Brilliant Earth Group, Inc.
For the period ended Dec 31, 2025. Filed Mar 17, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 17, 2026
BRLT$1.45-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-13.
0001866757-25-000038
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-17.
0001628280-26-018794
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 141 previous paragraphs and 141 current paragraphs.
84 unchanged; 37 reworded; 18 added; 20 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
•Net sales of $437.5 million compared to $422.2 million for the year ended December 31, 2024;
Current report
•Adjusted EBITDA of$12.0 million compared to $21.1 million for the year ended December 31, 2024; and
Current report
•Adjusted EBITDA marginof 2.7% compared to 5.0% for the year ended December 31, 2024.
Current report
In addition, many of the materials that go into our products are sourced and manufactured internationally. Tariffs on imports into the U.S. have had an impact on our materials costs and have the potential to further impact our business depending on the outcome of changes in U.S. trade policy and any corresponding actions by other countries in which companies with which we do business are located. Similarly, increases in prices of gold, platinum and other precious metals have also had an impact on our materials costs and have the potential to further impact our business. Any deterioration in macroeconomic conditions resulting from uncertainties and effects from tariffs, increases in the costs of materials, especially of gold, platinum and other precious metals, increased congestion and/or new import/export restrictions at ports that we rely on for our business, or delays or disruptions in the delivery of materials could adversely impact our business, financial condition, and operating results.
Current report
The U.S. federal government has in the past experienced, and may in the future experience, shutdowns, funding gaps, or other fiscal disruptions. Such disruptions may result in broader economic uncertainty that could affect demand for our products, disrupt supply chains, or result in reduced discretionary spending by our customers.
Current report
Income Tax Expense
Current report
Interest expense for the year ended December 31, 2025 decreased by$2.7 million, or 54.6%, compared to the year ended December 31, 2024, primarily due to the prepayment of all principal amounts outstanding of $34.8 million under the SVB Term Loan in August 2025. As a result of the prepayment, the Company recognized a loss on debt extinguishment of $0.6 million associated with the write-off of unamortized debt issuance costs.
Current report
Gain on TRA Liability Adjustment
Current report
The Company entered into a TRA with the Continuing Equity Owners to pay 85% of the tax savings from the tax basis adjustment to them as such savings are realized. As a result of exchanges of Class B common stock for Class A common stock, the long-term portion of the potential TRA liability was$7.8 million at December 31, 2024. For similar reasons that led the Company to record a full valuation allowance on the deferred tax assets, we evaluated the probability of amounts being owed pursuant to the TRA and determined the likelihood of a future liability was not probable at the current time and therefore did not record a TRA liability for the year ended December 31, 2025. As a result, the Company reduced the TRA liability to zero and recognized a gain on TRA liability adjustment of $7.8 million in the Company's consolidated statement of operations for the year ended December 31, 2025.
Current report
Income Tax Expense
Current report
Brilliant Earth Group, Inc.’s income tax expense was $9.6 million for the year ended December 31, 2025 compared to income tax expense of$0.2 million for the year ended December 31, 2024. During the fourth quarter 2025, the Company evaluated the likelihood it would realize its deferred tax assets and determined it was more likely than not that its deferred tax assets would not be realized and a full valuation allowance was recorded. The Company recognized approximately $9.6 million of deferred tax expense in the consolidated statement of operations primarily related to the increase in the valuation allowance and changes in deferred taxes related to the outside basis difference of Brilliant Earth Group, Inc.'s investment in Brilliant Earth, LLC.
Current report
In August 2025, our Board declared a one-time cash dividend of $0.25 per share to holders of our Class A common stock and holders of common units of Brilliant Earth, LLC, respectively. The distribution from Brilliant Earth, LLC totaled approximately $25.0 million, of which a pro rata portion was used by us to fund the dividend. Payment of the dividend was made on September 8, 2025 to holders of record of our Class A common stock as of the close of business on August 22, 2025. Approximately $21.2 million was paid to holders of common units of Brilliant Earth, LLC and approximately $3.8 million was paid to holders of the Company's Class A common stock.
Current report
Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of the Board, subject to the requirements of applicable law, compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness. Any such determination will also depend upon the Company's business prospects, results of operations, financial condition, cash requirements and availability, industry trends, and other factors that the Board may deem relevant.
Current report
Net cash used in financing activities was $88.5 million for the year ended December 31, 2025 compared to $6.6 million for the year ended December 31, 2024. The increase of$81.9 million was primarily due to higher payments made on the SVB Term Loan of$52.0 million and higher dividends and distributions paid to members of $26.2 million. Additionally, the Company paid a one-time cash dividend of $3.8 million to holders of the Company's Class A common stock.
Current report
In May 2025, we made principal payments totaling$20 million on the SVB Term Loan. No additional principal payments were required until the Maturity Date.
Current report
In August 2025, we prepaid all principal amounts outstanding of$34.8 million under the SVB Term Loan and terminated all commitments outstanding under the SVB Credit Agreement. As a result of the prepayment, we recognized a loss on debt extinguishment of$0.6 million associated with the write-off of unamortized debt issuance costs.
Current report
As a result of the prepayment of all principal amounts outstanding under the SVB Term Loan, and termination of all commitments outstanding under the SVB Credit Agreement, we are no longer required to be in compliance with any covenants under the SVB Credit Agreement as of December 31, 2025.
Current report
During the fourth quarter of 2025, we evaluated the likelihood we would realize the deferred tax assets and determined the probability was more likely than not that the deferred tax assets will not be realized and recorded a full valuation allowance for the year ended December 31, 2025. In connection with the Company recording a full valuation allowance for its deferred tax assets, it was also determined a TRA liability was not probable at the current time. As a result, the Company reduced the TRA liability to zero and recognized a gain on TRA liability adjustment of $7.8 million in the Company's consolidated statement of operations for the year ended December 31, 2025.
Removed paragraphs (20)
Previous report
•Net sales of $422.2 million compared to $446.4 million for the year ended December 31, 2023;
Previous report
•Adjusted EBITDA of$21.1 million compared to $26.2 million for the year ended December 31, 2023; and
Previous report
•Adjusted EBITDA marginof 5.0% compared to 5.9% for the year ended December 31, 2023.
Previous report
Costs of Operating as a Public Company
Previous report
The costs of operating as a public company are significant as we are subject to the reporting, listing, and compliance requirements of various governing bodies and applicable securities laws and regulations. Since becoming a public company, compliance with rules and regulations has increased and may continue to increase our legal, financial, and technology compliance costs, and to make some activities more difficult, time-consuming, and costly. Remaining compliant and satisfying our obligations as a public company, while maintaining forecasted gross margins and operating results, and attracting and retaining qualified persons to serve on our Board, our Board committees, or as our executive officers is critical to our future success.
Previous report
Income Tax (Expense) Benefit
Previous report
Interest expense for the year ended December 31, 2024 decreased by$0.1 million, or 1.9%, compared to the year ended December 31, 2023, primarily due to a decrease in the average principal debt outstanding during the year ended December 31, 2024 as compared to the prior year.
Previous report
Income Tax (Expense) Benefit
Previous report
Brilliant Earth Group, Inc.’s income tax expense was $0.2 million for the year ended December 31, 2024 compared to an income tax benefit of $0.4 million for the year ended December 31, 2023. The increase in income tax expense was primarily due to additional taxes related to additional taxable income from Brilliant Earth, LLC, as well as additional deferred tax expense due to basis movements related to the TRA, as compared to the year ended December 31, 2023.
Previous report
As of December 31, 2024, the SVB Credit Agreement had an outstanding principal balance of$56.1 million, excluding unamortized debt issuance costs of$0.4 million, of which$50.4 million is classified as long-term.
Previous report
We also have scheduled principal payments on our SVB Credit Agreement as presented below (in thousands):
Previous report
Net cash used in financing activities was $6.6 million for the year ended December 31, 2024 compared to $13.1 million for the year ended December 31, 2023. The decrease of$6.5 million was primarily due to lower tax distributions to members pursuant to the LLC Agreement of $8.1 million. The decrease in tax distributions paid to members was partially offset by an increase in payments made on the SVB Credit Agreement (defined below) of $0.8 million, repurchases of $0.6 million of our Class A common stock under the share repurchase program, and the payment of debt issuance costs of $0.1 million in connection with the First Amendment (as defined below).
Previous report
As of December 31, 2024, there were no amounts outstanding under the SVB Revolving Facility and there was$56.1 million of total debt outstanding under the SVB Term Loan, of which $50.4 million is classified as long-term debt.
Previous report
The SVB Credit Facilities are secured by substantially all assets of Brilliant Earth, LLC and any of its future material subsidiaries, subject to customary exceptions. Brilliant Earth, LLC’s future material subsidiaries (subject to certain customary exceptions) will guarantee repayment of the SVB Credit Facilities.
Previous report
Borrowings under the SVB Credit Facilities bear interest at either (a) a secured overnight financing rate plus an annual adjustment of 0.125%, plus an applicable margin of 2.25% to 2.75%, depending on the Consolidated Total Leverage Ratio (defined below), or an alternate base rate plus an applicable margin of 1.25% to 1.75%, depending on the Consolidated Total Leverage Ratio, each subject to a 0.00% floor. In addition, Brilliant Earth, LLC has agreed to pay a commitment fee on the first day of each quarter on the unused amount of the SVB Revolving Facility, equal to 0.25% to 0.35% per annum depending on the Consolidated Total Leverage Ratio. The Consolidated Total Leverage Ratio is defined as the ratio, as of the last day of any four fiscal quarter period, of (a) Consolidated Total Indebtedness of the Company and its subsidiaries to (b) the Consolidated EBITDA for such period (each term as further defined in the SVB Credit Agreement).
Previous report
The SVB Term Loan is required to be repaid on the last day of each calendar quarter in an amount equal to 1.25% per quarter through June 30, 2024, 1.875% per quarter from September 30, 2024 through June 30, 2025, and 2.50% per quarter thereafter, with the balance payable on the Maturity Date. The SVB Term Loan is also subject to certain mandatory prepayment requirements in connection with asset sales, casualty events and debt incurrence, subject to customary exceptions.
Previous report
The SVB Credit Facilities are subject to customary affirmative covenants and negative covenants as well as financial maintenance covenants. The financial covenants are tested at the end of each fiscal quarter, beginning with the quarter ended June 30, 2022, and requires that (a) the Company and its subsidiaries not have a Consolidated Fixed Charge Coverage Ratio (defined as the ratio of (i) Consolidated EBITDA, less cash taxes (including tax distributions), less certain capital expenditures, less cash dividends and other cash restricted payments, to (ii) the sum of cash interest expense and scheduled principal payments on outstanding debt (in each case, as further defined in the SVB Credit Agreement)) of less than 1.25 to 1.00, (b) the Company and its subsidiaries not have a Consolidated Total Leverage Ratio of more than 4.00 to 1.00, and (c) Brilliant Earth, LLC and its subsidiaries not have a Consolidated Borrower Leverage Ratio (defined substantially similar as Consolidated Total Leverage Ratio, but limited to Brilliant Earth, LLC and its subsidiaries) in excess of 3.00 to 1.00 (which level is subject to temporary increases to 4.00 to 1.00 in connection with certain acquisitions).
Previous report
On February 21, 2024, we entered into the First Amendment to the SVB Credit Agreement (the “First Amendment”), pursuant to which the lenders agreed to suspend the requirement to comply with the Consolidated Fixed Charge Coverage Ratio covenant on the last day of the fiscal quarters ended December 31, 2023, March 31, 2024, and June 30, 2024. The First Amendment also required us to maintain Balance Sheet Cash (defined as unrestricted cash and cash equivalents held in accounts with the lenders and their affiliates) in an amount greater than the sum of the aggregate principal amount outstanding under the SVB Revolving Facility (including issued letters of credit) and the aggregate principal amount of the SVB Term Loan outstanding at such time, which requirement applied at all times commencing on February 21, 2024 until the last day of the fiscal quarter ended June
Previous report
30, 2024. After such time, the minimum Balance Sheet Cash covenant no longer applied. As of December 31, 2024 the Company was in compliance with all applicable covenants under the SVB Credit Agreement.
Previous report
On March 10, 2023, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver. On March 14, 2023, the FDIC announced the establishment of Silicon Valley Bridge Bank, N.A. (the “Bridge Bank”) which assumed the deposits and obligations of SVB. On March 26, 2023, the FDIC announced that it had entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina (“First Citizens”) under which all deposits and loans of the Bridge Bank were assumed by First Citizens.
Reworded paragraphs (37)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information presented in our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis reflects the historical results of operations and financial position of Brilliant Earth Group, Inc. and its consolidated subsidiary, Brilliant Earth, LLC. In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources, that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described in “Cautionary Note Regarding Forward-Looking Statements,” and “Risk Factors” in this Annual Report on Form 10-K. We assume no obligation to update any of these forward-looking statements.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information presented in our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis reflects the historical results of operations and financial position of Brilliant Earth Group, Inc. and its consolidated subsidiary, Brilliant Earth, LLC. In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources, that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described in “Cautionary Note Regarding Forward-Looking Statements,” and “Risk Factors” in this Annual Report on Form 10-K. We assume no obligation to update any of these forward-looking statements. For a comparison of our results of Operations for the fiscal years ended December 31, 2024 and 2023 see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 13, 2025.
Previous wording
•Net income of $4.0 million compared to $4.7 million for the year ended December 31, 2023;
Current wording
•Net loss of $6.4 million compared to net income of $4.0 million for the year ended December 31, 2024;
Previous wording
•Net income margin of 0.9% compared to 1.1% for the year ended December 31, 2023;
Current wording
•Net loss margin of 1.5% compared to net income margin of 0.9% for the year ended December 31, 2024;
Previous wording
We have historically had attractive customer acquisition economics, including substantial first order profitability. To continue to grow our business, we must continue to acquire new customers and retain existing customers in a cost-effective manner. The success of our customer acquisition strategy depends on a number of factors, including the level and pattern of consumer spending in the products that we offer, and our ability to cost-effectively drive traffic to our website and showrooms and to convert these visitors to customers. With our strong brand resonance and passionate customer base, we generate significant earned and organic traffic, impressions, and media placements. We continually evolve our dynamic marketing strategies, optimizing our messaging, creative assets, and spending across channels. We also believe our expanded fine jewelry assortment and strategic customer acquisition will continue to drive fine jewelry orders from new customers and repeat orders from existing customers.
Current wording
We have historically had attractive customer acquisition economics, including substantial first order profitability. To continue to grow our business, we must continue to acquire new customers and retain existing customers in a cost-effective manner. The success of our customer acquisition strategy depends on a number of factors, including the level and pattern of consumer spending on the products that we offer, and our ability to cost-effectively drive traffic to our website and showrooms and to convert these visitors to customers. With our strong brand resonance and passionate customer base, we generate significant earned and organic traffic, impressions, and media placements. We continually evolve our dynamic marketing strategies, optimizing our messaging, creative assets, and spending across channels. We also believe our expanded fine jewelry assortment and strategic customer acquisition will continue to drive fine jewelry orders from new customers and repeat orders from existing customers.
Previous wording
We believe growing and managing our showrooms will drive accelerated growth by increasing our AOV compared to e-commerce orders, improving conversion in the showrooms’ metro regions compared to pre-opening conversion, and raising our brand awareness. We intend to strategically open showrooms in the future, and we believe we can achieve broad national showroom coverage with far fewer locations than many traditional retailers. We rely on this highly efficient showroom model to complement our digital strategy and to drive future growth and profitability.
Current wording
We believe growing and managing our showrooms will drive accelerated growth by increasing our average order value (“AOV”) compared to e-commerce orders, improving conversion in the showrooms’ metro regions compared to pre-opening conversion, and raising our brand awareness. We intend to strategically open showrooms in the future, and we believe we can achieve broad national showroom coverage with far fewer locations than many traditional retailers. We rely on this highly efficient showroom model to complement our digital strategy and to drive future growth and profitability.
Previous wording
Product expansion allows us significant opportunity to drive new and repeat purchases by expanding purchase occasions beyond engagement and bridal. We intend to leverage our in-house design capabilities and nimble data-driven product development to expand product assortment for special occasions and self-purchase. In addition, we will have more opportunity to enhance and leverage our CRM and data-segmentation capabilities to increase repeat purchases and lifetime value. We have consistently invested in technology to create a seamless customer experience, including dynamic visualization, augmented reality try-on, and automated, rapid fulfillment, and we intend to continue investing in technology to enhance the digital and showroom experience and help drive conversion. Expanding affiliations and brand collaborations will also broaden our existing assortment, reinforce our brand ethos, and feature like-minded designers, which will help to drive both new and repeat purchases.
Current wording
Product expansion allows us significant opportunity to drive new and repeat purchases by expanding purchase occasions beyond engagement and bridal. We intend to leverage our in-house design capabilities and nimble data-driven product development to expand product assortment for special occasions and self-purchase. In addition, we will have more opportunity to enhance and leverage our CRM and data-segmentation capabilities to increase repeat purchases and lifetime value. We have consistently invested in technology to create a seamless customer experience, including dynamic visualization, augmented reality try-on, and automated, rapid fulfillment, and we intend to continue investing in technology to enhance the digital and showroom experience and help drive conversion. Expanding partnerships and brand collaborations will also expand our reach, broaden our existing assortment, and reinforce our brand ethos.
Previous wording
We have a unique, asset-light operating model with attractive working capital dynamics, capital-efficient showrooms, and a vast virtual inventory of premium natural and lab-grown diamonds that allows us to offer a broad selection of diamonds while keeping our balance sheet inventory low. This has driven attractive inventory turns and allows us to operate with negative working capital, which we define as our current assets less cash minus our current liabilities. Our showroom strategy minimizes the inefficiencies of traditional, retail-first jewelers. Our showrooms are primarily appointment-driven with large catchment regions, so we are less reliant on expensive high foot traffic retail locations. Our showroom locations and formats vary from interior, upper floor locations to more recently higher traffic pedestrian and retail mall locations. In all locations, we also curate showroom inventory for scheduled visits and require limited inventory in each location. Our tech-enabled jewelry consultants can support online customers when not in appointment, increasing workforce utilization. As we continue to scale our business, our future success is dependent on maintaining this capital efficient operating model and driving continued operational improvement as we expand to new locations both in the U.S. and internationally.
Current wording
We have a unique, asset-light operating model with attractive working capital dynamics, capital-efficient showrooms, and a vast virtual inventory of premium natural and lab-grown diamonds that allows us to offer a broad selection of diamonds while keeping our balance sheet inventory low. This has driven attractive inventory turns and allows us to operate with negative working capital, which we define as our current assets less non-restricted cash minus our current liabilities. Our showroom strategy minimizes the inefficiencies of traditional, retail-first jewelers. Our showrooms are primarily appointment-driven with large catchment regions, so we are less reliant on expensive high foot traffic retail locations. Our showroom locations and formats vary from interior, upper floor locations to more recently higher traffic pedestrian and retail mall locations. In all locations, we also curate showroom inventory for scheduled visits and require limited inventory in each location. Our tech-enabled jewelry consultants can support online customers when not in appointment, increasing workforce utilization. As we continue to scale our business, our future success is dependent on maintaining this capital efficient operating model and driving continued operational improvement as we expand to new locations.
Previous wording
We believe we are well-positioned at the intersection of key macro-level trends impacting our industry. Consumers are increasingly seeking brands that reflect their values and provide supply chain transparency. This has contributed to our strong brand affinity and loyalty, and further differentiates us from our competitors. Consumers are increasingly favoring seamless omnichannel shopping experiences, and we believe our model is well-suited to satisfy these consumer preferences. The current inflationary environment and changes in macro-level consumer spending trends, due to volatile macro-economic conditions, have had a negative impact on sales and could further negatively impact our operating results.
Current wording
We believe we are well positioned at the intersection of key macro-level trends impacting our industry. Consumers are increasingly seeking brands that reflect their values and provide supply chain transparency. This has contributed to our strong brand affinity and loyalty, and further differentiates us from our competitors. Consumers are increasingly favoring seamless omnichannel shopping experiences, and we believe our model is well-suited to satisfy these consumer preferences.
Previous wording
We allow for certain returns within 30 days of when an order is available for shipment or pickup. We also typically provide one complimentary resizing for standard ring styles within 60 days of when an order is available for shipment or pickup, a lifetime manufacturing warranty (except center diamonds/gemstones), and a lifetime diamond upgrade program on all diamonds that meet certain criteria. We offer an extended protection plan through a third party that has terms ranging from two years to lifetime that vary based on the item purchased.
Current wording
We allow for certain returns within 30 days of when an order is available for shipment or pickup. We also typically provide one complimentary resizing within 60 days of when a purchase is available for shipment or pickup, regardless of sizing range, and within 1 year within sizing range, a lifetime manufacturing warranty (except center diamonds/gemstones), and a lifetime diamond upgrade program on all diamonds that meet certain criteria. We offer an extended protection plan through a third party that has terms ranging from two years to lifetime that vary based on the item purchased.
Previous wording
Interest expense primarily consists of interest incurred under our SVB Credit Agreement (defined below).
Current wording
Interest expense primarily consists of interest incurred under our SVB Credit Agreement.
Previous wording
Income tax (expense) benefit represents the federal and state income or franchise taxes asse ssed on Brilliant Earth Group, Inc's share of taxable income for the period.
Current wording
Income tax expense represents the federal and state income or franchise taxes asse ssed on Brilliant Earth Group, Inc's share of taxable income for the period.
Previous wording
The following table sets forth our statements of operations for the years ended December 31, 2024 and 2023, including amounts and percentages of net sales for each year and the year-to-year change in dollars and percent (amounts in thousands):
Current wording
The following table sets forth our statements of operations for the years ended December 31, 2025 and 2024, including amounts and percentages of net sales for each year and the year-to-year change in dollars and percent (dollars in thousands):
Previous wording
Net sales for the year ended December 31, 2024 decreased by$24.2 million, or 5.4%, compared to the year ended December 31, 2023. The decrease in net sales was due to a decrease of 11.3% in AOV, partially offset by an increase in order volumes of 6.6%.
Current wording
Net sales for the year ended December 31, 2025 increased by$15.3 million, or 3.6%, compared to the year ended December 31, 2024. The increase in net sales was due to an increase of 13.0% in order volumes, partially offset by a decrease of 8.2% in AOV.
Previous wording
The 6.6% increase in order volumes was due to strong performance in lower price point products, including fine jewelry, continued effectiveness of our customer acquisition and retention activities and the opening of new showrooms.
Current wording
The 13.0% increase in order volumes was due to strong performance in lower price point products, including fine jewelry, continued effectiveness of our customer acquisition and retention activities and the opening of new showrooms.
Previous wording
The decrease in AOV was driven by a higher mix of lower price point products, including fine jewelry.
Current wording
The decrease in AOV was driven by a higher mix of lower price point products, including fine jewelry, and comparatively stronger performance of engagement rings priced below $5,000.
Previous wording
Gross profit for the year ended December 31, 2024 decreased by $2.6 million, or 1.0%, compared to the year ended December 31, 2023. Gross margin, expressed as a percentage and calculated as gross profit divided by net sales, increased by 270 basis points for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase in gross margin was primarily driven by the continued optimization of our pricing engine, procurement efficiencies, and benefits from our extended warranty program. The gross margin improvements were partially offset by certain repair and fulfillment-related costs.
Current wording
Gross profit for the year ended December 31, 2025 decreased by$2.9 million, or 1.1%, compared to the year ended December 31, 2024. Gross margin, expressed as a percentage and calculated as gross profit divided by net sales, decreased by 280 basis points for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by higher gold and platinum costs. This decrease was partially offset by continued optimization of our pricing engine, procurement efficiencies, and other efforts to manage our gross margins to target levels.
Previous wording
Operating expenses for the year ended December 31, 2024 decreased by$1.5 million, or 0.6%, compared to the year ended December 31, 2023. Operating expenses as a percentage of net sales increased by 290 basis points for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in operating expenses was primarily driven by a decrease in marketing expenses partially offset by an increase in general and administrative expenses.
Current wording
Operating expenses for the year ended December 31, 2025 increased by$5.8 million, or 2.3%, compared to the year ended December 31, 2024. Operating expenses as a percentage of net sales decreased by 80 basis points for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in operating expenses was primarily driven by anincrease in employment expenses of$5.4 million and anincrease in other general and administrative expenses of $2.8 million. These increases were partially offset by a decrease in marketing expenses of $2.4 million compared to the year ended December 31, 2024.
Previous wording
The decrease in marketing expenses, which decreased by $11.0 million or 9.2%, from the prior year was a result of our continued focus on improving the effectiveness and efficiency of our marketing spend. The increase in general and administrative expenses was primarily due to an increase in employment expenses, which increased $8.5 million or 12.3%, from additional staff to support our growth initiatives, and annual compensation increases. The remaining increase in general and administrative expenses was a result of increases in rent, lease-related expenses, information technology and other software-related costs, and depreciation expense. These increases were partially offset by a decrease in pre-opening expenses from new showrooms and a decrease in charitable contributions compared to the year ended December 31, 2023.
Current wording
Theincrease in employment expenses was primarily driven by an increase in salaries and wages and other benefits primarily due to the addition of staff to support our growth. The increase in other general and administrative expenses was a result of increases in rent and lease-related expenses, professional fees, information technology and other software-related costs, and depreciation expense. These increases were partially offset by decreases in product development costs and pre-opening expenses from new showrooms compared to the year ended December 31, 2024. The decrease in marketing expenses from the prior year was a result of our continued focus on improving the effectiveness and efficiency of our marketing spend.
Previous wording
Other income, net for the year ended December 31, 2024 increased by$0.9 million, or 17.9%, compared to the year ended December 31, 2023, primarily due to increased interest income earned on our cash balances. Additionally, this amount includes immaterial losses on exchange rates on consumer payments and other miscellaneous income.
Current wording
Other income, net for the year ended December 31, 2025 decreased by $2.2 million, or 37.1%, compared to the year ended December 31, 2024, primarily due to decreased interest income earned on our cash balances. Additionally, this amount includes immaterial losses on exchange rates on consumer payments and other miscellaneous income.
Previous wording
Net Income Allocable to Non-Controlling Interests
Current wording
Net (Loss) Income Allocable to Non-Controlling Interests
Previous wording
The net income allocable to the non-controlling interests (“NCI”) of Brilliant Earth, LLC was$3.5 million, and 86.5% of net income of the Company for the year ended December 31, 2024, compared to $4.2 million and 87.7% of net income of the Company for the year ended December 31, 2023. The decrease in net income allocable to the NCI was primarily due to a decrease in net income from the prior year.
Current wording
The net loss allocable to the non-controlling interests (“NCI”) of Brilliant Earth, LLC was$2.8 million for the year ended December 31, 2025, compared to net income of $3.5 million for the year ended December 31, 2024. The decrease in net (loss) income allocable to the NCI was primarily due to a decrease in earnings from the prior year.
Previous wording
The following table sets forth our key performance metrics for the periods presented (amounts in thousands, except for total orders and AOV):
Current wording
The following table sets forth our key performance metrics for the periods presented (dollars in thousands, except for AOV):
Previous wording
Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures, are included in this Annual Report on Form 10-K because they are used by management and our Board to assess our financial performance. We define Adjusted EBITDA as net income excluding interest expense, income taxes, depreciation expense, amortization of cloud-based software implementation costs, showroom pre-opening expense, equity-based compensation expense, certain non-operating expenses and income, and other unusual and/or infrequent costs, which we do not consider in our evaluation of ongoing operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA calculated as a percentage of net sales. These non-GAAP financial measures provide users of our financial information with useful information in evaluating our operating performance and exclude certain items from net income that may vary substantially in frequency and magnitude from period to period. These non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net income prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of each of Adjusted EBITDA and Adjusted EBITDA margin to its most directly comparable GAAP financial measure, net income and net income margin, are presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the years presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items, and may include other expenses, costs and non-recurring items.
Current wording
Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures, are included in this Annual Report on Form 10-K because they are used by management and our Board to assess our financial performance. We define Adjusted EBITDA as net (loss) income excluding interest expense, income tax expense (benefit), depreciation expense, amortization of cloud-based software implementation costs, showroom pre-opening expense, equity-based compensation expense, other income, net loss on extinguishment of debt, certain non-operating expenses and income, and other unusual and/or infrequent costs, which we do not consider in our evaluation of ongoing operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA calculated as a percentage of net sales. These non-GAAP financial measures provide users of our financial information with useful information in evaluating our operating performance and exclude certain items from net (loss) income that may vary substantially in frequency and magnitude from period to period. These non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net (loss) income prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of each of Adjusted EBITDA and Adjusted EBITDA margin to its most directly comparable GAAP financial measure, net (loss) income and net (loss) income margin, are presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the years presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items, and may include other expenses, costs and non-recurring items.
Previous wording
The following table presents a reconciliation ofnet income and net income margin, the most comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, for the years presented (in thousands):
Current wording
The following table presents a reconciliation ofnet (loss) income and net (loss) income margin, the most comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, for the years presented (dollars in thousands):
Previous wording
(2) These expenses are those that we did not incur in the normal course of business. For the year ended December 31, 2023, these costs includeda $1 million charitable contribution.
Current wording
(2)These expenses are those that we did not incur in the normal course of business.
Previous wording
Our primary requirements for liquidity and capital are for purchases of inventory, payment of operating expenses, tax distributions to Continuing Equity Owners, debt service, and capital expenditures. Historically, these cash requirements have been met through cash provided by operating activities, cash and cash equivalents, proceeds from capital-raising activities and borrowings under our loan facilities. We have historically had negative working capital driven by our high inventory turns and typical collection of payment from customers prior to payment of suppliers. As of December 31, 2024, we had a cash balance, excluding restricted cash, of$161.9 million, and negative working capital, excluding non-restricted cash, of$(28.7) million.
Current wording
Our primary requirements for liquidity and capital are for purchases of inventory, payment of operating expenses, tax distributions to Continuing Equity Owners, and capital expenditures. Historically, these cash requirements have been met through cash provided by operating activities, cash and cash equivalents, proceeds from capital-raising activities and borrowings under our loan facilities. We have historically had negative working capital driven by our high inventory turns and typical collection of payment from customers prior to payment of suppliers. As of December 31, 2025, we had a cash balance, excluding restricted cash, of$79.1 million, and negative working capital of$(24.5) million.
Previous wording
For the twelve months ended December 31, 2024, the Company declared and paid$1.8 million of tax distributions and TRA payments to, or on behalf of, members associated with their estimated income tax obligations. We are committed to continue to make quarterly distributions in connection with member estimated income tax obligations which we expect to fund with cash flow from operations.
Current wording
For the twelve months ended December 31, 2025, the Company declared and paid$6.8 million of tax distributions to, or on behalf of, members associated with their estimated income tax obligations pursuant to the LLC Agreement. We are committed to continue to make quarterly distributions in connection with member estimated income tax obligations which we expect to fund with cash flow from operations.
Previous wording
We believe based on our current projections, that we have sufficient sources of liquidity to meet our projected operating, debt service, and tax distribution requirements for at least the next 12 months following the filing of this Annual Report on Form 10-K.
Current wording
We believe based on our current projections, that we have sufficient sources of liquidity to meet our projected operating and tax distribution requirements for at least the next 12 months following the filing of this Annual Report on Form 10-K.
Previous wording
For the year ended December 31, 2024, net cash provided by operating activities was $17.6 million compared to net cash provided by operating activities of $26.2 million for the year ended December 31, 2023, a decrease of $8.6 million. This decrease was primarily driven by $10.6 million from changes in assets and liabilities related to changes in working capital and an increase in net income adjusted for non-cash addbacks of $2.0 million. The decrease from changes in working capital was primarily due to an increase in cash used of $3.4 million in other assets and inventories, an increase in cash used of $2.8 million in accounts payable, accrued expenses and other current liabilities, and an increase in cash used of $1.4 million in operating lease liabilities. Also impacting the decrease was an increase in cash used of $1.6 million in deferred revenue and a decrease in cash provided of $1.4 million in prepaid expenses and other current assets when compared to the year ended December 31, 2023.
Current wording
For the year ended December 31, 2025, net cash provided by operating activities was $9.7 million compared to net cash provided by operating activities of $17.6 million for the year ended December 31, 2024, a decrease of $7.9 million. This decrease was primarily driven by a decrease in cash provided from net (loss) income adjusted for non-cash addbacks of $7.5 million. There was also an increase in cash used from changes in assets and liabilities related to working capital management activities of $0.4 million. The increase in cash used from changes in working capital was primarily due to an increase in cash used of $18.4 million in inventories, prepaid expenses and other current assets, other assets, and operating lease liabilities. This was partially offset by a decrease in cash used of $13.6 million in accounts payable, accrued expenses and other current liabilities, and an increase in cash generated of $4.4 million in deferred revenue when compared to the year ended December 31, 2024.
Previous wording
The overall decrease in operating cash flows was driven by higher cash outflows for working capital compared to the prior year as discussed above. The Company had an increase in inventory purchases and an increase in spend on prepaid expenses and cloud computing assets. Payments on operating lease liabilities increased from the prior year due to additional leased showrooms acquired during the year ended December 31, 2024.
Current wording
The overall decrease in operating cash flows was primarily driven by a decrease in earnings and higher cash outflows for working capital compared to the prior year as discussed above. The Company had increases in inventory purchases and prepaid expenses and cloud computing assets. Payments on operating lease liabilities increased from the prior year due to additional leased showrooms acquired during the year ended December 31, 2025.
Previous wording
Net cash used in investing activities was$4.9 million for the year ended December 31, 2024 compared to $11.9 million for the year ended December 31, 2023. The decrease of$7.0 million was principally due to a decrease in purchases of property and equipment related to new facilities leased during the year ended December 31, 2024. There were three new showroom openings during the year ended December 31, 2024 as opposed to twelve new showroom openings during the year ended December 31, 2023.
Current wording
Net cash used in investing activities was$4.0 million for the year ended December 31, 2025 compared to $4.9 million for the year ended December 31, 2024. The decrease of $0.9 million was principally due to a decrease in purchases of property and equipment related to new facilities leased during the year ended December 31, 2025.
Previous wording
On May 24, 2022 (the “Closing Date”), Brilliant Earth, LLC, as borrower, and SVB, as administrative agent and collateral agent for the lenders, entered into a credit agreement (the “SVB Credit Agreement”) which provides for a secured term loan credit facility of $65.0 million (the “SVB Term Loan”) and a secured revolving credit facility in an amount of up to $40.0 million (the “SVB Revolving Facility”, and together with the SVB Term Loan, the “SVB Credit Facilities”). The SVB Credit Facilities mature on May 24, 2027 (the “Maturity Date”).
Current wording
On May 24, 2022, Brilliant Earth, LLC, as borrower, and SVB, as administrative agent and collateral agent for the lenders, entered into a credit agreement (the “SVB Credit Agreement”) which provided for a secured term loan credit facility of $65.0 million (the “SVB Term Loan”) and a secured revolving credit facility in an amount of up to $40.0 million (the “SVB Revolving Facility”, and together with the SVB Term Loan, the “SVB Credit Facilities”). The SVB Credit Facilities were set to mature on May 24, 2027 (the “Maturity Date”).
Previous wording
For additional information regarding our long-term debt activity, see Note 8, Debtto the audited consolidated financial statements included elsewhere in the Annual Report on Form 10-K.
Current wording
For additional information regarding our long-term debt activity, see Note 8, Debtto the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Previous wording
We lease our showrooms and headquarters office space under non-cancelable lease agreements whereby$8.4 million is due in the year ended December 31, 2025. Total future lease payments as of December 31, 2024 are$50.9 million.
Current wording
We lease our showrooms and headquarters office space under non-cancelable lease agreements whereby$9.0 million is due in the year ended December 31,2026. Total future lease payments as of December 31, 2025 are$45.2 million.
Previous wording
From time to time in the normal course of business, we will enter into agreements with suppliers or service providers. As of December 31, 2024, contractual obligations with a remaining term in excess of 12 months primarily related to marketing and advertising spending as well as software maintenance totaled$8.2 million. For additional information on our contractual obligations and commitments, see Note 7, Leases, Note 9, Stockholders’ Equity and Members Unitsand Note 13, Commitments and Contingencies, to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Current wording
From time to time in the normal course of business, we will enter into agreements with suppliers or service providers. As of December 31, 2025, contractual obligations with a remaining term in excess of 12 months primarily related to marketing and advertising spending as well as software maintenance totaled$2.9 million. For additional information on our contractual obligations and commitments, see Note 7, Leases, Note 9, Stockholders’ Equity and Members Unitsand Note 13, Commitments and Contingencies, to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Previous wording
We expect that payments under the TRA will be significant. We will account for the income tax effects and corresponding TRA’s effects resulting from future taxable purchases or redemptions of LLC Interests of the Continuing LLC Owners by us or Brilliant Earth, LLC by recognizing an increase in our deferred tax assets, based on enacted tax rates at the date of the purchase or redemption, and assessment of the book basis of the redeemed LLC interests at the time of redemption. Further, we will evaluate the likelihood that we will realize the benefit represented by the deferred tax asset and, to the extent that we estimate that it is more likely than not that we will not realize the benefit, we will reduce the carrying amount of the deferred tax asset with a valuation allowance.
Current wording
We expect that payments under the TRA will be significant. We will account for the income tax effects and corresponding TRA’s effects resulting from future taxable purchases or redemptions of LLC Interests of the Continuing LLC Owners by us or Brilliant Earth, LLC by recognizing an increase in our deferred tax assets, based on enacted tax rates at the date of the purchase or redemption, and assessment of the book basis of the redeemed LLC interests at the time of redemption. Further, we evaluate the likelihood that we will realize any benefit represented by the deferred tax asset and, to the extent that we estimate that it is more likely than not that we will not realize the benefit, we will reduce the carrying amount of the deferred tax asset with a valuation allowance.
Previous wording
The amounts to be recorded for both the deferred tax asset and the liability for our obligations under the TRA will be estimated at the time of any purchase or redemption as a reduction to shareholders’ equity. The effect of subsequent changes in the enacted tax rates will be included in net income. We currently believe that all deferred tax assets will be recovered based upon the projected profitability of our operations. Judgment is required in assessing the future tax consequences of events that have been recognized in Brilliant Earth Group, Inc.’s financial statements. A change in the assessment of such consequences, such as realization of deferred tax assets, changes in tax laws or interpretations thereof could materially impact our results.
Current wording
The amounts to be recorded for both the deferred tax asset and the liability for our obligations under the TRA will be estimated at the time of any purchase or redemption as a reduction to shareholders’ equity. The effect of subsequent changes in the enacted tax rates will be included in net income.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The current inflationary environment and changes in macro-level consumer spending trends, due to volatile macro-economic conditions, have had a negative impact on sales and could further negatively impact our operating results.
Current report — wording carried from elsewhere
Judgment is required in assessing the future tax consequences of events that have been recognized in Brilliant Earth Group, Inc.’s financial statements. A change in the assessment of such consequences, such as realization of deferred tax assets, changes in tax laws or interpretations thereof could materially impact our results.