2023 net revenue increased 12.0% to $669.8
million
Average revenue per customer increased 9.3%
year over year to $287
Expanded relationship with Versant Health, Inc.
will nearly double lives with in-network access to >34
million
Warby Parker Inc. (NYSE: WRBY) (“Warby Parker” or the
“Company”), a direct-to-consumer lifestyle brand focused on vision
for all, today announced financial results for the fourth quarter
and full year ended December 31, 2023.
“2023 marked our second full year as a public company and one in
which we executed on our commitment to growing sustainably,
delivering double-digit revenue growth each quarter while improving
margins and creating exceptional customer experiences,” said
Co-Founder and Co-CEO Neil Blumenthal.
“Looking to 2024, we’re excited to meet millions of customers
where and how they want to shop as we expand our retail presence,
deploy disciplined marketing spend to support growth across our
omnichannel experiences, and nearly double the number of insured
lives who can use their in-network vision benefits with Warby
Parker to over 34 million individuals,” added Co-Founder and Co-CEO
Dave Gilboa.
Fourth Quarter and Full Year 2023
Highlights
- Full year net revenue increased $71.7 million, or 12.0%, to
$669.8 million compared to full year 2022.
- Fourth quarter net revenue increased $15.4 million, or 10.5%,
to $161.9 million compared to fourth quarter 2022.
- Average Revenue per Customer increased 9.3% year over year to
$287.
- Full year GAAP net loss of $63.2 million, and fourth quarter
GAAP net loss of $19.0 million.
- Full year adjusted EBITDA(1) of $52.4 million and adjusted
EBITDA margin(1) of 7.8%, and fourth quarter adjusted EBITDA(1) of
$9.4 million and adjusted EBITDA margin(1) of 5.8%.
- Opened 40 new stores during the year, ending 2023 with 237
stores.
- Net cash provided by operating activities of $61.0 million in
2023 compared to $10.4 million in 2022.
- $7.3 million of full year Free Cash Flow(1).
- Over 15 million pairs of glasses have been distributed to
people in need through our Buy a Pair, Give a Pair program.
Fourth Quarter 2023 Year Over Year
Financial Results
- Net revenue increased $15.4 million, or 10.5%, to $161.9
million.
- Average Revenue per Customer increased 9.3% to $287. Active
Customers increased 2.5%, to 2.33 million.
- Gross profit increased 8.0% to $87.1 million.
- Gross margin was 53.8% compared to 55.1% in the prior year. The
decrease in gross margin was primarily driven by the sales growth
of contact lenses which are sold at a lower margin than glasses,
increased doctor salaries, as the number of stores offering eye
exams grew, and increases in store occupancy costs as a percent of
revenue as we grew our store base from 200 stores as of December
31, 2022 to 237 stores as of December 31, 2023. These impacts were
partially offset by increased progressives penetration, increased
efficiencies in our owned labs, and lower outbound customer
shipping costs as a percent of revenue.
- Selling, general and administrative expenses (“SG&A”)
increased $6.3 million to $108.6 million, or 67.1% of revenue,
primarily driven by higher compensation costs from growth in our
retail team associated with store expansion, increased marketing
costs, and increased technology costs, partially offset by lower
stock-based compensation costs, which represented 10.1% of revenue
compared to 13.6% in Q4 2022. Adjusted SG&A(1) increased from
55.6% to 56.4% of revenue.
- GAAP net loss improved $1.2 million to $19.0 million, primarily
as a result of the increase in gross profit, partially offset by
increased SG&A as described above.
- Adjusted EBITDA(1) increased $0.8 million to
$9.4 million, and adjusted EBITDA margin(1) was flat at 5.8%.
Full Year 2023 Year Over Year Financial
Results
- Net revenue increased $71.7 million, or 12.0%, to $669.8
million.
- Average Revenue per Customer increased 9.3% to $287. Active
Customers increased 2.5%, to 2.33 million.
- Gross profit increased 7.1% to $365.2 million.
- Gross margin was 54.5% compared to 57.0% in the prior year. The
decrease in gross margin was primarily driven by the sales growth
of contact lenses which are sold at a lower margin than our
glasses, increased doctor salaries, as the number of stores
offering eye exams grew, and increases in store occupancy costs as
a percent of revenue as we grew our store base from 200 stores as
of December 31, 2022 to 237 stores as of December 31, 2023. These
impacts were partially offset by increased progressives
penetration, increased efficiencies in our owned labs, and lower
outbound customer shipping costs as a percent of revenue.
- SG&A decreased $15.0 million to $437.2 million, or 65.3% of
revenue, primarily driven by a decrease in stock-based compensation
and marketing costs, partially offset by increased technology costs
and higher salaries from growth in our retail team. Adjusted
SG&A(1) was $358.6 million, or 53.5% of revenue, versus $348.5
million, or 58.3% of revenue in the prior year.
- GAAP net loss improved $47.2 million to $63.2 million,
primarily as a result of the increase in gross profit and the
decrease in SG&A described above.
- Adjusted EBITDA(1) increased $25.2 million to $52.4 million,
and adjusted EBITDA margin(1) of 7.8% was up 3.3 points as compared
to 2022.
Balance Sheet Highlights
Warby Parker ended 2023 with $216.9 million in cash and cash
equivalents. The Company also entered into a new $120 million
revolving credit facility with JPMorgan Chase Bank, N.A., Citibank,
N.A., and the other lenders from time to time party thereto, which
remains undrawn. This facility replaces Warby Parker’s former
credit facility with Comerica Bank.
Recent Developments
In February 2024, Warby Parker expanded its relationship with
Versant Health, Inc., a wholly-owned subsidiary of MetLife, Inc.,
and one of the nation’s leading administrators of managed vision
care. This expansion will bring an additional 15 million lives
in-network with Warby Parker, nearly doubling the number of lives
with in-network access to Warby Parker to over 34 million. The
Company expects members under these plans to be able to access
their in-network benefits later this year.
2024 Outlook
For the full year 2024, Warby Parker is providing the following
guidance:
- Net revenue of $748 to $758 million, representing approximately
12% to 13% growth versus full year 2023.
- Adjusted EBITDA(1) of $67 million at the midpoint of our
revenue range, which equates to an adjusted EBITDA margin(1) of
8.9%.
- 40 new store openings.
“As a leadership team, we remain focused on delivering strong
topline and bottomline results that speak to Warby Parker’s brand
strength, disciplined cost management, and strategic vision as a
holistic vision care company,” said Chief Financial Officer Steve
Miller.
The guidance and forward-looking statements made in this press
release and on our conference call are based on management's
expectations as of the date of this press release.
(1) Please see the definitions and reconciliations of non-GAAP
financial measures to the most comparable GAAP financial measures
in the section titled “Non-GAAP Financial Measures” below.
Webcast and Conference
Call
A conference call to discuss Warby Parker’s fourth quarter and
full year 2023 results, as well as first quarter and full year 2024
outlook, is scheduled for 8:00 a.m. ET today. To participate,
please dial 833-470-1428 from the U.S. or 404-975-4839 from
international locations. The conference passcode is 043976. A live
webcast of the conference call will be available on the investors
section of the Company’s website at investors.warbyparker.com where
presentation materials will also be posted prior to the conference
call. A replay will be made available online approximately two
hours following the live call for a period of 90 days.
Forward-Looking
Statements
This press release and the related conference call, webcast and
presentation contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements may relate to, but are not limited to,
expectations of future operating results or financial performance,
including expectations regarding achieving profitability,
delivering stakeholder value, growing market share, and our GAAP
and non-GAAP guidance for the quarter ending March 31, 2024 and
year ending December 31, 2024; expectations regarding the number of
new store openings during the year ending December 31, 2024;
management’s plans, priorities, initiatives and strategies; and
expectations regarding growth of our business. Forward-looking
statements are inherently subject to risks and uncertainties, some
of which cannot be predicted or quantified. In some cases, you can
identify forward-looking statements because they contain words such
as “anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “target,” “toward,” “will,” or
“would,” or the negative of these words or other similar terms or
expressions. You should not put undue reliance on any
forward-looking statements. Forward-looking statements should not
be read as a guarantee of future performance or results and will
not necessarily be accurate indications of the times at, or by,
which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at
the time those statements are made and are based on current
expectations, estimates, forecasts, and projections as well as the
beliefs and assumptions of management as of that time with respect
to future events. These statements are subject to risks and
uncertainties, many of which involve factors or circumstances that
are beyond our control, that could cause actual performance or
results to differ materially from those expressed in or suggested
by the forward-looking statements. In light of these risks and
uncertainties, the forward-looking events and circumstances
discussed in this press release may not occur and actual results
could differ materially from those anticipated or implied in the
forward-looking statements. These risks and uncertainties include
our ability to manage our future growth effectively; our
expectations regarding cost of goods sold, gross margin, channel
mix, customer mix, and selling, general, and administrative
expenses; 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 and the
impacts of any significant failure, inadequacy, interruption or
cybersecurity incident; our ability to engage our existing
customers and obtain new customers; planned new retail stores in
2024 and going forward; an overall decline in the health of the
economy and other factors impacting consumer spending, such as
recessionary conditions, inflation, government instability, and
geopolitical unrest; 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; 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, operation and infrastructure; our duties
related to being a public benefit corporation; the ability of our
Co-Founders and Co-CEOs to exercise significant influence over all
matters submitted to stockholders for approval; the effect of our
multi-class structure on the trading price of our Class A common
stock; and the increased expenses associated with being a public
company. Additional information regarding these and other risks and
uncertainties that could cause actual results to differ materially
from the Company's expectations is included in our most recent
reports filed with the SEC on Form 10-K and Form 10-Q. Except as
required by law, we do not undertake any obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future developments, or otherwise.
Additional information regarding these and other factors that
could affect the Company’s results is included in the Company’s SEC
filings, which may be obtained by visiting the SEC's website at
www.sec.gov. Information contained on, or that is referenced or can
be accessed through, our website does not constitute part of this
document and inclusions of any website addresses herein are
inactive textual references only.
Glossary
Active Customer is defined as a unique customer that has made at
least one purchase of any product or service in the preceding
12-month period.
Average Revenue per Customer is defined as net revenue for a
given period divided by the number of Active Customers as of the
end of that same period.
Non-GAAP Financial
Measures
We use adjusted EBITDA, adjusted EBITDA margin, adjusted net
income, adjusted earnings per share, adjusted cost of goods sold
(“adjusted COGS”), adjusted gross profit, adjusted gross margin,
adjusted selling, general, and administrative expenses (“adjusted
SG&A”), and free cash flow as important indicators of our
operating performance. Collectively, we refer to these non-GAAP
financial measures as our “Non-GAAP Measures.” The Non-GAAP
Measures, when taken collectively with our GAAP results, may be
helpful to investors because they provide consistency and
comparability with past financial performance and assist in
comparisons with other companies, some of which use similar
non-GAAP financial information to supplement their GAAP
results.
Adjusted EBITDA is defined as net income (loss) before interest
and other income, taxes, and depreciation and amortization as
further adjusted for asset impairment costs, stock-based
compensation expense and related employer payroll taxes,
amortization of cloud-based software implementation costs, non-cash
charitable donations, and non-recurring costs such as restructuring
costs, major system implementation costs, and direct listing or
other transaction costs. Adjusted EBITDA margin is defined as
adjusted EBITDA divided by net revenue.
Adjusted net income (loss) is defined as net income (loss)
adjusted for stock-based compensation expense and related employer
payroll taxes, non-cash charitable donations, and non-recurring
costs such as restructuring costs, major system implementation
costs, and other direct listing or other transaction costs, and as
further adjusted for estimated income tax on such adjusted
items.
Adjusted earnings (loss) per share is defined as adjusted net
income (loss) divided by adjusted weighted average shares
outstanding.
Adjusted COGS is defined as cost of goods sold adjusted for
stock-based compensation expense and related employer payroll
taxes.
Adjusted gross profit is defined as net revenue minus adjusted
COGS. Adjusted gross margin is defined as adjusted gross profit
divided by net revenue.
Adjusted SG&A is defined as SG&A adjusted for
stock-based compensation expense and related employer payroll
taxes, non-cash charitable donations, and non-recurring costs such
as restructuring costs, major system implementation costs, and
direct listing or other transaction costs.
Free Cash Flow is defined as net cash provided by operating
activities minus purchases of property and equipment.
The Non-GAAP Measures are presented for supplemental
informational purposes only. A reconciliation of historical GAAP to
Non-GAAP financial information is included under “Selected
Financial Information” below.
We have not reconciled our adjusted EBITDA margin guidance to
GAAP net income (loss) margin, or net margin, or adjusted EBITDA
guidance to GAAP net income (loss) because we do not provide
guidance for GAAP net margin or GAAP net income (loss) due to the
uncertainty and potential variability of stock-based compensation
and taxes, which are reconciling items between GAAP net margin and
adjusted EBITDA margin and GAAP net income (loss) and adjusted
EBITDA, respectively. Because such items cannot be reasonably
provided without unreasonable efforts, we are unable to provide a
reconciliation of the adjusted EBITDA margin guidance to GAAP net
margin and adjusted EBITDA guidance to GAAP net income (loss).
However, such items could have a significant impact on GAAP net
margin and GAAP net income (loss).
About Warby Parker
Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to
inspire and impact the world with vision, purpose, and
style–without charging a premium for it. Headquartered in New York
City, the co-founder-led lifestyle brand pioneers ideas, designs
products, and develops technologies that help people see, from
designer-quality prescription glasses (starting at $95) and
contacts, to eye exams and vision tests available online and in its
more than 230 retail stores across the U.S. and Canada.
Warby Parker aims to demonstrate that businesses can scale, do
well, and do good in the world. Ultimately, the brand believes in
vision for all, which is why for every pair of glasses or
sunglasses sold, they distribute a pair to someone in need through
their Buy a Pair, Give a Pair program. To date, Warby Parker has
worked alongside its nonprofit partners to distribute more than 15
million glasses to people in need.
Selected Financial Information
Warby Parker Inc. and
Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except
share data)
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
216,894
$
208,585
Accounts receivable, net
1,779
1,435
Inventory
62,234
68,848
Prepaid expenses and other current
assets
17,712
15,700
Total current assets
298,619
294,568
Property and equipment, net
152,332
138,628
Right-of-use lease assets
122,305
127,014
Other assets
7,056
8,497
Total assets
$
580,312
$
568,707
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
22,456
$
20,791
Accrued expenses
46,320
58,222
Deferred revenue
31,617
25,628
Current lease liabilities
24,286
22,546
Other current liabilities
2,411
2,370
Total current liabilities
127,090
129,557
Non-current lease liabilities
150,171
150,832
Other liabilities
1,264
1,672
Total liabilities
278,525
282,061
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value; Class A:
750,000,000 shares authorized at December 31, 2023 and 2022,
98,368,239 and 96,115,202 shares issued and outstanding as of
December 31, 2023 and 2022, respectively; Class B: 150,000,000
shares authorized at December 31, 2023 and 2022, 19,788,682 and
19,223,572 shares issued and outstanding as of December 31, 2023
and 2022, respectively, convertible to Class A on a one-to-one
basis
12
12
Additional paid-in capital
970,135
890,915
Accumulated deficit
(666,831
)
(603,634
)
Accumulated other comprehensive income
(1,529
)
(647
)
Total stockholders’ equity
301,787
286,646
Total liabilities and stockholders’
equity
$
580,312
$
568,707
Warby Parker Inc. and
Subsidiaries
Consolidated Statements of
Operations (Unaudited)
(Amounts in thousands, except
share and per share data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2021
2023
2022
2021
Net revenue
$
161,855
$
146,493
$
132,892
$
669,765
$
598,112
$
540,798
Cost of goods sold
74,789
65,842
56,641
304,541
257,050
223,049
Gross profit
87,066
80,651
76,251
365,224
341,062
317,749
Selling, general, and administrative
expenses
108,635
102,361
122,146
437,220
452,265
461,410
Loss from operations
(21,569
)
(21,710
)
(45,895
)
(71,996
)
(111,203
)
(143,661
)
Interest and other income (loss), net
2,417
1,382
105
9,232
1,307
(347
)
Loss before income taxes
(19,152
)
(20,328
)
(45,790
)
(62,764
)
(109,896
)
(144,008
)
Provision for income taxes
(105
)
(77
)
112
433
497
263
Net loss
$
(19,047
)
$
(20,251
)
$
(45,902
)
$
(63,197
)
$
(110,393
)
$
(144,271
)
Deemed dividend upon redemption of
redeemable convertible preferred stock
$
—
$
—
$
—
$
—
$
—
$
(13,137
)
Net loss attributable to common
stockholders
$
(19,047
)
$
(20,251
)
$
(45,902
)
$
(63,197
)
$
(110,393
)
$
(157,408
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.16
)
$
(0.18
)
$
(0.41
)
$
(0.54
)
$
(0.96
)
$
(2.21
)
Weighted average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
118,569,946
115,713,915
112,501,252
117,389,012
114,942,019
71,249,257
Warby Parker Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows (Unaudited)
(Amounts in thousands)
Year Ended December
31,
2023
2022
2021
Cash flows from operating activities
Net loss
$
(63,197
)
$
(110,393
)
$
(144,271
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
38,554
31,864
21,551
Stock-based compensation
70,509
98,032
107,148
Non-cash charitable contribution
3,191
3,770
7,757
Asset impairment charges
3,230
1,647
317
Amortization of cloud-based software
implementation costs
2,895
247
—
Change in operating assets and
liabilities:
Accounts receivable, net
(345
)
(451
)
(392
)
Inventory
6,614
(11,794
)
(18,624
)
Prepaid expenses and other assets
(3,276
)
(10,534
)
(6,887
)
Accounts payable
1,633
(7,943
)
(11,114
)
Accrued expenses
(8,898
)
2,748
9,486
Deferred revenue
5,989
3,583
(4,478
)
Other current liabilities
41
537
579
Deferred rent
—
—
8,547
Right-of-use lease assets and current and
non-current lease liabilities
4,459
7,385
—
Other liabilities
(408
)
1,672
(1,613
)
Net cash provided by (used in) operating
activities
60,991
10,370
(31,994
)
Cash flows from investing activities
Purchases of property and equipment
(53,671
)
(60,181
)
(48,513
)
Investment in optical equipment
company
(1,000
)
—
—
Net cash used in investing activities
(54,671
)
(60,181
)
(48,513
)
Cash flows from financing activities
Proceeds from stock option and warrant
exercises
1,036
456
20,035
Employee tax withholding remitted in
connection with exercise or release of equity awards
—
—
(2,532
)
Proceeds from repayment of related party
loans
—
91
31,612
Proceeds from shares issued in connection
with ESPP
1,835
2,744
—
Repurchase of stock
—
—
(8,085
)
Payment for tender offer
—
—
(18,031
)
Net cash provided by financing
activities
2,871
3,291
22,999
Effect of exchange rates on cash
(882
)
(1,311
)
(161
)
Net increase (decrease) in cash and cash
equivalents
8,309
(47,831
)
(57,669
)
Cash and cash equivalents
Beginning of year
208,585
256,416
314,085
End of year
$
216,894
$
208,585
$
256,416
Supplemental disclosures
Cash paid for income taxes
$
419
$
536
$
356
Cash paid for interest
227
184
150
Cash paid for amounts included in the
measurement of lease liabilities
37,126
29,647
—
Non-cash investing and financing
activities:
Purchases of property and equipment
included in accounts payable and accrued expenses
3,647
3,968
4,158
Related party loans issued in connection
with stock option exercises
$
—
$
—
$
13,827
Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
The following table reconciles adjusted EBITDA and adjusted
EBITDA margin to the most directly comparable GAAP measure, which
is net loss:
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
(unaudited, in
thousands)
(unaudited, in
thousands)
Net loss
$
(19,047
)
$
(20,251
)
$
(63,197
)
$
(110,393
)
Adjusted to exclude the following:
Interest and other loss, net
(2,417
)
(1,382
)
(9,232
)
(1,307
)
Provision for income taxes
(105
)
(77
)
433
497
Depreciation and amortization expense
10,370
8,919
38,554
31,864
Asset impairment charges
1,822
138
3,230
1,647
Stock-based compensation expense(1)
16,569
20,052
71,065
98,655
Non-cash charitable donations(2)
—
500
3,191
3,770
Amortization of cloud-based software
implementation costs(3)
1,216
151
2,895
247
ERP implementation costs(4)
—
518
4,413
687
Restructuring and other costs(5)
1,000
—
1,000
1,535
Adjusted EBITDA
$
9,408
$
8,568
$
52,352
$
27,202
Adjusted EBITDA margin
5.8
%
5.8
%
7.8
%
4.5
%
(1)
Represents expenses related to the
Company’s equity-based compensation programs and related employer
payroll taxes, which may vary significantly from period to period
depending upon various factors including the timing, number, and
the valuation of awards granted, vesting of awards including the
satisfaction of performance conditions, and the impact of
repurchases of awards from employees. Included in stock-based
compensation expense for both the three and twelve months ended
December 31, 2023 is $2.2 million of liability based awards
resulting from accrued bonuses that will be settled in equity in
the first quarter of 2024. For the three and twelve months ended
December 31, 2023, the amount includes $0.1 million and $0.6
million of employer payroll costs, respectively, associated with
releases of RSUs and option exercises. For the three and twelve
months ended December 31, 2022, the amount includes $0.2 million
and $0.6 million of employer payroll costs, respectively,
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 both August 2023 and May 2022 to
the Warby Parker Impact Foundation, and a donation of 34,528 shares
of Class A common stock to third-party charitable donor advised
funds in November 2022.
(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.
(5)
Represents employee severance and related
costs for our restructuring plan that was executed in August 2022
and other non-recurring costs.
Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
The following table presents our non-GAAP, or adjusted,
financial measures for the periods presented as a percentage of
revenue. Each cost and operating expense is adjusted for
transaction costs, stock-based compensation expense and related
employer payroll taxes, non-cash charitable donations, ERP
implementation costs, and restructuring costs.
Reported
Adjusted
Reported
Adjusted
Three Months Ended
December 31,
Three Months Ended
December 31,
Year Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
2023
2022
2023
2022
(unaudited, in
thousands)
(unaudited, in
thousands)
(unaudited, in
thousands)
(unaudited, in
thousands)
Cost of goods sold
$
74,789
$
65,842
$
74,498
$
65,647
$
304,541
$
257,050
$
303,474
$
256,145
% of Revenue
46.2
%
44.9
%
46.0
%
44.8
%
45.5
%
43.0
%
45.3
%
42.8
%
Gross profit
$
87,066
$
80,651
$
87,357
$
80,846
$
365,224
$
341,062
$
366,291
$
341,967
% of Revenue
53.8
%
55.1
%
54.0
%
55.2
%
54.5
%
57.0
%
54.7
%
57.2
%
Selling, general, and administrative
expenses
$
108,635
$
102,361
$
91,357
$
81,486
$
437,220
$
452,265
$
358,618
$
348,523
% of Revenue
67.1
%
69.9
%
56.4
%
55.6
%
65.3
%
75.6
%
53.5
%
58.3
%
Net (loss) income
$
(19,047
)
$
(20,251
)
$
(1,105
)
$
523
$
(63,197
)
$
(110,393
)
$
11,801
$
(3,703
)
% of Revenue
(11.8
) %
(13.8
) %
(0.7
) %
0.4
%
(9.4
) %
(18.5
) %
1.8
%
(0.6
) %
* Numbers in the table above may not foot
due to rounding.
Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
The following table reflects a reconciliation of each non-GAAP,
or adjusted, financial measure to its most directly comparable
financial measure prepared in accordance with GAAP:
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
(unaudited, in
thousands)
(unaudited, in
thousands)
Cost of goods sold
$
74,789
$
65,842
$
304,541
$
257,050
Adjusted to exclude the following:
Stock-based compensation expense(1)
291
195
1,067
905
Adjusted cost of goods sold
$
74,498
$
65,647
$
303,474
$
256,145
Gross profit
$
87,066
$
80,651
$
365,224
$
341,062
Adjusted to exclude the following:
Stock-based compensation expense(1)
291
195
1,067
905
Adjusted gross profit
$
87,357
$
80,846
$
366,291
$
341,967
Selling, general, and administrative
expenses
$
108,635
$
102,361
$
437,220
$
452,265
Adjusted to exclude the following:
Stock-based compensation expense(1)
16,278
19,857
69,998
97,750
Non-cash charitable donations(2)
—
500
3,191
3,770
ERP implementation costs(3)
—
518
4,413
687
Restructuring and other costs(4)
1,000
—
1,000
1,535
Adjusted selling, general, and
administrative expenses
$
91,357
$
81,486
$
358,618
$
348,523
Net loss
$
(19,047
)
$
(20,251
)
$
(63,197
)
$
(110,393
)
Provision for income taxes
(105
)
(77
)
433
497
Loss before income taxes
(19,152
)
(20,328
)
(62,764
)
(109,896
)
Adjusted to exclude the following:
Stock-based compensation expense(1)
16,569
20,052
71,065
98,655
Non-cash charitable donations(2)
—
500
3,191
3,770
ERP implementation costs(3)
—
518
4,413
687
Restructuring and other costs(4)
1,000
—
1,000
1,535
Adjusted provision for income taxes(5)
478
(219
)
(5,104
)
1,546
Adjusted net (loss) income
$
(1,105
)
$
523
$
11,801
$
(3,703
)
Adjusted weighted average shares -
diluted
118,569,946
116,614,309
118,310,582
114,942,019
Adjusted diluted (loss) earnings per
share
$
(0.01
)
$
—
$
0.10
$
(0.03
)
(1)
Represents expenses related to the
Company’s equity-based compensation programs and related employer
payroll taxes, which may vary significantly from period to period
depending upon various factors including the timing, number, and
the valuation of awards granted, vesting of awards including the
satisfaction of performance conditions, and the impact of
repurchases of awards from employees. Included in stock-based
compensation expense for both the three and twelve months ended
December 31, 2023 is $2.2 million of liability based awards
resulting from accrued bonuses that will be settled in equity in
the first quarter of 2024. For the three and twelve months ended
December 31, 2023, the amount includes $0.1 million and $0.6
million of employer payroll costs, respectively, associated with
releases of RSUs and option exercises. For the three and twelve
months ended December 31, 2022, the amount includes $0.2 million
and $0.6 million of employer payroll costs, respectively,
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 both August 2023 and May 2022 to
the Warby Parker Impact Foundation, and a donation of 34,528 shares
of Class A common stock to third-party charitable donor advised
funds in November 2022.
(3)
Represents internal and external
non-capitalized costs related to the implementation of our new ERP
system.
(4)
Represents employee severance and related
costs for our restructuring plan that was executed in August 2022
and other non-recurring costs.
(5)
The adjusted provision for income taxes is
based on long-term estimated annual effective tax rates of 30.2% in
2023 and 29.5% in 2022. The Company may adjust its adjusted tax
rate as additional information becomes available or events occur
which may materially affect this rate, including impacts from the
rapidly evolving global tax environment, significant changes in our
geographic mix, merger and acquisition activity, or changes in our
business outlook.
Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
The following table reflects a reconciliation of free cash flow
to its most directly comparable financial measure prepared in
accordance with GAAP:
Year Ended December
31,
2023
2022
(unaudited, in
thousands)
Net cash provided by operating
activities
$
60,991
$
10,370
Purchases of property and equipment
(53,671
)
(60,181
)
Free cash flow
$
7,320
$
(49,811
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228791718/en/
Investor Relations: Jaclyn Berkley, Head of Investor Relations
Brendon Frey, ICR investors@warbyparker.com
Media: Ali Weltman ali@derris.com
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