Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-40825

Warby Parker Inc.

(Exact name of registrant as specified in its charter)


Delaware						80-0423634
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

233 Spring Street, 6th Floor East

New York, New York 10013

(646) 847-7215

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

WRBY

New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of August 7, 2023, there were approximately 97,393,263 shares of the registrant's Class A common stock, and 19,706,694 shares of the registrant’s Class B common stock outstanding.

Table Of Contents


		Page
Special Note Regarding Forward Looking Statements		2
Part I. Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
Part II. Other Information
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

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Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risk and uncertainties. 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,” “will,” or “would” or the negative of these words or other similar terms or expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about our future results of operations and financial position, industry and business trends, general macroeconomic and market trends, business strategy, plans, market growth and our objectives for future operations.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors. 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; increases in component and shipping costs and changes in supply chain; our reliance on our information technology systems and enterprise resource planning systems for our business to effectively operate and safeguard confidential information; our ability to engage our existing customers and obtain new customers; planned new retail stores in 2023 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; our ability to compete successfully; our ability to manage our inventory balances and shrinkage; the growth of our brand awareness; our ability to recruit and retain optometrists, opticians, and other vision care professionals; a resurgence of COVID-19 or the spread of new infectious diseases; 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, operations 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 volatility in the trading price of our Class A common stock; the effect of our multi-class structure on the trading price of our Class A common stock; the increased expenses associated with being a public company; and the other factors described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 28, 2023. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements such as “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

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Part I. Financial Information

Item 1. Financial Statements

Warby Parker Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(Amounts in thousands, except share data)


	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	212,656	$	208,585
Accounts receivable, net	1,177		1,435
Inventory	59,833		68,848
Prepaid expenses and other current assets	14,377		15,700
Total current assets	288,043		294,568

Property and equipment, net	143,606		138,628
Right-of-use lease assets	122,355		127,014
Other assets	7,705		8,497
Total assets	$	561,709	$	568,707

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	23,772	$	20,791
Accrued expenses	42,759		58,222
Deferred revenue	18,953		25,628
Current lease liabilities	22,598		22,546
Other current liabilities	2,351		2,370
Total current liabilities	110,433		129,557

Non-current lease liabilities	147,748		150,832
Other liabilities	1,466		1,672
Total liabilities	259,647		282,061
Commitments and contingencies (see Note 9)
Stockholders’ equity:
Common stock, $0.0001 par value; Class A: 750,000,000 shares authorized at June 30, 2023 and December 31, 2022, 97,142,756 and 96,115,202 issued and outstanding at June 30, 2023 and December 31, 2022, respectively; Class B: 150,000,000 shares authorized at June 30, 2023 and December 31, 2022, 19,398,920 and 19,223,572 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively, convertible to Class A on a one-to-one basis	12		12
Additional paid-in capital	933,786		890,915
Accumulated deficit	(630,371)		(603,634)
Accumulated other comprehensive loss	(1,365)		(647)
Total stockholders’ equity	302,062		286,646
Total liabilities and stockholders’ equity	$	561,709	$	568,707

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Warby Parker Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(Amounts in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net revenue	$	166,093	$	149,624	$	338,061	$	302,842
Cost of goods sold	75,458		63,277		152,635		126,849
Gross profit	90,635		86,347		185,426		175,993

Selling, general, and administrative expenses	108,865		118,428		216,086		241,814
Loss from operations	(18,230)		(32,081)		(30,660)		(65,821)

Interest and other income (loss), net	2,281		(38)		4,160		108

Loss before income taxes	(15,949)		(32,119)		(26,500)		(65,713)
Provision for income taxes	(24)		47		237		586
Net loss	$	(15,925)	$	(32,166)	$	(26,737)	$	(66,299)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.14)	$	(0.28)	$	(0.23)	$	(0.58)
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted	116,792,223		114,679,892		116,477,573		114,393,420

Other comprehensive loss
Foreign currency translation adjustment	$	(35)	$	(163)	$	(718)	$	(155)
Total comprehensive loss	$	(15,960)	$	(32,329)	$	(27,455)	$	(66,454)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Warby Parker Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

(Amounts in thousands)

Three and Six Months Ended June 30, 2023


	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2022	115,339	$	12	$	890,915	$	(647)	$	(603,634)	$	286,646
Stock option exercises	109	—		1,415		—		—		1,415
Restricted stock unit releases	153	—		—		—		—		—
Stock-based compensation	—	—		19,780		—		—		19,780
Other comprehensive loss	—	—		—		(683)		—		(683)
Net loss	—	—		—		—		(10,812)		(10,812)
Balance as of March 31, 2023	115,601	$	12	$	912,110	$	(1,330)	$	(614,446)	$	296,346
Stock option exercises	482	—		1,940		—		—		1,940
Restricted stock unit releases	285	—		—		—		—		—
Shares issued in connection with employee stock purchase plan	117	—		1,124		—		—		1,124
Stock-based compensation	—	—		18,012		—		—		18,012
Non-cash charitable contributions	57	—		600		—		—		600
Other comprehensive loss	—	—		—		(35)		—		(35)
Net loss	—	—		—		—		(15,925)		(15,925)
Balance as of June 30, 2023	116,542	$	12	$	933,786	$	(1,365)	$	(630,371)	$	302,062

Three and Six Months Ended June 30, 2022


	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2021	113,621	11		$	779,212	$	16	$	(493,241)	$	285,998
Stock option exercises	201	—		1,866		—		—		1,866
Restricted stock unit releases	147	—		—		—		—		—
Stock-based compensation	—	—		27,144		—		—		27,144
Other comprehensive income	—	—		—		8		—		8
Net loss	—	—		—		—		(34,133)		(34,133)
Balance as of March 31, 2022	113,969	$	11	$	808,222	$	24	$	(527,374)	$	280,883
Stock option exercises	128	—		1,689		—		—		1,689
Restricted stock unit releases	177	—		—		—		—		—
Shares issued in connection with employee stock purchase plan	118	—		1,754		—		—		1,754
Stock-based compensation	—	—		26,764		—		—		26,764
Non-cash charitable contributions	179	—		3,270		—		—		3,270
Other comprehensive loss	—	—		—		(163)		—		(163)
Net loss	—	—		—		—		(32,166)		(32,166)
Balance as of June 30, 2022	114,571	$	11	$	841,699	$	(139)	$	(559,540)	$	282,031

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Warby Parker Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Amounts in thousands)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities
Net loss	$	(26,737)	$	(66,299)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	18,424		14,605
Stock-based compensation	37,792		53,908
Non-cash charitable contribution	600		3,270
Asset impairment charges	650		412
Amortization of cloud-based software implementation costs	826		—
Change in operating assets and liabilities:
Accounts receivable, net	259		89
Inventory	9,048		(13,704)
Prepaid expenses and other assets	1,301		(2,385)
Accounts payable	2,148		1,461
Accrued expenses	(11,619)		(8,367)
Deferred revenue	(6,684)		(3,762)
Other current liabilities	(21)		233
Right-of-use lease assets and current and non-current lease liabilities	1,614		3,985
Other liabilities	(206)		1,930
Net cash provided by (used in) operating activities	27,395		(14,624)
Cash flows from investing activities
Purchases of property and equipment	(24,610)		(31,869)
Net cash used in investing activities	(24,610)		(31,869)
Cash flows from financing activities
Proceeds from stock option exercises	843		228
Proceeds from shares issued in connection with employee stock purchase plan	1,124		1,754



Net cash provided by financing activities	1,967		1,982
Effect of exchange rates on cash	(681)		(302)
Net change in cash and cash equivalents	4,071		(44,813)
Cash and cash equivalents, beginning of period	208,585		256,416
Cash and cash equivalents, end of period	$	212,656	$	211,603
Supplemental disclosures
Cash paid for income taxes	$	326	$	297
Cash paid for interest	110		62
Cash paid for amounts included in the measurement of lease liabilities	17,530		13,858
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	$	3,351	$	3,579

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

1. Description of Business

Warby Parker Inc., a public benefit corporation founded in 2010 (together with its wholly owned subsidiaries, the “Company”), is a founder-led, mission-driven lifestyle brand that sits at the intersection of technology, design, healthcare, and social enterprise. The Company offers holistic vision care by selling eyewear products and providing optical services directly to consumers through its retail stores and e-commerce platform. For every pair of glasses or sunglasses sold, the Company helps distribute a pair of glasses to someone in need through its Buy a Pair, Give a Pair program. The Company is headquartered in New York, New York.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s unaudited condensed consolidated financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the related notes. The December 31, 2022 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. There have been no significant changes in accounting policies during the six months ended June 30, 2023 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and the related notes. Certain prior period amounts were reclassified to conform to the current period presentation. These changes had no impact on the condensed consolidated financial statements for any period.

Principles of Consolidation

The condensed consolidated financial statements include the financial statements of Warby Parker Inc., and its wholly owned subsidiaries. The Company has consolidated certain entities meeting the definition of a variable interest entity as the Company concluded that it is the primary beneficiary of the entities. The inclusion of these entities does not have a material impact on its condensed consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The Company prepares its condensed consolidated financial statements in conformity with U.S. GAAP. These principles require management to make certain estimates and assumptions during the preparation of its condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Significant estimates underlying the accompanying condensed consolidated financial statements include, but are not limited to (i) the valuation of inventory, including the determination of the net realizable value, (ii) the useful lives and recoverability of long-lived assets, (iii) the determination of deferred income taxes, including related valuation allowances, and (iv) assumptions related to the valuation of common stock and determination of stock-based compensation.

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who makes decisions about allocating resources and assessing performance. The Company defines its CODM as its co-Chief Executive Officers. The Company has identified one operating segment. When evaluating the Company’s performance and allocating resources, the CODM relies on financial information prepared on a consolidated basis.

Concentration of Credit Risk and Major Suppliers

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in various accounts, which, at times, may exceed the limits insured by the Federal Deposit Insurance Corporation of $250 thousand per institution and the Canada Deposit Insurance Corporation of $100 thousand Canadian dollars. At June 30, 2023 and

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

December 31, 2022, uninsured cash balances were approximately $211.3 million and $207.0 million, respectively. The Company has not experienced any concentration losses related to its cash and cash equivalents to date. The Company seeks to minimize its credit risk by maintaining its cash and cash equivalents with high-quality financial institutions and monitoring the credit standing of such institutions. During the first quarter of 2023, the Company opened accounts with additional financial institutions to diversify its cash holdings.

The Company’s top five inventory suppliers accounted for approximately 18% and 22% of cost of goods sold for the six months ended June 30, 2023 and 2022, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid short-term investments with an original maturity of three months or less to be a cash equivalent. Cash and cash equivalents include deposits with banks and financial institutions, money market funds, and receivables from credit card issuers, which are typically converted into cash within two to four days of capture. As such, these receivables are recorded as a deposit in transit as a component of cash and cash equivalents on the condensed consolidated balance sheets. At June 30, 2023 and December 31, 2022, the balance of receivables from credit card issuers included within cash and cash equivalents was $3.5 million and $11.1 million, respectively.

Inventory

Inventory consists of approximately $12.9 million and $16.1 million of finished goods, including ready-to-wear sun frames, contact lenses, and eyeglass cases, as of June 30, 2023 and December 31, 2022, respectively, and approximately $46.9 million and $52.7 million of component parts, including optical frames and prescription optical lenses, as of June 30, 2023 and December 31, 2022, respectively. Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis.

The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, include estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates.

Cloud-Based Software Implementation Costs

The Company has entered into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on the long or short-term nature of such costs, in line with the Company's policy on the accounting for prepaid software hosting arrangements. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement.

As of June 30, 2023, the Company had $13.0 million of gross capitalized cloud-based software implementation costs and $1.1 million of related accumulated amortization, for a net balance of $11.9 million, made up of $4.5 million recorded within prepaid expenses and other current assets and $7.4 million recorded within other assets on the condensed consolidated balance sheet. As of December 31, 2022, the Company had $11.1 million of gross capitalized cloud-based software implementation costs and $0.3 million of related accumulated amortization, for a net balance of $10.8 million, made up of $2.6 million recorded within prepaid expenses and other current assets and $8.2 million recorded within other assets on the condensed consolidated balance sheet.

During the three and six months ended June 30, 2023, the Company incurred $0.5 million and $0.8 million of amortization of capitalized cloud-based software implementation costs, respectively. No amortization of cloud-based software implementation costs was recognized during the three and six months ended June 30, 2022.

Revenue Recognition

The Company primarily derives revenue from the sales of eyewear products, optical services, and accessories. The Company sells products and services through its stores, website, and mobile apps. Revenue generated from eyewear

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges, which are charged to the customer, associated with these purchases. Revenue generated from services consists of both in-person eye exams and prescriptions issued through the Virtual Vision Test app. All revenue is reported net of sales taxes collected from customers on behalf of taxing authorities and variable consideration, including returns and discounts.

Revenue is recognized when performance obligations are satisfied through either the transfer of control of promised goods or the rendering of services to the Company's customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, which is generally determined to be the point of delivery or upon rendering of the service in the case of eye exams. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. In the normal course of business, payment may be collected from the customer prior to recognizing revenue and such cash receipts are included in deferred revenue until the order is delivered to the customer. Substantially all of the deferred revenue included on the balance sheet at December 31, 2022 was recognized as revenue in the first quarter of 2023 and the Company expects substantially all of the deferred revenue at June 30, 2023 to be recognized as revenue in the third quarter of 2023.

The Company’s sales policy allows customers to return merchandise for any reason within 30 days of receipt, generally for an exchange or refund. An allowance is recorded within other current liabilities on the condensed consolidated balance sheets for expected future customer returns which the Company estimates using historical return patterns and its expectation of future returns. Any difference between the actual return and previous estimates is adjusted in the period in which such returns occur. Historical return estimates have not materially differed from actual returns in any of the periods presented. The allowance for returns was $2.2 million at both June 30, 2023 and December 31, 2022 and is included in other current liabilities on the condensed consolidated balance sheets.

The Company offers non-expiring gift cards to its customers. Proceeds from the sale of gift cards are initially deferred and recognized within deferred revenue on the condensed consolidated balance sheets, and are recognized as revenue when the product is received by the customer after the gift card has been tendered for payment. Based on historical experience, and to the extent there is no requirement to remit unclaimed card balances to government agencies under unclaimed property laws, an estimate of the gift card balances that will never be redeemed is recognized as revenue in proportion to gift cards which have been redeemed. While the Company will continue to honor all gift cards presented for payment, management may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity.

The following table disaggregates the Company’s revenue by product:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Eyewear products	$	156,680	$	142,985	$	319,027	$	290,304
Services and other	9,413		6,639		19,034		12,538
Total Revenue	$	166,093	$	149,624	$	338,061	$	302,842

The following table disaggregates the Company’s revenue by channel:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
E-commerce	$	55,329	$	58,448	$	117,081	$	125,452
Retail	110,764		91,176		220,980		177,390
Total Revenue	$	166,093	$	149,624	$	338,061	$	302,842

Leases

The Company records a lease liability and corresponding right-of-use (“ROU”) asset at lease commencement. The lease liability is measured at the present value of non-cancellable future lease payments over the lease term, minus expected tenant improvement allowances (“TIAs”) determined to be lease incentives. The ROU asset is measured at

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

the lease liability amount, adjusted for prepaid lease payments, TIAs expected to be received, and any initial direct costs.

When calculating the present value of future lease payments, the Company utilizes an incremental borrowing rate, which incorporates several factors including the lease term, U.S. Treasury bond rates, financial ratios related to earnings and cash flows, and other comparisons with similarly sized companies.

Many of the Company’s leases contain TIA provisions, which represent contractual amounts receivable from a lessor for improvements to the leased property made by the Company which are determined to represent lease incentives. The Company considers the collection of TIAs to be reasonably certain, and includes them in the present value calculation when determining the lease liabilities for new leases. The benefit from a TIA is amortized through rent expense over the term of the related lease.

The recognition of rent expense for an operating lease commences on the date at which control and possession of the property is obtained. Rent expense is calculated by recognizing total fixed minimum rental payments, net of any TIAs or other rental concessions, on a straight-line basis over the lease term. Some of the Company’s retail leases contain percent of sales rent or similar provisions, which is recognized as incurred as variable rent. Retail, optical laboratory, and distribution center rent expense is recognized as a component of cost of goods sold and all other rent expense is recognized as a component of selling, general, and administrative expenses.

Recent Accounting Pronouncements

The Company has not adopted nor are there any recently issued accounting pronouncements that had or are anticipated to have a material impact on the Company’s condensed consolidated financial statements.

3. Property and Equipment, Net

Property and equipment, net consists of the following:


	June 30, 2023		December 31, 2022
Leasehold improvements	$	149,770	$	139,421
Computers and equipment	34,274		31,928
Furniture and fixtures	26,532		23,849
Capitalized software	19,860		18,876
Construction in process	14,395		12,924
	244,831		226,998
Less: accumulated depreciation and amortization	(101,225)		(88,370)
Property and equipment, net	$	143,606	$	138,628

Expenses associated with property and equipment consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of goods sold	$	6,340	$	4,906	$	12,370	$	9,554
Selling, general, and administrative expenses	2,943		2,788		6,054		5,051
Total depreciation and amortization expense	$	9,283	$	7,694	$	18,424	$	14,605

Asset impairment charges	$	255	$	186	$	650	$	412

Asset impairment charges for the three and six months ended June 30, 2023 and 2022 primarily related to the write-off of assets in connection with capitalized software and retail store closures.

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

4. Accrued Expenses

Accrued expenses consists of the following:


	June 30, 2023		December 31, 2022
Payroll related	$	9,074	$	11,149
Marketing	5,611		8,353
Unvested early exercised stock options	5,273		7,784
Optical laboratory and product costs	5,140		4,547
Charitable contributions	4,897		6,001
Professional services	3,949		4,494
Retail related	2,159		4,121
Other accrued expenses	6,656		11,773
Total accrued expenses	$	42,759	$	58,222

5. Income Taxes

The Company uses the estimated annual effective tax rate approach to determine the provision for income taxes. The estimated annual effective tax rate is based on forecasted annual results and may fluctuate due to differences between the forecasted and actual results, changes in valuation allowances, and any other transactions that result in differing tax treatment.

The Company's income tax expense and effective tax rate were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income tax expense	$	(24)		$	47		$	237		$	586
Effective tax rate	0.2		%	(0.1)		%	(0.9)		%	(0.9)		%

The Company’s estimated annual effective income tax rate for the three and six months ended June 30, 2023 and 2022 differed from the statutory rate primarily due to the valuation allowance, non-deductible executive compensation, stock-based compensation, differences in tax rates in state and foreign jurisdictions, and other permanent items.

6. Stockholders’ Equity

Common Stock

As of June 30, 2023, the Company’s Twelfth Amended and Restated Certificate of Incorporation authorizes the issuance of up to 1,050,000,000 shares of common stock, par value of $0.0001 per share, of which 750,000,000 shares are designated Class A common stock, 150,000,000 shares are designated Class B common stock, and 150,000,000 shares are designated Class C common stock. Class A common stock receives one vote per share, Class B common stock receives ten votes per share, and Class C common stock has no voting rights except as required by Delaware law. Common stock is not redeemable at the option of the holder.

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

As of June 30, 2023, outstanding shares of common stock as well as shares of common stock attributable to stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”) were as follows:


	Class A	Class B	Class C
Common stock outstanding	97,142,756	19,398,920	—
Employee stock options – outstanding	645,003	1,729,292	—
Restricted stock units – outstanding	2,903,754	1,938,558	—
Performance stock units – outstanding	—	4,397,688	—
Employee stock plans – available	24,922,530	—	—
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs	27,464,458	—	—
Total common stock – outstanding or issuable	153,078,501	27,464,458	—
Shares authorized	750,000,000	150,000,000	150,000,000
Common stock authorized and available for future issuance	596,921,499	122,535,542	150,000,000

Preferred Stock

As of June 30, 2023, 50,000,000 preferred shares were authorized and no shares were outstanding.

7. Stock-Based Compensation

Plans and Awards

The Company’s eligible employees participate in various stock-based compensation plans, which are provided by the Company directly.

In August 2021, the board of directors approved the 2021 Incentive Award Plan (the “2021 Plan”), which became effective on September 28, 2021, and the Company no longer grants equity awards under any prior equity plan. Upon the 2021 Plan becoming effective, there were 11,076,515 shares of Class A common stock authorized under the 2021 Plan, and the remaining shares available for issuance under the 2010 Equity Incentive Plan, 2011 Stock Plan, 2012 Milestone Stock Plan, and 2019 Founder Stock Plan (collectively, the “Prior Plans”) were also made available for issuance under the 2021 Plan. The shares authorized under the 2021 Plan will increase annually, beginning on January 1, 2022 and continuing through 2031, by the lesser of (i) 5% of the outstanding common stock (on an as converted basis) as of the last day of the immediately preceding fiscal year, or (ii) a smaller amount as agreed by the board of directors. Awards granted under the 2021 Plan generally vest over four years. In addition, the shares authorized under the 2021 Plan will increase, among other things, to the extent that an award (including an award under the Prior Plans) terminates, expires, or lapses for any reason or an award is settled in cash without the delivery of shares. In January 2022, the board of directors approved an annual increase of 5,735,463 shares to the shares authorized for issuance under the 2021 Plan, and at December 31, 2022, 16,323,025 shares of Class A common stock remained available for future issuance pursuant to new awards under the 2021 Plan.

In January 2023, the board of directors approved an annual increase of 5,766,938 shares to the shares authorized for issuance under the 2021 Plan, and 20,712,346 shares remained available for future issuance pursuant to new awards as of June 30, 2023.

Employee Stock Purchase Plan

In August 2021, the board of directors adopted and the stockholders of the Company approved the 2021 Employee Stock Purchase Plan (the “ESPP” and, collectively with the Prior Plans and the 2021 Plan, the “Plans”). The ESPP initially reserved and authorized the issuance of up to 2,215,303 shares of Class A common stock, and such reserve will be increased annually on the first day of each fiscal year beginning in 2022 and ending in 2031, by an amount equal to the lesser of (i) 1% of the shares of the Company’s common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the board of directors; provided, however, no more than 16,614,772 shares of common stock may be issued under the ESPP. In January 2022 and 2023, the board of directors approved an annual increase of 1,147,092 and 1,153,387 shares,

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

respectively, to the ESPP, and 4,210,184 shares remained available for future issuance pursuant to ESPP purchases as of June 30, 2023.

The fair value for ESPP purchase rights granted under the Plans are estimated at the date of grant using the Black-Scholes option-pricing model. ESPP purchase rights for 475,916 shares and 528,238 shares were granted during both the three and six months ended June 30, 2023 and 2022, respectively.

The following range of assumptions was used for ESPP purchase rights granted:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
ESPP purchase rights
Risk-free interest rates	4.0% - 5.2%		1.5% - 2.6%		4.0% - 5.2%		1.5% - 2.6%
Expected dividend yield	—		—		—		—
Expected term	0.5 - 2.0 years		0.5 - 2.0 years		0.5 - 2.0 years		0.5 - 2.0 years
Volatility	60	%	53	%	60	%	53	%

Offering periods begin on May 15 and November 15 of each year and consist of four six-month purchase periods. Eligible employees may contribute up to 20% of their base wages and the purchase price of shares of Class A common stock under an offering will be 85% of the lesser of the fair market value of Class A common stock on (i) the first day of the offering period, and (ii) the applicable purchase date. If such fair market value decreases from the first day of the offering period to the applicable purchase date, the offering period will terminate after the purchase of shares and all participants will be automatically enrolled in the next offering period (a “rollover event”).

The following table presents other relevant ESPP information:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Shares purchased under the ESPP	116,936		118,329		116,936		118,329
Stock-based compensation expense related to ESPP	$	831	$	912	$	1,412	$	1,458
Employee contributions	$	385	$	617	$	997	$	1,587

As of June 30, 2023, total unrecognized compensation costs associated with the ESPP was $2.7 million and is expected to be amortized over a weighted average period of 0.7 years.

Stock-based Compensation Expense

Stock-based compensation expense consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of goods sold	$	290	$	231	$	484	$	457
Selling, general, and administrative expenses	17,722		26,533		37,308		53,451
Total stock-based compensation expense	$	18,012	$	26,764	$	37,792	$	53,908

Stock-based compensation expense for the three and six months ended June 30, 2023 includes $11.2 million and $25.0 million related to the 2021 Founders Grant, as described below, respectively, and $5.1 million and $9.7 million in connection with RSUs, respectively. Stock-based compensation expense for the three and six months ended June 30,

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

2022 includes $19.3 million and $39.4 million related to the 2021 Founders Grant, respectively, and $5.4 million and $10.7 million in connection with RSUs, respectively.

Stock Options

The fair value for stock options granted under the Plans are estimated at the date of grant using the Black-Scholes option-pricing model. No stock options were granted in 2023 or 2022.

Because the Company’s common stock was not yet publicly traded when the options currently outstanding were granted, the Company estimated the fair value of common stock. The board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards are approved. The factors considered included, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the Company’s preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as a qualified public offering or sale of the Company, given prevailing market conditions; and (vii) contemporaneous transactions involving the Company’s common shares. The board of directors utilized third-party valuations which were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation.

A summary of stock option activity for the six months ended June 30, 2023 is as follows:


	Number of Stock Options	Weighted Average Exercise Price		Weighted average contractual term (years)	Aggregate intrinsic value
Balance at December 31, 2022	2,965,144	$	7.23	4.5	$	21,243
Options granted	—	—
Options exercised	(590,849)	5.68			4,147
Options forfeited	—	—
Balance at June 30, 2023	2,374,295	$	7.62	4.5	$	13,141

Exercisable as of June 30, 2023	2,374,295	$	7.62	4.5	$	13,141
Vested as of June 30, 2023	1,951,511	5.47		3.9
Unvested as of June 30, 2023	422,784	$	17.53	7.5

The total value of unrecognized stock compensation expense related to unvested options granted under the Plans was $4.0 million as of June 30, 2023, and is expected to be recognized over 0.7 years.

Restricted Stock Units and Performance Stock Units

A summary of RSU activity for the six months ended June 30, 2023 is as follows:


	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested as of December 31, 2022	3,314,420	$	29.06
Granted	1,620,460	13.29
Forfeited	(243,030)	23.75
Released	(438,179)	23.25
Vested and not yet released	(404,348)	23.33
Unvested as of June 30, 2023	3,849,323	$	24.02

The total value of unrecognized stock compensation expense related to outstanding RSUs and PSUs granted under the Plans was $55.6 million and $29.8 million as of June 30, 2023, respectively, which is expected to be recognized

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

over a weighted-average period of 1.3 years and 0.7 years, respectively. No PSUs were granted, forfeited, released or vested during the six months ended June 30, 2023.

In June 2021, the Company granted 4,397,688 PSUs and 1,884,724 RSUs to the co-CEOs, in the aggregate, under the 2019 Founder Stock Plan (the “Founders Grant”). The PSUs vest upon two performance conditions, (i) a qualified public offering, which was satisfied upon the Company’s direct listing on September 20, 2021 (the “Direct Listing”), and (ii) the price of the Company’s Class A common stock reaching stock price hurdles over a period of ten years, as defined by the terms of the award. The PSUs are subject to the co-CEOs’ continued employment with the Company through the applicable vesting date. If the PSUs vest, the Company will deliver one share of Class B common stock on the settlement date. Unvested PSUs expire in ten years from the date of grant. The terms of the PSUs granted are described further below.

The PSUs are divided into eight substantially equal tranches, each one vesting on the date the 90-day trailing volume-weighted average trading price of the Company’s Class A common stock exceeds the stock price hurdle, as set forth in the table below, provided that no PSUs may vest prior to the six month anniversary of the Direct Listing.


Tranche	Number of PSUs	Stock Price Hurdle
1	549,712	$	47.75
2	549,710	$	55.71
3	549,712	$	63.67
4	549,710	$	71.63
5	549,712	$	79.59
6	549,710	$	87.55
7	549,712	$	95.50
8	549,710	$	103.46

The Company used a Monte Carlo simulation to calculate the grant-date fair value of the PSUs of $128.8 million. Since the PSUs contain a performance and market condition, the stock-based compensation expense will be recognized when it becomes probable that the performance condition will be met using the accelerated attribution method. Stock-based compensation will be recognized over the period of time the market condition for each tranche is expected to be met (i.e., the derived service period). The performance condition was satisfied at September 29, 2021 by the Direct Listing, and the Company began recording expense at that time.

The Founders Grant RSUs will vest in equal monthly installments over a period of five years, subject to the co-CEOs’ continued employment with the Company through the applicable vesting date and conditioned upon the completion of a qualified public offering. The grant-date fair value of the RSUs is $66.9 million. Since the RSUs contain a performance condition, stock-based compensation expense is recognized using the accelerated attribution method when it becomes probable that the performance condition will be met. The performance condition was satisfied on September 29, 2021 by the Direct Listing, and the Company began recording expense at that time.

Shares underlying vested PSUs and RSUs will be issued to the CEOs on a specified quarterly date following the second anniversary of the vesting date, except for an amount necessary to cover any taxes due in connection with the vesting, which will be withheld or sold to cover, or issued to offset, such taxes. Any RSUs or PSUs subject to the award that have not vested by the tenth anniversary of the grant date will be forfeited.

RSUs granted prior to the Company’s Direct Listing vest upon the satisfaction of both a service and a performance condition. Prior to its Direct Listing, the Company had concluded that it was not probable that the performance condition would be satisfied as the closing of a qualified public offering or change in control is not deemed probable until consummated. Upon its Direct Listing on September 29, 2021, the Company recorded stock-based compensation expense for the service condition satisfied through such date and began recording stock-based compensation expense using the accelerated attribution method as the service conditions are met. RSUs issued after its Direct Listing only contain a service condition and are recognized on a straight line basis over the vesting period.

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

8. Leases

The Company leases retail, office, optical laboratory, and distribution center space under operating leases from third parties. As of June 30, 2023, the total lease terms of the various leases range from 1 to 11 years. The leases generally contain renewal options and rent escalation clauses, and from time to time include contingent rent provisions. Renewal options are exercisable at the Company’s sole discretion and are included in the lease term if they are reasonably certain to be exercised. In general it is not reasonably certain that lease renewals will be exercised at lease commencement and as such, lease renewals are not included in the lease term.

The following table presents the assets and liabilities related to the Company’s leases:


	June 30, 2023		December 31, 2022
Lease assets:
Right-of-use assets	$	122,355	$	127,014
Total lease assets	122,355		127,014

Lease liabilities:
Current lease liabilities	22,598		22,546
Non-current lease liabilities	147,748		150,832
Total lease liabilities	$	170,346	$	173,378

The following table details the Company’s net lease expense:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating lease expense	$	7,495	$	6,280	$	14,931	$	12,293
Variable lease expense(1)	505		937		1,248		1,875
Net lease expense	$	8,000	$	7,217	$	16,179	$	14,168

(1) Variable lease expense primarily consists of contingent rent.

The following table presents the future maturity of lease liabilities:


	Operating Leases(1)
2023	$	15,348
2024	36,846
2025	34,740
2026	33,197
2027	29,878
Thereafter	56,772
Future minimum lease payments	206,781
Impact of discounting	36,435
Present value of lease payments	$	170,346

(1) The year 2023 and 2024 each include $4.9 million of expected cash inflows from TIAs. Operating lease payments exclude $9.1 million of legally binding minimum lease payments related to executed leases for which the Company has not yet taken possession of the leased premises.

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

The following table presents other relevant lease information:


	June 30, 2023
Weighted average remaining lease term (years)	5.8
Weighted average discount rate	4.6	%

9. Commitments and Contingencies

2013 Credit Facility

In August 2013, the Company entered into a Loan and Security Agreement with Comerica Bank (as amended, the “2013 Credit Facility”), which consisted of a revolving credit line of up to $50.0 million with a sub-limit of $15.0 million for the issuance of letters of credit. Borrowings under the revolving credit line bore interest on the principal amount outstanding at a variable interest rate based on either LIBOR or the bank’s prime rate, with no additional margin. The Company was charged fees on the uncommitted portion of the credit line of approximately 0.2% as long as total borrowings were less than $15.0 million. The 2013 Credit Facility was replaced by the 2022 Credit Facility (as defined below).

2022 Credit Facility

In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., (together, the "Borrowers") entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the "2022 Credit Facility"), which replaced the 2013 Credit Facility. The 2022 Credit Facility consists of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes. The 2022 Credit Facility includes an option for the Company to increase the available amount by up to $75.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2022 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2022 Credit Facility at any time, in whole or in part, without penalty.

Under the 2022 Credit Facility, borrowings bear interest on the principal amount outstanding at a variable interest rate either (a) based on the greater of (1) the prime rate (as defined in the credit agreement), (2) the federal funds rate plus 1%, and (3) the Bloomberg Short-Term Bank Yield Index rate (“BSBY Rate”) for a one month tenor plus 1%, in each case plus an applicable margin of 0.5% - 0.8% depending on the Company’s leverage ratio, or (b) the BSBY Rate plus an applicable margin of 1.5% - 1.8% depending on the Company’s leverage ratio. The Company is charged commitment fees of 0.5% whether or not amounts have been borrowed. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations.

The 2022 Credit Facility contains a financial maintenance covenant which takes effect once total borrowings first exceed $60.0 million, and at all times thereafter, that requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2022 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as representations, warranties and event of default provisions. The obligations of the Borrowers under the Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company.

Other than letters of credit outstanding of $4.3 million and $4.2 million as of June 30, 2023 and December 31, 2022, respectively, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2022 Credit Facility or 2013 Credit Facility.

Litigation

During the normal course of business, the Company may become subject to legal proceedings, claims and litigation. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated.

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

On March 13, 2023, a former employee, on behalf of herself and a proposed class of California hourly employees, filed a complaint against the Company, alleging violations of various California wage and hour laws. The matter is currently pending in the United States District Court for the Northern District of California. Pham v. Warby Parker Inc. (Case No. 5:23-cv-01884-NC; N.D. Cal.). On June 16, 2023, another former employee filed a related representative action in the Santa Clara County Superior Court of California pursuant to California’s Private Attorneys General Act, asserting largely overlapping claims, seeking civil penalties on behalf of the state. Chery v. Warby Parker Inc. (Case No. 23CV417693; Cal. Super. Ct.). We deny the allegations and intend to oppose the certification of any class or award of civil penalties, and to defend the each litigation vigorously. However, given the early stage of each litigation, the Company is unable to estimate the possible loss or range of loss, if any, that may result from these matters.

In addition to the matters described above, as of June 30, 2023, the Company is currently involved in other legal proceedings which, in the opinion of the Company’s management, will not materially affect the Company’s financial position, results of operations, or cash flows should such litigation be resolved unfavorably.

10. Net Loss Per Share Attributable to Common Stockholders

The computation of net loss per share attributable to common stockholders is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Numerator
Net loss attributable to common stockholders - basic and diluted	$	(15,925)	$	(32,166)	$	(26,737)	$	(66,299)
Denominator
Weighted average shares, basic and diluted	116,792,223		114,679,892		116,477,573		114,393,420
Earnings Per Share
Net loss per share attributable to common stockholders, basic and diluted	$	(0.14)	$	(0.28)	$	(0.23)	$	(0.58)

The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Stock options to purchase common stock	2,374,295	3,295,106	2,374,295	3,295,106
Unvested restricted stock units	3,849,323	3,320,619	3,849,323	3,320,619
Unvested performance stock units	4,397,688	4,397,688	4,397,688	4,397,688
ESPP purchase rights	414,306	543,792	414,306	543,792

11. Related-Party Transactions

As a private company, the Company issued secured promissory notes collateralized by the stock purchased by certain Company executives in relation to the exercise of employee stock options. As the promissory notes are secured by the underlying shares they have been treated as non-recourse notes in the condensed consolidated financial statements. The promissory notes were issued with a term of 8.5 years and an interest rate equal to the minimum applicable federal mid-term rate in the month the loan was issued. The secured promissory notes were recorded as a reduction to equity offsetting the amount in additional paid-in-capital related to the exercised options funded by the notes.

The loans are held by current and former employees and had a balance of $2.5 million at both June 30, 2023 and December 31, 2022. No loans are outstanding with any of our executive officers.

During each of the three and six months ended June 30, 2023 and 2022, the outstanding loan balance increased by an immaterial amount due to interest. No new promissory notes were issued during the six months ended June 30, 2023 and 2022.

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Warby Parker Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Amounts in thousands, except share data)

12. Subsequent Events

Lease Obligations

Subsequent to June 30, 2023, the Company entered into 4 operating lease agreements and extended the term of 2 existing operating lease agreements for retail space in the U.S., with terms ranging from 5 to 7 years. Total commitments under the new agreements are approximately $3.8 million, payable over the terms of the related agreements.

Stock Donation

In August 2023, the Company issued 178,572 shares of Class A common stock to the Warby Parker Impact Foundation, a 501(c)(3) nonprofit organization. The grant date fair value of the shares was $2.6 million.

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Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 28, 2023 (the “Annual Report”). Data as of and for the three and six months ended June 30, 2023 and 2022 has been derived from our unaudited condensed consolidated financial statements. Results for any interim period should not be construed as an inference of what our results would be for any full fiscal year or future period. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, which involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and in Part I, Item 1A, Risk Factors, in the Annual Report.

Overview

A pioneer of the direct-to-consumer model, Warby Parker is one of the fastest-growing brands at scale in the United States. We are a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise.

Since day one, our focus on delighting customers and doing good has created a foundation for continuous innovation:

•We aim to provide customers with the highest-quality product possible by designing glasses at our headquarters in New York City, using custom materials, and selling direct to the customer. By cutting out the middleman, we are able to sell our products at a lower price than many of our competitors and pass the savings on to our customers. In addition to lower prices, we introduced simple, unified pricing (glasses starting at $95, including prescription lenses) to the eyewear market.

•We’ve built a seamless shopping experience that meets customers where and how they want to shop, whether that’s on our website, on our mobile app, or in our 217 retail stores.

•We’ve crafted a holistic vision care offering that extends beyond glasses to include contacts, vision tests and eye exams, vision insurance, and beyond. We leverage leading (and in many cases proprietary) technology to enhance our customers’ experiences, whether it’s to help them find a better-fitting frame using our Virtual Try-On tool, or to update their prescription from home using Virtual Vision Test, our telehealth app.

•We recruit and retain highly engaged, motivated team members who are driven by our commitment to scaling a large, growing business while making an impact and are excited to connect their daily work back to our mission.

•We are a public benefit corporation focused on positively impacting all stakeholders, and hope to inspire other entrepreneurs and businesses to think along the same lines. Working closely with our nonprofit partners, we distribute glasses to people in need in more than 50 countries globally and many parts of the United States. Over 13 million more people now have the glasses they need to learn, work, and achieve better economic outcomes through our Buy a Pair, Give a Pair program.

We generate revenue through selling our wide array of prescription and non-prescription eyewear, including glasses, sunglasses, and contact lenses. We also generate revenue from providing eye exams and vision tests, and selling eyewear accessories. We maintain data across the entire customer journey that allows us to develop deep insights, informing our innovation priorities and enabling us to create a highly personalized, brand-enhancing experience for our customers. We have built an integrated, multichannel presence that we believe deepens our relationship with existing customers while broadening reach and accessibility. And while we have the ability to track where our customers transact, we’re channel agnostic to where the transaction takes place and find that many of our customers engage with us across both digital and physical channels; for example, many customers who check out online also visit a store throughout their customer journey, while others choose to browse online before visiting one of our stores.

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Financial Highlights

For the three months ended June 30, 2023 and 2022:

•we generated net revenue of $166.1 million and $149.6 million, respectively;

•we generated gross profit of $90.6 million and $86.3 million, respectively, representing a gross profit margin of 54.6% and 57.7%, respectively;

•we generated net loss of $15.9 million and $32.2 million, respectively; and

•we generated adjusted EBITDA of $14.2 million and $5.9 million, respectively.

For the six months ended June 30, 2023 and 2022:

•we generated net revenue of $338.1 million and $302.8 million, respectively;

•we generated gross profit of $185.4 million and $176.0 million, respectively, representing a gross profit margin of 54.8% and 58.1%, respectively;

•we generated net loss of $26.7 million and $66.3 million, respectively; and

•we generated adjusted EBITDA of $31.9 million and $6.7 million, respectively.

For a definition of adjusted EBITDA, a non-GAAP measure, and a reconciliation to the most directly comparable GAAP measure, see the section titled “Key Business Metrics and Certain Non-GAAP Financial Measures.”

Factors Affecting Our Financial Condition and Results of Operations

We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed below and in Part I, Item 1A. “Risk Factors” of the Annual Report.

Overall economic environment

The nature of our business, which involves the sale of products and services that are a medical necessity for many consumers, provides some insulation from swings in consumer sentiment and general economic conditions. However, our performance and growth are still impacted by these factors. The current economic downturn, rising inflation and interest rates, and other negative economic factors may impact consumer spending habits as well as our cost of attracting and our ability to attract new customers. For example, during the second quarter of 2023, we continued to see lower overall sales growth rates than we have historically experienced as consumer activity within the optical industry has not recovered to pre-pandemic growth levels and is expected to remain flat in 2023 based on The Vision Council’s projections. We believe our business model, focused on providing an exceptional value and experience to our customers, will help mitigate the impact of many of these macroeconomic factors, however, the extent of such mitigation and the impact on future results is uncertain. We also continue to diversify and expand our supply chain network, both internationally with our frame manufacturers and domestically with our wholly owned and partner optical laboratories, which we believe has helped to insulate us from supply chain disruption and allowed us to continue to meet growing customer demand over the last several years while maintaining our exceptional quality and customer satisfaction standards.

Key Business Metrics and Certain Non-GAAP Financial Measures

In addition to the measures presented in our condensed consolidated financial statements, we use the following key business metrics and certain non-GAAP financial measures to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions. The following table summarizes our key performance indicators and non-GAAP financial measures for each period presented below, which are unaudited.


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Active Customers (in thousands)	2,285			2,258			2,285			2,258
Store Count(1)	217			178			217			178
Adjusted EBITDA(2) (in thousands)	$	14,175		$	5,936		$	31,912		$	6,710
Adjusted EBITDA margin(2)	8.5		%	4.0		%	9.4		%	2.2		%

__________________

(1)Store Count number at the end of the period indicated.

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(2)Adjusted EBITDA and adjusted EBITDA margin are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. Adjusted EBITDA and adjusted EBITDA margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to net loss or any other performance measure derived in accordance with GAAP.

Active Customers

The number of Active Customers is a key performance measure that we use to assess the reach of our physical retail stores and digital platform as well as our brand awareness. We define an Active Customer as a unique customer that has made at least one purchase in the preceding 12-month period. We determine our number of Active Customers by counting the total number of customers who have made at least one purchase in the preceding 12-month period, measured from the last date of such period. Given our definition of a customer is a unique customer that has made at least one purchase, it can include either an individual person or a household of more than one person utilizing a single account.

Store Count

Store Count is a key performance measure that we use to reach consumers and generate incremental demand for our products. We define Store Count as the total number of retail stores open at the end of a given period. We believe our retail stores embody our brand, drive brand awareness, and serve as efficient customer acquisition vehicles. Our results of operations have been and will continue to be affected by the timing and number of retail stores that we operate.

As of June 30, 2023, 169 out of our 217 retail stores offered in-person eye exams.

Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA 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 other transaction costs. We define adjusted EBITDA margin as adjusted EBITDA divided by net revenue. We caution investors that amounts presented in accordance with our definitions of adjusted EBITDA and adjusted EBITDA margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate adjusted EBITDA and adjusted EBITDA margin in the same manner. We present adjusted EBITDA and adjusted EBITDA margin because we consider these metrics to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.

Management uses adjusted EBITDA and adjusted EBITDA margin:

•as a measurement of operating performance because they assist us in evaluating the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations;

•for planning purposes, including the preparation of our internal annual operating budget and financial projections;

•to evaluate the performance and effectiveness of our operational strategies; and

•to evaluate our capacity to expand our business.

By providing these non-GAAP financial measures, together with a reconciliation to the most directly comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Adjusted EBITDA and adjusted EBITDA margin have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net loss or other financial statement data presented in our condensed consolidated financial statements as indicators of financial performance. Some of the limitations are:

•such measures do not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments;

•such measures do not reflect changes in, or cash requirements for, our working capital needs;

•such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

•such measures do not reflect our tax expense or the cash requirements to pay our taxes;

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•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and

•other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.

Due to these limitations, adjusted EBITDA and adjusted EBITDA margin should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. Each of the adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP measure, which is net loss:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	(in thousands)						(in thousands)
Net loss	$	(15,925)		$	(32,166)		$	(26,737)		$	(66,299)
Adjusted to exclude the following:
Interest and other loss, net	(2,281)			38			(4,160)			(108)
Provision for income taxes	(24)			47			237			586
Depreciation and amortization expense	9,284			7,694			18,424			14,605
Asset impairment charges	255			186			650			412
Stock-based compensation expense(1)	18,164			26,867			38,030			54,244
Non-cash charitable donation(2)	600			3,270			600			3,270
Amortization of cloud-based software implementation costs(3)	463			—			826			—
ERP implementation costs(4)	3,639			—			4,042			—
Adjusted EBITDA	14,175			5,936			31,912			6,710
Adjusted EBITDA margin	8.5		%	4.0		%	9.4		%	2.2		%

__________________

(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, and vesting of awards including the satisfaction of performance conditions. For the three months ended June 30, 2023 and 2022, the amount includes $0.2 million and $0.1 million, respectively, of employer payroll costs associated with releases of RSUs and option exercises. For the six months ended June 30, 2023 and 2022, the amount includes $0.2 million and $0.3 million, respectively, of employer payroll costs associated with releases of RSUs and option exercises.

(2) Represents charitable expense recorded in connection with the donation of 56,938 shares of Class A common stock to charitable donor advised funds in June 2023 and 178,572 shares of Class A common stock in May 2022 to the Warby Parker Impact Foundation.

(3) Represents the amortization of costs capitalized in connection with the implementation of cloud-based software.

(4) Represents internal and external non-capitalized costs related to the implementation of our new Enterprise Resource Planning (“ERP”) system.

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Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q. The following tables set forth our results of operations for the periods presented in dollars and as a percentage of net revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)				(in thousands)
Net revenue	$	166,093	$	149,624	$	338,061	$	302,842
Cost of goods sold	75,458		63,277		152,635		126,849
Gross profit	90,635		86,347		185,426		175,993
Selling, general, and administrative expenses	108,865		118,428		216,086		241,814
Loss from operations	(18,230)		(32,081)		(30,660)		(65,821)
Interest and other income (loss), net	2,281		(38)		4,160		108
Loss before income taxes	(15,949)		(32,119)		(26,500)		(65,713)
Provision for income taxes	(24)		47		237		586
Net loss	(15,925)		(32,166)		(26,737)		(66,299)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	% of Net Revenue				% of Net Revenue
Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	45.4	%	42.3	%	45.2	%	41.9	%
Gross profit	54.6	%	57.7	%	54.8	%	58.1	%
Selling, general, and administrative expenses	65.5	%	79.2	%	63.9	%	79.8	%
Loss from operations	(10.9)	%	(21.5)	%	(9.1)	%	(21.7)	%
Interest and other income (loss), net	1.3	%	—	%	1.3	%	—	%
Loss before income taxes	(9.6)	%	(21.5)	%	(7.8)	%	(21.7)	%
Provision for income taxes	—	%	—	%	0.1	%	0.2	%
Net loss	(9.6)	%	(21.5)	%	(7.9)	%	(21.9)	%

Components of Results of Operations

Net Revenue

We primarily derive revenue from the sales of eyewear products, optical services, and accessories. We sell products and services through our retail stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges, which are charged to the customer, associated with these purchases. Revenue is recognized when the customer takes possession of the product, either at the point of delivery or in-store pickup, and is recorded net of returns and discounts. Revenue generated from services consists of both in-person eye exams and prescriptions issued through the Virtual Vision Test app. Revenue is recognized when the service is rendered and is recorded net of discounts.

Cost of Goods Sold

Cost of goods sold includes the costs incurred to acquire materials, assemble, and sell our finished products. Such costs include (i) product costs held at the lesser of cost and net realizable value, (ii) freight and import costs, (iii) optical laboratory costs, (iv) customer shipping, (v) occupancy and depreciation costs of retail stores, and (vi) employee-related costs associated with our prescription services and optical laboratories, which includes salaries, benefits, bonuses, and stock-based compensation. We expect our cost of goods sold to fluctuate as a percentage of net revenue primarily due

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to product mix, customer preferences and resulting demand, customer shipping costs, and management of our inventory and merchandise mix. Cost of goods sold also may change as we open or close retail stores because of the resulting change in related occupancy and depreciation costs. Over time we expect our cost of goods sold to increase with revenue due to an increased number of orders and with the opening of new retail stores driven by the resulting occupancy and depreciation costs and employee-related costs associated with prescription services offerings at our retail stores.

Gross Profit and Gross Margin

We define gross profit as net revenues less cost of goods sold. Gross margin is gross profit expressed as a percentage of net revenues. Our gross margin has remained relatively steady historically, but has decreased as we have expanded our holistic eyecare offering with contacts and eye exams which operate at a lower margin than eyeglasses. Gross margin may continue to fluctuate in the future based on a number of factors, including the cost at which we can obtain, transport, and assemble our inventory, the rate at which we open new retail stores, the mix of products we sell, and how effective we can be at controlling costs, in any given period.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses, or SG&A, primarily consist of employee-related costs including salaries, benefits, bonuses, and stock-based compensation for our corporate and retail employees, marketing, information technology, credit card processing fees, donations in connection with our Buy a Pair, Give a Pair program, facilities, legal, and other administrative costs associated with operating the business. Marketing costs, which consist of both online and offline advertising, include sponsored search, online advertising, marketing and retail events, and other initiatives. SG&A also includes administrative costs associated with our Home Try-On program, which provides customers the opportunity to sample eyewear at home prior to purchase. SG&A is expensed in the period in which it is incurred. During 2022 we implemented a headcount reduction in our corporate offices and are executing on certain other cost control actions, including reducing marketing spend and other variable costs. We expect these actions to reduce costs included in SG&A as compared to revenue, however, the changing prices of goods and services caused by inflation and other macroeconomic factors may cause unforeseen fluctuations in SG&A expenses.

Interest and Other Income, Net

Interest and other income, net, consists primarily of interest generated from our cash and cash equivalents balances net of interest incurred on borrowings and fees on our undrawn line of credit, and are recognized as incurred. We expect our interest and other income costs to fluctuate based on our future bank balances, credit line utilization, and the interest rate environment.

Provision for Income Taxes

Provision for income taxes consists of income taxes related to foreign and domestic federal and state jurisdictions in which we conduct business, adjusted for allowable credits, deductions, and valuation allowance against deferred tax assets.

Comparison of the Three Months Ended June 30, 2023 and 2022

Net Revenue


	Three Months Ended June 30,
	2023		2022		$ Change		% Change
	(in thousands)
Net revenue	$	166,093	$	149,624	$	16,469	11.0	%

Net revenue increased $16.5 million, or 11.0%, for the three months ended June 30, 2023 compared to the same period in 2022. The growth in net revenue was primarily driven by an increase in units sold, as well as an increase in the average selling price per unit.

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Cost of Goods Sold, Gross Profit, and Gross Margin


	Three Months Ended June 30,
	2023			2022			$ Change		% Change
	(in thousands)
Cost of goods sold	$	75,458		$	63,277		$	12,181	19.3	%
Gross profit	90,635			86,347			4,288		5.0	%
Gross margin	54.6		%	57.7		%			(3.1)	%

Cost of goods sold increased by $12.2 million, or 19.3%, for the three months ended June 30, 2023 compared to the same period in 2022, and increased as a percentage of revenue over the same period by 310 basis points, from 42.3% of revenue to 45.4% of revenue. The increase in cost of goods sold was primarily driven by increased product and fulfillment costs associated with our sales growth, particularly related to the growth in our contact lens offering, as well as increases in store occupancy, store depreciation, and prescription services expenses due to new retail stores opened in 2023 and the second half of 2022.

Gross profit, calculated as net revenue less cost of goods sold, increased by $4.3 million, or 5.0%, for the three months ended June 30, 2023 compared to the same period in 2022, primarily due to the increase in net revenue over the same period.

Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, decreased by 310 basis points for the three months ended June 30, 2023 compared to the same period in 2022. The decrease in gross margin was primarily driven by the sales growth of contact lenses which are sold at a lower margin than our other eyewear, increased prescription services costs as the number of stores with optical examination rooms grew, and increases in store occupancy costs as a percent of revenue primarily due to increased depreciation and rent charges as we grew our store base from 178 stores as of June 30, 2022 to 217 stores as of June 30, 2023.

Selling, General, and Administrative Expenses


	Three Months Ended June 30,
	2023			2022			$ Change		% Change
	(in thousands)
Selling, general, and administrative expenses	$	108,865		$	118,428		$	(9,563)	(8.1)	%
As a percentage of net revenue	65.5		%	79.2		%			(13.7)	%

Selling, general, and administrative expenses decreased $9.6 million, or 8.1%, for the three months ended June 30, 2023 compared to the same period in 2022. This decrease was primarily driven by a $8.8 million decrease in stock-based compensation, mostly related to the Founders Grant (as described in Note 7 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q), and lower marketing costs, including costs associated with our Home Try-On program, which decreased to 11% of revenue in the current quarter compared to 14% in the same quarter of 2022. The decrease was partially offset by increased technology costs, mainly driven by the implementation of our new ERP system.

Interest and Other Income (Loss), Net


	Three Months Ended June 30,
	2023			2022			$ Change		% Change
	(in thousands)
Interest and other income (loss), net	$	2,281		$	(38)		$	2,319	(6,102.6)	%
As a percentage of net revenue	1.3		%	—		%			1.3	%

Interest and other income (loss), net increased $2.3 million, or 6,102.6%, for the three months ended June 30, 2023 compared to the same period in 2022 primarily due to higher interest rates on our cash and cash equivalents balance.

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Provision for Income Taxes


	Three Months Ended June 30,
	2023			2022			$ Change		% Change
	(in thousands)
Provision for income taxes	$	(24)		$	47		$	(71)	(151.1)	%
As a percentage of net revenue	—		%	—		%			—	%

Provision for income taxes decreased $0.1 million, or 151.1%, for the three months ended June 30, 2023 compared to the same period in 2022 primarily due to the change in pre-tax loss in addition to the tax effects of stock-based compensation expense and foreign provision to return adjustments related to the 2022 corporate income tax return.

Comparison of the Six Months Ended June 30, 2023 and 2022

Net Revenue


	Six Months Ended June 30,
	2023		2022		$ Change		% Change
	(in thousands)
Net revenue	$	338,061	$	302,842	$	35,219	11.6	%

Net revenue increased $35.2 million, or 11.6%, for the six months ended June 30, 2023 compared to the same period in 2022. The growth in net revenue was primarily driven by an increase in units sold, as well as an increase in the average selling price per unit.

Cost of Goods Sold, Gross Profit, and Gross Margin


	Six Months Ended June 30,
	2023			2022			$ Change		% Change
	(in thousands)
Cost of goods sold	$	152,635		$	126,849		$	25,786	20.3	%
Gross profit	185,426			175,993			9,433		5.4	%
Gross margin	54.8		%	58.1		%			(3.3)	%

Cost of goods sold increased by $25.8 million, or 20.3%, for the six months ended June 30, 2023 compared to the same period in 2022, and increased as a percentage of revenue over the same period by 330 basis points, from 41.9% of revenue to 45.2% of revenue. The increase in cost of goods sold was primarily driven by increased product and fulfillment costs associated with our sales growth, particularly related to the growth in our contact lens offering, as well as increases in store occupancy, store depreciation, and prescription services expenses due to new retail stores opened in 2023 and the second half of 2022.

Gross profit, calculated as net revenue less cost of goods sold, increased by $9.4 million, or 5.4%, for the six months ended June 30, 2023 compared to the same period in 2022, primarily due to the increase in net revenue over the same period.

Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, decreased by 330 basis points for the six months ended June 30, 2023 compared to the same period in 2022. The decrease in gross margin was primarily driven by increases in store occupancy costs as a percent of revenue primarily due to increased depreciation and rent charges as we grew our store base from 178 stores as of June 30, 2022 to 217 stores as of June 30, 2023, increased prescription services costs as the number of stores with optical examination rooms grew, and the sales growth of contact lenses which are sold at a lower margin than our other eyewear.

Selling, General, and Administrative Expenses

Six Months Ended June 30,

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	2023			2022			$ Change		% Change
	(in thousands)
Selling, general, and administrative expenses	$	216,086		$	241,814		$	(25,728)	(10.6)	%
As a percentage of net revenue	63.9		%	79.8		%			(15.9)	%

Selling, general, and administrative expenses decreased $25.7 million, or 10.6%, for the six months ended June 30, 2023 compared to the same period in 2022. This decrease was primarily driven by a $16.1 million decrease in stock-based compensation, mostly related to the Founders Grant (as described in Note 7 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q), and lower marketing costs, including costs associated with our Home Try-On program, which decreased to 11% of revenue in the six months ended June 30, 2023 compared to 17% in the same period of 2022. The decrease was partially offset by increased technology costs, mainly driven by the implementation of our new ERP system.

Interest and Other Income, Net


	Six Months Ended June 30,
	2023			2022			$ Change		% Change
	(in thousands)
Interest and other income, net	$	4,160		$	108		$	4,052	3,751.9	%
As a percentage of net revenue	1.3		%	—		%			1.3	%

Interest and other income, net increased $4.1 million, or 3,751.9%, for the six months ended June 30, 2023 compared to the same period in 2022 primarily due to higher interest rates on our cash and cash equivalents balance.

Provision for Income Taxes


	Six Months Ended June 30,
	2023			2022			$ Change		% Change
	(in thousands)
Provision for income taxes	$	237		$	586		$	(349)	(59.6)	%
As a percentage of net revenue	0.1		%	0.2		%			(0.1)	%

Provision for income taxes decreased $0.3 million, or 59.6%, for the six months ended June 30, 2023 compared to the same period in 2022 primarily due to the change in pre-tax loss in addition to the tax effects of stock-based compensation expense and the establishment of a valuation allowance.

Seasonality

Historically, we have observed moderately higher seasonal demand during the month of December due in part to customer usage of health and flexible spending benefits in the final week of the year. Consistent with our policy to recognize revenue upon order delivery, any orders placed at the end of December are recognized as revenue upon delivery, which may occur in the following year, and as such we typically see revenue increase sequentially from the fourth quarter to the first quarter of the following year.

Our business has historically experienced a higher proportion of costs in each subsequent quarter as a year progresses due to the overall growth of the business and operating costs to support that growth, including costs related to the opening of new retail stores and employee-related compensation to support growth. The fourth quarter, in particular, has historically experienced the highest amount of costs in a year to support the business demand in the quarter, even though a portion of the net revenue from that demand is not recognized until January of the following year, as discussed above. In 2022, this historical trend was offset by specific actions we took to reduce costs, including a reduction in marketing spend beginning in the second quarter and a reduction in corporate headcount in connection with our restructuring plan that was executed in the third quarter. These actions contributed to a sequential decline in selling, general, and administrative costs from quarter to quarter in 2022, however, we expect 2023 to follow historic trends. In the future, seasonal trends may cause fluctuations in our quarterly results, which may impact the predictability of our business and operating results.

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Liquidity and Capital Resources

Since inception, we have financed our operations primarily from net proceeds from the sale of redeemable convertible preferred stock and cash flows from operating activities. As of June 30, 2023, we had cash and cash equivalents of $212.7 million, which was primarily held for working capital purposes, and an accumulated deficit of $630.4 million. As of December 31, 2022, we had cash and cash equivalents of $208.6 million, which was primarily held for working capital purposes, and an accumulated deficit of $603.6 million.

We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion of our business. We believe our existing cash and cash equivalents, funds available under our existing credit facility, and cash flows from operating activities will be sufficient to fund our operations for at least the next 12 months.

However, our future capital requirements will depend on many factors, including, but not limited to, growth in the number of retail stores, the needs of our optical laboratories and distribution network, expansion of our product offerings or service capabilities, and the timing of investments in technology and personnel to support the overall growth in our business. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for additional operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. In the event that additional financing is required from outside sources, we may not be able to negotiate terms acceptable to us or at all. In particular, COVID-19, rising interest and inflation rates, and other macroeconomic factors have caused disruption in the global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.

Credit Facility

2013 Credit Facility

2022 Credit Facility

In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the “2022 Credit Facility”), which replaced the 2013 Credit Facility. The 2022 Credit Facility consists of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes. The 2022 Credit Facility includes an option for the Company to increase the available amount by up to $75.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2022 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2022 Credit Facility at any time, in whole or in part, without penalty.

Under the 2022 Credit Facility, borrowings under the revolving credit facility bear interest on the principal amount outstanding at a variable interest rate either (a) based on the greater of (1) the prime rate (as defined in the credit agreement), (2) the federal funds rate plus 1%, and (3) the Bloomberg Short-Term Bank Yield Index rate (“BSBY Rate”) for a one month tenor plus 1%, in each case plus an applicable margin of 0.5% - 0.8% depending on the Company’s leverage ratio, or (b) the BSBY Rate plus an applicable margin of 1.5 - 1.8% depending on the Company’s leverage ratio. The Company is charged commitment fees of 0.5% whether or not amounts have been borrowed. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations.

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The 2022 Credit Facility contains a financial maintenance covenant which takes effect once total borrowings first exceed $60.0 million, and at all times thereafter, which requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2022 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as representations, warranties and event of default provisions. The obligations of the Borrowers under the Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company.

Cash Flows

The following table summarizes our cash flows for the six months ended June 30, 2023 and 2022:


	Six Months Ended June 30,
	2023		2022
	(in thousands)
Net cash provided by (used in) operating activities	$	27,395	$	(14,624)
Net cash used in investing activities	(24,610)		(31,869)
Net cash provided by financing activities	1,967		1,982
Effect of exchange rates on cash	(681)		(302)
Net increase (decrease) in cash and cash equivalents	$	4,071	$	(44,813)

Cash Flows from Operating Activities

Net cash provided by operating activities was $27.4 million for the six months ended June 30, 2023, consisting of a net loss of $26.7 million adjusted for $58.3 million of non-cash expenses and $4.2 million of net cash used as a result of changes in operating assets and liabilities. The non-cash charges included $37.8 million of stock-based compensation, $18.4 million of depreciation and amortization, $0.6 million of non-cash charitable contributions, $0.7 million of asset impairment charges, and $0.8 million of amortization of cloud-based software implementation costs. The changes in operating assets and liabilities were primarily driven by a decrease in accrued expenses and deferred revenue, partially offset by decreases in inventory and accounts payable.

Net cash used in operating activities was $14.6 million for the six months ended June 30, 2022, consisting of a net loss of $66.3 million, adjusted for $72.2 million of non-cash expenses and $20.5 million of net cash used as a result of changes in operating assets and liabilities. The non-cash charges included $53.9 million of stock-based compensation, $14.6 million of depreciation and amortization, $3.3 million of non-cash charitable contributions, and $0.4 million of asset impairment charges. The changes in operating assets and liabilities were primarily driven by an increase in net inventory to support the growth of our business, an increase in other non-current assets related to investments in the implementation of our new enterprise resource planning system and other technology infrastructure, and decreases in accrued expenses and deferred revenue, partially offset by an increase in net lease liabilities in connection with new retail location leases entered into in 2022.

Cash Flows from Investing Activities

For the six months ended June 30, 2023, net cash used in investing activities was $24.6 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores, as well as investments in capitalized software development costs.

For the six months ended June 30, 2022, net cash used in investing activities was $31.9 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores, as well as investments in capitalized software development costs.

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Cash Flows from Financing Activities

For the six months ended June 30, 2023, net cash provided by financing activities was $2.0 million, which was primarily related to proceeds from shares issued in connection with our ESPP and stock option exercises.

For the six months ended June 30, 2022, net cash provided by financing activities was $2.0 million, which was primarily related to proceeds from shares issued in connection with our ESPP and stock option exercises.

Contractual Obligations and Commitments

There have been no material changes to our contractual obligations from those described in the Annual Report.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report and the notes to the audited consolidated financial statements appearing elsewhere in the Annual Report, and in Note 2 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q. There were no significant changes to our critical accounting policies and estimates as reported in the Annual Report.

Recent Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for more information regarding recent accounting pronouncements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our financial position because of adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure resulting from potential changes in currency rates, interest rates, or inflation.

Foreign Exchange Risk

We are exposed to changes in foreign currency rates as a result of our foreign operations and international suppliers from whom we purchase in Japanese yen and euros. Revenue and income generated by our operations in Canada and our cost of goods sold will increase or decrease compared to prior periods as a result of changes in foreign currency exchange rates. We do not believe that foreign exchange rates have a material effect on our business, financial condition or results of operations.

Interest Rate Risk

Our cash and cash equivalents as of June 30, 2023 consisted of $212.7 million in cash and money-market funds. Such interest-earning instruments carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate exposure. We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents.

Inflation Risk

We believe that inflation, including from conditions stemming from the war in Ukraine, the impact of COVID-19, and other macroeconomic factors, has had a limited impact on our business, financial condition, and results of operations. Inflation may, however, have an impact on raw materials, transportation, labor, construction, rent, and other costs which materially impact operations. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with increased revenue. Our inability or failure to do so could harm our business, financial condition, and results of operations.

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Item 4. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our co-principal executive officers and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, and as a result of the material weaknesses described below, our co-principal executive officers and principal financial officer concluded that, as of June 30, 2023, our disclosure controls and procedures were not effective at the reasonable assurance level.

Material Weaknesses

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.

Management identified two material weaknesses related to (i) information technology general controls, in the areas of user access and program change management, over our key accounting, reporting, and proprietary systems and (ii) certain process, application and management review controls within our financial reporting processes to enforce segregation of duties, validate completeness and accuracy of data and information used to reconcile and analyze certain key accounts, and perform the review of manual journal entries. We have concluded that these material weaknesses arose because we did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy our accounting and financial reporting requirements.

Remediation Measures

In order to remediate these material weaknesses, we have invested significantly in our IT environment and added critical resources to our team. We have made progress in the following areas, among others, during 2022 and the first half of 2023:

•development of IT general controls to manage access and program changes across our key systems and the execution of improvements to application controls within our proprietary system;

•selected an enterprise resource planning system, hired an implementation partner, implemented certain modules of the system, and are in the process of implementing additional enhancements which will provide improvements to our IT-dependent and application controls to help prevent and detect errors, enforce segregation of duties, and permit controls around the review of manual journal entries;

•implemented additional review controls and processes, documentation of completeness and accuracy of data and information used in controls, and requirements to timely account reconciliations and analyses;

•implemented processes and controls to better identify and manage segregation of duties; and

•continued hiring of additional qualified accounting and financial reporting personnel to support division of responsibilities.

Despite this progress, we will not be able to fully remediate these material weaknesses until all of these steps have been completed and have been operating effectively for a sufficient period of time. At this time, we cannot provide an estimate of total costs expected to be incurred in connection with implementing these remediation efforts; however, these remediation efforts will be time consuming, have resulted and will continue to result in us incurring significant costs, and will place significant demands on our financial and operational resources.

Furthermore, we cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further,

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weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.

Changes in Internal Control Over Financial Reporting

Other than the remediation measures described in “Remediation Measures” above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

The information contained under the heading “Litigation” in Note 9 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item.

Item 1A. Risk Factors

There have been no material changes to the risk factors affecting our business, financial condition, or future results from those set forth in Part I, Item 1A, Risk Factors, in the Annual Report. However, you should carefully consider the factors discussed in the Annual Report and in this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Recent Sales of Unregistered Securities

In June 2023, the Company issued 56,938 shares of Class A common stock for no consideration to third-party charitable donor advised funds. The shares donated were issued in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.

Issuer Purchase of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a)

None.

(b)

None.

During the second quarter of 2023, no director or officer, as defined in Rule 16a-1(f) of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K.

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Item 6. Exhibits

Incorporated by Reference

Filed / Furnished Herewith

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

3.1

Twelfth Amended and Restated Certificate of Incorporation of Warby Parker Inc.

S-8

333-259704

4.2

9/22/2021

3.2

Amended and Restated Bylaws of Warby Parker Inc.

S-8

333-259704

4.3

9/22/2021

4.1

Specimen Class A common stock certificate of Warby Parker Inc.

S-1

333-259035

4.1

8/24/2021

4.2

Specimen Class B common stock certificate of Warby Parker Inc.

10-Q

001-40825

4.2

5/16/2022

10.1

Second Amendment to Credit Agreement, dated as of J une 2 , 2023, by and among Warby Parker Inc., Warby Parker Retail, Inc., the lenders party thereto and Comerica Bank as Administrative Agent.

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

31.2

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

31.3

Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.2

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

32.3

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

__________________

* Filed herewith.

** Furnished herewith.

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Signatures

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, thereunto duly authorized.

Date: August 9, 2023


			WARBY PARKER INC.

			By:			/s/ Neil Blumenthal
						Neil Blumenthal
						Co-Chief Executive Officer

			By:			/s/ Dave Gilboa
						Dave Gilboa
						Co-Chief Executive Officer

			By:			/s/ Steve Miller
						Steve Miller
						Chief Financial Officer

SECOND AMENDMENT TO CREDIT AGREEMENT

This Second Amendment to Credit Agreement (“Second Amendment”) is made as of June 2, 2023 by and among the undersigned Lenders (defined below), Comerica Bank, as the Administrative Agent for the Lenders (in such capacity, the “Agent”), Warby Parker Inc., a Delaware corporation (“Warby Parker”) and Warby Parker Retail, Inc., a Delaware corporation (“Warby Retail” and together with Warby Parker, the “Borrowers” and each, individually, a “Borrower”).

RECITALS

A. Borrowers, Agent and the Lenders are parties to that certain Credit Agreement dated as of September 30, 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

B. Borrowers have requested that Agent and the Lenders make certain amendments to the Credit Agreement, and Agent and the Lenders are willing to do so, but only on the terms and conditions set forth in this Second Amendment.

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Borrowers, Agent and the Lenders agree as follows:

1.Section 1.1 of the Credit Agreement is amended by adding the following definition to read in its entirety as follows:

“Second Amendment Effective Date” shall mean June 2, 2023.

“Outside Cash Amount” shall mean an amount equal to 50% of aggregate cash and cash equivalents held by the Credit Parties.

2.Section 1.1 of the Credit Agreement is amended by amending and restating the following definition to read in its entirety as follows:

“Revolving Credit Aggregate Commitment” shall mean One Hundred Million Dollars ($100,000,000), subject to increases pursuant to Section 2.12 hereof by an amount not to exceed the Optional Increase Amount and subject to reduction or termination under Section 2.10, 2.11, or 9.2 hereof.

3.Effective as of May 26, 2023, Section 7.2(e) of the Credit Agreement is amended and restated to read in its entirety as follows:

(e) Not later than March 15 of each Fiscal Year (or, solely in the case of the Fiscal Year ending December 31, 2023, not later than May 26, 2023), projections for the Credit Parties for the then current Fiscal Year, on a quarterly basis and for the following Fiscal Year on an annual basis, including a balance sheet, as at the end of each relevant period and for the period commencing at the beginning of the Fiscal Year and ending on the last day of such relevant period, such projections certified by a Responsible Officer of the Borrowers as being based on reasonable estimates and assumptions taking into account all facts and information known (or reasonably available to any Credit Party) by a Responsible Officer of the Borrowers;

4.Section 7.14 of the Credit Agreement is amended and restated to read in its entirety as follows:

7.14 Accounts.

(a)Maintain all primary deposit accounts, securities accounts, operating accounts and cash management accounts of any Credit Party with the Agent or a Lender, provided that, so long as Borrowers and Guarantors at all times maintain at least $10,000,000 in the aggregate in Net Cash in deposit accounts with Agent or a Lender or with Agent’s or a Lender’s Affiliates (and in the case of such accounts with a Lender or Agent’s or a Lender’s Affiliates, covered by Account Control Agreements), Credit Parties may maintain up to the Outside Cash Amount in the aggregate consisting of deposit and investment balances in accounts outside of Agent and Lenders, and so long as no Event of Default exists, no Account Control Agreements shall be required with respect to any such accounts that have an aggregate balance for all such accounts of less than or equal to $30,000,000 (it being understood that no more than $30,000,000 in total Outside Cash Amount balances shall not be subject to Account Control Agreements), provided further, however, that any Account Control Agreements required pursuant to the foregoing shall be delivered to Agent not later than forty five (45) days after the Second Amendment Effective Date (as such date may be extended by Agent in its sole discretion).

(b)With respect to any such accounts maintained with any Lender (other than the Agent), such Credit Party that is a Borrower or a Guarantor (x) shall cause to be executed and delivered an Account Control Agreement in form and substance satisfactory to the Agent and (y) shall take all other steps necessary, or in the opinion of the Agent, desirable to ensure that the Agent has a perfected security interest in such account.

(c)Upon request of Agent from time to time, Borrowers shall promptly, and in any event within two (2) Business Days of request by Agent, provide Agent with a true, correct and complete listing of all deposit and securities accounts maintained outside of Agent by any Credit Party or any of its Subsidiaries.

5.Section 7.24 of the Credit Agreement is amended by adding a new clause (b) thereto, to read in its entirety as follows:

(b) On or before five (5) Business Days after the Second Amendment Effective Date (or such later date as agreed by Agent), Borrowers shall have delivered to Agent evidence satisfactory to Agent that the Credit Parties have transferred cash to the Agent or a Lender in an amount sufficient for the Credit Parties to be in compliance with Section 7.14 hereof.

6.Effective as of the Second Amendment Effective Date, Annex I to the Credit Agreement is amended and restated with Annex I attached hereto.

7.This Second Amendment shall become effective as of the Second Amendment Effective Date upon satisfaction in full of the following conditions:

(a)Agent shall have received counterpart signature pages to this Second Amendment, duly executed and delivered by the Agent, the Borrowers and the Lenders.

(b)Agent shall have received such other documents, certificates, instruments and diligence in connection with the foregoing, to the extent requested by the Agent.

(c)Borrower shall have paid to Agent any fees, costs and expenses, owed to Agent and the Lenders, in each case, as and to the extent required to be paid in accordance with the Loan Documents, including without limitation, the fees required to be paid under the Fee Letter.

8.Each Borrower hereby certifies to the Agent and the Lenders as of the Second Amendment Effective Date that (a) execution and delivery of this Second Amendment, and the performance by such Borrower of its obligations under the Credit Agreement as amended hereby (herein, as so amended, the “Amended Credit Agreement”) are within such Borrower’s powers, have been duly authorized, are not in contravention of law or the terms of its articles of incorporation or bylaws or other organizational documents of such Borrower, as applicable, and except as have been previously obtained do not require the consent or approval, material to the amendments contemplated in this Second Amendment, of any governmental body, agency or authority, and the Amended Credit Agreement will constitute the valid and binding obligations of such Borrower enforceable in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, reorganization, insolvency, moratorium, ERISA or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought in a proceeding in equity or at law), (b) the representations and warranties set forth in Section 6 of the Amended Credit Agreement are true and correct on and as of the Second Amendment Effective Date (except to the extent such representations specifically relate to an earlier date), and (c) on and as of the Second Amendment Effective Date, after giving effect to this Second Amendment, no Default or Event of Default has occurred and is continuing.

9.Except as specifically set forth above, this Second Amendment shall not be deemed to amend or alter in any respect the terms and conditions of the Credit Agreement (including without limitation all conditions and requirements for Advances and any financial covenants), any of the Notes issued thereunder or any of the other Loan Documents. This Second Amendment shall not constitute a waiver or release by the Agent or the Lenders of any right, remedy, Default or Event of Default under or a consent to any transaction not meeting the terms and conditions of the Credit Agreement, any of the Notes issued thereunder or any of the other Loan Documents. Furthermore, this Second Amendment shall not affect in any manner whatsoever any rights or remedies of the Lenders with respect to any other non-compliance by any Borrower or any other Credit Party with the Credit Agreement or the other Loan Documents, whether in the nature of a Default or Event of Default, and whether now in existence or subsequently arising, and shall not apply to any other transaction. Each Borrower hereby confirms that each of the Collateral Documents continues in full force and effect and secure, among other things, all of its obligations, liabilities and indebtedness owing to the Agent and the Lenders under the Credit Agreement and the other Loan Documents (where applicable, as amended herein).

10.Each Borrower hereby reaffirms, confirms, ratifies and agrees to be bound by each of its covenants, agreements and obligations under the Amended Credit Agreement and each other Loan Document previously executed and delivered by it, or executed and delivered in accordance with this Second Amendment. Each reference in the Credit Agreement to “this Agreement” or “the Credit Agreement” shall be deemed to refer to the Credit Agreement as amended by this Second Amendment.

11.Each Borrower hereby acknowledges and agrees that this Second Amendment and the amendments contained herein do not constitute any course of dealing or other basis for altering any obligation of any Borrower, any other Credit Party, or any other party or any rights,

privilege or remedy of the Lenders under the Credit Agreement, any other Loan Document, any other agreement or document, or any contract or instrument.

12.Except as specifically defined to the contrary herein, capitalized terms used in this Second Amendment shall have the meanings set forth in the Credit Agreement.

13.This Second Amendment may be executed in counterpart in accordance with Section 13.9 of the Credit Agreement.

14.This Second Amendment shall be construed in accordance with and governed by the laws of the State of California.

[SIGNATURES FOLLOW ON NEXT PAGE]

WITNESS the due execution hereof as of the day and year first above written.

WARBY PARKER INC.

By: /s/ Steve Miller

Name: Steve Miller____________________

Title: CFO

WARBY PARKER RETAIL, INC.

By: /s/ Steve Miller

Name: Steve Miller____________________

Title: CFO

COMERICA BANK, as Agent and a Lender

By: /s/ Bryan Kana

Name: Bryan Kana

Title: Senior Vice President

Annex I
Applicable Margin and Applicable Fee Percentages Grid
Credit Facilities
(basis points per annum)


Basis for Pricing	Level I	Level II
Consolidated Senior Net Leverage Ratio*	< 2.00 : 1.00	> 2.00 : 1.00
Revolving Credit BSBY Rate Margin	150	180
Revolving Credit Base Rate Margin	50	80
Revolving Credit Facility Fee	50	50
Letter of Credit Fees (exclusive of facing fees)	150	180

* Definitions as set forth in the Credit Agreement.

Exhibit 31.1

CERTIFICATION

I, Neil Blumenthal, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Warby Parker Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 9, 2023	By:	/s/ Neil Blumenthal
		Neil Blumenthal Co-Chief Executive Officer
		(Co-Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Dave Gilboa, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Warby Parker Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 9, 2023	By:	/s/ Dave Gilboa
		Dave Gilboa Co-Chief Executive Officer
		(Co-Principal Executive Officer)

Exhibit 31.3

CERTIFICATION

I, Steve Miller, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Warby Parker Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 9, 2023	By:	/s/ Steve Miller
		Steve Miller Chief Financial Officer
		(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Warby Parker Inc. (the “Company”) for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2023

By:

/s/ Neil Blumenthal

Neil Blumenthal

Co-Chief Executive Officer

(Co-Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2023

By:

/s/ Dave Gilboa

Dave Gilboa

Co-Chief Executive Officer

(Co-Principal Executive Officer)

Exhibit 32.3

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2023

By:

/s/ Steve Miller

Steve Miller

Chief Financial Officer

(Principal Financial Officer)

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 07, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-40825
Entity Registrant Name	Warby Parker Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	80-0423634
Entity Address, Address Line One	233 Spring Street
Entity Address, Address Line Two	6th Floor East
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10013
City Area Code	646
Local Phone Number	847-7215
Title of 12(b) Security	Class A Common Stock, $0.0001 par value per share
Trading Symbol	WRBY
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001504776
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Common class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		97,393,263
Common class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		19,706,694

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 212,656	$ 208,585
Accounts receivable, net	1,177	1,435
Inventory	59,833	68,848
Prepaid expenses and other current assets	14,377	15,700
Total current assets	288,043	294,568
Property and equipment, net	143,606	138,628
Right-of-use lease assets	122,355	127,014
Other assets	7,705	8,497
Total assets	561,709	568,707
Current liabilities:
Accounts payable	23,772	20,791
Accrued expenses	42,759	58,222
Deferred revenue	18,953	25,628
Current lease liabilities	22,598	22,546
Other current liabilities	2,351	2,370
Total current liabilities	110,433	129,557
Non-current lease liabilities	147,748	150,832
Other liabilities	1,466	1,672
Total liabilities	259,647	282,061
Commitments and contingencies (see Note 9)
Stockholders’ equity:
Common stock, $0.0001 par value; Class A: 750,000,000 shares authorized at June 30, 2023 and December 31, 2022, 97,142,756 and 96,115,202 issued and outstanding at June 30, 2023 and December 31, 2022, respectively; Class B: 150,000,000 shares authorized at June 30, 2023 and December 31, 2022, 19,398,920 and 19,223,572 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively, convertible to Class A on a one-to-one basis	12	12
Additional paid-in capital	933,786	890,915
Accumulated deficit	(630,371)	(603,634)
Accumulated other comprehensive loss	(1,365)	(647)
Total stockholders’ equity	302,062	286,646
Total liabilities and stockholders’ equity	$ 561,709	$ 568,707

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Common stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock shares authorized	1,050,000,000
Common class A
Common stock shares authorized	750,000,000	750,000,000
Common stock shares issued	97,142,756	96,115,202
Common stock shares outstanding	97,142,756	96,115,202
Common class B
Common stock shares authorized	150,000,000	150,000,000
Common stock shares issued	19,398,920	19,223,572
Common stock shares outstanding	19,398,920	19,223,572

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net revenue	$ 166,093	$ 149,624	$ 338,061	$ 302,842
Cost of goods sold	75,458	63,277	152,635	126,849
Gross profit	90,635	86,347	185,426	175,993
Selling, general, and administrative expenses	108,865	118,428	216,086	241,814
Loss from operations	(18,230)	(32,081)	(30,660)	(65,821)
Interest and other income (loss), net	2,281	(38)	4,160	108
Loss before income taxes	(15,949)	(32,119)	(26,500)	(65,713)
Provision for income taxes	(24)	47	237	586
Net loss	$ (15,925)	$ (32,166)	$ (26,737)	$ (66,299)
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.14)	$ (0.28)	$ (0.23)	$ (0.58)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.14)	$ (0.28)	$ (0.23)	$ (0.58)
Weighted average shares used in computing net loss per share attributable to common stockholders, basic	116,792,223	114,679,892	116,477,573	114,393,420
Weighted average shares used in computing net loss per share attributable to common stockholders, diluted	116,792,223	114,679,892	116,477,573	114,393,420
Other comprehensive loss
Foreign currency translation adjustment	$ (35)	$ (163)	$ (718)	$ (155)
Total comprehensive loss	$ (15,960)	$ (32,329)	$ (27,455)	$ (66,454)

Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity - USD ($) $ in Thousands	Total	Common Stock	Common Stock Class A and Class B Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2021			113,621,000
Beginning balance at Dec. 31, 2021	$ 285,998		$ 11	$ 779,212	$ 16	$ (493,241)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises (in shares)			201,000
Stock option exercises	1,866			1,866
Restricted stock unit releases (in shares)			147,000
Stock-based compensation	27,144			27,144
Other comprehensive income	8				8
Net income (loss)	(34,133)					(34,133)
Ending balance (in shares) at Mar. 31, 2022			113,969,000
Ending balance at Mar. 31, 2022	280,883		$ 11	808,222	24	(527,374)
Beginning balance (in shares) at Dec. 31, 2021			113,621,000
Beginning balance at Dec. 31, 2021	285,998		$ 11	779,212	16	(493,241)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(66,299)
Ending balance (in shares) at Jun. 30, 2022			114,571,000
Ending balance at Jun. 30, 2022	282,031		$ 11	841,699	(139)	(559,540)
Beginning balance (in shares) at Mar. 31, 2022			113,969,000
Beginning balance at Mar. 31, 2022	280,883		$ 11	808,222	24	(527,374)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises (in shares)			128,000
Stock option exercises	1,689			1,689
Restricted stock unit releases (in shares)			177,000
Stock Issued During Period, Value, Employee Stock Purchase Plan	1,754			1,754
Shares issued in connection with employee stock purchase plan (in shares)		118,000
Stock-based compensation	26,764			26,764
Stock Issued During Period, Value, Non-cash Charitable Contribution	3,270			3,270
Non-cash charitable contributions (in shares)		179,000
Other comprehensive income	(163)				(163)
Net income (loss)	(32,166)					(32,166)
Ending balance (in shares) at Jun. 30, 2022			114,571,000
Ending balance at Jun. 30, 2022	282,031		$ 11	841,699	(139)	(559,540)
Beginning balance (in shares) at Dec. 31, 2022			115,339,000
Beginning balance at Dec. 31, 2022	286,646		$ 12	890,915	(647)	(603,634)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises (in shares)			109,000
Stock option exercises	1,415			1,415
Restricted stock unit releases (in shares)			153,000
Stock-based compensation	19,780			19,780
Other comprehensive income	(683)				(683)
Net income (loss)	(10,812)					(10,812)
Ending balance (in shares) at Mar. 31, 2023			115,601,000
Ending balance at Mar. 31, 2023	296,346		$ 12	912,110	(1,330)	(614,446)
Beginning balance (in shares) at Dec. 31, 2022			115,339,000
Beginning balance at Dec. 31, 2022	$ 286,646		$ 12	890,915	(647)	(603,634)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises (in shares)	590,849
Net income (loss)	$ (26,737)
Ending balance (in shares) at Jun. 30, 2023			116,542,000
Ending balance at Jun. 30, 2023	302,062		$ 12	933,786	(1,365)	(630,371)
Beginning balance (in shares) at Mar. 31, 2023			115,601,000
Beginning balance at Mar. 31, 2023	296,346		$ 12	912,110	(1,330)	(614,446)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises (in shares)			482,000
Stock option exercises	1,940			1,940
Restricted stock unit releases (in shares)			285,000
Stock Issued During Period, Value, Employee Stock Purchase Plan	1,124			1,124
Shares issued in connection with employee stock purchase plan (in shares)		117,000
Stock-based compensation	18,012			18,012
Stock Issued During Period, Value, Non-cash Charitable Contribution	600			600
Non-cash charitable contributions (in shares)		57,000
Other comprehensive income	(35)				(35)
Net income (loss)	(15,925)					(15,925)
Ending balance (in shares) at Jun. 30, 2023			116,542,000
Ending balance at Jun. 30, 2023	$ 302,062		$ 12	$ 933,786	$ (1,365)	$ (630,371)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities
Net loss	$ (26,737)	$ (66,299)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	18,424	14,605
Stock-based compensation	37,792	53,908
Non-cash charitable contribution	600	3,270
Asset Impairment Charges	650	412
Amortization of cloud-based software implementation costs	826	0
Change in operating assets and liabilities:
Accounts receivable, net	259	89
Inventory	9,048	(13,704)
Prepaid expenses and other assets	1,301	(2,385)
Accounts payable	2,148	1,461
Accrued expenses	(11,619)	(8,367)
Deferred revenue	(6,684)	(3,762)
Other current liabilities	(21)	233
Right-of-use lease assets and current and non-current lease liabilities	1,614	3,985
Other liabilities	(206)	1,930
Net cash provided by (used in) operating activities	27,395	(14,624)
Cash flows from investing activities
Purchases of property and equipment	(24,610)	(31,869)
Net cash used in investing activities	(24,610)	(31,869)
Cash flows from financing activities
Proceeds from stock option exercises	843	228
Proceeds from shares issued in connection with employee stock purchase plan	1,124	1,754
Net cash provided by financing activities	1,967	1,982
Effect of exchange rates on cash	(681)	(302)
Net change in cash and cash equivalents	4,071	(44,813)
Cash and cash equivalents, beginning of period	208,585	256,416
Cash and cash equivalents, end of period	212,656	211,603
Supplemental disclosures
Cash paid for income taxes	326	297
Cash paid for interest	110	62
Payments for Leasing Costs	17,530	13,858
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	$ 3,351	$ 3,579

Description of Business	6 Months Ended
Description of Business	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of BusinessWarby Parker Inc., a public benefit corporation founded in 2010 (together with its wholly owned subsidiaries, the “Company”), is a founder-led, mission-driven lifestyle brand that sits at the intersection of technology, design, healthcare, and social enterprise. The Company offers holistic vision care by selling eyewear products and providing optical services directly to consumers through its retail stores and e-commerce platform. For every pair of glasses or sunglasses sold, the Company helps distribute a pair of glasses to someone in need through its Buy a Pair, Give a Pair program. The Company is headquartered in New York, New York.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

Principles of Consolidation

Use of Estimates

Segment Information

Concentration of Credit Risk and Major Suppliers

The Company’s top five inventory suppliers accounted for approximately 18% and 22% of cost of goods sold for the six months ended June 30, 2023 and 2022, respectively.

Cash and Cash Equivalents

Inventory

Cloud-Based Software Implementation Costs

Revenue Recognition

The following table disaggregates the Company’s revenue by product:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Eyewear products	$	156,680	$	142,985	$	319,027	$	290,304
Services and other	9,413		6,639		19,034		12,538
Total Revenue	$	166,093	$	149,624	$	338,061	$	302,842

The following table disaggregates the Company’s revenue by channel:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
E-commerce	$	55,329	$	58,448	$	117,081	$	125,452
Retail	110,764		91,176		220,980		177,390
Total Revenue	$	166,093	$	149,624	$	338,061	$	302,842

Leases

the lease liability amount, adjusted for prepaid lease payments, TIAs expected to be received, and any initial direct costs.

Recent Accounting Pronouncements

Property and Equipment, Net

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net consists of the following:


	June 30, 2023		December 31, 2022
Leasehold improvements	$	149,770	$	139,421
Computers and equipment	34,274		31,928
Furniture and fixtures	26,532		23,849
Capitalized software	19,860		18,876
Construction in process	14,395		12,924
	244,831		226,998
Less: accumulated depreciation and amortization	(101,225)		(88,370)
Property and equipment, net	$	143,606	$	138,628

Expenses associated with property and equipment consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of goods sold	$	6,340	$	4,906	$	12,370	$	9,554
Selling, general, and administrative expenses	2,943		2,788		6,054		5,051
Total depreciation and amortization expense	$	9,283	$	7,694	$	18,424	$	14,605

Asset impairment charges	$	255	$	186	$	650	$	412

Asset impairment charges for the three and six months ended June 30, 2023 and 2022 primarily related to the write-off of assets in connection with capitalized software and retail store closures.

Accrued Expenses

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

Accrued ExpensesAccrued expenses consists of the following:


	June 30, 2023		December 31, 2022
Payroll related	$	9,074	$	11,149
Marketing	5,611		8,353
Unvested early exercised stock options	5,273		7,784
Optical laboratory and product costs	5,140		4,547
Charitable contributions	4,897		6,001
Professional services	3,949		4,494
Retail related	2,159		4,121
Other accrued expenses	6,656		11,773
Total accrued expenses	$	42,759	$	58,222

Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

The Company's income tax expense and effective tax rate were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income tax expense	$	(24)		$	47		$	237		$	586
Effective tax rate	0.2		%	(0.1)		%	(0.9)		%	(0.9)		%

Redeemable Convertible Preferred Stock and Stockholders’ Equity

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Redeemable Convertible Preferred Stock and Stockholders’ Equity

Stockholders’ Equity

Common Stock


	Class A	Class B	Class C
Common stock outstanding	97,142,756	19,398,920	—
Employee stock options – outstanding	645,003	1,729,292	—
Restricted stock units – outstanding	2,903,754	1,938,558	—
Performance stock units – outstanding	—	4,397,688	—
Employee stock plans – available	24,922,530	—	—
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs	27,464,458	—	—
Total common stock – outstanding or issuable	153,078,501	27,464,458	—
Shares authorized	750,000,000	150,000,000	150,000,000
Common stock authorized and available for future issuance	596,921,499	122,535,542	150,000,000

Preferred Stock

As of June 30, 2023, 50,000,000 preferred shares were authorized and no shares were outstanding.

Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Plans and Awards

The Company’s eligible employees participate in various stock-based compensation plans, which are provided by the Company directly.

Employee Stock Purchase Plan

respectively, to the ESPP, and 4,210,184 shares remained available for future issuance pursuant to ESPP purchases as of June 30, 2023.

The following range of assumptions was used for ESPP purchase rights granted:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
ESPP purchase rights
Risk-free interest rates	4.0% - 5.2%		1.5% - 2.6%		4.0% - 5.2%		1.5% - 2.6%
Expected dividend yield	—		—		—		—
Expected term	0.5 - 2.0 years		0.5 - 2.0 years		0.5 - 2.0 years		0.5 - 2.0 years
Volatility	60	%	53	%	60	%	53	%

The following table presents other relevant ESPP information:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Shares purchased under the ESPP	116,936		118,329		116,936		118,329
Stock-based compensation expense related to ESPP	$	831	$	912	$	1,412	$	1,458
Employee contributions	$	385	$	617	$	997	$	1,587

As of June 30, 2023, total unrecognized compensation costs associated with the ESPP was $2.7 million and is expected to be amortized over a weighted average period of 0.7 years.

Stock-based Compensation Expense

Stock-based compensation expense consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of goods sold	$	290	$	231	$	484	$	457
Selling, general, and administrative expenses	17,722		26,533		37,308		53,451
Total stock-based compensation expense	$	18,012	$	26,764	$	37,792	$	53,908

2022 includes $19.3 million and $39.4 million related to the 2021 Founders Grant, respectively, and $5.4 million and $10.7 million in connection with RSUs, respectively.

Stock Options

The fair value for stock options granted under the Plans are estimated at the date of grant using the Black-Scholes option-pricing model. No stock options were granted in 2023 or 2022.

A summary of stock option activity for the six months ended June 30, 2023 is as follows:


	Number of Stock Options	Weighted Average Exercise Price		Weighted average contractual term (years)	Aggregate intrinsic value
Balance at December 31, 2022	2,965,144	$	7.23	4.5	$	21,243
Options granted	—	—
Options exercised	(590,849)	5.68			4,147
Options forfeited	—	—
Balance at June 30, 2023	2,374,295	$	7.62	4.5	$	13,141

Exercisable as of June 30, 2023	2,374,295	$	7.62	4.5	$	13,141
Vested as of June 30, 2023	1,951,511	5.47		3.9
Unvested as of June 30, 2023	422,784	$	17.53	7.5

The total value of unrecognized stock compensation expense related to unvested options granted under the Plans was $4.0 million as of June 30, 2023, and is expected to be recognized over 0.7 years.

Restricted Stock Units and Performance Stock Units

A summary of RSU activity for the six months ended June 30, 2023 is as follows:


	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested as of December 31, 2022	3,314,420	$	29.06
Granted	1,620,460	13.29
Forfeited	(243,030)	23.75
Released	(438,179)	23.25
Vested and not yet released	(404,348)	23.33
Unvested as of June 30, 2023	3,849,323	$	24.02

over a weighted-average period of 1.3 years and 0.7 years, respectively. No PSUs were granted, forfeited, released or vested during the six months ended June 30, 2023.


Tranche	Number of PSUs	Stock Price Hurdle
1	549,712	$	47.75
2	549,710	$	55.71
3	549,712	$	63.67
4	549,710	$	71.63
5	549,712	$	79.59
6	549,710	$	87.55
7	549,712	$	95.50
8	549,710	$	103.46

Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

The following table presents the assets and liabilities related to the Company’s leases:


	June 30, 2023		December 31, 2022
Lease assets:
Right-of-use assets	$	122,355	$	127,014
Total lease assets	122,355		127,014

Lease liabilities:
Current lease liabilities	22,598		22,546
Non-current lease liabilities	147,748		150,832
Total lease liabilities	$	170,346	$	173,378

The following table details the Company’s net lease expense:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating lease expense	$	7,495	$	6,280	$	14,931	$	12,293
Variable lease expense(1)	505		937		1,248		1,875
Net lease expense	$	8,000	$	7,217	$	16,179	$	14,168

(1) Variable lease expense primarily consists of contingent rent.

The following table presents the future maturity of lease liabilities:


	Operating Leases(1)
2023	$	15,348
2024	36,846
2025	34,740
2026	33,197
2027	29,878
Thereafter	56,772
Future minimum lease payments	206,781
Impact of discounting	36,435
Present value of lease payments	$	170,346

The following table presents other relevant lease information:


	June 30, 2023
Weighted average remaining lease term (years)	5.8
Weighted average discount rate	4.6	%

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies 2013 Credit Facility In August 2013, the Company entered into a Loan and Security Agreement with Comerica Bank (as amended, the “2013 Credit Facility”), which consisted of a revolving credit line of up to $50.0 million with a sub-limit of $15.0 million for the issuance of letters of credit. Borrowings under the revolving credit line bore interest on the principal amount outstanding at a variable interest rate based on either LIBOR or the bank’s prime rate, with no additional margin. The Company was charged fees on the uncommitted portion of the credit line of approximately 0.2% as long as total borrowings were less than $15.0 million. The 2013 Credit Facility was replaced by the 2022 Credit Facility (as defined below). 2022 Credit Facility In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., (together, the "Borrowers") entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the "2022 Credit Facility"), which replaced the 2013 Credit Facility. The 2022 Credit Facility consists of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes. The 2022 Credit Facility includes an option for the Company to increase the available amount by up to $75.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2022 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2022 Credit Facility at any time, in whole or in part, without penalty. Under the 2022 Credit Facility, borrowings bear interest on the principal amount outstanding at a variable interest rate either (a) based on the greater of (1) the prime rate (as defined in the credit agreement), (2) the federal funds rate plus 1%, and (3) the Bloomberg Short-Term Bank Yield Index rate (“BSBY Rate”) for a one month tenor plus 1%, in each case plus an applicable margin of 0.5% - 0.8% depending on the Company’s leverage ratio, or (b) the BSBY Rate plus an applicable margin of 1.5% - 1.8% depending on the Company’s leverage ratio. The Company is charged commitment fees of 0.5% whether or not amounts have been borrowed. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations. The 2022 Credit Facility contains a financial maintenance covenant which takes effect once total borrowings first exceed $60.0 million, and at all times thereafter, that requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2022 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as representations, warranties and event of default provisions. The obligations of the Borrowers under the Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company. Other than letters of credit outstanding of $4.3 million and $4.2 million as of June 30, 2023 and December 31, 2022, respectively, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2022 Credit Facility or 2013 Credit Facility. Litigation During the normal course of business, the Company may become subject to legal proceedings, claims and litigation. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. On March 13, 2023, a former employee, on behalf of herself and a proposed class of California hourly employees, filed a complaint against the Company, alleging violations of various California wage and hour laws. The matter is currently pending in the United States District Court for the Northern District of California. Pham v. Warby Parker Inc. (Case No. 5:23-cv-01884-NC; N.D. Cal.). On June 16, 2023, another former employee filed a related representative action in the Santa Clara County Superior Court of California pursuant to California’s Private Attorneys General Act, asserting largely overlapping claims, seeking civil penalties on behalf of the state. Chery v. Warby Parker Inc. (Case No. 23CV417693; Cal. Super. Ct.). We deny the allegations and intend to oppose the certification of any class or award of civil penalties, and to defend the each litigation vigorously. However, given the early stage of each litigation, the Company is unable to estimate the possible loss or range of loss, if any, that may result from these matters. In addition to the matters described above, as of June 30, 2023, the Company is currently involved in other legal proceedings which, in the opinion of the Company’s management, will not materially affect the Company’s financial position, results of operations, or cash flows should such litigation be resolved unfavorably.

Net Loss Per Share Attributable to Common Stockholders

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Net Loss Per Share Attributable to Common Stockholders

The computation of net loss per share attributable to common stockholders is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Numerator
Net loss attributable to common stockholders - basic and diluted	$	(15,925)	$	(32,166)	$	(26,737)	$	(66,299)
Denominator
Weighted average shares, basic and diluted	116,792,223		114,679,892		116,477,573		114,393,420
Earnings Per Share
Net loss per share attributable to common stockholders, basic and diluted	$	(0.14)	$	(0.28)	$	(0.23)	$	(0.58)

The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Stock options to purchase common stock	2,374,295	3,295,106	2,374,295	3,295,106
Unvested restricted stock units	3,849,323	3,320,619	3,849,323	3,320,619
Unvested performance stock units	4,397,688	4,397,688	4,397,688	4,397,688
ESPP purchase rights	414,306	543,792	414,306	543,792

Related-Party Transactions	6 Months Ended
Related-Party Transactions	Jun. 30, 2023
Related Party Transactions [Abstract]
Related-Party Transactions	Related-Party Transactions As a private company, the Company issued secured promissory notes collateralized by the stock purchased by certain Company executives in relation to the exercise of employee stock options. As the promissory notes are secured by the underlying shares they have been treated as non-recourse notes in the condensed consolidated financial statements. The promissory notes were issued with a term of 8.5 years and an interest rate equal to the minimum applicable federal mid-term rate in the month the loan was issued. The secured promissory notes were recorded as a reduction to equity offsetting the amount in additional paid-in-capital related to the exercised options funded by the notes. The loans are held by current and former employees and had a balance of $2.5 million at both June 30, 2023 and December 31, 2022. No loans are outstanding with any of our executive officers. During each of the three and six months ended June 30, 2023 and 2022, the outstanding loan balance increased by an immaterial amount due to interest. No new promissory notes were issued during the six months ended June 30, 2023 and 2022.

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Lease Obligations Subsequent to June 30, 2023, the Company entered into 4 operating lease agreements and extended the term of 2 existing operating lease agreements for retail space in the U.S., with terms ranging from 5 to 7 years. Total commitments under the new agreements are approximately $3.8 million, payable over the terms of the related agreements. Stock Donation In August 2023, the Company issued 178,572 shares of Class A common stock to the Warby Parker Impact Foundation, a 501(c)(3) nonprofit organization. The grant date fair value of the shares was $2.6 million.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Pay vs Performance Disclosure
Net loss	$ (15,925)	$ (10,812)	$ (32,166)	$ (34,133)	$ (26,737)	$ (66,299)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of PresentationThe Company’s unaudited condensed consolidated financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the related notes. The December 31, 2022 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. There have been no significant changes in accounting policies during the six months ended June 30, 2023 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and the related notes. Certain prior period amounts were reclassified to conform to the current period presentation. These changes had no impact on the condensed consolidated financial statements for any period.
Principles of Consolidation	Principles of ConsolidationThe condensed consolidated financial statements include the financial statements of Warby Parker Inc., and its wholly owned subsidiaries. The Company has consolidated certain entities meeting the definition of a variable interest entity as the Company concluded that it is the primary beneficiary of the entities. The inclusion of these entities does not have a material impact on its condensed consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The Company prepares its condensed consolidated financial statements in conformity with U.S. GAAP. These principles require management to make certain estimates and assumptions during the preparation of its condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Significant estimates underlying the accompanying condensed consolidated financial statements include, but are not limited to (i) the valuation of inventory, including the determination of the net realizable value, (ii) the useful lives and recoverability of long-lived assets, (iii) the determination of deferred income taxes, including related valuation allowances, and (iv) assumptions related to the valuation of common stock and determination of stock-based compensation.
Segment Information	Segment Information Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who makes decisions about allocating resources and assessing performance. The Company defines its CODM as its co-Chief Executive Officers. The Company has identified one operating segment. When evaluating the Company’s performance and allocating resources, the CODM relies on financial information prepared on a consolidated basis.
Concentration of Credit Risk and Major Suppliers	Concentration of Credit Risk and Major SuppliersFinancial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in various accounts, which, at times, may exceed the limits insured by the Federal Deposit Insurance Corporation of $250 thousand per institution and the Canada Deposit Insurance Corporation of $100 thousand Canadian dollars.
Cash and Cash Equivalents	Cash and Cash EquivalentsThe Company considers all highly liquid short-term investments with an original maturity of three months or less to be a cash equivalent. Cash and cash equivalents include deposits with banks and financial institutions, money market funds, and receivables from credit card issuers, which are typically converted into cash within two to four days of capture. As such, these receivables are recorded as a deposit in transit as a component of cash and cash equivalents on the condensed consolidated balance sheets.
Inventory	Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, include estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates.
Revenue Recognition	Revenue Recognition The Company primarily derives revenue from the sales of eyewear products, optical services, and accessories. The Company sells products and services through its stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges, which are charged to the customer, associated with these purchases. Revenue generated from services consists of both in-person eye exams and prescriptions issued through the Virtual Vision Test app. All revenue is reported net of sales taxes collected from customers on behalf of taxing authorities and variable consideration, including returns and discounts. Revenue is recognized when performance obligations are satisfied through either the transfer of control of promised goods or the rendering of services to the Company's customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, which is generally determined to be the point of delivery or upon rendering of the service in the case of eye exams. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. In the normal course of business, payment may be collected from the customer prior to recognizing revenue and such cash receipts are included in deferred revenue until the order is delivered to the customer. Substantially all of the deferred revenue included on the balance sheet at December 31, 2022 was recognized as revenue in the first quarter of 2023 and the Company expects substantially all of the deferred revenue at June 30, 2023 to be recognized as revenue in the third quarter of 2023. The Company’s sales policy allows customers to return merchandise for any reason within 30 days of receipt, generally for an exchange or refund. An allowance is recorded within other current liabilities on the condensed consolidated balance sheets for expected future customer returns which the Company estimates using historical return patterns and its expectation of future returns. Any difference between the actual return and previous estimates is adjusted in the period in which such returns occur. Historical return estimates have not materially differed from actual returns in any of the periods presented. The allowance for returns was $2.2 million at both June 30, 2023 and December 31, 2022 and is included in other current liabilities on the condensed consolidated balance sheets. The Company offers non-expiring gift cards to its customers. Proceeds from the sale of gift cards are initially deferred and recognized within deferred revenue on the condensed consolidated balance sheets, and are recognized as revenue when the product is received by the customer after the gift card has been tendered for payment. Based on historical experience, and to the extent there is no requirement to remit unclaimed card balances to government agencies under unclaimed property laws, an estimate of the gift card balances that will never be redeemed is recognized as revenue in proportion to gift cards which have been redeemed. While the Company will continue to honor all gift cards presented for payment, management may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity.
Leases	Leases The Company records a lease liability and corresponding right-of-use (“ROU”) asset at lease commencement. The lease liability is measured at the present value of non-cancellable future lease payments over the lease term, minus expected tenant improvement allowances (“TIAs”) determined to be lease incentives. The ROU asset is measured at the lease liability amount, adjusted for prepaid lease payments, TIAs expected to be received, and any initial direct costs. When calculating the present value of future lease payments, the Company utilizes an incremental borrowing rate, which incorporates several factors including the lease term, U.S. Treasury bond rates, financial ratios related to earnings and cash flows, and other comparisons with similarly sized companies. Many of the Company’s leases contain TIA provisions, which represent contractual amounts receivable from a lessor for improvements to the leased property made by the Company which are determined to represent lease incentives. The Company considers the collection of TIAs to be reasonably certain, and includes them in the present value calculation when determining the lease liabilities for new leases. The benefit from a TIA is amortized through rent expense over the term of the related lease. The recognition of rent expense for an operating lease commences on the date at which control and possession of the property is obtained. Rent expense is calculated by recognizing total fixed minimum rental payments, net of any TIAs or other rental concessions, on a straight-line basis over the lease term. Some of the Company’s retail leases contain percent of sales rent or similar provisions, which is recognized as incurred as variable rent. Retail, optical laboratory, and distribution center rent expense is recognized as a component of cost of goods sold and all other rent expense is recognized as a component of selling, general, and administrative expenses.
Recently Adopted and Issued Accounting Pronouncements	Recent Accounting Pronouncements The Company has not adopted nor are there any recently issued accounting pronouncements that had or are anticipated to have a material impact on the Company’s condensed consolidated financial statements.
Research, Development, and Computer Software, Policy	Cloud-Based Software Implementation Costs The Company has entered into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on the long or short-term nature of such costs, in line with the Company's policy on the accounting for prepaid software hosting arrangements. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement.

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by product:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Eyewear products	$	156,680	$	142,985	$	319,027	$	290,304
Services and other	9,413		6,639		19,034		12,538
Total Revenue	$	166,093	$	149,624	$	338,061	$	302,842

The following table disaggregates the Company’s revenue by channel:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
E-commerce	$	55,329	$	58,448	$	117,081	$	125,452
Retail	110,764		91,176		220,980		177,390
Total Revenue	$	166,093	$	149,624	$	338,061	$	302,842

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment, net consists of the following:


	June 30, 2023		December 31, 2022
Leasehold improvements	$	149,770	$	139,421
Computers and equipment	34,274		31,928
Furniture and fixtures	26,532		23,849
Capitalized software	19,860		18,876
Construction in process	14,395		12,924
	244,831		226,998
Less: accumulated depreciation and amortization	(101,225)		(88,370)
Property and equipment, net	$	143,606	$	138,628

Expenses associated with property and equipment consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of goods sold	$	6,340	$	4,906	$	12,370	$	9,554
Selling, general, and administrative expenses	2,943		2,788		6,054		5,051
Total depreciation and amortization expense	$	9,283	$	7,694	$	18,424	$	14,605

Asset impairment charges	$	255	$	186	$	650	$	412

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued expenses consists of the following:


	June 30, 2023		December 31, 2022
Payroll related	$	9,074	$	11,149
Marketing	5,611		8,353
Unvested early exercised stock options	5,273		7,784
Optical laboratory and product costs	5,140		4,547
Charitable contributions	4,897		6,001
Professional services	3,949		4,494
Retail related	2,159		4,121
Other accrued expenses	6,656		11,773
Total accrued expenses	$	42,759	$	58,222

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Summary of Income Tax Expense (Benefit)

The Company's income tax expense and effective tax rate were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Income tax expense	$	(24)		$	47		$	237		$	586
Effective tax rate	0.2		%	(0.1)		%	(0.9)		%	(0.9)		%

Redeemable Convertible Preferred Stock and Stockholders’ Equity (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Stock by Class


	Class A	Class B	Class C
Common stock outstanding	97,142,756	19,398,920	—
Employee stock options – outstanding	645,003	1,729,292	—
Restricted stock units – outstanding	2,903,754	1,938,558	—
Performance stock units – outstanding	—	4,397,688	—
Employee stock plans – available	24,922,530	—	—
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs	27,464,458	—	—
Total common stock – outstanding or issuable	153,078,501	27,464,458	—
Shares authorized	750,000,000	150,000,000	150,000,000
Common stock authorized and available for future issuance	596,921,499	122,535,542	150,000,000

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Share-based Payment Arrangement, Expensed and Capitalized, Amount

Stock-based compensation expense consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of goods sold	$	290	$	231	$	484	$	457
Selling, general, and administrative expenses	17,722		26,533		37,308		53,451
Total stock-based compensation expense	$	18,012	$	26,764	$	37,792	$	53,908

Share-based Payment Arrangement, Option, Activity

A summary of stock option activity for the six months ended June 30, 2023 is as follows:


	Number of Stock Options	Weighted Average Exercise Price		Weighted average contractual term (years)	Aggregate intrinsic value
Balance at December 31, 2022	2,965,144	$	7.23	4.5	$	21,243
Options granted	—	—
Options exercised	(590,849)	5.68			4,147
Options forfeited	—	—
Balance at June 30, 2023	2,374,295	$	7.62	4.5	$	13,141

Exercisable as of June 30, 2023	2,374,295	$	7.62	4.5	$	13,141
Vested as of June 30, 2023	1,951,511	5.47		3.9
Unvested as of June 30, 2023	422,784	$	17.53	7.5

Share-based Payment Arrangement, Restricted Stock Unit, Activity

A summary of RSU activity for the six months ended June 30, 2023 is as follows:


	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested as of December 31, 2022	3,314,420	$	29.06
Granted	1,620,460	13.29
Forfeited	(243,030)	23.75
Released	(438,179)	23.25
Vested and not yet released	(404,348)	23.33
Unvested as of June 30, 2023	3,849,323	$	24.02

Schedule of Nonvested Performance-based Units Activity


Tranche	Number of PSUs	Stock Price Hurdle
1	549,712	$	47.75
2	549,710	$	55.71
3	549,712	$	63.67
4	549,710	$	71.63
5	549,712	$	79.59
6	549,710	$	87.55
7	549,712	$	95.50
8	549,710	$	103.46

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following range of assumptions was used for ESPP purchase rights granted:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
ESPP purchase rights
Risk-free interest rates	4.0% - 5.2%		1.5% - 2.6%		4.0% - 5.2%		1.5% - 2.6%
Expected dividend yield	—		—		—		—
Expected term	0.5 - 2.0 years		0.5 - 2.0 years		0.5 - 2.0 years		0.5 - 2.0 years
Volatility	60	%	53	%	60	%	53	%

Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award

The following table presents other relevant ESPP information:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Shares purchased under the ESPP	116,936		118,329		116,936		118,329
Stock-based compensation expense related to ESPP	$	831	$	912	$	1,412	$	1,458
Employee contributions	$	385	$	617	$	997	$	1,587

Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of Operating Lease Assets and Liabilities

The following table presents the assets and liabilities related to the Company’s leases:


	June 30, 2023		December 31, 2022
Lease assets:
Right-of-use assets	$	122,355	$	127,014
Total lease assets	122,355		127,014

Lease liabilities:
Current lease liabilities	22,598		22,546
Non-current lease liabilities	147,748		150,832
Total lease liabilities	$	170,346	$	173,378

Lease, Cost

The following table details the Company’s net lease expense:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating lease expense	$	7,495	$	6,280	$	14,931	$	12,293
Variable lease expense(1)	505		937		1,248		1,875
Net lease expense	$	8,000	$	7,217	$	16,179	$	14,168

(1) Variable lease expense primarily consists of contingent rent.

The following table presents other relevant lease information:


	June 30, 2023
Weighted average remaining lease term (years)	5.8
Weighted average discount rate	4.6	%

Lessee, Operating Lease, Liability, Maturity

The following table presents the future maturity of lease liabilities:


	Operating Leases(1)
2023	$	15,348
2024	36,846
2025	34,740
2026	33,197
2027	29,878
Thereafter	56,772
Future minimum lease payments	206,781
Impact of discounting	36,435
Present value of lease payments	$	170,346

Net Loss Per Share Attributable to Common Stockholders (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The computation of net loss per share attributable to common stockholders is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Numerator
Net loss attributable to common stockholders - basic and diluted	$	(15,925)	$	(32,166)	$	(26,737)	$	(66,299)
Denominator
Weighted average shares, basic and diluted	116,792,223		114,679,892		116,477,573		114,393,420
Earnings Per Share
Net loss per share attributable to common stockholders, basic and diluted	$	(0.14)	$	(0.28)	$	(0.23)	$	(0.58)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Stock options to purchase common stock	2,374,295	3,295,106	2,374,295	3,295,106
Unvested restricted stock units	3,849,323	3,320,619	3,849,323	3,320,619
Unvested performance stock units	4,397,688	4,397,688	4,397,688	4,397,688
ESPP purchase rights	414,306	543,792	414,306	543,792

Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2023 USD ($) segment	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Concentration Risk [Line Items]
Number of operating segments \| segment		1
Uninsured cash balances	$ 211,300	$ 211,300		$ 207,000
Cash and cash equivalents	212,656	212,656		208,585
Finished goods	12,900	12,900		16,100
Component parts	46,900	46,900		52,700
Allowance for returns	2,200	2,200		2,200
Capitalized Computer Software, Gross	13,000	13,000		11,100
Capitalized Computer Software, Net	11,900	11,900		10,800
Capitalized Computer Software, Accumulated Amortization	1,100	1,100		300
Amortization of cloud-based software implementation costs	500	826	$ 0
Prepaid Expenses and Other Current Assets
Concentration Risk [Line Items]
Capitalized Computer Software, Net	4,500	4,500		2,600
Other Noncurrent Assets
Concentration Risk [Line Items]
Capitalized Computer Software, Net	7,400	7,400		8,200
Credit Card Receivable
Concentration Risk [Line Items]
Cash and cash equivalents	$ 3,500	$ 3,500		$ 11,100
Cost of Goods and Service Benchmark \| Supplier Concentration Risk \| Top Five Inventory Suppliers
Concentration Risk [Line Items]
Concentration risk percent		18.00%	22.00%

Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Net revenue	$ 166,093	$ 149,624	$ 338,061	$ 302,842
E-commerce
Disaggregation of Revenue [Line Items]
Net revenue	55,329	58,448	117,081	125,452
Retail
Disaggregation of Revenue [Line Items]
Net revenue	110,764	91,176	220,980	177,390
Eyewear products
Disaggregation of Revenue [Line Items]
Net revenue	156,680	142,985	319,027	290,304
Services and other
Disaggregation of Revenue [Line Items]
Net revenue	$ 9,413	$ 6,639	$ 19,034	$ 12,538

Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 244,831		$ 244,831		$ 226,998
Less: accumulated depreciation and amortization	(101,225)		(101,225)		(88,370)
Property and equipment, net	143,606		143,606		138,628
Total depreciation and amortization expense			18,424	$ 14,605
Asset Impairment Charges	255	$ 186	650	412
Cost of goods sold
Property, Plant and Equipment [Line Items]
Total depreciation and amortization expense	6,340	4,906	12,370	9,554
Selling, general, and administrative expenses
Property, Plant and Equipment [Line Items]
Total depreciation and amortization expense	2,943	2,788	6,054	5,051
Total depreciation and amortization expense
Property, Plant and Equipment [Line Items]
Total depreciation and amortization expense	9,283	$ 7,694	18,424	$ 14,605
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	149,770		149,770		139,421
Computers and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	34,274		34,274		31,928
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	26,532		26,532		23,849
Capitalized software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	19,860		19,860		18,876
Construction in process
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 14,395		$ 14,395		$ 12,924

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Unvested early exercised stock options	$ 5,273	$ 7,784
Payroll related	9,074	11,149
Retail related	2,159	4,121
Accrued Professional Fees, Current	3,949	4,494
Charitable contributions	4,897	6,001
Marketing	5,611	8,353
Other accrued expenses	6,656	11,773
Total accrued expenses	42,759	58,222
Accrued Freight and Fulfillment Costs	$ 5,140	$ 4,547

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense	$ (24)	$ 47	$ 237	$ 586
Effective tax rate	0.20%	(0.10%)	(0.90%)	(0.90%)

Redeemable Convertible Preferred Stock and Stockholders’ Equity - Narrative (Details)	Jun. 30, 2023 vote $ / shares shares	Dec. 31, 2022 $ / shares shares
Temporary Equity [Line Items]
Common stock shares authorized	1,050,000,000
Common stock par value (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001
Preferred stock shares authorized	50,000,000
Preferred stock shares outstanding	0
Series A common stock
Temporary Equity [Line Items]
Common stock shares authorized	750,000,000	750,000,000
Number of votes granted \| vote	1
Series B common stock
Temporary Equity [Line Items]
Common stock shares authorized	150,000,000	150,000,000
Number of votes granted \| vote	10
Series C common stock
Temporary Equity [Line Items]
Common stock shares authorized	150,000,000
Number of votes granted \| vote	0

Redeemable Convertible Preferred Stock and Stockholders’ Equity - Common Stock Outstanding (Details) - shares	Jun. 30, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Employee stock options - outstanding (in shares)	2,374,295	2,965,144
Authorized (in shares)	1,050,000,000
Employee Stock Purchase Plan
Class of Stock [Line Items]
Total common stock – outstanding or issuable on exercise of options (in shares)	4,210,184
Series A common stock
Class of Stock [Line Items]
Common stock outstanding (in shares)	97,142,756	96,115,202
Employee stock options - outstanding (in shares)	645,003
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs (in shares)	27,464,458
Total common stock – outstanding or issuable on exercise of options (in shares)	153,078,501
Authorized (in shares)	750,000,000	750,000,000
Common stock available for future issuance (in shares)	596,921,499
Series A common stock \| Restricted stock units (RSUs)
Class of Stock [Line Items]
Stock units - outstanding (in shares)	2,903,754
Series A common stock \| Performance Stock Units
Class of Stock [Line Items]
Stock units - outstanding (in shares)	0
Series A common stock \| Employee Stock Purchase Plan
Class of Stock [Line Items]
Employee stock options - available (in shares)	24,922,530
Series B common stock
Class of Stock [Line Items]
Common stock outstanding (in shares)	19,398,920	19,223,572
Employee stock options - outstanding (in shares)	1,729,292
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs (in shares)	0
Total common stock – outstanding or issuable on exercise of options (in shares)	27,464,458
Authorized (in shares)	150,000,000	150,000,000
Common stock available for future issuance (in shares)	122,535,542
Series B common stock \| Restricted stock units (RSUs)
Class of Stock [Line Items]
Stock units - outstanding (in shares)	1,938,558
Series B common stock \| Performance Stock Units
Class of Stock [Line Items]
Stock units - outstanding (in shares)	4,397,688
Series B common stock \| Employee Stock Purchase Plan
Class of Stock [Line Items]
Employee stock options - available (in shares)	0
Series C common stock
Class of Stock [Line Items]
Common stock outstanding (in shares)	0
Employee stock options - outstanding (in shares)	0
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs (in shares)	0
Total common stock – outstanding or issuable on exercise of options (in shares)	0
Authorized (in shares)	150,000,000
Common stock available for future issuance (in shares)	150,000,000
Series C common stock \| Restricted stock units (RSUs)
Class of Stock [Line Items]
Stock units - outstanding (in shares)	0
Series C common stock \| Performance Stock Units
Class of Stock [Line Items]
Stock units - outstanding (in shares)	0
Series C common stock \| Employee Stock Purchase Plan
Class of Stock [Line Items]
Employee stock options - available (in shares)	0

Stock-Based Compensation - Narrative (Details)	1 Months Ended				3 Months Ended		6 Months Ended
Stock-Based Compensation - Narrative (Details)	Jan. 31, 2023 shares	Jan. 31, 2022 shares	Aug. 31, 2021 shares	Jun. 30, 2021 performanceCondition shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($) shares	Dec. 31, 2022 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense \| $					$ 18,012,000	$ 26,764,000	$ 37,792,000	$ 53,908,000
Direct Listing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense \| $						5,400,000		10,700,000
Series A common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future issuance					153,078,501		153,078,501
Series B common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future issuance					27,464,458		27,464,458
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase in shares authorized, percent			5.00%
Number of additional shares authorized	5,766,938	5,735,463
2021 Plan \| Series A common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized			11,076,515
The Plans \| Series A common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options approved for grant (in shares)					20,712,346		20,712,346		16,323,025
The Founders Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense \| $					$ 11,200,000	$ 19,300,000	$ 25,000,000	$ 39,400,000
Stock options or restricted stock units (RSUs) \| 2021 Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			4 years
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized			2,215,303
Number of additional shares authorized	1,153,387	1,147,092	16,614,772
Shares available for future issuance					4,210,184		4,210,184
Shares purchased under ESPP (in shares)					116,936	118,329	116,936	118,329
Total stock-based compensation expense \| $					$ 831,000	$ 912,000	$ 1,412,000	$ 1,458,000
Contributions withheld from employees \| $					385,000	$ 617,000	997,000	$ 1,587,000
Cost not yet recognized, outstanding awards \| $					$ 2,700,000		$ 2,700,000
Non-vested award, cost not yet recognized, period for recognition							8 months 12 days
Granted (in shares)					475,916		528,238
Stock options \| The Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cost not yet recognized, outstanding awards \| $					$ 4,000,000		$ 4,000,000
Non-vested award, cost not yet recognized, period for recognition							8 months 12 days
Restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units vested (in shares)							438,179
Granted (in shares)							1,620,460
Restricted stock units (RSUs) \| 2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense \| $					5,100,000		$ 9,700,000
Restricted stock units (RSUs) \| The Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested award, cost not yet recognized, period for recognition							1 year 3 months 18 days
Cost not yet recognized, outstanding awards \| $					55,600,000		$ 55,600,000
Restricted stock units (RSUs) \| The Founders Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period				5 years
Granted (in shares)				1,884,724
Grant date fair value \| $							66,900,000
Performance stock units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award expiration period				10 years
Number of performance conditions \| performanceCondition				2
Terms of award, stock price hurdle period				10 years
Performance stock units (PSUs) \| Monte Carlo simulation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value \| $							$ 128,800,000
Performance stock units (PSUs) \| Series B common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares receivable per share based payments award (in shares)				1
Performance stock units (PSUs) \| The Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested award, cost not yet recognized, period for recognition							8 months 12 days
Cost not yet recognized, outstanding awards \| $					$ 29,800,000		$ 29,800,000
Performance stock units (PSUs) \| The Founders Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)				4,397,688

Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 18,012	$ 26,764	$ 37,792	$ 53,908
Cost of goods sold
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	290	231	484	457
Selling, general, and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 17,722	$ 26,533	$ 37,308	$ 53,451

Stock-Based Compensation - Schedule of Stock Option Assumptions (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate	60.00%	53.00%	60.00%	53.00%
Employee Stock Purchase Plan \| The Plans \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	4.00%	1.50%	4.00%	1.50%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term	6 months	6 months	6 months	6 months
Employee Stock Purchase Plan \| The Plans \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	5.20%	2.60%	5.20%	2.60%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term	2 years	2 years	2 years	2 years

Stock-Based Compensation - Schedule of Stock Option Activity (Details) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Number of Stock Options
Beginning balance (in shares) \| shares	2,965,144
Options granted (in shares) \| shares	0
Options exercised (in shares) \| shares	(590,849)
Options forfeited (in shares) \| shares	0
Ending balance (in shares) \| shares	2,374,295	2,965,144
Exercisable at end of period (in shares) \| shares	2,374,295
Vested at end of period (in shares) \| shares	1,951,511
Exercisable at end of period (in shares) \| shares	422,784
Weighted Average Exercise Price
Beginning balance (in dollars per share) \| $ / shares	$ 7.23
Options granted (in dollars per share) \| $ / shares	0
Options exercised (in dollars per share) \| $ / shares	5.68
Options forfeited (in dollars per share) \| $ / shares	0
Ending balance (in dollars per share) \| $ / shares	7.62	$ 7.23
Exercisable at end of period (in dollars per share) \| $ / shares	7.62
Vested at end of period (in dollars per share) \| $ / shares	5.47
Unvested at end of period (in dollars per share) \| $ / shares	$ 17.53
Weighted average contractual term (years)
Weighted average contractual term	4 years 6 months	4 years 6 months
Exercisable at end of period	4 years 6 months
Vested at end of period	3 years 10 months 24 days
Unvested at end of period	7 years 6 months
Aggregate intrinsic value
Beginning balance \| $	$ 21,243
Options exercised \| $	4,147
Ending balance \| $	13,141	$ 21,243
Exercisable at end of period \| $	$ 13,141

Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted stock units (RSUs)	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Number of Restricted Stock Units
Unvested beginning balance (in shares) \| shares	3,314,420
Granted (in shares) \| shares	1,620,460
Forfeited (in shares) \| shares	(243,030)
Released (in shares) \| shares	(438,179)
Vested and not yet released (in shares) \| shares	(404,348)
Unvested ending balance (in shares) \| shares	3,849,323
Weighted Average Grant Date Fair Value
Unvested beginning balance (in dollars per share) \| $ / shares	$ 29.06
Granted (in dollars per share) \| $ / shares	13.29
Forfeited (in dollars per share) \| $ / shares	23.75
Released (in dollars per share) \| $ / shares	23.25
Vested and not yet released (in dollars per share) \| $ / shares	23.33
Unvested ending balance (in dollars per share) \| $ / shares	$ 24.02

Stock-Based Compensation - Schedule of PSUs (Details) - Unvested performance stock units	Jun. 30, 2023 $ / shares shares
1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,712
Stock price hurdle (in dollars per share) \| $ / shares	$ 47.75
2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,710
Stock price hurdle (in dollars per share) \| $ / shares	$ 55.71
3
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,712
Stock price hurdle (in dollars per share) \| $ / shares	$ 63.67
4
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,710
Stock price hurdle (in dollars per share) \| $ / shares	$ 71.63
5
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,712
Stock price hurdle (in dollars per share) \| $ / shares	$ 79.59
6
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,710
Stock price hurdle (in dollars per share) \| $ / shares	$ 87.55
7
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,712
Stock price hurdle (in dollars per share) \| $ / shares	$ 95.50
8
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSUs (in shares) \| shares	549,710
Stock price hurdle (in dollars per share) \| $ / shares	$ 103.46

Leases - Narrative (Details)	Jun. 30, 2023
Minimum
Lessee, Lease, Description [Line Items]
Operating lease term period	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease term period	11 years

Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Right-of-use lease assets	$ 122,355	$ 127,014
Current lease liabilities	22,598	22,546
Non-current lease liabilities	147,748	150,832
Total lease liabilities	$ 170,346	$ 173,378

Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Operating lease expense	$ 7,495	$ 6,280	$ 14,931	$ 12,293
Variable lease expense(1)	505	937	1,248	1,875
Net lease expense	$ 8,000	$ 7,217	$ 16,179	$ 14,168

Leases - Future Minimum Operating Lease Payment (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 15,348
2024	36,846
2025	34,740
2026	33,197
2027	29,878
Thereafter	56,772
Future minimum lease payments	206,781
Impact of discounting	36,435
Present value of lease payments	170,346	$ 173,378
Expected cash inflows from TIAs	4,900
Minimum lease payments for leases not yet commenced	9,100
Expected Proceeds from Tenant Improvement Allowance, Following Year	$ 4,900

Leases - Other Lease Information (Details)	Jun. 30, 2023
Leases [Abstract]
Weighted average remaining lease term (years)	5 years 9 months 18 days
Weighted average discount rate	4.60%

Commitments and Contingencies (Details) - Comerica Bank - Line of credit $ in Millions	1 Months Ended
	Sep. 30, 2022 USD ($)	Aug. 31, 2013 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Revolving credit facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 100.0	$ 50.0
Unused capacity, commitment fee percentage	0.50%
Total borrowings minimum threshold for covenant	$ 60.0
Senior net leverage ratio	3
Revolving credit facility \| Federal Funds Rate
Debt Instrument [Line Items]
Basis spread	1.00%
Revolving credit facility \| Federal Funds Rate \| Minimum
Debt Instrument [Line Items]
Basis spread	0.50%
Revolving credit facility \| Federal Funds Rate \| Maximum
Debt Instrument [Line Items]
Basis spread	0.80%
Revolving credit facility \| BSBY Rate
Debt Instrument [Line Items]
Basis spread	1.00%
Revolving credit facility \| BSBY Rate \| Minimum
Debt Instrument [Line Items]
Basis spread	1.50%
Revolving credit facility \| BSBY Rate \| Maximum
Debt Instrument [Line Items]
Basis spread	1.80%
Revolving credit facility \| Option to Increase
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 175.0
Increase available	75.0
Revolving credit facility \| Credit Facility
Debt Instrument [Line Items]
Unused capacity, commitment fee percentage		0.20%
Unused capacity, maximum outstanding amount		$ 15.0
Letter of credit
Debt Instrument [Line Items]
Maximum borrowing capacity	15.0
Letter of credit \| Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 15.0
Letters of credit, outstanding amount			$ 4.3	$ 4.2
Swing Line Notes
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 5.0

Net Loss Per Share Attributable to Common Stockholders - Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator
Net loss attributable to common stockholders, basic	$ (15,925)	$ (32,166)	$ (26,737)	$ (66,299)
Net loss attributable to common stockholders, diluted	$ (15,925)	$ (32,166)	$ (26,737)	$ (66,299)
Denominator
Weighted average shares, basic (in shares)	116,792,223	114,679,892	116,477,573	114,393,420
Weighted average shares, diluted (in shares)	116,792,223	114,679,892	116,477,573	114,393,420
Earnings Per Share
Net loss per share attributable to common stockholders, basic (in dollars per share)	$ (0.14)	$ (0.28)	$ (0.23)	$ (0.58)
Net loss per share attributable to common stockholders, diluted (in dollars per share)	$ (0.14)	$ (0.28)	$ (0.23)	$ (0.58)

Net Loss Per Share Attributable to Common Stockholders -Schedule of Antidilutive Shares (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Stock options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares excluded from computation of earnings per share (in shares)	2,374,295	3,295,106	2,374,295	3,295,106
Unvested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares excluded from computation of earnings per share (in shares)	3,849,323	3,320,619	3,849,323	3,320,619
Unvested performance stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares excluded from computation of earnings per share (in shares)	4,397,688	4,397,688	4,397,688	4,397,688
Employee Stock Purchase Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares excluded from computation of earnings per share (in shares)	414,306	543,792	414,306	543,792

Related-Party Transactions (Details) - Management - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Related Party
Related Party Transaction [Line Items]
Other Receivables	$ 2.5	$ 2.5
Secured promissory notes
Related Party Transaction [Line Items]
Notes payable, term	8 years 6 months

Subsequent Events (Details) $ in Thousands	Aug. 09, 2023 USD ($) leaseAgreement shares	Jun. 30, 2023 USD ($)
Subsequent Event [Line Items]
Future minimum lease payments		$ 206,781
Minimum
Subsequent Event [Line Items]
Operating lease term period		1 year
Maximum
Subsequent Event [Line Items]
Operating lease term period		11 years
Subsequent Event \| Series A common stock
Subsequent Event [Line Items]
Stock issued (in shares) \| shares	178,572
Grant date fair value	$ 2,600
Subsequent Event \| New and Extended Lease Terms, Retail Space United States
Subsequent Event [Line Items]
Operating lease agreements \| leaseAgreement	4
Operating lease agreements extended \| leaseAgreement	2
Future minimum lease payments	$ 3,800
Subsequent Event \| New and Extended Lease Terms, Retail Space United States \| Minimum
Subsequent Event [Line Items]
Operating lease term period	5 years
Subsequent Event \| New and Extended Lease Terms, Retail Space United States \| Maximum
Subsequent Event [Line Items]
Operating lease term period	7 years