Q4 Net Revenue of $3.1 billion
22.1 million Active
Customers
BOSTON, Feb. 23,
2023 /PRNewswire/ -- Wayfair Inc. ("Wayfair", "we",
or "our") (NYSE: W), one of the world's largest online destinations
for the home, today reported financial results for its fourth
quarter and full year ended December 31, 2022.
Fourth Quarter 2022 Financial Highlights
- Total net revenue of $3.1 billion
decreased $151 million, down 4.6%
year over year
- U.S. net revenue of $2.7 billion
decreased $49 million, down 1.8% year
over year
- International net revenue of $415
million decreased $102
million, down 19.7% year over year
- Gross profit was $893 million or
28.8% of total net revenue
- Net loss was $351 million and
Non-GAAP Adjusted EBITDA was ($71)
million
- Diluted loss per share was $3.26
and Non-GAAP Adjusted Diluted Loss Per Share was $1.71
- Net cash provided by operating activities was $98 million and Non-GAAP Free Cash Flow was
($19) million
- Cash, cash equivalents and short-term investments totaled
$1.3 billion
Full Year 2022 Financial Highlights
- Total net revenue of $12.2
billion decreased $1.5
billion, down 10.9% year over year
- U.S. net revenue of $10.5 billion
decreased $785 million, down 7.0%
year over year
- International net revenue of $1.8
billion decreased $705
million, down 28.7% year over year
- Gross profit was $3.4 billion or
28.0% of total net revenue
- Net loss was $1.3 billion and
Non-GAAP Adjusted EBITDA was ($416)
million
- Diluted loss per share was $12.54
and Non-GAAP Adjusted Diluted Loss Per Share was $7.71
- Net cash used in operating activities was $674 million and Non-GAAP Free Cash Flow was
($1.1) billion
"We are excited to see customers respond
positively to improvements in our core recipe - with compelling
pricing, faster delivery times and increasing availability bearing
fruit in the form of market share gains," said Niraj Shah, CEO, co-founder and co-chairman,
Wayfair.
"We are excited to see customers respond positively to
improvements in our core recipe - with compelling pricing, faster
delivery times and increasing availability bearing fruit in the
form of market share gains," said Niraj
Shah, CEO, co-founder and co-chairman, Wayfair. "We enter
2023 as a lean, focused team driven by the same key priorities that
defined much of 2022 - driving cost efficiency, nailing the basics,
and earning customer and supplier loyalty every day. Although the
short-term macroeconomic picture is unpredictable, we are confident
in our ability to navigate its challenges and are reiterating our
commitment to quickly reaching adjusted EBITDA profitability and
then to positive free cash flow."
Other Fourth Quarter Highlights
- Active customers totaled 22.1 million as of December 31, 2022, a decrease of 19.0% year over
year
- LTM net revenue per active customer was $553 as of December 31,
2022, an increase of 10.4% year over year
- Orders per customer, measured as LTM orders divided by active
customers, was 1.81 for the fourth quarter of 2022, compared to
1.89 for the fourth quarter of 2021
- Orders delivered in the fourth quarter of 2022 were 11.0
million, a decrease of 9.1% year over year
- Repeat customers placed 77.4% of total orders delivered in the
fourth quarter of 2022, compared to 76.3% in the fourth quarter of
2021
- Repeat customers placed 8.5 million orders in the fourth
quarter of 2022, a decrease of 7.6% year over year
- Average order value was $283 for
the fourth quarter of 2022, compared to $269 for the fourth quarter of 2021
- In the fourth quarter of 2022, 61.7% of total orders delivered
were placed via a mobile device, compared to 59.0% in the fourth
quarter of 2021
Key Financial and
Operating Metrics
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(in millions, except
LTM Net Revenue per Active Customer, Average
Order Value and per share data)
|
Key Financial
Statement Metrics:
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
3,101
|
|
$
3,252
|
|
$
12,218
|
|
$
13,708
|
Gross
profit
|
|
893
|
|
881
|
|
3,416
|
|
3,895
|
Loss from
operations
|
|
(330)
|
|
(196)
|
|
(1,384)
|
|
(94)
|
Net loss
|
|
(351)
|
|
(202)
|
|
(1,331)
|
|
(131)
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(3.26)
|
|
$
(1.92)
|
|
$
(12.54)
|
|
$
(1.26)
|
Diluted
|
|
$
(3.26)
|
|
$
(1.92)
|
|
$
(12.54)
|
|
$
(1.26)
|
Net cash provided by
(used in) operating activities
|
|
98
|
|
89
|
|
(674)
|
|
410
|
Key Operating
Metrics:
|
|
|
|
|
|
|
|
|
Active customers
(1)
|
|
22
|
|
27
|
|
22
|
|
27
|
LTM net revenue per
active customer (2)
|
|
$
553
|
|
$
501
|
|
$
553
|
|
$
501
|
Orders delivered
(3)
|
|
11
|
|
12
|
|
40
|
|
52
|
Average order value
(4)
|
|
$
283
|
|
$
269
|
|
$
305
|
|
$
265
|
Non-GAAP Financial
Measures:
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
(71)
|
|
$
(4)
|
|
$
(416)
|
|
$
614
|
Free Cash
Flow
|
|
$
(19)
|
|
$
15
|
|
$
(1,132)
|
|
$
130
|
Adjusted Diluted
(Loss) Earnings per Share
|
|
$
(1.71)
|
|
$
(0.92)
|
|
$
(7.71)
|
|
$
2.32
|
|
|
(1)
|
The number of active
customers represents the total number of individual customers who
have purchased at least once directly from our sites during the
preceding twelve-month period. The change in active customers in a
reported period captures both the inflow of new customers as well
as the outflow of existing customers who have not made a purchase
in the last twelve months. We view the number of active customers
as a key indicator of our growth.
|
(2)
|
LTM net revenue per
active customer represents our total net revenue in the last twelve
months divided by our total number of active customers for the same
preceding twelve-month period. We view LTM net revenue per active
customer as a key indicator of our customers' purchasing patterns,
including their initial and repeat purchase behavior.
|
(3)
|
Orders delivered
represents the total orders delivered in any period, inclusive of
orders that may eventually be returned. As we ship a large volume
of packages through multiple carriers, actual delivery dates may
not always be available, and as such we estimate delivery dates
based on historical data. We recognize net revenue when an order is
delivered, and therefore orders delivered, together with average
order value, is an indicator of the net revenue we expect to
recognize in a given period. We view orders delivered as a key
indicator of our growth.
|
(4)
|
We define average order
value as total net revenue in a given period divided by the orders
delivered in that period. We view average order value as a key
indicator of the mix of products on our sites, the mix of offers
and promotions and the purchasing behavior of our
customers.
|
Webcast and Conference Call
Wayfair will host a conference call and webcast to discuss its
fourth quarter and full year 2022 financial results today at 8
a.m. (ET). Investors and participants should register for the
call in advance by visiting http://bit.ly/3qOzwoJ. After
registering, instructions will be shared on how to join the call.
The call will also be available via live webcast at
http://bit.ly/3YaU6OF and supporting slides will be available at
investor.wayfair.com. An archive of the webcast conference call
will be available shortly after the call ends at
investor.wayfair.com.
About Wayfair
Wayfair is the destination for all things home: helping
everyone, anywhere create their feeling of home. From expert
customer service, to the development of tools that make the
shopping process easier, to carrying one of the widest and deepest
selections of items for every space, style, and budget, Wayfair
gives everyone the power to create spaces that are just right for
them.
The Wayfair family of sites includes:
- Wayfair: Everything home — for a space that's all
you.
- Joss & Main: The ultimate style edit for
home.
- AllModern: All of modern, made simple.
- Birch Lane: A fresh take on the classics.
- Perigold: An undiscovered world of luxury
design.
- Wayfair Professional: Just right for
Pros.
Wayfair generated $12.2 billion in
net revenue for full year 2022. Headquartered in Boston, Massachusetts with operations
throughout North America and
Europe.
Media Relations Contact:
Susan
Frechette
PR@wayfair.com
Investor Relations Contact:
James Lamb
IR@wayfair.com
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,
including our financial outlook, profitability goals, the financial
impact and expected savings of our recent reduction in force,
available liquidity and access to financing sources, our business
strategy, plans and objectives of management for future operations,
including our growth, expansion, and optimization initiatives,
consumer activity and behaviors, including seasonal trends,
e-commerce adoption trends, developments in our technology and
systems and anticipated results of those developments, the impact
of macroeconomic factors, including the rise in inflation and
interest rates and the novel coronavirus (COVID-19) pandemic, and
our response to such events, 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 BALANCE
SHEETS
|
(Unaudited)
|
|
|
|
December
31,
|
|
|
2022
|
|
2021
|
|
|
(in millions, except
share and per
share data)
|
Assets:
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,050
|
|
$
1,706
|
Short-term
investments
|
|
228
|
|
693
|
Accounts receivable,
net
|
|
272
|
|
226
|
Inventories
|
|
90
|
|
69
|
Prepaid expenses and
other current assets
|
|
293
|
|
318
|
Total current
assets
|
|
1,933
|
|
3,012
|
Operating lease
right-of-use assets
|
|
839
|
|
849
|
Property and equipment,
net
|
|
774
|
|
674
|
Other non-current
assets
|
|
34
|
|
35
|
Total
assets
|
|
$
3,580
|
|
$
4,570
|
Liabilities and
Stockholders' Deficit:
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
1,204
|
|
$
1,166
|
Other current
liabilities
|
|
868
|
|
1,051
|
Total current
liabilities
|
|
2,072
|
|
2,217
|
Long-term
debt
|
|
3,137
|
|
3,052
|
Operating lease
liabilities, net of current
|
|
893
|
|
892
|
Other non-current
liabilities
|
|
28
|
|
28
|
Total
liabilities
|
|
6,130
|
|
6,189
|
Stockholders'
deficit:
|
|
|
|
|
Convertible preferred
stock, $0.001 par value per share: 10,000,000 shares authorized
and none issued at December 31, 2022 and
2021
|
|
—
|
|
—
|
Class A common
stock, par value $0.001 per share, 500,000,000 shares
authorized,
82,903,862 and 79,150,937 shares issued and
outstanding at December 31, 2022 and
2021
|
|
—
|
|
—
|
Class B common
stock, par value $0.001 per share, 164,000,000 shares
authorized,
25,691,397 and 25,691,761 shares issued and
outstanding at December 31, 2022 and
2021
|
|
—
|
|
—
|
Additional paid-in
capital
|
|
737
|
|
337
|
Accumulated
deficit
|
|
(3,280)
|
|
(1,949)
|
Accumulated other
comprehensive loss
|
|
(7)
|
|
(7)
|
Total stockholders'
deficit
|
|
(2,550)
|
|
(1,619)
|
Total liabilities and
stockholders' deficit
|
|
$
3,580
|
|
$
4,570
|
WAYFAIR
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(in millions, except
per share data)
|
Net revenue
(1)
|
|
$
3,101
|
|
$
3,252
|
|
$
12,218
|
|
$
13,708
|
Cost of goods sold
(2)
|
|
2,208
|
|
2,371
|
|
8,802
|
|
9,813
|
Gross profit
|
|
893
|
|
881
|
|
3,416
|
|
3,895
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Customer service and
merchant fees (2)
|
|
163
|
|
152
|
|
632
|
|
584
|
Advertising
|
|
406
|
|
345
|
|
1,473
|
|
1,378
|
Selling, operations,
technology, general and
administrative (2)
|
|
655
|
|
580
|
|
2,625
|
|
2,015
|
Impairment and other
related net charges
|
|
(1)
|
|
—
|
|
39
|
|
12
|
Restructuring
charges
|
|
—
|
|
—
|
|
31
|
|
—
|
Total operating
expenses
|
|
1,223
|
|
1,077
|
|
4,800
|
|
3,989
|
Loss from
operations
|
|
(330)
|
|
(196)
|
|
(1,384)
|
|
(94)
|
Interest expense,
net
|
|
(8)
|
|
(8)
|
|
(27)
|
|
(32)
|
Other expense,
net
|
|
(4)
|
|
(3)
|
|
(4)
|
|
(4)
|
Gain on debt
extinguishment
|
|
—
|
|
—
|
|
96
|
|
—
|
Loss before income
taxes
|
|
(342)
|
|
(207)
|
|
(1,319)
|
|
(130)
|
Provision (benefit) for
income taxes, net
|
|
9
|
|
(5)
|
|
12
|
|
1
|
Net loss
|
|
$
(351)
|
|
$
(202)
|
|
$
(1,331)
|
|
$
(131)
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(3.26)
|
|
$
(1.92)
|
|
$
(12.54)
|
|
$
(1.26)
|
Diluted
|
|
$
(3.26)
|
|
$
(1.92)
|
|
$
(12.54)
|
|
$
(1.26)
|
Weighted-average number
of shares of common
stock outstanding used in computing per share
amounts:
|
|
|
|
|
|
|
|
|
Basic
|
|
108
|
|
105
|
|
106
|
|
104
|
Diluted
|
|
108
|
|
105
|
|
106
|
|
104
|
|
(1)The
following tables present net revenue attributable to our reportable
segments for the periods indicated:
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(in
millions)
|
U.S. net revenue
|
|
$
2,686
|
|
$
2,735
|
|
$
10,464
|
|
$
11,249
|
International net
revenue
|
|
415
|
|
517
|
|
1,754
|
|
2,459
|
Total net revenue
|
|
$
3,101
|
|
$
3,252
|
|
$
12,218
|
|
$
13,708
|
|
(2)Includes equity-based compensation and related taxes
as follows:
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(in
millions)
|
Cost of goods sold
|
|
$
3
|
|
$
3
|
|
$
11
|
|
$
12
|
Customer service and merchant
fees
|
|
9
|
|
8
|
|
34
|
|
27
|
Selling, operations,
technology, general
and
administrative
|
|
147
|
|
99
|
|
482
|
|
335
|
Total equity-based compensation
and
related
taxes
|
|
$
159
|
|
$
110
|
|
$
527
|
|
$
374
|
WAYFAIR
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
|
(in
millions)
|
Cash flows (for)
from operating activities:
|
|
|
|
|
Net loss
|
|
$
(1,331)
|
|
$
(131)
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities
|
|
|
|
|
Depreciation and
amortization
|
|
371
|
|
322
|
Equity-based
compensation expense
|
|
513
|
|
344
|
Amortization of
discount and issuance costs on convertible notes
|
|
8
|
|
7
|
Impairment and other
related net charges
|
|
39
|
|
12
|
Gain on debt
extinguishment
|
|
(96)
|
|
—
|
Other non-cash
adjustments
|
|
41
|
|
6
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable,
net
|
|
(48)
|
|
(118)
|
Inventories
|
|
(21)
|
|
(17)
|
Prepaid expenses and
other current assets
|
|
26
|
|
(28)
|
Other
assets
|
|
1
|
|
—
|
Accounts payable and
other current liabilities
|
|
(177)
|
|
9
|
Other
liabilities
|
|
—
|
|
4
|
Net cash (used in)
provided by operating activities
|
|
(674)
|
|
410
|
|
|
|
|
|
Cash flows from
(for) investing activities:
|
|
|
|
|
Purchase of short- and
long-term investments
|
|
(430)
|
|
(989)
|
Sale and maturities of
short- and long-term investments
|
|
889
|
|
749
|
Purchase of property
and equipment
|
|
(186)
|
|
(101)
|
Site and software
development costs
|
|
(272)
|
|
(179)
|
Other investing
activities, net
|
|
—
|
|
5
|
Net cash provided by (used in) investing
activities
|
|
1
|
|
(515)
|
|
|
|
|
|
Cash flows from
(for) financing activities:
|
|
|
|
|
Repurchase of common
stock
|
|
(75)
|
|
(300)
|
Proceeds from issuance
of convertible notes, net of issuance costs
|
|
678
|
|
—
|
Premiums paid for
capped call confirmations
|
|
(80)
|
|
—
|
Payment of principal
upon maturity of convertible debt
|
|
(3)
|
|
—
|
Payments to extinguish
convertible debt
|
|
(504)
|
|
—
|
Other financing
activities, net
|
|
—
|
|
(3)
|
Net cash provided by (used in) financing
activities
|
|
16
|
|
(303)
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
1
|
|
(16)
|
Net decrease in cash
and cash equivalents
|
|
(656)
|
|
(424)
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
Beginning of
year
|
|
1,706
|
|
2,130
|
End of year
|
|
$
1,050
|
|
$
1,706
|
Non-GAAP Financial Measures
To supplement our 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 Diluted (Loss)
Earnings per Share, and Free Cash Flow. 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 is a non-GAAP financial measure that is
calculated as net loss before depreciation and amortization,
equity-based compensation and related taxes, interest expense, net,
other expense, net, provision (benefit) for income taxes, net,
non-recurring items and other items not indicative of our ongoing
operating performance. We have included Adjusted EBITDA in this
earnings release because it is a key measure used by our management
and our board of directors to evaluate our operating performance,
generate future operating plans and make strategic decisions
regarding the allocation of capital. In particular, the exclusion
of certain expenses in calculating Adjusted EBITDA facilitates
operating performance comparisons on a period-to-period basis as
these costs may vary independent of business performance. For
instance, we exclude the impact of equity-based compensation and
related taxes as we do not consider this item to be indicative of
our core operating performance. Investors should, however,
understand that equity-based compensation and related taxes will be
a significant recurring expense in our business and an important
part of the compensation provided to our employees. Accordingly, we
believe that Adjusted EBITDA provides useful information to
investors and others in understanding and evaluating our operating
results in the same manner as our management and board of
directors.
Adjusted Diluted (Loss) Earnings per Share is a non-GAAP
financial measure that is calculated as net loss plus equity-based
compensation and related taxes, provision (benefit) 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 loss per
share. We believe that these adjustments to our adjusted diluted
net income before calculating per share amounts for all periods
presented provides a more meaningful comparison between our
operating results from period to period.
Free Cash Flow is a non-GAAP financial measure that is
calculated as net cash used in or provided by operating activities
less net cash used to purchase property and equipment and site and
software development costs (collectively, "Capital Expenditures").
We believe Free Cash Flow is an important indicator of our business
performance, as it measures the amount of cash we generate.
Accordingly, we believe that Free Cash Flow provides useful
information to investors and others in understanding and evaluating
our operating results in the same manner as our management.
We calculate forward-looking non-GAAP Adjusted EBITDA based on
internal forecasts that omit certain amounts that would be included
in forward-looking GAAP net loss. We do not attempt to
provide a reconciliation of
forward-looking non-GAAP Adjusted EBITDA guidance to
forward looking GAAP net 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 loss to Adjusted EBITDA for each
of the periods indicated:
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
(in
millions)
|
Reconciliation of
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(351)
|
|
$
(202)
|
|
$
(1,331)
|
|
$
(131)
|
Depreciation and
amortization
|
|
101
|
|
82
|
|
371
|
|
322
|
Equity-based
compensation and related taxes
|
|
159
|
|
110
|
|
527
|
|
374
|
Interest expense,
net
|
|
8
|
|
8
|
|
27
|
|
32
|
Other expense,
net
|
|
4
|
|
3
|
|
4
|
|
4
|
Provision (benefit)
for income taxes, net
|
|
9
|
|
(5)
|
|
12
|
|
1
|
Other:
|
|
|
|
|
|
|
|
|
Impairment and other
related net charges (1)
|
|
(1)
|
|
—
|
|
39
|
|
12
|
Restructuring charges
(2)
|
|
—
|
|
—
|
|
31
|
|
—
|
Gain on debt
extinguishment (3)
|
|
—
|
|
—
|
|
(96)
|
|
—
|
Adjusted
EBITDA
|
|
$
(71)
|
|
$
(4)
|
|
$
(416)
|
|
$
614
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the year ended
December 31, 2022, we recorded $40 million of lease
impairment and other related charges related to
changes in market conditions around future sublease income for one
of our office locations in the U.S. In the fourth
quarter of 2022, we recorded a $9 million recovery related to
the termination of the lease. Additionally, we recorded an
impairment charge of $8 million related to construction in
progress assets at an International warehouse. In the year
ended December 31, 2021, we recorded $12 million of
customer service center impairment and other related charges
related to our plan to consolidate customer service centers in
identified U.S. locations.
|
(2)
|
In the year ended
December 31, 2022, we recorded a $31 million charge to
restructuring charges for severance costs
associated with the August 2022 workforce reductions.
|
(3)
|
In the year ended
December 31, 2022, we recorded a $96 million gain on debt
extinguishment upon repurchase of
$375 million aggregate principal amount of our 2024 Notes and
$229 million aggregate principal amount of our 2025
Notes.
|
The following table
presents Adjusted EBITDA attributable to our segments, and the
reconciliation of net loss to Adjusted
EBITDA is presented in the preceding table:
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(in
millions)
|
Segment Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
U.S.
|
|
$
11
|
|
$
65
|
|
$
(98)
|
|
$
782
|
International
|
|
(82)
|
|
(69)
|
|
(318)
|
|
(168)
|
Adjusted
EBITDA
|
|
$
(71)
|
|
$
(4)
|
|
$
(416)
|
|
$
614
|
A reconciliation of the
numerator and denominator for diluted loss per share, the most
directly comparable GAAP financial
measure, to the numerator and denominator for Adjusted Diluted
(Loss) Earnings per Share, in order to calculate Adjusted
Diluted (Loss) Earnings per Share is as follows:
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(in millions, except
per share data)
|
Numerator:
|
|
|
|
|
|
|
|
|
Numerator for diluted
loss per share - net loss
available to common stockholders after the effect of
dilutive securities
|
|
$
(351)
|
|
$
(202)
|
|
$
(1,331)
|
|
$
(131)
|
Adjustments to net
loss
|
|
|
|
|
|
|
|
|
Interest expense
associated with convertible debt
instruments
|
|
—
|
|
—
|
|
—
|
|
20
|
Equity-based
compensation and related taxes
|
|
159
|
|
110
|
|
527
|
|
374
|
Provision (benefit)
for income taxes, net
|
|
9
|
|
(5)
|
|
12
|
|
1
|
Other:
|
|
|
|
|
|
|
|
|
Impairment and other
related net charges
|
|
(1)
|
|
—
|
|
39
|
|
12
|
Restructuring
charges
|
|
—
|
|
—
|
|
31
|
|
—
|
Gain on debt
extinguishment
|
|
—
|
|
—
|
|
(96)
|
|
—
|
Numerator for Adjusted
Diluted (Loss) Earnings
Per Share - Adjusted net (loss) income
|
|
$
(184)
|
|
$
(97)
|
|
$
(818)
|
|
$
276
|
Denominator:
|
|
|
|
|
|
|
|
|
Denominator for diluted
loss per share - weighted-
average number of shares of common stock
outstanding after the effect of dilutive securities
|
|
108
|
|
105
|
|
106
|
|
104
|
Adjustments to
effect of dilutive securities:
|
|
|
|
|
|
|
|
|
Restricted stock
units
|
|
—
|
|
—
|
|
—
|
|
3
|
Convertible debt
instruments
|
|
—
|
|
—
|
|
—
|
|
12
|
Denominator for
Adjusted Diluted (Loss)
Earnings per Share - Adjusted weighted-average
number of shares of common stock outstanding
after the effect of dilutive securities
|
|
108
|
|
105
|
|
106
|
|
119
|
Diluted loss per
share
|
|
$
(3.26)
|
|
$
(1.92)
|
|
$
(12.54)
|
|
$
(1.26)
|
Adjusted Diluted (Loss)
Earnings per Share
|
|
$
(1.71)
|
|
$
(0.92)
|
|
$
(7.71)
|
|
$
2.32
|
The following table
presents a reconciliation of net cash provided by or used in
operating activities to Free Cash Flow for each of the
periods indicated:
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(in
millions)
|
Net cash provided by
(used in) operating
activities
|
|
$
98
|
|
$
89
|
|
$
(674)
|
|
$
410
|
Purchase of property
and equipment
|
|
(50)
|
|
(24)
|
|
(186)
|
|
(101)
|
Site and software
development costs
|
|
(67)
|
|
(50)
|
|
(272)
|
|
(179)
|
Free Cash
Flow
|
|
$
(19)
|
|
$
15
|
|
$
(1,132)
|
|
$
130
|
Quarterly Financial
Metrics (Unaudited)
|
|
The following tables
set forth selected financial quarterly metrics and other financial
and operations data for the eight quarters
ended December 31, 2022:
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
March 31,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
March 31,
2021
|
|
|
(in
millions)
|
Segment Financial
Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Net
Revenue
|
|
$
2,686
|
|
$
2,440
|
|
$
2,796
|
|
$
2,542
|
|
$
2,735
|
|
$
2,595
|
|
$
3,098
|
|
$
2,821
|
U.S. Adjusted
EBITDA
|
|
$
11
|
|
$
(51)
|
|
$
(28)
|
|
$
(30)
|
|
$
65
|
|
$
167
|
|
$
323
|
|
$
227
|
International Net
Revenue
|
|
$
415
|
|
$
400
|
|
$
488
|
|
$
451
|
|
$
517
|
|
$
526
|
|
$
759
|
|
$
657
|
International
Adjusted EBITDA
|
|
$
(82)
|
|
$
(73)
|
|
$
(80)
|
|
$
(83)
|
|
$
(69)
|
|
$
(66)
|
|
$
(12)
|
|
$
(21)
|
The following table
reflects the reconciliation of net (loss) income to Adjusted EBITDA
for each of the periods indicated:
|
|
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
March 31,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
March 31,
2021
|
|
|
|
(in
millions)
|
Net (loss)
income
|
|
$
(351)
|
|
$
(283)
|
|
$
(378)
|
|
$
(319)
|
|
$
(202)
|
|
$
(78)
|
|
$
131
|
|
$
18
|
Depreciation and
amortization
|
|
101
|
|
94
|
|
91
|
|
85
|
|
82
|
|
82
|
|
77
|
|
81
|
Equity-based
compensation and
related taxes
|
|
159
|
|
123
|
|
133
|
|
112
|
|
110
|
|
89
|
|
88
|
|
87
|
Interest expense,
net
|
|
8
|
|
5
|
|
6
|
|
8
|
|
8
|
|
8
|
|
9
|
|
7
|
Other expense (income),
net
|
|
4
|
|
1
|
|
(1)
|
|
—
|
|
3
|
|
(4)
|
|
2
|
|
3
|
Provision (benefit)
for
income taxes, net
|
|
9
|
|
1
|
|
1
|
|
1
|
|
(5)
|
|
4
|
|
4
|
|
(2)
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment and
other related net
charges (1)
|
|
(1)
|
|
—
|
|
40
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12
|
Restructuring
charges (2)
|
|
—
|
|
31
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Gain on debt
extinguishment (3)
|
|
—
|
|
(96)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Adjusted
EBITDA
|
|
$
(71)
|
|
$
(124)
|
|
$
(108)
|
|
$
(113)
|
|
$
(4)
|
|
$
101
|
|
$
311
|
|
$
206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In the year ended
December 31, 2022, we recorded $40 million of lease
impairment and other related charges related to changes in
market conditions around future sublease income for one of our
office locations in the U.S. In the fourth quarter of 2022, we
recorded a
$9 million recovery related to the termination of the lease.
Additionally, we recorded an impairment charge of $8 million
related to
construction in progress assets at an International warehouse. In
the year ended December 31, 2021, we recorded $12 million
of customer
service center impairment and other related charges related to our
plan to consolidate customer service centers in identified U.S.
locations.
|
(2)
|
In the year ended
December 31, 2022, we recorded a $31 million charge to
restructuring charges for severance costs associated with the
August 2022 workforce reductions.
|
(3)
|
In the year ended
December 31, 2022, we recorded a $96 million gain on debt
extinguishment upon repurchase of $375 million aggregate
principal amount of our 2024 Notes and $229 million aggregate
principal amount of our 2025 Notes.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/wayfair-announces-fourth-quarter-and-full-year-2022-results-301753894.html
SOURCE Wayfair Inc.