Warby Parker (WRBY) Q1 2025 earnings summary

Executive summary

• Net revenue grew 11.9% year-over-year to $223.8 million for Q1 2025, with adjusted EBITDA rising to $29.2 million (13.1% margin) and the first positive GAAP net income as a public company at $3.5 million.

• Active customers increased 8.7% to 2.57 million, with average revenue per customer up 4.8% to $310 and strong retention rates.

• Opened 11 net new stores, ending Q1 with 287 locations, and achieved the highest e-commerce growth since 2021.

• Strategic priorities include continued investment in marketing, product innovation, omnichannel expansion, and supply chain diversification.

• Decisive actions taken to mitigate higher tariffs, including supply chain shifts, selective price increases, and disciplined expense management.

Financial highlights

• Q1 2025 revenue was $223.8 million, up 11.9% year-over-year; adjusted EBITDA was $29.2 million (13.1% margin), and net income was $3.5 million.

• Adjusted gross margin was 56.4%, down slightly from 56.9% last year; gross profit was $126.0 million.

• Free cash flow was $13.2 million, with cash and cash equivalents at $265.1 million at quarter-end.

• Retail revenue increased 14.8% and e-commerce revenue rose 5.5% year-over-year.

• Adjusted SG&A was $110.3 million (49.3% of revenue); SG&A expenses were $123.5 million (55.2% of revenue).

Outlook and guidance

• Full-year 2025 net revenue guidance: $869–$886 million (13–15% growth year-over-year); adjusted EBITDA guidance: $91–$97 million (10.5–11% margin).

• Q2 2025 guidance: net revenue $211–$214 million (12–14% growth), adjusted EBITDA $20–$22 million (~10% margin).

• 45 new store openings planned for 2025, including five Target shop-in-shops in H2.

• Guidance reflects a more conservative outlook due to macro uncertainty and tariff impacts.

• Management expects continued investment in business expansion and store growth, with sufficient liquidity to fund operations for at least the next 12 months.