Q1 Net Revenue Growth of 49% Year over Year to
$3.5 billion
33.2 million Active Customers, up 57% Year over
Year
Wayfair Inc. (NYSE: W), one of the world’s largest online
destinations for the home, today reported financial results for its
first quarter ended March 31, 2021.
First Quarter 2021 Financial
Highlights
- Total net revenue of $3.5 billion increased $1.1 billion, up
49.2% year over year
- U.S. net revenue of $2.8 billion increased $0.8 billion, up
42.8% year over year
- International net revenue of $0.7 billion increased $0.3
billion, up 85.0% year over year. International segment Net Revenue
Constant Currency Growth was 72.5%
- Gross profit was $1.0 billion or 28.8% of total net
revenue
- Net income was $18.2 million
- Non-GAAP Adjusted EBITDA and Adjusted EBITDA Margin were $205.8
million and 5.9% of total net revenue
- Diluted earnings per share was $0.16
- Non-GAAP Adjusted Diluted Earnings per Share was $1.00
- Non-GAAP Free Cash Flow was $111.2 million
- Cash, cash equivalents and short-term investments totaled $2.7
billion
“Wayfair’s focus remains squarely on connecting all of the
industry’s customers and suppliers on our unique platform, which is
custom-built to address the specific needs of shopping for the
home. Our platform model creates a flywheel where scale begets
growth, which leads to further efficiency. We see this in action
each quarter, and Q1 was no exception,” said Niraj Shah, CEO,
co-founder and co-chairman, Wayfair. “We grew to $3.5 billion
dollars in net revenue in the quarter, having added more than $1
billion dollars to the top-line year-over-year, and generated over
$200 hundred million dollars in adjusted EBITDA -- all while
simultaneously and ambitiously investing for the future. We are
confident that customers will remain focused on their homes even as
the environment normalizes in the US and Europe, and that our
strong profitability should not only continue but expand.”
Other First Quarter
Highlights
- The number of active customers reached 33.2 million as of March
31, 2021, an increase of 57.3% year over year
- LTM net revenue per active customer was $461 as of March 31,
2021, an increase of 2.7% year over year
- Orders per customer, measured as LTM orders divided by active
customers, was 1.98 for the first quarter of 2021, compared to 1.86
for the first quarter of 2020
- Repeat customers placed 74.5% of total orders in the first
quarter of 2021, compared to 69.8% in the first quarter of
2020
- Repeat customers placed 10.9 million orders in the first
quarter of 2021, an increase of 58.9% year over year
- Orders delivered in the first quarter of 2021 were 14.7
million, an increase of 48.8% year over year
- Average order value was $237 for the first quarter of 2021,
compared to $235 for the first quarter of 2020
- In the first quarter of 2021, 60.0% of total orders delivered
were placed via a mobile device, compared to 54.8% in the first
quarter of 2020
Key Financial and Operating
Metrics
Three months ended March
31,
2021
2020
(in thousands, except LTM Net
Revenue per Active Customer, Average Order Value and per share
data)
Key Financial Statement
Metrics:
Net revenue
$
3,477,518
$
2,330,063
Gross profit
$
1,003,027
$
579,123
Income (loss) from operations
$
26,342
$
(262,068
)
Net income (loss)
$
18,234
$
(285,865
)
Earnings (loss) per share:
Basic
$
0.18
$
(3.04
)
Diluted
$
0.16
$
(3.04
)
Key Operating Metrics:
Active Customers
33,193
21,108
LTM Net Revenue per Active Customer
$
461
$
449
Orders Delivered
14,696
9,876
Average Order Value
$
237
$
235
Non-GAAP Financial Measures:
Adjusted EBITDA
$
205,767
$
(127,277
)
Free Cash Flow
$
111,190
$
(354,623
)
Adjusted Diluted Earnings (Loss) per
Share
$
1.00
$
(2.30
)
Webcast and Conference
Call
Wayfair will host a conference call and webcast to discuss its
first quarter 2021 financial results today at 8 a.m. (ET).
Investors and participants should register for the call in advance
by visiting https://bit.ly/39M9PMA and entering the conference ID
number 2165038. After registering, instructions will be shared on
how to join the call. The call will also be available via live
webcast at https://bit.ly/3mofqhk and supporting slides will be
available at investor.wayfair.com. An archive of the webcast
conference call will be available shortly after the call ends at
investor.wayfair.com.
About Wayfair
Wayfair believes everyone should live in a home they love.
Through technology and innovation, Wayfair makes it possible for
shoppers to quickly and easily find exactly what they want from a
selection of more than twenty-two million items across home
furnishings, décor, home improvement, housewares and more.
Committed to delighting its customers every step of the way,
Wayfair is reinventing the way people shop for their homes - from
product discovery to final delivery.
The Wayfair family of sites includes:
- Wayfair - Everything home for every budget.
- Joss & Main - Stylish designs to discover
daily.
- AllModern - The best of modern, priced for real
life.
- Birch Lane - Classic home. Comfortable cost.
- Perigold - The widest-ever selection of luxury home
furnishings.
Wayfair generated $15.3 billion in net revenue for the twelve
months ended March 31, 2021. Headquartered in Boston, Massachusetts
with operations throughout North America and Europe, Wayfair
employs more than 16,200 people.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of federal and state securities laws. All statements
other than statements of historical fact contained in this press
release, including statements regarding our investment plans and
anticipated returns on those investments, our future customer
growth, our future results of operations and financial position,
available liquidity and access to financing sources, our business
strategy, plans and objectives of management for future operations,
consumer activity and behaviors, our tax liability, e-commerce
adoption trends, developments in our technology and systems,
increased shipping costs, our future real estate plans, and
anticipated results of those developments and the impact of the
novel coronavirus (COVID-19) pandemic and our response to it, are
forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as "may," "will,"
"should," "expects," "plans," "anticipates," "could," "intends,"
"target," "projects," "contemplates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these
terms or other similar expressions.
Forward-looking statements are based on current expectations of
future events. We cannot guarantee that any forward-looking
statement will be accurate, although we believe that we have been
reasonable in our expectations and assumptions. Investors should
realize that if underlying assumptions prove inaccurate or that
known or unknown risks or uncertainties materialize, actual results
could vary materially from our expectations and projections.
Investors are therefore cautioned not to place undue reliance on
any forward-looking statements. These forward-looking statements
speak only as of the date of this press release and, except as
required by applicable law, we undertake no obligation to publicly
update or revise any forward-looking statements contained herein,
whether as a result of any new information, future events or
otherwise.
A list and description of risks, uncertainties and other factors
that could cause or contribute to differences in our results can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K and subsequent
filings. We qualify all of our forward-looking statements by these
cautionary statements.
WAYFAIR INC.
CONSOLIDATED AND CONDENSED
BALANCE SHEETS
(Unaudited)
March 31, 2021
December 31,
2020
(in thousands, except share
and per share data)
Assets:
Current assets
Cash and cash equivalents
$
2,086,484
$
2,129,440
Short-term investments
608,524
461,698
Accounts receivable, net
107,043
110,299
Inventories
59,613
52,152
Prepaid expenses and other current
assets
355,211
292,213
Total current assets
3,216,875
3,045,802
Operating lease right-of-use assets
858,297
808,375
Property and equipment, net
665,177
684,306
Other non-current assets
34,584
31,446
Total assets
$
4,774,933
$
4,569,929
Liabilities and Stockholders'
Deficit:
Current liabilities
Accounts payable
$
1,174,208
$
1,156,624
Other current liabilities
1,045,814
1,008,970
Total current liabilities
2,220,022
2,165,594
Long-term debt
3,060,091
2,659,243
Operating lease liabilities
920,936
869,958
Other non-current liabilities
43,593
67,031
Total liabilities
6,244,642
5,761,826
Stockholders’ deficit:
Convertible preferred stock, $0.001 par
value per share: 10,000,000 shares authorized and none issued at
March 31, 2021 and December 31, 2020
—
—
Class A common stock, par value $0.001 per
share: 500,000,000 shares authorized, 77,196,363 and 72,980,490
shares issued and outstanding at March 31, 2021 and December 31,
2020.
77
73
Class B common stock, par value $0.001 per
share: 164,000,000 shares authorized, 26,563,909 and 26,564,234
shares issued and outstanding at March 31, 2021 and December 31,
2020.
27
27
Additional paid-in capital
331,513
698,482
Accumulated deficit
(1,799,437
)
(1,885,950
)
Accumulated other comprehensive loss
(1,889
)
(4,529
)
Total stockholders’ deficit
(1,469,709
)
(1,191,897
)
Total liabilities and stockholders’
deficit
$
4,774,933
$
4,569,929
Note: Wayfair adopted a new accounting standards update for debt
effective January 1, 2021. The adoption of this standards update
had no effect on prior periods.
WAYFAIR INC.
CONSOLIDATED AND CONDENSED
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended March
31,
2021
2020
(in thousands, except per
share data)
Net revenue
$
3,477,518
$
2,330,063
Cost of goods sold (1)
2,474,491
1,750,940
Gross profit
1,003,027
579,123
Operating expenses:
Customer service and merchant fees (1)
147,241
89,463
Advertising
365,863
275,760
Selling, operations, technology, general
and administrative (1)
451,369
475,968
Customer service center impairment and
other charges
12,212
—
Total operating expenses
976,685
841,191
Income (loss) from operations
26,342
(262,068
)
Interest (expense), net
(6,812
)
(22,218
)
Other (expense), net
(3,298
)
(246
)
Income (loss) before income taxes
16,232
(284,532
)
(Benefit) provision for income taxes,
net
(2,002
)
1,333
Net income (loss)
$
18,234
$
(285,865
)
Earnings (loss) per share:
Basic
$
0.18
$
(3.04
)
Diluted (2)
$
0.16
$
(3.04
)
Weighted-average number of shares of
common stock outstanding used in computing per share amounts:
Basic
102,840
94,089
Diluted
106,682
94,089
(1)
Includes equity-based compensation and
related taxes as follows:
Cost of goods sold
$
3,005
$
1,728
Customer service and merchant fees
5,894
2,118
Selling, operations, technology, general
and administrative
78,002
60,146
$
86,901
$
63,992
(2)
Wayfair adopted a new accounting standards
update for debt effective January 1, 2021. If Wayfair had not
adopted the standard January 1, 2021, Wayfair's diluted earnings
(loss) per share would have been $(0.31) for the first quarter of
2021.
WAYFAIR INC.
CONSOLIDATED AND CONDENSED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended March
31,
2021
2020
(in thousands)
Cash flows from operating
activities:
Net income (loss)
$
18,234
$
(285,865
)
Adjustments used to reconcile net income
(loss) to net cash from (for) operating activities:
Depreciation and amortization
80,312
66,843
Equity-based compensation
74,524
59,449
Amortization of discount and issuance
costs on convertible notes
2,072
19,527
Loss on impairment
12,212
—
Other non-cash adjustments
(1,700
)
(633
)
Changes in operating assets and
liabilities:
Accounts receivable, net
2,528
(16,216
)
Inventories
(7,734
)
5,023
Prepaid expenses and other current
assets
(64,270
)
7,802
Other assets
(3,430
)
24
Accounts payable and other current
liabilities
58,416
(118,475
)
Other liabilities
5,432
6,231
Net cash from (for) operating
activities
176,596
(256,290
)
Cash flows from investing
activities:
Purchase of short- and long-term
investments
(340,328
)
—
Sale and maturities of short- and
long-term investments
193,403
294,810
Purchase of property and equipment
(24,448
)
(59,964
)
Site and software development costs
(40,958
)
(38,369
)
Other investing activities, net
—
(124
)
Net cash (for) from investing
activities
(212,331
)
196,353
Cash flows from financing
activities:
Proceeds from borrowings
—
100,000
Repurchase of common stock
(188
)
—
Other financing activities, net
45
125
Net cash (for) from financing
activities
(143
)
100,125
Effect of exchange rate changes on cash
and cash equivalents
(7,078
)
1,540
Net increase (decrease) in cash and cash
equivalents
(42,956
)
41,728
Cash and cash equivalents:
Beginning of period
2,129,440
582,753
End of period
$
2,086,484
$
624,481
Non-GAAP Financial
Measures
To supplement our unaudited consolidated financial statements
presented in accordance with generally accepted accounting
principles ("GAAP"), this earnings release and the accompanying
tables and the related earnings conference call contain certain
non-GAAP financial measures, including Adjusted EBITDA, Adjusted
EBITDA as a percentage of total net revenue ("Adjusted EBITDA
Margin"), Free Cash Flow, Adjusted Diluted Earnings (Loss) per
Share and Net Revenue Constant Currency Growth. We use these
non-GAAP financial measures internally in analyzing our financial
results and believe they are useful to investors, as a supplement
to GAAP measures, in evaluating our ongoing operational
performance. We have provided a reconciliation of these non-GAAP
financial measures to the most directly comparable GAAP financial
measure in this earnings release.
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP
financial measures that are calculated as net income (loss) before
depreciation and amortization, equity-based compensation and
related taxes, interest (expense), net, other (expense), net,
(benefit) provision for income taxes, net, non-recurring items and
other items not indicative of our ongoing operating performance. We
have included Adjusted EBITDA and Adjusted EBITDA Margin in this
earnings release because they are key measures used by our
management and our board of directors to evaluate our operating
performance, generate future operating plans and make strategic
decisions regarding the allocation of capital. In particular, the
exclusion of certain expenses in calculating Adjusted EBITDA and
Adjusted EBITDA Margin facilitates operating performance
comparisons on a period-to-period basis as these costs may vary
independent of business performance. For instance, we exclude the
impact of equity-based compensation and related taxes as we do not
consider this item to be indicative of our core operating
performance. Investors should, however, understand that
equity-based compensation and related taxes will be a significant
recurring expense in our business and an important part of the
compensation provided to our employees. Accordingly, we believe
that Adjusted EBITDA and Adjusted EBITDA Margin provide useful
information to investors and others in understanding and evaluating
our operating results in the same manner as our management and
board of directors.
Free Cash Flow is a non-GAAP financial measure that is
calculated as net cash from or for operating activities less net
cash used to purchase property and equipment and site and software
development costs (collectively, "Capital Expenditures"). We
believe Free Cash Flow is an important indicator of our business
performance, as it measures the amount of cash we generate.
Accordingly, we believe that Free Cash Flow provides useful
information to investors and others in understanding and evaluating
our operating results in the same manner as our management.
Adjusted Diluted Earnings (Loss) per Share is a non-GAAP
financial measure that is calculated as GAAP net income (loss) plus
equity-based compensation and related taxes, (benefit) provision
for income taxes, net, non-recurring items and other items not
indicative of our ongoing operating performance, and, if dilutive,
interest expense associated with convertible debt instruments under
the if-converted method divided by the weighted-average number of
shares of common stock used in the computation of diluted earnings
(loss) per share. We believe that these adjustments to our non-GAAP
diluted net income (loss) before calculating per share amounts for
all periods presented provides a more meaningful comparison between
our operating results from period to period.
Net Revenue Constant Currency Growth is a non-GAAP financial
measure that is calculated by translating the current period local
currency net revenue by the currency exchange rates used to
translate the financial statements in the comparable prior-year
period. We believe Net Revenue Constant Currency Growth is an
important indicator of our business performance, as it provides
useful information to investors and others in understanding and
evaluating trends in our operating results in the same manner as
our management.
We calculate forward-looking non-GAAP Adjusted EBITDA based on
internal forecasts that omit certain amounts that would be included
in forward-looking GAAP net income (loss). We do not attempt to
provide a reconciliation of forward-looking non-GAAP Adjusted
EBITDA guidance to forward looking GAAP net income (loss) because
forecasting the timing or amount of items that have not yet
occurred and are out of our control is inherently uncertain and
unavailable without unreasonable efforts. Further, we believe that
such reconciliations would imply a degree of precision and
certainty that could be confusing to investors. Such items could
have a substantial impact on GAAP measures of financial
performance.
The non-GAAP measures have limitations as analytical tools. We
do not, nor do we suggest that investors should, consider such
non-GAAP financial measures in isolation from, or as a substitute
for, financial information prepared in accordance with GAAP.
Investors should also note that the non-GAAP financial measures we
use may not be the same non-GAAP financial measures, and may not be
calculated in the same manner, as that of other companies,
including other companies in our industry.
The following table reflects the reconciliation of net income
(loss) to Adjusted EBITDA, as well as Adjusted EBITDA Margin, for
each of the periods indicated:
Three months ended March
31,
2021
2020
(in thousands)
Reconciliation of Adjusted
EBITDA
Net income (loss)
$
18,234
$
(285,865)
Depreciation and amortization
80,312
66,843
Equity-based compensation and related
taxes
86,901
63,992
Interest expense, net
6,812
22,218
Other expense, net
3,298
246
(Benefit) provision for income taxes,
net
(2,002)
1,333
Other (1)
12,212
3,956
Adjusted EBITDA
$
205,767
$
(127,277)
Net revenue
$
3,477,518
$
2,330,063
Adjusted EBITDA Margin
5.9
%
(5.5)
%
(1)
In the three months ended March
31, 2021, we recorded $12.2 million of customer service center
impairment and other charges related to our plan to consolidate
customer service centers. During the three months ended March 31,
2020, we recorded $4.0 million in selling, operations, technology,
general and administrative expenses for severance costs associated
with February 2020 workforce reductions.
The following table presents Adjusted EBITDA attributable to our
segments, and the reconciliation of net income (loss) to Adjusted
EBITDA is presented in the preceding table:
Three months ended March
31,
2021
2020
(in thousands)
Segment Adjusted EBITDA
U.S.
$
227,235
$
(45,095
)
International
(21,468
)
(82,182
)
Adjusted EBITDA
$
205,767
$
(127,277
)
A reconciliation of the numerator and denominator for diluted
earnings (loss) per share, the most directly comparable GAAP
financial measure, to the numerator and denominator for Adjusted
Diluted Earnings (Loss) per Share, in order to calculate Adjusted
Diluted Earnings (Loss) per Share is as follows:
Three months ended March
31,
2021
2020
(in thousands, except per
share data)
Numerator:
Net income (loss)
$
18,234
$
(285,865
)
Effect of dilutive securities:
Interest expense associated with
convertible debt instruments
(1,567
)
—
Numerator for diluted EPS - net income
(loss) available to common stockholders after the effect of
dilutive securities
16,667
(285,865
)
Adjustments to net income (loss):
Interest expense associated with
convertible debt instruments
8,508
—
Equity-based compensation and related
taxes
86,901
63,992
(Benefit) provision for income taxes,
net
(2,002
)
1,333
Other
12,212
3,956
Numerator for Adjusted Diluted EPS -
Adjusted net income (loss)
$
122,286
$
(216,584
)
Denominator:
Denominator for basic EPS -
weighted-average number of shares of common stock outstanding
102,840
94,089
Effect of dilutive securities:
Employee stock options
15
—
Restricted stock units
3,128
—
Convertible debt instruments
699
—
Dilutive potential common shares
3,842
—
Denominator for diluted EPS - adjusted
weighted-average number of shares of common stock outstanding after
the effect of dilutive securities
106,682
94,089
Adjustments to effect of dilutive
securities:
Employee stock options
—
—
Restricted stock units
—
—
Convertible debt instruments
15,630
—
Denominator for Adjusted Diluted EPS -
adjusted weighted-average number of shares of common stock
outstanding after the effect of dilutive securities
122,312
94,089
Diluted Earnings (Loss) per Share
$
0.16
$
(3.04
)
Adjusted Diluted Earnings (Loss) per
Share
$
1.00
$
(2.30
)
The following tables present net revenues attributable to our
reportable segments for the periods indicated:
Three Months Ended March
31,
2021
2020
(in thousands)
U.S. net revenue
$
2,820,686
$
1,974,983
International net revenue
656,832
355,080
Total net revenue
$
3,477,518
$
2,330,063
The following table presents a reconciliation of net cash from
or for operating activities to Free Cash Flow for each of the
periods indicated:
Three months ended March
31,
2021
2020
(in thousands)
Net cash from (for) operating
activities
$
176,596
$
(256,290
)
Purchase of property and equipment
(24,448
)
(59,964
)
Site and software development costs
(40,958
)
(38,369
)
Free Cash Flow
$
111,190
$
(354,623
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005349/en/
Media Relations: Jane Carpenter, 617-502-7595
PR@wayfair.com
Investor Relations: Jane Gelfand IR@wayfair.com
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