FIGS, Inc.

Previous wording

By elevating scrubs and creating premium products for healthcare professionals, we revolutionized the large and fragmented healthcare apparel market, branded a previously unbranded industry and de-commoditized a previously commoditized product. Most importantly, we built a community and lifestyle around a profession. As a result, we have become the industry’s category-defining healthcare apparel and lifestyle brand.

Current wording

By elevating scrubs and creating premium products for healthcare professionals that support them on and off-shift, we revolutionized the large and fragmented healthcare apparel market, branded a previously unbranded industry and de-commoditized a previously commoditized product. Most importantly, we built a community and lifestyle around a profession. As a result, we have become the industry’s category-defining healthcare apparel and lifestyle brand.

Previous 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.

Current wording

At March 31, 2026, we had approximately 3.0 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 nine months ended September 30, 2025, we had the following results compared to the comparable periods in 2024:

Current wording

In the three months ended March 31, 2026, we had the following results compared to the comparable period in 2025:

Previous 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;

Current wording

◦Expanded our community of active customers by 12.2% from approximately 2.7 million at March 31, 2025 to approximately 3.0 million at March 31, 2026;

Previous 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;

Current wording

◦Adjusted EBITDA increased from $9.2 million to $13.9 million in the three months ended March 31, 2026, representing an adjusted EBITDA margin of 8.7%;

Previous wording

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

Current wording

◦Cash flows from operating activities decreased from $9.2 million to $(3.2) million in the three months ended March 31, 2026; and

Previous wording

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

Current wording

◦Free cash flow decreased from $7.9 million to $(5.6) million in the three months ended March 31, 2026.

Previous wording

These tariffs have increased our product costs, negatively impacting gross margin for the three months ended September 30, 2025 by 120 basis points. We are implementing various mitigation strategies, including adjusting the countries from which we source our products and renegotiating terms with suppliers, but cannot be certain whether they will be effective. Without taking into account mitigation efforts, we estimate, based on the information available to us today, that the current tariff regime will negatively impact gross margin for 2025 by approximately 110 basis points, and gross margin for 2026 by approximately 440 basis points. This estimate and actual impact may change materially as conditions evolve and new information becomes available.

Current wording

The tariffs in place from April 2025 through the February 2026 Supreme Court decision under IEEPA increased our product costs, negatively impacting gross margin for the three months ended March 31, 2026. We have implemented, and plan to continue to implement as needed, various mitigation strategies, which have included, and may in the future again include, adjusting the countries from which we source our products and renegotiating terms with suppliers, but we cannot be certain how effective they will be over the long term. Without taking into account mitigation efforts and based on the information available to us today, we believe that tariffs will continue to negatively impact gross margin for 2026, although to a lesser extent than we previously disclosed in our 2025 Annual Report on Form 10-K. This estimate and actual impact may change materially as conditions evolve and new information becomes available.

Previous wording

Marketing expenses consist primarily of online performance marketing costs, such as retargeting, paid search and product listing advertisements, paid social media advertisements, search engine optimization, personalized email and mobile push notifications through our app. Marketing expenses also include our spend on brand marketing channels, including billboards, podcasts, commercials, photo and video shoot development, expenses associated with our Ambassador Program and other forms of online and offline marketing. We expect our marketing expenses to increase in absolute dollars as we continue to grow our business.

Current wording

Marketing expenses consist primarily of online performance marketing costs, such as retargeting, paid search and product listing advertisements, paid social media advertisements, search engine optimization, personalized email and SMS marketing and mobile push notifications through our app. Marketing expenses also include our spend on brand marketing channels, including billboards, podcasts, commercials, photo and video shoot development, expenses associated with our Ambassador Program, events and other forms of online and offline marketing. We expect our marketing expenses to increase in absolute dollars as we continue to grow our business.

Previous 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.

Current 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.

Previous 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.

Current wording

(1)Includes stock-based compensation expense of $5.5 million and $7.2 million for the three months ended March 31, 2026 and 2025, respectively.

Previous 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.

Current wording

Net revenues increased by $35.0 million, or 28.0%, for the three months ended March 31, 2026, 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.

Previous 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.

Current wording

Operating expenses increased by $19.1 million, or 22.6%, for the three months ended March 31, 2026, compared to the prior year period, driven by higher marketing expense, general and administrative expense, and selling expense. As a percentage of net revenues, operating expenses decreased by 2.9 percentage points, primarily driven by leverage on higher net revenues in general and administrative expense and selling expense, partially offset by an increase in marketing expense.

Previous 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.

Current wording

Selling expense increased by $3.8 million, or 11.5%, for the three months ended March 31, 2026, compared to the prior year period and, as a percentage of net revenues, decreased by 3.4 percentage points. The decrease in selling expense as a percentage of net revenues was primarily due to leverage on higher net revenues, favorable shipping rates, and lower fulfillment expense due to fulfillment center optimization.

Previous 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.

Current wording

General and administrative expense increased by $4.0 million, or 12.0%, for the three months ended March 31, 2026, compared to the prior year period and, as a percentage of net revenues, decreased by 3.4 percentage points. The decrease in general and administrative expense as a percentage of net revenues was primarily due to leverage on higher net revenues and lower stock-based compensation expense, partially offset by increased investment in people, and higher depreciation and amortization expense.

Previous wording

Other income, net decreased for the three 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.

Current wording

Other income, net decreased for the three months ended March 31, 2026, compared to the prior year period, primarily due to foreign exchange loss, partially offset by an increase in interest 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 nine months ended September 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 AOV 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 months ended March 31, 2026 and 2025, respectively, are presented in the following table:

Previous 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.

Current wording

We calculate adjusted EBITDA as net income (loss) 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.

Previous 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.

Current wording

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

Previous wording

The following table presents a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP.

Current wording

The following table presents a reconciliation of free cash flow to net cash (used in) provided by operating activities, which is the most directly comparable financial measure calculated in accordance with GAAP.

Previous 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.

Current wording

As of March 31, 2026 and December 31, 2025, we had $74.3 million and $82.0 million of cash and cash equivalents, respectively. Since inception, we have financed operations primarily through cash flows from operating activities and the sale of our capital stock.

Previous 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.

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 March 31, 2026, we had no outstanding borrowings under the 2021 Facility (other than $8.4 million of outstanding letters of credit) and available borrowings of $91.6 million.

Previous wording

In August 2024, our board of directors authorized a share repurchase program for up to $50.0 million of our outstanding Class A common stock, with no expiration date. On February 27, 2025, our board of directors authorized an increase of $50.0 million to the share repurchase program, bringing the total authorization for repurchases under the program to up to $100.0 million of our outstanding Class A common stock. During the three months ended September 30, 2025, we did not repurchase any shares of Class A common stock under the share repurchase program. As of September 30, 2025, we had approximately $52.0 million available for future repurchases under the share repurchase program.

Current wording

In August 2024, our board of directors authorized a share repurchase program for up to $50.0 million of our outstanding Class A common stock, with no expiration date. On February 27, 2025, our board of directors authorized an increase of $50.0 million to the share repurchase program, bringing the total authorization for repurchases under the program to up to $100.0 million of our outstanding Class A common stock. During the three months ended March 31, 2026, we repurchased 571,592 shares of our Class A common stock for approximately $8.8 million. As of March 31, 2026, we had approximately $43.2 million available for future repurchases under the share repurchase program.

Previous 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.

Current wording

Cash flows from operating activities decreased by $12.4 million for the three months ended March 31, 2026, compared to the same period last year. The decrease was due the timing of cash payments of accounts payable of $11.9 million and the timing of cash payments of accrued compensation and benefits of $11.7 million. The decrease was partially offset by an increase in our net income, including the impact of non-cash adjustments, of $5.9 million, lower inventory purchases of $4.4 million, the timing of cash payments for sales tax payable of $0.6 million, and decreased cash payments of operating lease liabilities of $0.5 million.

Previous wording

Cash flows from investing activities consist of capital expenditures and purchases of investments.

Current wording

Cash flows from investing activities consists of capital expenditures, as well as purchases, maturities, and sales of investments.

Previous 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.

Current wording

Cash flows from investing activities increased by $16.0 million for the three months ended March 31, 2026, compared to the same period last year. The increase in cash flows from investing activities was primarily due to higher maturities and sales of available-for-sale securities of $67.7 million. This was offset by higher purchases of available-for-sale securities of $50.8 million and higher purchases of property and equipment of $1.1 million.

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 nine months ended September 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 any commitments entered into during the three months ended March 31, 2026.