Purple Innovation (PRPL) Q4 2025 earnings summary

Executive summary

• Revenue grew 9% year-over-year in Q4 2025, driven by wholesale channel expansion and improved showroom profitability, marking an inflection point with positive adjusted EBITDA of $8.8 million.

• Full-year 2025 saw positive adjusted EBITDA and gross margin exceeding 40%, a profitability milestone not seen since 2021.

• Strategic actions included disciplined cost initiatives, manufacturing consolidation, expanded Mattress Firm and Costco distribution, and a focus on premium products.

Financial highlights

• Q4 2025 net revenue was $140.7 million, up 9.1% year-over-year; full-year revenue was $468.7 million, down 3.9% from prior year.

• Q4 gross margin was 41.9%, down 100 bps year-over-year but up 870 bps over two years; full-year gross margin rose 310 bps to 40.2%.

• Q4 adjusted EBITDA was $8.8 million (vs. $2.9 million prior year); full-year adjusted EBITDA was $1.9 million (vs. -$20.8 million prior year).

• Q4 adjusted loss per share was $0.02 (vs. $0.11 prior year); full-year adjusted net loss per share was $0.32 (vs. $0.51 prior year).

• Operating expenses for 2025: $231.6 million, down 15.3% year-over-year.

Outlook and guidance

• 2026 revenue expected between $500 million-$520 million; adjusted EBITDA guidance is $20 million-$30 million.

• Q1 2026 revenue expected at $100 million-$105 million, with adjusted EBITDA loss of $7 million to $4 million.

• Guidance reflects premium product momentum, expanded wholesale, and operational leverage, not market recovery.

• Positive free cash flow expected for 2026, with CapEx targeted at $10 million-$12 million.