Warby Parker Inc.
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Item 1. Business
Our Company
Warby Parker is a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise. We stand for fun, creativity, and doing good in the world. Every day, our team of over 4,000 employees is focused on our mission to inspire and impact the world with vision, purpose, and style (without charging a premium for it). Our ultimate objective is to provide vision for all.
As a pioneer of the direct-to-consumer model, we design our glasses in-house at our New York City headquarters and sell directly to customers, enabling us to make high-quality, designer eyewear more accessible, with simple, unified pricing starting at $95 including prescription lenses. Since our launch, we’ve expanded beyond glasses to offer comprehensive eye care, including eye exams, contacts, lens enhancements and tech-enabled experiences like Virtual Try-On and Virtual Vision Test, with an aim to make Warby Parker a convenient, one-stop shop for all eye care needs. We operate an integrated, omnichannel platform across digital commerce and 323 retail stores as of December 31, 2025, all designed to make shopping both convenient and fun.
What Sets Us Apart
•A customer-first brand that stands for exceptional value and customer experiences. At Warby Parker, we design every customer interaction, both in stores and online, to be consistently thoughtful, frictionless, and delightful. We aim to offer a seamless experience across all our channels, and our business model is designed to provide our customers the best quality at simple, accessible prices. By designing our products in-house and cutting out the middleman, we are able to pass the savings on to customers and offer designer-quality eyewear at prices that are lower than many of our competitors. Our commitment to service, convenience and exceptional value has deepened customer relationships and strengthened brand loyalty. As a result, we have maintained an industry-leading Net Promoter Score (“NPS”) and observed consistent revenue retention across cohorts, with approximately 50% retention over 24 months and over 100% over 48 months.
•Seamless experience across physical and online channels. Since our founding, we have reimagined how our customers shop for eyewear, transforming a category that has historically underinvested in innovation. We aim to create a seamless experience across channels and find that many of our customers start their journeys online, leveraging proprietary technology like our Virtual Try On, before visiting a store. Similarly, many retail-first customers ultimately transact online, reflecting the flexibility of our omnichannel model. Each of our stores is uniquely designed, featuring local artists and drawing on the character of the local community, and our stores are strategically located in high-traffic lifestyle centers, malls, street locations, and grocery-anchored centers. Our stores are led by our tenured store leadership team, most of whom have been promoted from within the company, and we believe our ability to grow and retain talent remains key to our success. Ultimately, we are committed to meeting customers where and how they want to shop.
•A culture of innovation. We maintain a regular cadence of product and technology development to differentiate our brand, operate with speed and efficiency, and enhance the customer experience across channels. We regularly launch new eyewear collections featuring new materials, constructions, and designs, and across all new initiatives we employ a test-and-learn approach, scaling after we validate customer demand and unit economics. We have developed proprietary technologies and systems to improve convenience and support a seamless omnichannel experience, including the first true to scale Virtual Try-On, our Virtual Vision Test telehealth app, which enables eligible patients to renew their prescription at home, and our custom point-of-sale system. Looking ahead, we plan to leverage emerging technologies, including artificial intelligence and machine learning (“artificial intelligence” or “AI”), to support innovation in product development and the shopping experience.
•Data-driven operating model. By overseeing the entire customer journey, we capture key insights at every touchpoint, from the initial eye exam to final frame adjustment, and from repeat purchasing to retention across customer cohorts. This end-to-end visibility informs how we design new products, select store locations, and manage logistics. We apply these same insights to acquire customers through a flexible media model that allows us to shift marketing spend in real-time across digital and
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physical channels. This direct relationship with our customer allows us to move faster, operate more efficiently, and create a highly personalized experience for every customer we serve.
•Flexible, vertically integrated supply chain. Our integrated supply chain includes a mix of owned optical labs and long-standing manufacturing partnerships that allow us to be nimble and move quickly. This vertical integration allows us to maintain a continuous feedback loop that enables real-time refinement while ensuring that every stage, from initial design to final delivery, remains consistent with our brand standards. This level of control allows us to deliver high quality products and a remarkable experience, as reflected in our consistently high NPS.
•Mission-driven culture and social impact. Warby Parker was founded on the belief that businesses can scale and do good in the world. Our mission to provide vision for all resonates deeply with both our team and customers, driving engagement and retention. As a public benefit corporation, social impact is built into our model. Our Buy a Pair, Give a Pair program was integrated into our business operations from day one, and for every pair of glasses or sunglasses Warby Parker sells, a pair is distributed to someone in need. To date, over 20 million pairs of glasses have been distributed across the U.S. and more than 80 countries.
Our Growth Strategies
We plan to leverage the following growth strategies to achieve long-term, sustainable growth:
•Growing brand awareness. Our brand is integral to the growth of our business and to the implementation of our business expansion strategies. Our business is oriented around delighting the customer, which we believe enhances customer loyalty, drives organic word of mouth marketing and a leading NPS. Still, many customers, including long-time customers, continue to perceive us as primarily an online-only glasses company. To educate both new and existing customers about our expanded assortment of products, services, and store locations, we continue to invest in growing top of funnel awareness through our diversified media-mix model, strategic partnerships and collaborations, and stores.
•Expanding our retail footprint. Our U.S. retail footprint has a long runway for expansion. Based on analysis we conducted with a third-party research firm in 2021, we expect that our retail footprint has room to expand in the U.S. to over 900 stores, which is still a fraction of the approximately 45,000 optical stores in the United States as of December 2025. In addition to our standalone locations, we are exploring additional store formats, including shop-in-shops at select retail locations, which aim to meet the customer where they are in their shopping journey in a convenient and accessible way. We are highly selective with each store we open, and we believe our stores embody the brand, are efficient customer acquisition vehicles, and will generate significant free cash flow over time.
•Continuing to invest in technology and our digital experience. Since launching online, we have leveraged technology to deliver a differentiated customer experience and transform how consumers shop for eyewear. We believe our digital heritage positions us to continue innovating at a faster pace than the rest of the optical industry as we invest in AI-enabled capabilities across our business. AI is reshaping how consumers discover, browse, and purchase products, and we believe it will meaningfully enhance how customers and patients engage with eye care. We plan to leverage AI by:
◦Developing new products and categories. In 2025, we announced long-term partnerships with Google and Samsung to develop AI-powered intelligent eyewear designed for all-day use, marking a transformative step for our brand and significantly expanding our addressable market beyond traditional glasses. We believe glasses are the perfect form factor to leverage AI, enabling the delivery of real-time personalized insights tailored to what the wearer sees and hears as they move through the world.
◦Enhancing the customer and patient experiences. We are investing in AI-powered tools that make shopping easier, reduce friction, and help customers feel confident in their purchase decisions, including our award-winning Virtual Try-On, and Advisor, a personalized AI-driven recommendation tool that we launched in 2025. We believe AI will further improve fit visualization, style guidance, and personalization, supporting greater engagement, higher conversion, and enhanced customer satisfaction over time.
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•Expanding our holistic vision care offering. We are focused on expanding our products and services to serve our customers’ comprehensive vision care needs. Our holistic vision care customers, or those that purchase glasses, contacts and exams, demonstrate the highest lifetime value. Industry-wide, approximately 75% of customers purchase their eyewear at the same location where they receive their eye exam, supporting our strategy to expand our store base and exam capabilities. We believe there is significant opportunity to expand penetration within each of the following categories:
◦Glasses. We release new eyewear collections and collaborations throughout the year to drive engagement with existing customers and reach new customers. We will continue to scale our core glasses offering by introducing new sizes, shapes, widths, and more to ensure as many people as possible can find a frame that fits, functions, and looks great.
◦Progressives and other premium lenses. Progressives represent 22.3% of our prescription units as of December 31, 2025, compared to nearly 40% of units industry-wide for progressives, bifocals and multifocals. By expanding our offering of progressives, and premium lens enhancements, including blue-light-filtering, custom colors, polarization, light-responsive, and anti-fatigue, we can serve a broader range of needs across a larger population of customers and drive higher average revenue per customer.
◦Contact lenses. The contact lens market is estimated at $10.4 billion as of December 31, 2025 and over 80% of contacts wearers purchase contact lenses at least once per year, driving subscription-like purchasing. Contact lenses contributed only 11.1% to Warby Parker net revenue for the year ended December 31, 2025.
◦Eye exams and vision care. The eye exams and vision care market is estimated at $11.4 billion as of December 31, 2025 and contributed only 6.4% to Warby Parker net revenue for the year ended December 31, 2025.
•Scaling vision insurance. Insurance is used in approximately 60% of U.S. vision care purchases, yet insurance-backed orders contributed only 8.3% of our 2025 revenue. This represents a significant opportunity for growth, as we remain underpenetrated relative to the broader category. We are closing this gap through two primary mechanisms:
◦Expanding in-network access: In the last two years, we nearly doubled our in-network lives covered, driven by an integration with Versant Health, which expanded our coverage to over 30 million lives. Insurance serves as a powerful customer acquisition tool, attracting some of our highest value customers who tend to spend more on initial purchases and return more frequently.
◦Maximizing out-of-network benefits: Over 50% of our current customers have vision insurance and choose Warby Parker for our brand and value proposition, even when we are out-of-network. Most of these plans offer roughly $100 in out-of-network reimbursement, which can cover the entire cost of our $95 single vision frames. We are also investing in tools that make it easier for customers to identify and use their benefits at Warby Parker.
The Eyewear Market is Large, Growing, and Ripe for Disruption
Large and Growing Market
The U.S. eyewear market is large and growing. The Vision Council defines the U.S. eyewear market as a $70 billion industry as of December 2025 that has exhibited consistent, stable growth across multiple economic cycles given its medical and non-discretionary nature and is defined by durable fundamentals and trends including:
•Most people need vision correction: The incidence of myopia continues to rise rapidly, and it’s estimated that by 2050, over half the world’s population will need corrective vision according to a study published by the American Academy of Ophthalmology. The Vision Council also reported that in 2025 over 80% of adults in the United States use some form of vision correction.
•Consistent replenishment cycle: Approximately 50% of glasses wearers purchase new glasses every year, and another 33% purchase every two years, according to the Vision Council. Additionally, over 54
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million people in the United States wear contact lenses that are nearly all disposable in nature, replaced on a daily, weekly, or monthly basis, driving an under one year average repurchase frequency.
•Increasing screen time usage: With the rising usage of smartphones, tablets, computers, and other devices, three out of four adults report experiencing digital eye strain at some point during the day, contributing significantly to increased vision correction needs and a steady influx of new customers within the eyewear market.
Our Competition
The legacy optical industry is highly concentrated among a small number of players that control much of the eyewear value chain, often limiting consumer choice and innovation. Competition in the eyewear industry is principally based on brand image and recognition, as well as product quality, price, innovation, and style. Eyewear is both a style choice and a medical necessity, yet the traditional purchase experience has focused primarily on its medical aspects. At Warby Parker, we believe customers should be able to purchase high-quality eyewear online or in engaging retail environments, supported by helpful associates and transparent, unified pricing.
Independent optical retailers made up approximately 40% of all prescription optical retail sales in 2025, while national optical retail chains made up the majority of the remainder. We are in direct competition with large, integrated optical players like EssilorLuxottica and VSP that own and license multiple frame and lens brands, retail banners and online stores, vision insurance plans, and large optical lab networks. We also compete with low priced, online-only players like Zenni Optical.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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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, 2025 filed with the Securities and Exchange Commission (“SEC”) on February 26, 2026 (the “Annual Report”). Data as of and for the three and six months ended June 30, 2026 and 2025 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 sections titled “Special Note Regarding Forward-Looking Statements” and in Part I, Item 1A, Risk Factors, in the Annual Report.
Overview
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 352 retail stores as of June 30, 2026.
•We’ve crafted a holistic vision care offering that extends beyond glasses to include contacts, vision tests and eye exams, vision insurance, and more. 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 have distributed glasses to people in need in more than 80 countries globally and many parts of the United States. Over 25 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 eyewear and contact lenses, as well as from providing eye exams and vision tests. 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, omnichannel 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
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who check out online also visit a store throughout their customer journey, while others choose to browse online before visiting one of our stores.
Financial Highlights
For the three months ended June 30, 2026 and 2025:
•we generated net revenue of $235.5 million and $214.5 million, respectively;
•we generated gross profit of $136.5 million and $113.6 million, respectively, representing a gross margin of 57.9% and 53.0%, respectively;
•we generated net income of $4.6 million and net loss of $1.8 million, respectively; and
•we generated Adjusted EBITDA of $32.9 million and $25.0 million, respectively, representing an Adjusted EBITDA Margin of 14.0% and 11.7%, respectively.
For the six months ended June 30, 2026 and 2025:
•we generated net revenue of $478.0 million and $438.3 million, respectively;
•we generated gross profit of $267.5 million and $239.6 million, respectively, representing a gross margin of 56.0% and 54.7%, respectively;
•we generated net income of $7.8 million and $1.7 million, respectively; and
•we generated Adjusted EBITDA of $62.4 million and $54.2 million, respectively, representing an Adjusted EBITDA Margin of 13.1% and 12.4%, respectively.
For definitions of Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP financial measures, and reconciliations to the most directly comparable GAAP measure, see the section titled “Key Business Metrics and Certain Non-GAAP Financial Measures.”
Recent Business Developments
AI Glasses
In the second quarter of 2025, we announced a partnership with Google to develop AI-enabled glasses intended for all-day wear. We are working closely with Google on the development of AI glasses and intend to launch a series of products over time. As part of this collaborative arrangement, Google has committed up to $75 million for our product development and commercialization costs. In addition, Google has committed to investing up to $75 million in Warby Parker, at our option and subject to reaching certain collaboration milestones. During the three and six months ended June 30, 2026, the Company reduced selling, general, and administrative expenses by $4.4 million and $6.4 million, respectively, related to costs which are reimbursable by Google and are thus fully offset within the period. To date, the Company has incurred $9.7 million of reimbursable costs.
Supreme Court Tariff Ruling
In February 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). The U.S. presidential administration subsequently invoked additional tariffs under other laws resulting in a rapidly changing tariff environment. In April 2026, the U.S. Customs and Border Protection agency launched a platform to allow for the submission of IEEPA tariff refund requests. The Company is accounting for any claims as loss recoveries and recognizes receivables when receipt of the claims become probable. Recoveries are reflected as a reduction of cost of goods sold for inventory previously sold, or as a reduction of inventory for goods that remain unsold.
During the three and six months ended June 30, 2026, the Company determined that the receipt of refunds totaling $14.4 million of IEEPA tariffs were probable and recorded an $11.8 million benefit to cost of goods sold for inventory sold through June 30, 2026 and a $2.6 million reduction to inventory that will be recorded through cost of goods sold as inventory turns in the second half of 2026. The Company recorded interest income of $0.2 million related to IEEPA tariffs which is included in interest and other income. As of June 30, 2026, $3.4 million of cash had been collected, inclusive of interest, and $11.2 million remained as a receivable within prepaid expenses and other current assets on the Company’s condensed consolidated balance sheet. Subsequent to June 30, 2026, the Company collected all of the remaining tariff receivable.
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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 throughout this Quarterly Report on Form 10-Q as well as 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. However, our performance and growth are still subject to broader macroeconomic factors. Pressures in the U.S. and the global economy such as changes in tariff regimes, inflation, energy prices, and recession fears may influence consumer sentiment and spending behavior.
Throughout 2025 and into 2026, we experienced pressure from a dynamic trade environment. We source frame components from suppliers in China, Italy, Vietnam and Japan, and our cost structure has been directly affected by tariffs on imports from these countries. While the U.S. Supreme Court has struck down tariffs previously imposed under the IEEPA, the U.S. presidential administration subsequently invoked new tariffs under other authorities, resulting in a rapidly changing policy environment. We continue to strategically diversify our supplier base outside of China through international frame manufacturing partnerships and our domestic optical laboratories, however the complexity of the current trade environment makes it difficult to predict the net effect on our future financial results.
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 the periods presented, which are unaudited.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
Active Customers (in thousands) | 2,709 | 2,602 | 2,709 | 2,602 | ||||||||||||||||||
Store Count(1) | 352 | 298 | 352 | 298 | ||||||||||||||||||
Adjusted EBITDA(2) (in thousands) | $ | 32,882 | $ | 25,014 | $ | 62,449 | $ | 54,221 | ||||||||||||||
Adjusted EBITDA Margin(2) | 14.0 | % | 11.7 | % | 13.1 | % | 12.4 | % | ||||||||||||||
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(1)Store Count number at the end of the period indicated.
(2)Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For more information regarding our use of these measures and a reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA Margin, see the section titled "Adjusted EBITDA and Adjusted EBITDA Margin” below.
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 account that has made at least one purchase in the trailing 12-month period. We determine our number of Active Customers by counting the total number of customer accounts that have made at least one purchase in the trailing 12-month period, measured from the last date of such period. Given our definition of a customer is a unique customer account 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. We define Average Revenue per Customer as the sum of the total net revenues in the trailing 12-month period divided by the current period Active Customers.
Store Count
Store Count is a key performance measure that we track as we grow our retail footprint. Stores drive customer awareness of our brand 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
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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.
We have expanded our retail store footprint over the past several years. During the three months ended June 30, 2026 and 2025, we opened 15 and 11 net new retail stores, respectively. As of June 30, 2026, 315 out of our 352 retail stores offered in-person eye exams, representing 89.5% of our fleet, compared to 86.9% as of June 30, 2025.
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA as net income 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, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs and major system implementation 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 these measures 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;
•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
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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 income:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||
| Net income (loss) | $ | 4,644 | $ | (1,752) | $ | 7,821 | $ | 1,720 | ||||||||||||||
| Adjusted to exclude the following: | ||||||||||||||||||||||
| Interest and other income, net | (2,084) | (1,984) | (4,415) | (4,439) | ||||||||||||||||||
| Provision for income taxes | 607 | (789) | 1,428 | 665 | ||||||||||||||||||
| Depreciation and amortization expense | 14,070 | 12,486 | 27,838 | 24,648 | ||||||||||||||||||
| Asset impairment charges | 163 | 175 | 631 | 486 | ||||||||||||||||||
Stock-based compensation expense(1) | 10,325 | 9,162 | 22,320 | 22,163 | ||||||||||||||||||
Non-cash charitable donations(2) | 3,950 | 2,821 | 3,950 | 2,821 | ||||||||||||||||||
| Amortization of cloud-based software implementation costs | 1,042 | 752 | 2,064 | 1,489 | ||||||||||||||||||
System implementation costs(3) | — | 346 | 477 | 346 | ||||||||||||||||||
Inventory write-downs(4) | — | 2,456 | — | 2,456 | ||||||||||||||||||
Other costs(5) | 165 | 1,341 | 335 | 1,866 | ||||||||||||||||||
| Adjusted EBITDA | $ | 32,882 | $ | 25,014 | $ | 62,449 | $ | 54,221 | ||||||||||||||
| Adjusted EBITDA Margin | 14.0 | % | 11.7 | % | 13.1 | % | 12.4 | % | ||||||||||||||
(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, 2026 and 2025, the amount includes $0.4 million and $0.3 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises. For the six months ended June 30, 2026 and 2025, the amount includes $1.0 million and $0.9 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.
(2) Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both April 2026 and May 2025 to the Warby Parker Impact Foundation.
(3) Represents costs related to the implementation of major new enterprise software systems.
(4) Represents one-time inventory write-downs primarily related to the decision in the second quarter of 2025 to sunset our Home Try-On program at the end of 2025.
(5) Represents restructuring costs incurred in the second quarter of 2025 and charges for certain legal matters outside the ordinary course of business.
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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, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||
| Net revenue | $ | 235,511 | $ | 214,475 | $ | 477,958 | $ | 438,257 | ||||||||||||||
| Cost of goods sold | 99,054 | 100,866 | 210,460 | 198,668 | ||||||||||||||||||
| Gross profit | 136,457 | 113,609 | 267,498 | 239,589 | ||||||||||||||||||
| Selling, general, and administrative expenses | 133,290 | 118,134 | 262,664 | 241,643 | ||||||||||||||||||
| Income (loss) from operations | 3,167 | (4,525) | 4,834 | (2,054) | ||||||||||||||||||
| Interest and other income, net | 2,084 | 1,984 | 4,415 | 4,439 | ||||||||||||||||||
| Income (loss) before income taxes | 5,251 | (2,541) | 9,249 | 2,385 | ||||||||||||||||||
| Provision for income taxes | 607 | (789) | 1,428 | 665 | ||||||||||||||||||
| Net income (loss) | $ | 4,644 | $ | (1,752) | $ | 7,821 | $ | 1,720 | ||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| % of Net Revenue | % of Net Revenue | |||||||||||||||||||||
| Net revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||
| Cost of goods sold | 42.1 | % | 47.0 | % | 44.0 | % | 45.3 | % | ||||||||||||||
| Gross profit | 57.9 | % | 53.0 | % | 56.0 | % | 54.7 | % | ||||||||||||||
| Selling, general, and administrative expenses | 56.6 | % | 55.1 | % | 55.0 | % | 55.1 | % | ||||||||||||||
| Income (loss) from operations | 1.3 | % | (2.1) | % | 1.0 | % | (0.4) | % | ||||||||||||||
| Interest and other income, net | 0.9 | % | 0.9 | % | 0.9 | % | 1.0 | % | ||||||||||||||
| Income (loss) before income taxes | 2.2 | % | (1.2) | % | 1.9 | % | 0.6 | % | ||||||||||||||
| Provision for income taxes | 0.2 | % | (0.4) | % | 0.3 | % | 0.2 | % | ||||||||||||||
| Net income (loss) | 2.0 | % | (0.8) | % | 1.6 | % | 0.4 | % | ||||||||||||||
Components of Results of Operations
Net Revenue
We primarily derive revenue from the sales of eyewear, contact lenses, and eye care. We sell products and services through our stores, website, and mobile apps. Revenue generated from eyewear includes the sales of prescription and non-prescription optical glasses and sunglasses, eyewear accessories, lens replacements, and customer charges for optional expedited shipping. Revenue generated from eye care consists of in-person eye exams and prescriptions issued through the Virtual Vision Test app. Revenue from products 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 for services 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, purchase and fulfill contacts orders through our third-party distribution partner, and provide eye exams. Such
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costs include (i) product costs, including freight and import costs and adjustments to the lesser of cost and net realizable value, (ii) optical laboratory costs, (iii) customer shipping, (iv) occupancy and depreciation costs of retail stores, and (v) employee-related costs associated with eye exams, 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 to product mix, customer preferences and resulting demand, the cost and management of inventory, tariffs, shipping costs, laboratory utilization, and the scaling of our eye exam and contacts businesses. 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.
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 steady historically, but may 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, which consists of both online and offline advertising, includes sponsored search, online advertising, Home Try-On program costs, and other initiatives. We expect SG&A to increase in absolute dollars over time and to fluctuate as a percentage of revenue due to the anticipated growth of our business, intentional investments in marketing, and changing prices of goods and services caused by inflation and other macroeconomic factors. SG&A is expensed in the period in which it is incurred.
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 is 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. We expect our provision to fluctuate based on changes in our operations, our income before taxes, and tax laws or regulations.
Comparison of the Three Months Ended June 30, 2026 and 2025
Net Revenue
| Three Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Net revenue | $ | 235,511 | $ | 214,475 | $ | 21,036 | 9.8 | % | |||||||||||||
Net revenue increased $21.0 million, or 9.8%, for the three months ended June 30, 2026 compared to the same period in 2025. Active Customers increased 4.1% and Average Revenue per Customer increased to $336 from $316 in the prior year period. Average Revenue per Customer growth was primarily driven by our eyewear business, which benefited from increased penetration of premium lenses and enhancements, like our precision progressives, as well as an increase in customers purchasing eye exams along with glasses or contacts.
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Cost of Goods Sold, Gross Profit, and Gross Margin
| Three Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Cost of goods sold | $ | 99,054 | $ | 100,866 | $ | (1,812) | (1.8) | % | |||||||||||||
| Gross profit | 136,457 | 113,609 | 22,848 | 20.1 | % | ||||||||||||||||
| Gross margin | 57.9 | % | 53.0 | % | 4.9 | % | |||||||||||||||
Cost of goods sold decreased by $1.8 million, or 1.8%, for the three months ended June 30, 2026 compared to the same period in 2025, and decreased as a percentage of revenue over the same period, from 47.0% of revenue to 42.1% of revenue. The decrease in cost of goods sold was primarily related to the benefit from IEEPA tariff refunds, partially offset by increases in store occupancy costs and doctor headcount due to new retail stores.
Gross profit, calculated as net revenue less cost of goods sold, increased by $22.8 million, or 20.1%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to the increase in net revenue over the same period as well as a benefit from IEEPA tariff refunds.
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased by 490 basis points for the three months ended June 30, 2026 compared to the same period in 2025. The increase was primarily related to a 500 basis point benefit from IEEPA tariff refunds as well as 110 basis points from the one-time inventory write-downs in Q2 2025 related to the sunset of our Home Try-On program. These benefits were partially offset by deleverage in the fixed portion of gross margin, which includes doctor headcount and occupancy.
Selling, General, and Administrative Expenses
| Three Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Selling, general, and administrative expenses | $ | 133,290 | $ | 118,134 | $ | 15,156 | 12.8 | % | |||||||||||||
| As a percentage of net revenue | 56.6 | % | 55.1 | % | 1.5 | % | |||||||||||||||
Selling, general, and administrative expenses increased $15.2 million, or 12.8%, for the three months ended June 30, 2026 compared to the same period in 2025. This increase was primarily driven by higher payroll-related costs from growth in our retail workforce and higher corporate expenses, mainly related to technology costs. As a percentage of revenue, SG&A increased by 150 basis points, primarily driven by increased retail compensation and technology costs as a percent of revenue, partially offset by customer experience efficiencies.
Interest and Other Income, Net
| Three Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Interest and other income, net | $ | 2,084 | $ | 1,984 | $ | 100 | 5.0 | % | |||||||||||||
| As a percentage of net revenue | 0.9 | % | 0.9 | % | — | % | |||||||||||||||
Interest and other income, net increased $0.1 million, or 5.0%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to favorable fluctuations in foreign currency rates, partially offset by lower interest rates on our increased cash and cash equivalents balance.
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Provision for Income Taxes
| Three Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Provision for income taxes | $ | 607 | $ | (789) | $ | 1,396 | 176.9 | % | |||||||||||||
| As a percentage of net revenue | 0.2 | % | (0.4) | % | 0.6 | % | |||||||||||||||
Provision for income taxes increased $1.4 million, or 176.9%, for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in income before income taxes in the current year.
Comparison of the Six Months Ended June 30, 2026 and 2025
Net Revenue
| Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Net revenue | $ | 477,958 | $ | 438,257 | $ | 39,701 | 9.1 | % | |||||||||||||
Net revenue increased $39.7 million, or 9.1%, for the six months ended June 30, 2026 compared to the same period in 2025. Active Customers increased 4.1% and Average Revenue per Customer increased to $336 from $316 in the prior year period. Average Revenue per Customer growth was primarily driven by our eyewear business, which benefited from increased penetration of premium lenses and enhancements, like our precision progressives, as well as an increase in customers purchasing eye exams along with glasses or contacts.
Cost of Goods Sold, Gross Profit, and Gross Margin
| Six Months Ended June 30, | |||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Cost of goods sold | $ | 210,460 | $ | 198,668 | |||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-10-01 | Blumenthal Neil Harris | Co-Chief Executive Officer | Sell | -100,000 | $27.69 | -$2,769,000 |
| 2026-10-01 | Raider Jeffrey Jacob | Director | Sell | -15,000 | $27.70 | -$415,500 |
Source: SEC Form 4 filings.
Next expected filings
- ~2027-02-25 10-K expected by 2027-02-26 (in 105 days)
- ~2027-05-06 10-Q expected by 2027-05-07 (in 175 days)
- ~2027-08-05 10-Q expected by 2027-08-06 (in 266 days)
- ~2027-11-05 10-Q expected by 2027-11-06 (in 358 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-11-05 8-K Earnings Release; Financial Statements and Exhibits
- 2026-08-06 8-K Earnings Release; Financial Statements and Exhibits
- 2026-08-06 10-Q Quarterly Report
- 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-07 10-Q Quarterly Report
- 2026-04-28 DEF 14A Proxy Statement
- 2026-02-26 10-K Annual Report
- 2026-02-26 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2026-02-09 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-06 10-Q Quarterly Report
- 2025-11-06 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-08 10-Q Quarterly Report
- 2025-08-07 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
- 2025-05-20 8-K Unregistered Equity Sale; Other Events; Financial Statements and Exhibits
- 2025-05-08 10-Q Quarterly Report