that was executed in
August 2022.
(7)
The adjusted provision for income
taxes is based on long-term estimated annual effective tax rates of
29.94% in 2022 and 28.28% in 2021. The Company may adjust its
adjusted tax rate as additional information becomes available or
events occur which may materially affect this rate, including
impacts from the rapidly evolving global tax environment,
significant changes in our geographic mix, merger and acquisition
activity, or changes in our business outlook.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109006136/en/
Investor Relations: Brendon Frey, ICR
Investors@warbyparker.com
Media: Lena Griffin lena@derris.com
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