Warby Parker Inc.

Previous wording

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.

Current wording

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 nine months ended September 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.

Previous wording

•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.

Current wording

•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 364 retail stores as of September 30, 2026.

Previous wording

•we generated net revenue of $235.5 million and $214.5 million, respectively;

Current wording

•we generated net revenue of $244.7 million and $221.7 million, respectively;

Previous wording

•we generated gross profit of $136.5 million and $113.6 million, respectively, representing a gross margin of 57.9% and 53.0%, respectively;

Current wording

•we generated gross profit of $133.2 million and $119.9 million, respectively, representing a gross margin of 54.4% and 54.1%, respectively;

Previous wording

•we generated net income of $7.8 million and $1.7 million, respectively; and

Current wording

•we generated net income of $5.6 million and $5.9 million, respectively; and

Previous wording

•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.

Current wording

•we generated Adjusted EBITDA of $28.6 million and $25.7 million, respectively, representing an Adjusted EBITDA Margin of 11.7% and 11.6%, respectively.

Previous wording

•we generated net revenue of $478.0 million and $438.3 million, respectively;

Current wording

•we generated net revenue of $722.7 million and $659.9 million, respectively;

Previous wording

•we generated gross profit of $267.5 million and $239.6 million, respectively, representing a gross margin of 56.0% and 54.7%, respectively;

Current wording

•we generated gross profit of $400.7 million and $359.5 million, respectively, representing a gross margin of 55.4% and 54.5%, respectively;

Previous wording

•we generated net income of $4.6 million and net loss of $1.8 million, respectively; and

Current wording

•we generated net income of $13.4 million and $7.6 million, respectively; and

Previous wording

•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.

Current wording

•we generated Adjusted EBITDA of $91.0 million and $80.0 million, respectively, representing an Adjusted EBITDA Margin of 12.6% and 12.1%, respectively.

Previous wording

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.

Current wording

In the second quarter of 2025, the Company announced a partnership with Google to develop AI-enabled glasses intended for all-day wear. The Company is working closely with Google on the development of intelligent eyewear and intends to launch a series of products over time. As part of this collaborative arrangement, Google has committed up to $75 million for the Company’s product development and commercialization costs. In addition, Google has committed to investing up to $75 million in Warby Parker, at the Company’s option and subject to reaching certain collaboration milestones. During the three and nine months ended September 30, 2026, the Company reduced selling, general, and administrative expenses by $12.7 million and $19.0 million, respectively, related to costs which are reimbursable by Google and are thus fully offset within the period. To date, the Company has incurred $22.3 million of reimbursable expenses, of which $9.8 million has been collected from Google as of September 30, 2026 and $12.5 million remains outstanding and is presented in prepaid expenses and other current assets on the condensed consolidated balance sheets.

Previous wording

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.

Current wording

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 becomes 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.

Previous wording

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.

Current wording

During the second quarter of 2026, the Company determined that the receipt of refunds totaling $14.4 million of IEEPA tariffs was 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. During the three months ended September 30, 2026, $1.6 million of the $2.6 million was recognized through cost of goods sold as inventory turned, and substantially all of the remainder is expected to be recognized in the fourth quarter of 2026. During the three and nine months ended September 30, 2026, the Company recorded interest income of $0.4 million and $0.6 million, respectively, related to IEEPA tariffs which is included in interest and other income. As of September 30, 2026, all of the cash had been collected.

Previous wording

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.

Current wording

We have expanded our retail store footprint over the past several years. During the three months ended September 30, 2026 and 2025, we opened 12 and 15 net new retail stores, respectively. As of September 30, 2026, 329 out of our 364 retail stores offered in-person eye exams, representing 90.4% of our fleet, compared to 87.9% as of September 30, 2025.

Previous wording

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.

Current wording

We define Adjusted EBITDA as net income before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment charges, 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.

Previous wording

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:

Current wording

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 income or other financial statement data presented in our condensed consolidated financial statements as indicators of financial performance. Some of the limitations are:

Previous wording

(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.

Current wording

(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 valuation of awards granted, and vesting of awards including the satisfaction of performance conditions. For the three months ended September 30, 2026 and 2025, the amount includes $0.5 million and $0.3 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises. For the nine months ended September 30, 2026 and 2025, the amount includes $1.5 million and $1.2 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.

Previous wording

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.

Current wording

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, paid protection plans, 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.

Previous wording

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 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.

Current wording

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 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 include 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.

Previous wording

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.

Current wording

Net revenue increased $23.1 million, or 10.4%, for the three months ended September 30, 2026 compared to the same period in 2025. Active Customers increased 3.0% and Average Revenue per Customer increased to $342 from $320 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.

Previous wording

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.

Current wording

Cost of goods sold increased by $9.8 million, or 9.7%, for the three months ended September 30, 2026 compared to the same period in 2025, and decreased as a percentage of revenue over the same period, from 45.9% of revenue to 45.6% of revenue. The increase in cost of goods sold was primarily related to store occupancy costs and doctor headcount due to new retail stores.

Previous wording

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.

Current wording

Gross profit, calculated as net revenue less cost of goods sold, increased by $13.2 million, or 11.0%, for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to the increase in net revenue over the same period.

Previous wording

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.

Current wording

Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased by 30 basis points for the three months ended September 30, 2026 compared to the same period in 2025. The increase was primarily related to leverage from our glasses business, driven by reduced tariffs, customer shipping savings, optical lab efficiencies, and increased penetration of progressives and other lens treatments. These benefits were partially offset by deleverage from growth in vision services, which has a lower margin than glasses, and in fixed expenses related to occupancy costs.

Previous wording

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.

Current wording

Selling, general, and administrative expenses increased $13.2 million, or 11.4%, for the three months ended September 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 50 basis points, primarily driven by retail compensation and corporate expenses, including higher technology costs, partially offset by leverage from marketing.

Previous wording

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.

Current wording

Interest and other income, net increased $0.4 million, or 19.7%, for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to favorable fluctuations in foreign currency rates, partially offset by lower interest on our cash and cash equivalents balance.

Previous wording

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.

Current wording

Provision for income taxes increased $0.7 million, or 550.4%, for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to an increase in income before income taxes in the current year.

Previous wording

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.

Current wording

Net revenue increased $62.8 million, or 9.5%, for the nine months ended September 30, 2026 compared to the same period in 2025. Active Customers increased 3.0% and Average Revenue per Customer increased to $342 from $320 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.

Previous wording

Cost of goods sold increased by $11.8 million, or 5.9%, for the six months ended June 30, 2026 compared to the same period in 2025, and decreased as a percentage of revenue over the same period, from 45.3% of revenue to 44.0% of revenue. The increase in cost of goods sold was primarily driven by increases in store occupancy costs and doctor headcount due to new retail stores, as well as increased product and fulfillment costs associated with our sales growth, partially offset by the benefit from IEEPA tariff refunds.

Current wording

Cost of goods sold increased by $21.6 million, or 7.2%, for the nine months ended September 30, 2026 compared to the same period in 2025, and decreased as a percentage of revenue over the same period, from 45.5% of revenue to 44.6% of revenue. The increase in cost of goods sold was primarily driven by increases in store occupancy costs and doctor headcount due to new retail stores, as well as increased product and fulfillment costs associated with our contacts sales growth, partially offset by reduced tariffs.

Previous wording

Gross profit, calculated as net revenue less cost of goods sold, increased by $27.9 million, or 11.6%, for the six 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.

Current wording

Gross profit, calculated as net revenue less cost of goods sold, increased by $41.1 million, or 11.4%, for the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to the increase in net revenue over the same period.

Previous wording

Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased by 130 basis points for the six months ended June 30, 2026 compared to the same period in 2025. The increase was primarily related to a 250 basis point benefit from IEEPA tariff refunds. These benefits were partially offset by deleverage in the fixed portion of gross margin, which includes doctor headcount and occupancy.

Current wording

Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased by 90 basis points for the nine months ended September 30, 2026 compared to the same period in 2025. The increase was primarily related to a 160 basis point benefit from IEEPA tariff refunds. This benefit was partially offset by deleverage from growth in vision services, which has a lower margin than glasses, and in fixed expenses related to occupancy costs.

Previous wording

Selling, general, and administrative expenses increased $21.0 million, or 8.7%, for the six 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 was flat, as customer experience efficiencies, marketing costs related to our now retired Home Try-On program, and stock-based compensation were partially offset by deleverage from our retail workforce.

Current wording

Selling, general, and administrative expenses increased $34.3 million, or 9.6%, for the nine months ended September 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 10 basis points, as deleverage from our retail workforce was partially offset by leverage from customer experience efficiencies and marketing.

Previous wording

Interest and other income, net was flat for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to favorable fluctuations in foreign currency rates, offset by lower interest rates on our increased cash and cash equivalents balance.

Current wording

Interest and other income, net increased $0.4 million for the nine months ended September 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 cash and cash equivalents balance.

Previous wording

Provision for income taxes increased $0.8 million, or 114.7%, for the six 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.

Current wording

Provision for income taxes increased $1.5 million, or 268.7%, for the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to an increase in income before income taxes in the current year.

Previous wording

Since inception, we have financed our operations primarily from net proceeds from the sale of redeemable convertible preferred stock and cash flows from operating activities. We also have access to cash from our 2024 Credit Facility, as described below, which remains undrawn as of June 30, 2026. We had cash and cash equivalents of $292.7 million, which was primarily held for working capital purposes, and an accumulated deficit of $677.8 million as of June 30, 2026. As of December 31, 2025, we had cash and cash equivalents of $286.4 million, which was primarily held for working capital purposes, and an accumulated deficit of $685.6 million.

Current wording

Since inception, we have financed our operations primarily from net proceeds from the sale of redeemable convertible preferred stock and cash flows from operating activities. We also have access to cash from our 2024 Credit Facility, as described below, which remains undrawn as of September 30, 2026. We had cash and cash equivalents of $287.9 million, which was primarily held for working capital purposes, and an accumulated deficit of $672.2 million as of September 30, 2026. As of December 31, 2025, we had cash and cash equivalents of $286.4 million, which was primarily held for working capital purposes, and an accumulated deficit of $685.6 million.

Previous wording

In February 2026, the Company’s Board of Directors authorized a share repurchase program to purchase up to $100.0 million of the Company’s Class A common stock (the “Share Repurchase Program”). Repurchases under the Share Repurchase Program may be made in the open market, in privately negotiated transactions, or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. The Share Repurchase Program does not have a fixed expiration date, does not obligate the Company to acquire any particular amount of Class A common stock, and may be modified, suspended, or terminated at any time at the discretion of the Company’s Board of Directors. During the three and six months ended June 30, 2026, the Company did not purchase any shares under the Share Repurchase Program.

Current wording

In February 2026, the Company’s Board of Directors authorized a share repurchase program to purchase up to $100.0 million of the Company’s Class A common stock (the “Share Repurchase Program”). Repurchases under the Share Repurchase Program may be made in the open market, in privately negotiated transactions, or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. The Share Repurchase Program does not have a fixed expiration date, does not obligate the Company to acquire any particular amount of Class A common stock, and may be modified, suspended, or terminated at any time at the discretion of the Company’s Board of Directors. During the three and nine months ended September 30, 2026, the Company did not purchase any shares under the Share Repurchase Program.

Previous wording

Net cash provided by operating activities was $54.1 million for the six months ended June 30, 2026, consisting of net income of $7.8 million adjusted for $55.8 million of non-cash expenses and $9.5 million of net cash used as a result of changes in operating assets and liabilities. The non-cash charges included $27.8 million of depreciation and amortization, $21.3 million of stock-based compensation, $4.0 million of non-cash charitable contributions, $2.1 million of amortization of cloud-based software implementation costs, and $0.6 million of asset impairment charges. The changes in operating assets and liabilities were primarily driven by an increase in prepaid expenses and other assets and a decrease in deferred revenue, partially offset by increases in accounts payable and accrued expenses.

Current wording

Net cash provided by operating activities was $78.9 million for the nine months ended September 30, 2026, consisting of net income of $13.4 million adjusted for $80.1 million of non-cash expenses and $14.6 million of net cash used as a result of changes in operating assets and liabilities. The non-cash charges included $42.3 million of depreciation and amortization, $29.8 million of stock-based compensation, $4.0 million of non-cash charitable donations, $3.0 million of amortization of cloud-based software implementation costs, and $1.0 million of asset impairment charges. The changes in operating assets and liabilities were primarily driven by an increase in prepaid expenses and other assets and a decrease in deferred revenue and accounts payable, partially offset by an increase in accrued expenses.

Previous wording

Net cash provided by operating activities was $69.6 million for the six months ended June 30, 2025, consisting of net income of $1.7 million, adjusted for $50.7 million of non-cash expenses and $17.2 million of net cash generated as a result of changes in operating assets and liabilities. The non-cash charges included $24.6 million of depreciation and amortization, $21.2 million of stock-based compensation, $2.8 million of non-cash charitable contributions, $1.5 million of amortization of cloud-based software implementation costs, and $0.5 million of asset impairment charges. The changes in operating assets and liabilities were primarily driven by a decrease in inventory and an increase in accrued expenses and leasehold liabilities, partially offset by a decrease in deferred revenue.

Current wording

Net cash provided by operating activities was $87.5 million for the nine months ended September 30, 2025, consisting of net income of $7.6 million adjusted for $71.2 million of non-cash expenses and $8.7 million of net cash provided as a result of changes in operating assets and liabilities. The non-cash charges included $37.2 million of depreciation and amortization, $28.3 million of stock-based compensation, $2.8 million of non-cash charitable donations, $2.4 million of amortization of cloud-based software implementation costs, and $0.5 million of asset impairment charges. The changes in operating assets and liabilities were primarily driven by a decrease in inventory and an increase in accrued expenses and leasehold liabilities, partially offset by decreases in accounts payable and deferred revenue.

Previous wording

For the six months ended June 30, 2026, net cash used in investing activities was $39.0 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores and investments in capitalized software development costs.

Current wording

For the nine months ended September 30, 2026, net cash used in investing activities was $65.7 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores and investments in capitalized software development costs.

Previous wording

For the six months ended June 30, 2025, net cash used in investing activities was $32.4 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores and investments in capitalized software development costs.

Current wording

For the nine months ended September 30, 2025, net cash used in investing activities was $51.9 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores and investments in capitalized software development costs.

Previous wording

For the six months ended June 30, 2026, net cash used in financing activities was $8.5 million, which was primarily related to cash paid for shares withheld for taxes for stock-based compensation, partially offset by proceeds from shares issued in connection with our ESPP and option exercises.

Current wording

For the nine months ended September 30, 2026, net cash used in financing activities was $11.3 million, which was primarily related to cash paid for shares withheld for taxes for stock-based compensation, partially offset by proceeds from shares issued in connection with our ESPP and option exercises.