FIGS, Inc.

Previous wording

At June 30, 2025, we had approximately 2.7 million active customers. Our customers come to us through word of mouth referrals, as well as through our data-driven brand and performance marketing efforts. See the section titled “Key Operating Metrics and Non-GAAP Financial Measures” for a definition of active customers.

Current wording

At September 30, 2025, we had approximately 2.8 million active customers. Our customers come to us through word of mouth referrals, as well as through our data-driven brand and performance marketing efforts. See the section titled “Key Operating Metrics and Non-GAAP Financial Measures” for a definition of active customers.

Previous wording

In the three and six months ended June 30, 2025, we had the following results compared to the comparable periods in 2024:

Current wording

In the three and nine months ended September 30, 2025, we had the following results compared to the comparable periods in 2024:

Previous wording

◦Expanded our community of active customers by 4.1% from approximately 2.6 million at June 30, 2024 to approximately 2.7 million at June 30, 2025;

Current wording

◦Expanded our community of active customers by 4.0% from approximately 2.7 million at September 30, 2024 to approximately 2.8 million at September 30, 2025;

Previous wording

◦Adjusted EBITDA increased from $12.9 million to $19.7 million for the three months ended June 30, 2025, and increased from $25.9 million to $28.9 million for the six months ended June 30, 2025, representing an adjusted EBITDA margin of 12.9% and 10.4%, respectively;

Current wording

◦Adjusted EBITDA increased from $4.8 million to $18.9 million for the three months ended September 30, 2025, and increased from $30.7 million to $47.8 million for the nine months ended September 30, 2025, representing an adjusted EBITDA margin of 12.4% and 11.1%, respectively;

Previous wording

◦Cash flows from operating activities decreased from $28.2 million to $(3.2) million for the six months ended June 30, 2025; and

Current wording

◦Cash flows from operating activities decreased from $50.7 million to $0.2 million for the nine months ended September 30, 2025; and

Previous wording

◦Free cash flow decreased from $18.7 million to $(5.6) million for the six months ended June 30, 2025.

Current wording

◦Free cash flow decreased from $37.1 million to $(5.1) million for the nine months ended September 30, 2025.

Previous wording

We continue to monitor changes in policy impacting global trade, including tariffs, which have been dynamic and unpredictable. On April 2, 2025, the United States announced a new universal baseline tariff of 10% on all U.S. imports, plus an additional country-specific tariff for select trading partners, including Vietnam, Jordan and China. The rates and effective dates of these additional tariffs have been adjusted on several occasions since the initial announcement, and certain of these tariffs are subject to legal and other challenges, the outcome of which could further change tariff rates and effective dates.

Current wording

We continue to monitor changes in policy impacting global trade, including tariffs, which have been dynamic and unpredictable. There is currently a universal baseline tariff of 10% on all U.S. imports, in addition to country-specific tariffs for select trading partners, including Vietnam and Jordan, which together account for nearly all of our production of finished goods. The rates and effective dates of these additional tariffs have been adjusted on several occasions since they were announced in early 2025, and certain of these tariffs are subject to legal and other challenges, the outcome of which could further change tariff rates and effective dates.

Previous wording

Our provision for income taxes consists of an estimate of federal, state and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions and uncertain tax positions.

Current wording

Our provision (benefit) for income taxes consists of an estimate of federal, state and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions and uncertain tax positions.

Previous wording

(1)Includes stock-based compensation expense of $7.6 million and $10.2 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

(1)Includes stock-based compensation expense of $6.8 million and $10.5 million for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Net revenues increased by $14.0 million, or 5.3%, for the six months ended June 30, 2025, compared to the prior year period. The increase in net revenues was primarily driven by an increase in orders from new and existing customers and an increase in AOV.

Current wording

Net revenues increased by $11.5 million, or 8.2%, for the three months ended September 30, 2025, compared to the prior year period. The increase in net revenues was primarily driven by an increase in orders and AOV.

Previous wording

Operating expenses decreased by $3.4 million, or 3.5%, for the three months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 5.9 percentage points, primarily driven by decrease in selling expense, general and administrative expense, and marketing expense as a percentage of net revenues.

Current wording

Operating expenses decreased by $6.2 million, or 6.1%, for the three months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 9.6 percentage points, primarily driven by decrease in marketing expense, selling expense, and general and administrative expense as a percentage of net revenues.

Previous wording

Selling expense decreased by $2.5 million, or 6.8%, for the three months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 3.0 percentage points. The decrease in selling expense as a percentage of net revenues was primarily driven by lower fulfillment and shipping expenses.

Current wording

Selling expense decreased by $2.8 million, or 7.1%, for the three months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 3.9 percentage points. The decrease in selling expense as a percentage of net revenues was primarily driven by lower fulfillment expense and lower shipping expenses.

Previous wording

Marketing expense increased by $0.1 million, or 0.6%, for the three months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 0.7 percentage points. The decrease in marketing expense as a percentage of net revenues was primarily driven by greater efficiency in our digital marketing spend and lapping of prior year expenses related to our 2024 Olympics campaign.

Current wording

Marketing expense decreased by $5.1 million, or 17.7%, for the three months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 4.8 percentage points. The decrease in marketing expense as a percentage of net revenues was primarily driven by lapping of prior year expenses related to our 2024 Olympics campaign and greater efficiency in our marketing spend.

Previous wording

General and administrative expense decreased by $3.2 million, or 4.4%, for the six months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased 2.5 percentage points. The decrease in general and administrative expense as a percentage of net revenues was primarily due to lower stock-based compensation expense, partially offset by higher depreciation and increased investment in people.

Current wording

General and administrative expense increased by $1.6 million, or 4.5%, for the three months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased 0.8 percentage points. The decrease in general and administrative expense as a percentage of net revenues was primarily due to lower stock-based compensation expense, partially offset by increased investment in people.

Previous wording

Provision for income taxes increased by $1.6 million, or 50.2%, for the three months ended June 30, 2025, compared to the same period last year, primarily due to an increase in pre-tax income.

Current wording

Provision for income taxes increased by $7.2 million, or 180.3%, for the three months ended September 30, 2025, compared to the same period last year, primarily due to an increase in pre-tax income.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our condensed consolidated financial statements.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has applied the OBBBA to its condensed consolidated financial statements and determined that its impact was not material.

Previous wording

(1)Includes stock-based compensation expense of $14.9 million and $22.1 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(1)Includes stock-based compensation expense of $21.7 million and $32.4 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net revenues increased by $8.4 million, or 5.8%, for the three months ended June 30, 2025, compared to the prior year period. The increase in net revenues was primarily driven by an increase in orders from new and existing customers and an increase in AOV.

Current wording

Net revenues increased by $25.5 million, or 6.3%, for the nine months ended September 30, 2025, compared to the prior year period. The increase in net revenues was primarily driven by an increase in orders and an increase in AOV.

Previous wording

Gross margin decreased 0.4 percentage points for the three months ended June 30, 2025, compared to the same period last year. The decrease in gross margin was driven by higher inventory reserves and tariffs, partially offset by higher duty drawback and a lower return rate.

Current wording

Gross margin increased 0.5 percentage points for the nine months ended September 30, 2025, compared to the same period last year. The increase in gross margin was driven by fewer discounts, improved return rates and processing, and lower duty rates, partially offset by tariffs.

Previous wording

Operating expenses decreased by $0.4 million, or 0.2%, for the six months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 3.5 percentage points, primarily driven by a decrease in selling expense, marketing expense, and general and administrative expense as a percentage of net revenues.

Current wording

Operating expenses decreased by $6.6 million, or 2.4%, for the nine months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 5.7 percentage points, primarily driven by a decrease in general and administrative expense, marketing expense, and selling expense as a percentage of net revenues.

Previous wording

Selling expense increased by $1.7 million, or 2.6%, for the six months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 0.6 percentage points. The decrease in selling expense as a percentage of net revenues was primarily due to higher fulfillment expenses in the same period last year following our transition to a new facility.

Current wording

Selling expense decreased by $1.0 million, or 1.0%, for the nine months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased by 1.8 percentage points. The decrease in selling expense as a percentage of net revenues was primarily due to higher fulfillment expenses in the same period last year following our transition to a new facility.

Previous wording

Marketing expense increased by $1.1 million, or 2.6%, for the six months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased 0.4 percentage points. The decrease in marketing expense as a percentage of net revenues was primarily driven by greater efficiency in our digital marketing.

Current wording

Marketing expense decreased by $4.0 million, or 5.8%, for the nine months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased 1.9 percentage points. The decrease in marketing expense as a percentage of net revenues was primarily driven by lapping of prior year expenses related to our 2024 Olympics campaign and greater efficiency in our marketing spend.

Previous wording

General and administrative expense decreased by $1.0 million, or 2.9%, for the three months ended June 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased 2.0 percentage points. The decrease in general and administrative expense as a percentage of net revenues was primarily due to lower stock-based compensation expense, partially offset by higher depreciation and increased investment in people.

Current wording

General and administrative expense decreased by $1.6 million, or 1.5%, for the nine months ended September 30, 2025, compared to the same period last year and, as a percentage of net revenues, decreased 2.0 percentage points. The decrease in general and administrative expense as a percentage of net revenues was primarily due to lower stock-based compensation expense, partially offset by increased investment in people and higher depreciation.

Previous wording

Other income, net decreased for the six months ended June 30, 2025, compared to the same period last year, primarily due to a decrease in interest income driven by lower interest rates.

Current wording

Other income, net decreased for the nine months ended September 30, 2025, compared to the same period last year, primarily due to a decrease in interest income driven by lower interest rates.

Previous wording

Provision for income taxes increased by $1.8 million, or 34.5%, for the six months ended June 30, 2025, compared to the same period last year, primarily due to an increase in pre-tax income.

Current wording

Provision for income taxes increased by $9.0 million, or 798.8%, for the nine months ended September 30, 2025, compared to the same period last year, primarily due to an increase in pre-tax income.

Previous wording

We define AOV as the sum of the total net revenues in a given period divided by the total orders placed in that period. Total orders are the summation of all completed individual purchase transactions in a given period. We believe our relatively high average order value demonstrates the premium nature of our product. As we expand into and increase our presence in additional product categories, price points and international markets, AOV may fluctuate. AOV for the three and six months ended June 30, 2025 and 2024, respectively, are presented in the following table:

Current wording

We define AOV as the sum of the total net revenues in a given period divided by the total orders placed in that period. Total orders are the summation of all completed individual purchase transactions in a given period. We believe our relatively high average order value demonstrates the premium nature of our product. As we expand into and increase our presence in additional product categories, price points and international markets, AOV may fluctuate. AOV for the three and nine months ended September 30, 2025 and 2024, respectively, are presented in the following table:

Previous wording

We calculate adjusted EBITDA as net income adjusted to exclude: other income, net; gain/loss on disposal of assets; provision for income taxes; depreciation and amortization expense; stock-based compensation and related expense; transaction costs; and expenses related to non-ordinary course disputes. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net revenues.

Current wording

We calculate adjusted EBITDA as net income (loss) adjusted to exclude: other income, net; gain/loss on disposal of assets; provision (benefit) for income taxes; depreciation and amortization expense; stock-based compensation and related expense; transaction costs; and expenses related to non-ordinary course disputes. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net revenues.

Previous wording

The following table reflects a reconciliation of adjusted EBITDA to net income, the most directly comparable financial measure prepared in accordance with GAAP and presents adjusted EBITDA margin with net income margin, the most directly comparable financial measure prepared in accordance with GAAP:

Current wording

The following table reflects a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable financial measure prepared in accordance with GAAP and presents adjusted EBITDA margin with net income (loss) margin, the most directly comparable financial measure prepared in accordance with GAAP:

Previous wording

(3)For the six months ended June 30, 2025, reflects $171,000 of stock-based compensation expense and payroll taxes inadvertently not reflected in our previously disclosed Adjusted EBITDA results for the three months ended March 31, 2025.

Current wording

(3)For the nine months ended September 30, 2025, reflects $171,000 of stock-based compensation expense and payroll taxes inadvertently not reflected in our previously disclosed Adjusted EBITDA results for the three months ended March 31, 2025.

Previous wording

(4)Net income margin represents net income as a percentage of net revenues.

Current wording

(4)Net income (loss) margin represents net income (loss) as a percentage of net revenues.

Previous wording

We calculate free cash flow as net cash (used in) provided by operating activities reduced by capital expenditures, including purchases of property and equipment and capitalized software development costs. We believe free cash flow is a useful supplemental measure of liquidity and an additional basis for assessing our ability to generate cash. There are limitations related to the use of free cash flow as an analytical tool, including that other companies may calculate free cash flow differently, which reduces its usefulness as a comparative measure, and free cash flow does not reflect our future contractual commitments, nor does it represent the total residual cash flow for a given period.

Current wording

We calculate free cash flow as net cash provided by operating activities reduced by capital expenditures, including purchases of property and equipment and capitalized software development costs. We believe free cash flow is a useful supplemental measure of liquidity and an additional basis for assessing our ability to generate cash. There are limitations related to the use of free cash flow as an analytical tool, including that other companies may calculate free cash flow differently, which reduces its usefulness as a comparative measure, and free cash flow does not reflect our future contractual commitments, nor does it represent the total residual cash flow for a given period.

Previous wording

As of June 30, 2025 and December 31, 2024, we had $50.8 million and $85.6 million of cash and cash equivalents, respectively. Since inception, we have financed operations primarily through cash flows from operating activities, the sale of our capital stock and borrowings under credit facilities.

Current wording

As of September 30, 2025 and December 31, 2024, we had $46.5 million and $85.6 million of cash and cash equivalents, respectively. Since inception, we have financed operations primarily through cash flows from operating activities, the sale of our capital stock and borrowings under credit facilities.

Previous wording

In September 2021, we entered into a credit agreement with Bank of America, N.A. providing for a revolving credit facility in an amount of up to $100.0 million (as amended, the “2021 Facility”). The 2021 Facility will mature in September 2026. As of June 30, 2025, we had no outstanding borrowings under the 2021 Facility (other than $4.9 million of outstanding letters of credit) and available borrowings of $95.1 million.

Current wording

In September 2021, we entered into a credit agreement with Bank of America, N.A. (as amended from time to time, the “Credit Agreement”) providing for a revolving credit facility in an amount of up to $100.0 million (as amended, the “2021 Facility”). On November 3, 2025, we entered into a second amendment to the Credit Agreement, which, among other things, extends the maturity date of the 2021 Facility from September 7, 2026 to November 3, 2030 and reduces the annual commitment fee to 0.15% of the unused Revolving Facility (as defined in the Credit Agreement). As of September 30, 2025, we had no outstanding borrowings under the 2021 Facility (other than $4.9 million of outstanding letters of credit) and available borrowings of $95.1 million.

Previous wording

Cash flows from operating activities decreased by $31.4 million for the six months ended June 30, 2025, compared to the same period last year. The decrease in operating cash flows was a result of the timing of payments against accrued expenses of $30.9 million and higher inventory purchases of $19.5 million. The decrease in operating cash flows was partly offset by higher cash flows due to the timing of payments of prepaid expenses and other current assets of $9.1 million, the timing of cash payments related to accounts payable of $4.9 million, and the timing of payments of accrued compensation and benefits of $4.9 million.

Current wording

Cash flows from operating activities decreased by $50.5 million for the nine months ended September 30, 2025, compared to the same period last year. The decrease in operating cash flows was a result of higher inventory purchases of $31.1 million, the timing of payments against accrued expenses of $28.9 million, and the timing of cash payments related to accounts payable of $14.8 million. The decrease in operating cash flows was partly offset by higher cash flows due to the timing of payments of accrued compensation and benefits of $8.6 million, the timing of payments of prepaid expenses and other current assets of $8.2 million, and the increase in net income, including the impact of non-cash adjustments, of $6.6 million.

Previous wording

Cash flows from investing activities increased by $11.7 million for the six months ended June 30, 2025, compared to the same period last year. The increase in cash flows from investing activities was primarily due to a decrease in purchases of property and equipment of $7.1 million, an increase in maturities of available-for-sale securities of $3.5 million, and a decrease in purchases of available-for-sale securities of $1.3 million.

Current wording

Cash flows from investing activities increased by $25.7 million for the nine months ended September 30, 2025, compared to the same period last year. The increase in cash flows from investing activities was primarily due to an increase in maturities of available-for-sale securities of $12.1 million, a decrease in purchases of property and equipment of $8.4 million, and a decrease in purchases of available-for-sale securities of $5.5 million.

Previous wording

Capital expenditures during the six months ended June 30, 2025 were primarily related to capitalized software development costs and purchases of computer equipment.

Current wording

Capital expenditures during the nine months ended September 30, 2025 were primarily related to capitalized software development costs and purchases of computer equipment.

Previous wording

Cash flows from financing activities were $(2.5) million for the six months ended June 30, 2025. Cash flows from financing activities decreased by $2.8 million as compared to the same period last year primarily due to repurchases of our Class A common stock in the current year with no comparable activity in the prior year.

Current wording

Cash flows from financing activities increased by $5.6 million as compared to the same period last year primarily due to a decrease in repurchases of our Class A common stock in the current year compared to the same period last year.

Previous wording

Refer to Note 10 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for commitments entered into during the six months ended June 30, 2025.

Current wording

Refer to Note 10 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for commitments entered into during the nine months ended September 30, 2025.