Brilliant Earth Group, Inc.

Previous wording

•Net loss margin of 8.5%, compared to net loss margin of 3.5% for the three months ended March 31, 2025;

Current wording

•Net loss margin of 3.5%, compared to net loss margin of 2.2% for the six months ended June 30, 2025;

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 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.

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 are in the early stages of selling globally, and a larger geographic footprint will help drive future growth. Our proof-points from localizing our website for Canada, Australia, and the United Kingdom, and our sales to customers from over 50 countries, provide encouraging signs for future global expansion. We see strong potential in launching e-commerce in new overseas markets and new showrooms in countries where we have already established a localized digital presence. We plan to drive brand awareness through localized marketing channels and expect our data-driven technology platform to continue providing insights for product recommendations and inventory management.

Current wording

We are in the early stages of selling globally, and a larger geographic footprint will help drive future growth. Our proof-points from our sales to customers from over 50 countries, provide encouraging signs for future global expansion. We see strong potential in launching e-commerce in new overseas markets and new showrooms in countries where we have already established a localized digital presence. We plan to drive brand awareness through localized marketing channels and expect our data-driven technology platform to continue providing insights for product recommendations and inventory management.

Previous wording

Net sales for thethree months ended March 31, 2026 increased by $5.6 million, or 6.0%, compared to thethree months ended March 31, 2025. The increase in net sales was due to an increase of 3.3% in AOV and an increase of 2.5% in order volumes.

Current wording

Net sales for thethree months ended June 30, 2026 increased by$6.2 million, or 5.7%, compared to thethree months ended June 30, 2025. Theincrease in net sales was due to anincrease of 7.9% in AOV partially offset by adecreaseof 2.1% in order volumes.

Previous wording

Interest expense for the three months ended March 31, 2026 decreased by $1.1 million, or 100.0%, compared to the three months ended March 31, 2025, primarily due to the prepayment of all principal amounts outstanding of $34.8 million under the SVB Term Loan in August 2025.

Current wording

Interest expense for the three months ended June 30, 2026 decreased by $0.9 million, or 100.0%, compared to the three months ended June 30, 2025, primarily due to the prepayment of all principal amounts outstanding of $34.8 million under the SVB Term Loan in August 2025.

Previous wording

Other income, net for thethree months ended March 31, 2026 decreased by $0.8 million, or 65.5%, compared to the three months ended March 31, 2025, 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.

Current wording

Other income, net for the three months ended June 30, 2026 decreased by $0.7 million, or 65.2%, compared to thethree months ended June 30, 2025, 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

The increase in AOV was driven by a larger mix of higher-priced items across our product offerings and selective price increases as a result of the rising cost of precious metals.

Current wording

The increase in AOV was driven by a larger sales mix of higher-priced items across our product offerings and selective price increases as a result of the rising cost of precious metals.

Previous wording

Gross profit for thethree months ended March 31, 2026 decreased by $1.0 million, or 1.8%, compared to thethree months ended March 31, 2025. Gross margin, expressed as a percentage and calculated as gross profit divided by net sales, decreased by 430 basis points for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by higher gold and platinum costs. The increase in gold and platinum costs was partially offset by the continued optimization of our pricing engine, procurement efficiencies, and other efforts to manage our gross margins to target levels.

Current wording

Gross profit for thesix months ended June 30, 2026 increased by $2.2 million, or 1.8%, compared to thesix months ended June 30, 2025. Gross margin, expressed as a percentage and calculated as gross profit divided by net sales, decreased by 220 basis points for thesix months ended June 30, 2026 compared to thesix months ended June 30, 2025, primarily driven by costs related to higher gold and platinum costs. The increase in costs related to higher gold and platinum costs was partially offset by the continued optimization of our pricing engine, procurement efficiencies, and other efforts to mitigate the impact of tariffs and higher metal costs.

Previous wording

Operating expenses for the three months ended March 31, 2026 increased by $4.4 million, or 7.5%, compared to thethree months ended March 31, 2025. Operating expenses as a percentage of net sales increased by 90 basis points for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in operating expenses was primarily driven by anincrease in employment expenses of $2.0 million, anincrease in other general and administrative expenses of $1.8 million, and an increase in marketing expenses of $0.6 million for the period.

Current wording

Operating expenses for the six months ended June 30, 2026 increased by $5.9 million, or 4.8%, compared to thesix months ended June 30, 2025. Operating expenses as a percentage of net sales decreased by 60 basis points for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in operating expenses was primarily driven by anincrease in other general and administrative expenses of$3.8 million, anincrease in employment expenses of$1.5 million, andan increase in marketing expenses of$0.5 million for the period.

Previous wording

The increase in employment expenses was primarily driven by an increase in salaries and wages and other benefits expense primarily due to the addition of staff to support our growth. The increase in other general and administrative expenses was primarily driven by an increase in donation expense, an increase in information technology and other software-related costs and an increase in rent, and lease-related expenses. These increases were partially offset by a decrease in professional fees and future showroom expenses as compared to the three months ended March 31, 2025. The increase in marketing expenses compared to the three months ended March 31, 2025 was a result of our continued focus on managing our marketing spend in relation to our sales volume.

Current wording

The increase in other general and administrative expenses was primarily driven by increase in information technology and other software-related costs, an increase in donation expense, and an increase in rent and lease-related expenses. The increase in employment expenses was primarily driven by an increase in salaries and wages and other benefits expense primarily due to the addition of staff to support our growth. These increases were partially offset by a decrease in professional fees and future showroom expenses as compared to the six months ended June 30, 2025. The increase in marketing expenses compared to the six months ended June 30, 2025 was a result of our continued focus on managing our marketing spend in relation to our sales volume.

Previous wording

Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP financial measures, are included in this Quarterly Report on Form 10-Q because they are used by management and our board of directors to assess our financial performance. We define Adjusted EBITDA as net loss 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 loss 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 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 and net loss 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 periods 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 Quarterly Report on Form 10-Q because they are used by management and our board of directors to assess our financial performance. We define Adjusted EBITDA as net income (loss) 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 loss 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 (loss) 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 (loss) and net income (loss) 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 periods 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 of net loss and net loss margin, the most comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, for the periods presented (in thousands):

Current wording

The following table presents a reconciliation of net income (loss) and net income (loss) margin, the most comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, for the periods presented (in thousands):

Previous wording

(2) These expenses are those that we did not incur in the normal course of business. For the three months ended March 31, 2026, these expenses include a $0.6 million charitable contribution.

Current wording

(2) These expenses are those that we did not incur in the normal course of business. For the three months ended June 30, 2026, these expenses include a$1.8 million charge for write-offs of information technology projects. For the six months ended June 30, 2026, these expenses also include a $0.6 million charitable contribution.

Previous 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 payments from customers prior to payment of suppliers. As of March 31, 2026, we had a cash balance, excluding restricted cash, of$58.6 million, and negative working capital, excluding non-restricted cash, of$11.6 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 payments from customers prior to payment of suppliers. As of June 30, 2026, we had a cash balance, excluding restricted cash, of$74.9 million, and negative working capital, excluding non-restricted cash, of$24.0 million.

Previous wording

For thethree months ended March 31, 2026, the Company declared and paid$1.4 million of distributions to, or on behalf of, members associated with their estimated income tax obligations pursuant to the LLC Agreement. We are comm itted 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 six months ended June 30, 2026, the Company declared and paid $1.5 million of distributions to, or on behalf of, members associated with their estimated income tax obligations pursuant to the LLC Agreement. We are comm itted 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

The following table summarizes our cash flows for thethree months ended March 31, 2026 and 2025 (in thousands):

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025 (in thousands):

Previous wording

Net Cash Used In Operating Activities

Current wording

Net Cash Provided by (Used In) Operating Activities

Previous wording

For the three months ended March 31, 2026, net cash used in operating activities was $18.8 million compared to net cash used in operating activities of $7.1 million for the three months ended March 31, 2025, an increase of $11.7 million. This increase was primarily driven by an increase in net loss adjusted for non-cash expense addbacks of $5.7 million and an increase in cash used from changes in assets and liabilities related to working capital management activities of $6.0 million. The increase in cash used from changes in working capital was primarily due to an increase in cash used of $4.0 million in prepaid expenses and other current assets; accounts payable, accrued expenses and other current liabilities; and other assets. Also impacting the increase in cash used was a decrease in cash generated of $2.1 million in deferred revenue. These increases in cash used were partially offset by decreases in cash used in inventories and operating lease liabilities of $0.1 million.

Current wording

For thesix months ended June 30, 2026, net cash used in operating activities was $1.4 million compared to net cash provided by operating activities of $1.9 million for thesix months ended June 30, 2025, an increase in cash used of $3.3 million. This increase was primarily driven by an increase in net loss adjusted for non-cash expense add backs of $2.8 million and an increase in cash used from changes in assets and liabilities related to working capital management activities of $0.5 million. The increase in cash used from changes in working capital was primarily due to an increase in cash used of $9.7 million in accounts payable, accrued expenses and other current liabilities, deferred revenue and operating lease liabilities. That increase was partially offset by a decrease in cash used in inventories and prepaid expenses and other current assets of $9.2 million.

Previous wording

For thethree months ended March 31, 2026, net cash used in investing activities was $0.6 million compared to $0.7 million for the three months ended March 31, 2025. The decrease of $0.2 million was principally due to a decrease in purchases of property and equipment related to new facilities leased during the period.

Current wording

For the six months ended June 30, 2026, net cash used in investing activities was $1.4 million compared to $1.9 million for thesix months ended June 30, 2025. The decrease of $0.4 million was principally due to a decrease in purchases of property and equipment related to new facilities leased during the period.

Previous wording

For thethree months ended March 31, 2026, net cash used in financing activities was$1.4 million compared to$6.7 million for thethree months ended March 31, 2025. The decrease of $5.3 million was primarily due to lower distributions paid to members during the three month ended March 31, 2026 when compared to the three months ended March 31, 2025.

Current wording

For the six months ended June 30, 2026, net cash used in financing activities was$1.6 million compared to$28.4 million for the six months ended June 30, 2025. The decrease of $26.8 million was primarily due to no debt payments or stock repurchases made during the six months ended June 30, 2026 when compared to the debt payments and stock repurchases made during thesix months ended June 30, 2025.