Revolve Group, Inc.

Previous wording

REVOLVE is the next-generation fashion retailer for Millennial and Generation Z consumers. As a trusted premium lifestyle brand and a go-to online source for discovery and inspiration, we deliver exceptional service and an engaging customer experience with a vast yet curated offering totaling over 110,000 apparel and footwear styles, as well as beauty, accessories and home products as of December 31, 2024. Our dynamic platform connects a deeply engaged community of millions of consumers, thousands of global fashion influencers and over 1,400 emerging, established and owned brands as of December 31, 2024. Through more than 20 years of continued investment in technology, data analytics and innovative marketing and merchandising strategies, we have built a powerful platform and brand that we believe is connecting with the next generation of consumers and is redefining fashion retail for the 21st century.

Current wording

REVOLVE is the next-generation fashion retailer for Millennial and Generation Z consumers. As a trusted premium lifestyle brand and a go-to online source for discovery and inspiration, we deliver exceptional service and an engaging customer experience with a vast yet curated offering totaling over 140,000 apparel and footwear styles, as well as beauty and accessories. Our dynamic platform connects a deeply engaged community of millions of consumers, thousands of global fashion influencers and over 1,600 emerging, established and owned brands. Through more than 20 years of investment in technology, data analytics and innovative marketing and merchandising strategies, we have built a powerful platform and brand that we believe is connecting with the next generation of consumers and is redefining fashion retail.

Previous wording

We sell merchandise through two complementary segments, REVOLVE and FWRD, that leverage one platform. Through REVOLVE, we offer an assortment of premium apparel, footwear, beauty, accessories and home products from emerging, established and owned brands. Through FWRD, we offer an assortment of curated and elevated iconic and emerging luxury brands. REVOLVE has historically been focused on the discovery of trend-driven, ready-to-wear styles, while FWRD has been more heavily weighted toward the statement pieces in our customers’ wardrobe, such as shoes and handbags. We believe that FWRD provides our customer with a unique destination for luxury products as our customers’ spending power increases and their desire for fashion and inspiration remains central to their self-expression.

Current wording

We sell merchandise through two complementary segments, REVOLVE and FWRD, that leverage one platform. Through REVOLVE, we offer an assortment of premium apparel, footwear, beauty and accessories from emerging, established and owned brands. Through FWRD, we offer an assortment of curated and elevated iconic and emerging luxury brands. REVOLVE has historically been focused on the discovery of trend-driven, ready-to-wear styles, while FWRD has been more heavily weighted toward the statement pieces in our customers’ wardrobe, such as shoes and handbags. We believe that FWRD provides our customer with a unique destination for luxury products as our customers’ spending power increases and their desire for fashion and inspiration remains central to their self-expression.

Previous wording

We review our inventory levels on an ongoing basis to identify slow-moving merchandise and use product markdowns to efficiently sell these products. We have maintained a high percentage of sales that occur at full price, which we believe reflects our data-driven merchandising strategy, our focus on emerging and owned brands that minimizes our assortment overlap with other retailers, customer acceptance of our merchandise and the sense of urgency we create through frequent product introductions in limited quantities. Gross margin is impacted by the mix of sales at full price and markdowns, as well as the level of markdowns.

Current wording

We review our inventory levels on an ongoing basis to identify slow-moving merchandise and use product markdowns to efficiently sell these products. We have maintained a high percentage of sales that occur at full price, which we believe reflects our data-driven merchandising strategy, customer acceptance of our merchandise and the sense of urgency we create through frequent product introductions in limited quantities. Gross margin is impacted by the mix of sales at full price and markdowns, as well as the level of markdowns.

Previous wording

A reconciliation of Adjusted EBITDA to net income for the three and nine months ended September 30, 2025 and 2024 is as follows:

Current wording

A reconciliation of Adjusted EBITDA to net income for the three months ended March 31, 2026 and 2025 is as follows:

Previous wording

The following table presents a reconciliation of free cash flow to net cash provided by operating activities, as well as information regarding net cash used in investing activities and net cash provided by financing activities, for each of the periods indicated:

Current wording

The following table presents a reconciliation of free cash flow to net cash provided by operating activities, as well as information regarding net cash used in investing activities and net cash used in financing activities, for each of the periods indicated:

Previous wording

Active customers increased during the period ended September 30, 2025 compared to the same period in 2024 primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts. Although the impact, if any, is uncertain, customer behavior may be adversely affected by changes in trade policies and other macroeconomic factors. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Current wording

Active customers increased during the period ended March 31, 2026 compared to the same period in 2025 primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts.

Previous wording

Total orders placed increased in the three and nine months ended September 30, 2025 compared to the same periods in 2024, primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts. Although the impact, if any, is uncertain, customer behavior may be adversely affected by changes in trade policies and other macroeconomic factors. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Current wording

Total orders placed increased in the three months ended March 31, 2026 compared to the same period in 2025, primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts.

Previous wording

We define average order value as the sum of the total gross sales from our sites in a given period, prior to product returns, divided by the total orders placed in that period. We believe our high average order value demonstrates the premium nature of our product assortment. We believe that average order value is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. Average order value varies depending on the site through which we sell merchandise, the percentage of sales at full price, and for sales at less than full price, the level of markdowns on these products, product mix, and the number of units per order. Average order value can be adversely impacted by negative consumer sentiment, including as a result of tariffs. A shift in product mix toward lower-priced products or categories may also reduce our average order value. In the near-term, average order value may decrease year-over-year given the challenging macroeconomic environment, as customers seek to purchase products at more accessible price points. We expect this potential decrease to be at least partially offset by price increases as a result of the actual or anticipated effects of tariffs, though any long-term impact remains unclear. The impact of tariffs may also impair comparability of average order value with prior periods. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Current wording

We define average order value as the sum of the total gross sales from our sites in a given period, prior to product returns, divided by the total orders placed in that period. We believe that average order value is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. Average order value varies depending on the site through which we sell merchandise, the percentage of sales at full price, and for sales at less than full price, the level of markdowns on these products, product mix, and the number of units per order. Average order value can be adversely impacted by negative consumer sentiment, including as a result of tariffs. A shift in product mix toward lower-priced products or categories may also reduce our average order value.

Previous wording

Average order value increased in the three months ended September 30, 2025, relative to the same periods in 2024, primarily due to an increase in units per order, an increase in full price sales and to a lesser extent, selective price increases, partially offset by shift in product mix. Average order value decreased in the nine months ended September 30, 2025, relative to the same periods in 2024, primarily due to a shift in product mix.

Current wording

Average order value increased in the three months ended March 31, 2026, relative to the same period in 2025, primarily due to an increase in average selling price, partially offset by a decrease in units per order.

Previous wording

Since May 2025, the U.S. government has imposed incremental tariffs of 30% on most goods imported from China, from which we source a significant portion of our products, subject to certain exceptions. This tariff rate is comprised of a 20% fentanyl-related tariff rate imposed under the International Emergency Economic Powers Act, or the IEEPA, since March 2025, and a temporarily reduced 10% reciprocal tariff imposed under IEEPA since May 2025. When factoring in the pre-existing Section 301 tariffs of 7.5% on products we import, these policies combine for an additional 37.5% tariff rate on goods we import from China. These rates are subject to changes, particularly in light of ongoing bilateral trade negotiations between the United States and China, and at various points in 2025, this total tariff rate on goods imported from China reached 152.5%. These tariffs are in addition to the baseline Harmonized Tariff Schedule, or HTS, tariffs, which vary by product. In addition, U.S. tariffs on goods imported from other countries from which we source products included an incremental reciprocal tariff of 10% imposed since April 2025. Since August 7, 2025, higher reciprocal tariff rates for many U.S. trading partners, including countries such as Japan, Turkey, Indonesia and India, have been imposed pursuant to additional executive orders modifying the reciprocal tariff rates for certain countries. Products of India have also been targeted since August 2025 with an additional 25% tariff (on top of baseline HTS, reciprocal and other applicable duties) due to India’s import of crude oil from Russia. Heightened tariffs, particularly on Chinese goods, directly impact our owned brand products and, to a lesser extent, a limited number of third-party branded products for which we are the importer of record. In addition, we face various indirect exposures to the effects of heightened tariffs from other third-party brands. If U.S. tariffs on China or other countries from which we source products are sustained at heightened levels or are increased further, it will increase our cost of sales and may also increase the price of our products. Raising prices of our products could adversely impact customer demand. In addition, heightened tariffs may adversely impact our ability to acquire products on acceptable terms and may also adversely impact global logistics, which may result in our inability to purchase sufficient inventory to meet customer demand and in turn materially and adversely impact our net sales. Furthermore, these and future changes in trade policy may adversely impact the macroeconomic environment, consumer sentiment and international demand if consumers outside of the United States boycott U.S. retailers. If we are not able to adjust our inventory levels and our inventory assortment in response to reduced customer demand, our gross margin may be adversely impacted.

Current wording

Heightened tariffs, particularly on Chinese goods, directly impact our owned brand products and, to a lesser extent, a limited number of third-party branded products for which we are the importer of record. In addition, we face various indirect exposures to the effects of heightened tariffs from other third-party brands. If U.S. tariffs on China or other countries from which we source products are reinstated or are increased further, it will increase our cost of sales and may also increase the price of our products. Raising prices of our products could adversely impact customer demand. In addition, heightened tariffs may adversely impact our ability to acquire products on acceptable terms and may also adversely impact global logistics, which may result in our inability to purchase sufficient inventory to meet customer demand and in turn materially and adversely impact our net sales. Furthermore, these and future changes in trade policy may adversely impact the macroeconomic environment, consumer sentiment and international demand if consumers outside of the United States boycott U.S. retailers. If we are not able to adjust our inventory levels and our inventory assortment in response to reduced customer demand, our gross margin may be adversely impacted

Previous wording

We are undertaking a series of actions and initiatives to mitigate the impact of heightened tariffs, including cost-sharing discussions with our owned brand manufacturing partners, diversifying our owned brand manufacturing sources outside of China, partnering with our third-party brands to mitigate the impact of tariffs, optimizing our product import logistics, selectively increasing prices for our products and further optimizing our supply chain. However, our mitigation efforts may be costly and may not yield near-term results or be as effective as we intend, or at all, and may have other negative impacts on our business, operations and financial condition. See the sections titled “Risk Factors—Risks Related to Our Business and Industry—Tariffs imposed by the U.S. or foreign governments or a global trade war has increased and may in the future continue to increase the cost of our products, which could have a material adverse effect on our business, financial condition and results of operations” and “—We purchase inventory in anticipation of sales, and if we are unable to manage our inventory effectively, our operating results could be adversely affected.”

Current wording

We have and continue to undertake a series of actions and initiatives to mitigate the impact of heightened tariffs, including cost-sharing discussions with our owned brand manufacturing partners, diversifying our owned brand manufacturing sources outside of China, partnering with our third-party brands to mitigate the impact of tariffs, optimizing our product import logistics, selectively increasing prices for our products and further optimizing our supply chain. However, our mitigation efforts may be costly and may not yield near-term results or be as effective as we intend, or at all, and may have other negative impacts on our business, operations and financial condition. See the sections titled “Risk Factors—Risks Related to Our Business and Industry—Tariffs imposed by the U.S. or foreign governments or a global trade war has increased and may in the future continue to increase the cost of our products, which could have a material adverse effect on our business, financial condition and results of operations” and “—We purchase inventory in anticipation of sales, and if we are unable to manage our inventory effectively, our operating results could be adversely affected.”

Previous wording

If our marketing efforts do not connect with our customer or fail to cost-effectively promote our brands or convert impressions into new customers, our net sales growth and profitability will be adversely affected. The social media and influencer-based marketing landscape continues to shift and competition remains intense, which may adversely impact our ability to differentiate ourselves and cost-effectively acquire and retain customers. Furthermore, changes in the user experience on search, social media and other platforms, including recent developments in artificial intelligence, or AI, and the introduction of large language models, or LLMs, a shift towards video and the level of recommended content as well as changes in privacy practices by third parties, may make it more difficult to gain customer awareness and cost-effectively acquire and retain customers. For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality, which may change consumer search behavior and affect our ability to cost-effectively acquire and retain customers. Additionally, Apple Inc. has imposed requirements for consumer disclosures regarding privacy practices, and has implemented an application tracking transparency framework that requires opt-in consent for certain types of tracking. This transparency framework was launched in April 2021 and has made it more difficult and costly to acquire and retain customers. In June 2023, Apple announced new software development kit, or SDK, privacy controls that it has integrated into iOS 17, which was released in September 2023, including new protections designed to limit tracking or identification of user devices. Additionally, Apple Inc. recently updated Apple Mail, including automated inbox categorization, sender-level grouping, and AI-generated email previews. These changes may reduce the visibility and effectiveness of our email communications, which could negatively impact customer engagement and, over time, affect customer retention. In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers’ ability to collect app and user data across Android devices, and in July 2024, announced its change from a previously-announced plan to stop supporting third-party cookies in its Google Chrome browser as a part of this initiative.

Current wording

If our marketing efforts do not connect with our customer or fail to cost-effectively promote our brands or convert impressions into new customers, our net sales growth and profitability will be adversely affected. The social media and influencer-based marketing landscape continues to shift and competition remains intense, which may adversely impact our ability to differentiate ourselves and cost-effectively acquire and retain customers. Furthermore, changes in the user experience on search, social media and other platforms, including recent developments in artificial intelligence, or AI, and the introduction of large language models, or LLMs, a shift towards video and the level of recommended content as well as changes in privacy practices by third parties, may make it more difficult to gain customer awareness and cost-effectively acquire and retain customers. For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality, which may change consumer search behavior and affect our ability to cost-effectively acquire and retain customers. Additionally, Apple Inc. has imposed requirements for consumer disclosures regarding privacy practices, and has implemented an application tracking transparency framework that requires opt-in consent for certain types of tracking. This transparency framework was launched in April 2021 and has made it more difficult and costly to acquire and retain customers. Apple Inc. introduced new SDK privacy controls in 2023 that it integrated into iOS 17, including new protections designed to limit tracking or identification of user devices. Apple Inc. has also updated Apple Mail, including automated inbox categorization, sender-level grouping, and AI-generated email previews. These changes may reduce the visibility and effectiveness of our email communications, which could negatively impact customer engagement and, over time, affect customer retention. In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers’ ability to collect app and user data across Android devices, and in July 2024, announced its change from a previously-announced plan to stop supporting third-party cookies in its Google Chrome browser as a part of this initiative.

Previous wording

We leverage our platform and technology to buy and manage our inventory, including merchandise assortment and fulfillment center optimization. We utilize a data-driven “read and react” buying process to merchandise and curate the latest on-trend fashion. We generally make shallow initial inventory buys and then use our proprietary technology tools to identify and re-order best sellers, taking into account customer feedback across a variety of key metrics, which allows us to manage inventory and fashion risk. To ensure sufficient availability of merchandise, we generally purchase inventory in advance and frequently before apparel trends are confirmed. As a result, we are vulnerable to demand and pricing shifts and to suboptimal selection and timing of merchandise purchases. In the normal course of business, we incur inventory valuation adjustments, which are reflected in our gross margin. Moreover, our inventory investments will fluctuate with the needs of our business. For example, entering new categories will require additional investments in inventory. In addition, increased tariffs and global trade instability could also negatively impact customer demand, our supply chain and cost to source from China and other countries, which in turn could adversely impact our ability to manage our inventory at appropriate levels. Shifts in inventory levels may result in fluctuations in the percentage of full price sales, levels of markdowns, merchandise mix, as well as gross margin.

Current wording

We leverage our platform and technology to buy and manage our inventory, including merchandise assortment and fulfillment center optimization. We utilize a data-driven “read and react” buying process to merchandise and curate the latest on-trend fashion. We generally make shallow initial inventory buys and then use our proprietary technology tools to identify and re-order best sellers, taking into account customer feedback across a variety of key metrics, which allows us to manage inventory and fashion risk. To ensure sufficient availability of merchandise, we generally purchase inventory in advance and frequently before apparel trends are confirmed. As a result, we are vulnerable to demand and pricing shifts and to suboptimal selection and timing of merchandise purchases. In the normal course of business, we incur inventory valuation adjustments, which impact our gross margin. Moreover, our inventory investments will fluctuate with the needs of our business. For example, entering new categories will require additional investments in inventory. Shifts in inventory levels may result in fluctuations in the percentage of full price sales, levels of markdowns, merchandise mix, as well as gross margin.

Previous wording

The REVOLVE segment contributes to a majority of our net sales, representing 86.1% and 86.0% of our net sales for the three months ended September 30, 2025 and 2024, respectively, and 86.3% and 85.9% of our net sales for the nine months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025 and 2024, REVOLVE generated $254.6 million and $243.4 million in net sales, respectively, representing an increase of 4.6%. During the nine months ended September 30, 2025 and 2024, REVOLVE generated $777.5 million and $718.5 million in net sales, respectively, representing an increase of 8.2%. The net sales increase in the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in the number of orders shipped and an increase in average order value, partially offset by a higher proportion of returned purchases. The net sales increase in the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in the number of orders shipped and a lower proportion of returned purchases.

Current wording

The REVOLVE segment contributes to a majority of our net sales, representing 85.5% and 85.7% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, REVOLVE generated $293.2 million and $254.4 million in net sales, respectively, representing an increase of 15.3%. The net sales increase in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of orders shipped, a lower proportion of returned purchases and an increase in average order value.

Previous wording

The FWRD segment contributes to a smaller portion of our overall net sales, representing 13.9% and 14.0% of our net sales for the three months ended September 30, 2025 and 2024, respectively, and 13.7% and 14.1% of our net sales for the nine months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025 and 2024, FWRD generated $41.0 million and $39.7 million in net sales, respectively, representing an increase of 3.2%. During the nine months ended September 30, 2025 and 2024, FWRD generated $123.8 million and $117.6 million in net sales, respectively, representing an increase of 5.3%. The net sales increase in the three and nine months ended September 30, 2025, as compared to the same periods in 2024, was primarily due to an increase in the number of orders shipped, partially offset by a decrease in average order value.

Current wording

The FWRD segment contributes to a smaller portion of our overall net sales, representing 14.5% and 14.3% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, FWRD generated $49.6 million and $42.3 million in net sales, respectively, representing an increase of 17.3%. The net sales increase in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of orders shipped, an increase in average order value and a lower proportion of returned purchases.

Previous wording

Net sales to customers in the United States contributed to 78.3% and 78.6% of our net sales for the three months ended September 30, 2025 and 2024, respectively, and 79.0% and 79.7% of our net sales for the nine months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025 and 2024, net sales to customers in the United States were $231.4 million and $222.7 million, respectively, representing an increase of 3.9%. During the nine months ended September 30, 2025 and 2024, net sales to customers in the United States were $712.3 million and $666.8 million, respectively, representing an increase of 6.8%.

Current wording

Net sales to customers in the United States contributed to 79.9% and 80.6% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, net sales to customers in the United States were $274.0 million and $239.2 million, respectively, representing an increase of 14.5%.

Previous wording

Net sales to customers outside of the United States contributed to 21.7% and 21.4% of our net sales for the three months ended September 30, 2025 and 2024, respectively, and 21.0% and 20.3% of our net sales for the nine months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025 and 2024, net sales to customers outside of the United States were $64.2 million and $60.5 million, respectively, representing an increase of 6.1%. During the nine months ended September 30, 2025 and 2024, net sales to customers outside of the United States were $189.0 million and $169.3 million, respectively, representing an increase of 11.6%.

Current wording

Net sales to customers outside of the United States contributed to 20.1% and 19.4% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, net sales to customers outside of the United States were $68.9 million and $57.5 million, respectively, representing an increase of 19.9%.

Previous wording

Cost of sales consists of our purchase price for merchandise sold to customers and includes import duties, net of drawback claims, and other taxes, inbound freight costs, receiving costs, defective merchandise returned from customers, inventory valuation adjustments, and other miscellaneous shrinkage. Cost of sales is primarily driven by the cost of the product, the number of total orders placed by customers, the mix of the product available for sale on our sites and transportation costs related to inventory receipts from our vendors. We expect our cost of sales to fluctuate as a percentage of net sales primarily due to how we manage our inventory and merchandise mix. We have recently experienced and may continue to experience an increase in the cost of goods due to an increase in the cost of materials. In the near-term, we expect cost of sales as a percentage of net sales to increase as a result of increased tariffs, particularly on products with a China origin.

Current wording

Cost of sales consists of our purchase price for merchandise sold to customers and includes import duties, net of drawback claims, and other taxes, inbound freight costs, receiving costs, defective merchandise returned from customers, inventory valuation adjustments, and other miscellaneous shrinkage. Cost of sales is primarily driven by the cost of the product, the number of total orders placed by customers, the mix of the product available for sale on our sites and transportation costs related to inventory receipts from our vendors. We expect our cost of sales to fluctuate as a percentage of net sales primarily due to how we manage our inventory and merchandise mix. We have recently experienced and may continue to experience an increase in the cost of goods due to an increase in the cost of materials.

Previous wording

Marketing expenses consist primarily of costs to execute targeted marketing campaigns across free and paid channels, such as paid search/product listing ads, affiliate marketing, paid social, retargeting, search engine optimization, personalized email and SMS marketing, and mobile “push” communications through our mobile applications. Marketing expenses also consist of investment in brand marketing channels, including events, payments to influencers and other forms of online and offline marketing. Marketing expenses are primarily related to growing and retaining our customer base and building the REVOLVE and FWRD brands. Over the long term, we expect marketing expenses to increase in absolute dollars as we continue to scale our business, and may fluctuate as a percentage of sales depending on net sales volume, the level of marketing investment in a particular period and the competitive environment. We may make opportunistic investments in marketing initiatives that may increase marketing as a percentage of net sales to levels in excess of historical levels for certain quarters or periods of time in the future.

Current wording

Marketing expenses consist primarily of targeted online performance marketing costs, such as paid search/product listing ads, affiliate marketing, paid social, retargeting, search engine optimization, personalized email and SMS marketing, and mobile “push” communications through our mobile applications. Marketing expenses also consist of investment in brand marketing channels, including events, payments to influencers and other forms of online and offline marketing. Marketing expenses are primarily related to growing and retaining our customer base and building the REVOLVE and FWRD brands. Over the long term, we expect marketing expenses to increase in absolute dollars as we continue to scale our business, and may fluctuate as a percentage of sales depending on net sales volume, the level of marketing investment in a particular period and the competitive environment. We may make opportunistic investments in marketing initiatives that may increase marketing as a percentage of net sales to levels in excess of historical levels for certain quarters or periods of time in the future.

Previous wording

Other income, net consists primarily of interest income on our money market funds, partially offset by foreign currency exchange gains and losses and fees associated with our line of credit. For the three and nine months ended September 30, 2025, other income, net includes $4.5 million of insurance proceeds related to a previously disclosed shipment theft incident. For the nine months ended September 30, 2025, other income, net also includes a $2.4 million loss on deconsolidation of a subsidiary. For the nine months ended September 30, 2024, other income, net includes $2.8 million of insurance proceeds related to a settled legal matter.

Current wording

Other income, net consists primarily of interest income on our money market funds, foreign currency exchange gains and losses, and fees associated with our line of credit.

Previous wording

The increase in net sales for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to a 4.5% increase in the number of orders shipped combined with a 1.0% increase in the average order value, partially offset by a higher proportion of returned purchases.

Current wording

The increase in net sales for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a 11.8% increase in the number of orders shipped, a lower proportion of returned purchases and a 1.0% increase in the average order value.

Previous wording

Net sales in the REVOLVE segment increased 4.6% to $254.6 million in the three months ended September 30, 2025 as compared to net sales of $243.4 million in the same period in 2024. Net sales in the FWRD segment increased 3.2% to $41.0 million in the three months ended September 30, 2025 as compared to net sales of $39.7 million in the same period in 2024.

Current wording

Net sales in the REVOLVE segment increased 15.3% to $293.2 million in the three months ended March 31, 2026 as compared to net sales of $254.4 million in the same period in 2025. Net sales in the FWRD segment increased 17.3% to $49.6 million in the three months ended March 31, 2026 as compared to net sales of $42.3 million in the same period in 2025.

Previous wording

The increase in cost of sales for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in net sales. The decrease in cost of sales as a percentage of net sales was primarily due to a lower mix of third-party brand sales and shallower markdowns within markdown sales, partially offset by a lower percentage of full price sales and the impact of increased import tariff rates.

Current wording

The increase in cost of sales for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in net sales. The decrease in cost of sales as a percentage of net sales was primarily due to shallower markdowns within markdown sales and a lower mix of third-party brand sales, partially offset by a lower percentage of full price sales.

Previous wording

The increase in fulfillment expenses for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in the number of units processed. The decrease in fulfillment expenses as a percentage of net sales was primarily due to a lower proportion of returned purchases, partially offset by a decrease in average order value.

Current wording

The increase in fulfillment expenses for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of units processed. The decrease in fulfillment expenses as a percentage of net sales was primarily due to a lower proportion of returned purchases.

Previous wording

The increase in selling and distribution expenses for the three months ended September 30, 2025, as compared to the same period in 2024, was due to increases in orders placed and net sales that resulted in a $2.1 million increase in shipping and handling costs, a $0.4 million increase in merchant processing fees, a $0.4 million increase in customer service expenses and a $0.9 million increase in other selling expenses. The increase in selling and distribution expenses as a percentage of net sales was primarily due to higher shipping rates and a higher proportion of returned purchases as compared to the same period in the prior year, partially offset by an increase in average order value.

Current wording

The increase in selling and distribution expenses for the three months ended March 31, 2026, as compared to the same period in 2025, was due to increases in orders placed and net sales that resulted in a $5.3 million increase in shipping and handling costs, a $1.8 million increase in merchant processing fees and a $0.6 million increase in other selling expenses. Selling and distribution expenses as a percentage of net sales were flat as compared to the three months ended March 31, 2025, as higher shipping rates were offset by a lower proportion of returned purchases and an increase in average order value.

Previous wording

The increase in marketing expenses for the three months ended September 30, 2025, as compared to the same period in 2024, was due to a $0.8 million increase in performance marketing expense and a $0.1 million increase in brand marketing expense. The decrease in marketing expenses as a percentage of net sales was due to efficiencies in our performance marketing and brand marketing investments.

Current wording

The increase in marketing expenses for the three months ended March 31, 2026, as compared to the same period in 2025, was due to a $6.3 million increase in performance marketing expense and a $5.5 million increase in brand marketing expense. The increase in marketing expenses as a percentage of net sales was primarily due to incremental marketing investments to support various growth initiatives, including the launch of our first-ever namesake label, REVOLVE Los Angeles, within our owned brand assortment.

Previous wording

The increase in general and administrative expenses for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to a $5.7 million increase related to professional services and other occupancy costs, a $5.0 million increase in salaries and related benefits and equity-based compensation expense, a $2.0 million increase in non-routine and transaction costs and a $1.7 million increase in other operating expenses. The increase in general and administrative expenses as a percentage of net sales was driven by increased investment in strategic growth initiatives and an increase in non-routine and transaction costs.

Current wording

The increase in general and administrative expenses for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a $2.0 million increase in salaries and related benefits and equity-based compensation expense, a $0.4 million increase related to professional services and other occupancy costs and a $2.0 million increase in other operating expenses to support business growth. The decrease in general and administrative expenses as a percentage of net sales was driven by scale efficiencies with growth in net sales outpacing growth in general and administrative expenses.

Previous wording

The increase in the effective tax rate for the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in valuation allowance against deferred income tax assets, partially offset by a decrease in state income taxes.

Current wording

The decrease in the effective tax rate for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to the prior year increase in valuation allowance against deferred tax assets, which did not recur in the current period.

Previous wording

On March 23, 2021, we amended and restated our existing credit agreement to, among other things, extend the expiration date from March 23, 2021 to March 23, 2026. On May 11, 2023, we amended the credit agreement to replace the LIBO reference rate with a term SOFR reference rate and made conforming changes throughout the credit agreement. The line of credit provides us with up to $75.0 million aggregate principal in revolver borrowings, based on eligible inventory and accounts receivable less reserves. Borrowings under the credit agreement accrue interest, at our option, at (1) a base rate equal to the highest of (a) the federal funds rate, plus 0.50%, (b) the prime rate and (c) an adjusted term SOFR rate determined on the basis of a one-month interest period, plus 1.00%, or (2) an adjusted term SOFR rate, subject to a floor of 0.00%, in each case, plus a margin ranging from 0.25% to 0.75% per year in the case of base rate loans, and 1.25% to 1.75% per year in the case of term SOFR rate loans. No borrowings were outstanding as of September 30, 2025 and December 31, 2024.

Current wording

On February 2, 2026, we amended our existing credit agreement to, among other things, extend the maturity date from March 23, 2026 to February 2, 2031, adjust the eligible inventory component of the borrowing base, amend certain of the reporting obligations and provide additional flexibility under certain of the negative covenants. The line of credit provides us with up to $75.0 million aggregate principal in revolver borrowings, based on eligible inventory and accounts receivable less reserves. Borrowings under the credit agreement accrue interest at a per annum rate equal to, at our option, (1) a base rate equal to the highest of (a) the federal funds rate, plus 0.50%, (b) the prime rate and (c) a term SOFR rate determined on the basis of a one-month interest period, plus 1.00%, or (2) a term SOFR rate, subject to a floor of 0.00%, in each case, plus a margin ranging from 0.25% to 0.75% per year in the case of base rate loans, and 1.25% to 1.75% per year in the case of term SOFR rate loans, depending upon availability under the credit agreement as of the most recently ended fiscal quarter. No borrowings were outstanding as of March 31, 2026 and December 31, 2025.

Previous wording

We are also obligated to pay other customary fees for a credit facility of this size and type, including an unused commitment fee. The credit agreement also permits us, in certain circumstances, to request an increase in the facility by an additional amount of up to $25.0 million (in an initial minimum amount of $10.0 million and in increments of $5.0 million thereafter) at the same maturity, pricing and other terms. Our obligations under the credit agreement are secured by substantially all of our assets. The credit agreement also contains customary covenants restricting certain of our activities, including limitations on our ability to sell assets, engage in mergers and acquisitions, enter into transactions involving related parties, obtain letters of credit, incur indebtedness, repurchase stock or grant liens or negative pledges on our assets, make loans or make other investments. Under these covenants, we are prohibited from paying cash dividends with respect to our capital stock. We were in compliance with all financial covenants as of September 30, 2025 and December 31, 2024.

Current wording

We are also obligated to pay other customary fees for a credit facility of this size and type, including an unused commitment fee. The credit agreement also permits us, in certain circumstances, to request an increase in the facility by an additional amount of up to $25.0 million (in an initial minimum amount of $10.0 million and in increments of $5.0 million thereafter) at the same maturity, pricing and other terms as the existing revolving commitments. Our obligations under the credit agreement are secured by substantially all of our assets and the assets of our subsidiaries that are borrowers or guarantors under the credit agreement. The credit agreement also contains customary covenants restricting certain of our activities, including limitations on our ability to sell assets, engage in mergers and acquisitions, enter into transactions involving related parties, obtain letters of credit, incur indebtedness, repurchase stock or grant liens or negative pledges on our assets, make loans or make other investments. Under these covenants, we are prohibited from paying cash dividends with respect to our capital stock, subject to certain exceptions. We are also required to maintain a minimum consolidated fixed charge coverage ratio of 1.00 to 1.00 for any twelve consecutive fiscal month period, determined as of the last date of each fiscal quarter.

Previous wording

For the nine months ended September 30, 2025, we generated $69.6 million of operating cash flow as compared to $22.8 million for the same period in 2024. The increase in our operating cash flow was primarily due to favorable impact from changes in working capital and higher net income adjusted for certain non-cash items.

Current wording

For the three months ended March 31, 2026, we generated $49.4 million of operating cash flow as compared to $45.1 million for the same period in 2025. The increase in our operating cash flow was primarily due to higher net income adjusted for certain non-cash items and favorable impact from changes in working capital.

Previous wording

As of September 30, 2025, our principal contractual obligations consist of obligations under operating leases for office and fulfillment facilities. There have been no material changes in our contractual obligations and commitments as compared to the contractual obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025.

Current wording

As of March 31, 2026, our principal contractual obligations consist of obligations under operating leases for office and fulfillment facilities and retail stores. There have been no material changes in our contractual obligations and commitments as compared to the contractual obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026.