10-Q · August 4, 2026
Wayfair delivered Q2 revenue of $3.519 billion, up 7.5% year over year and above Q1 revenue of $2.931 billion, while operating income reached $104 million versus $17 million a year earlier. Gross margin was essentially…
Earnings analysis · 10-Q
W earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Wayfair delivered a strong operating quarter, with revenue up 9.7% year over year, positive GAAP operating income of $106 million and free cash flow of $136 million. U.S. growth, customer activity and adjusted…
Read full summary
Wayfair delivered a strong operating quarter, with revenue up 9.7% year over year, positive GAAP operating income of $106 million and free cash flow of $136 million. U.S. growth, customer activity and adjusted profitability improved, while International revenue declined and gross margin compressed modestly to 29.6%. Liquidity fell to $1.098 billion and debt-related interest expense increased, but management stated that available liquidity and operating cash generation should cover anticipated needs for at least the next 12 months.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.45
What stood out
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Revenue grew 9.7% year over year
Net revenue was $3.420 billion, up $303 million, or 9.7%, year over year, although revenue declined from $3.520 billion in Q2 2026. Growth was driven primarily by higher order volume, partially offset by a lower average order value.
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GAAP profitability turned positive
GAAP diluted EPS improved to $0.45 from a $(0.76) loss in Q3 2025 and $(0.01) in Q2 2026. Adjusted diluted EPS was $0.93, versus $0.70 in the prior-year quarter.
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Operating leverage improved
Operating income increased to $106 million from $38 million year over year, lifting operating margin to 3.1% from 1.2%. Operating expenses were $906 million, or 26.5% of revenue, versus 28.8% a year earlier.
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U.S. growth and engagement strengthened
U.S. revenue increased 11.4% to $3.040 billion, while active customers rose to 22.2 million from 21.2 million and orders delivered increased to 11.0 million from 9.8 million.
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Cash generation increased
Operating cash flow was $198 million versus $155 million in Q3 2025, and free cash flow rose to $136 million from $93 million. Quarterly capital expenditures totaled $62 million, comprising $30 million of property and equipment purchases and $32 million of site and software development costs.
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Adjusted profitability expanded
Adjusted EBITDA increased to $236 million from $208 million, with adjusted EBITDA margin expanding to 6.9% from 6.7%. Contribution profit increased to $550 million from $493 million, and contribution margin rose to 16.1% from 15.8%.
What to watch
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Liquidity and leverage remain material
Total liquidity declined to $1.098 billion from $1.542 billion at December 31, 2025, while outstanding indebtedness was $2.8 billion. The company also had $82 million of letters of credit reducing Revolver availability.
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Higher debt costs pressure earnings
Net interest expense increased 35.5% year over year to $42 million in the quarter, primarily following the issuance of the 2032 and 2034 Secured Notes. Nine-month interest expense increased 44.6% to $120 million.
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International and macro headwinds persist
International revenue declined 2.3% year over year to $380 million, with constant-currency growth of (1.8)%. Management also cited persistent macroeconomic pressures, tariffs, inflation and higher interest rates as factors that may negatively affect consumer behavior and results.
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Gross-margin pressure continues
Gross margin contracted to 29.6% from 30.0% year over year as cost of goods sold rose to 70.4% of revenue from 70.0%, reflecting customer-experience investments, partially offset by supplier-services growth.
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Debt management remains complex
The filing states there were no material changes to previously disclosed risk factors as of the report date. However, the company recorded a $102 million loss on debt extinguishment during the nine months ended September 30, 2026, and debt agreements include a maximum Consolidated Senior Secured Debt to Consolidated EBITDA ratio of 4.0 to 1.0.
Management's outlook
The 10-Q provides no quantitative forward revenue or EPS guidance. Management expects existing cash, operating cash generation and Revolver availability to satisfy anticipated cash needs for at least the next 12 months.
Earlier filings 4
10-Q · April 30, 2026
Wayfair reported Q1 2026 results with revenues of $2.93 billion, a notable 7.4% increase year-over-year. The diluted EPS improved to -$0.80, surpassing estimates, while active customers grew to 21.4 million. The company…
10-K · February 19, 2026
Wayfair's 2025 10-K emphasizes an omni-channel strategy anchored by its Wayfair brand, investments in logistics (CastleGate, WDN) and AI (launched Muse in 2025), and a U.S.-centric revenue base (U.S. was 88% of…
10-Q · October 28, 2025
Wayfair Inc. reported a strong performance in its third quarter of 2025, showcasing significant revenue growth and an impressive EPS beat. Revenues increased to $3.12 billion, a notable uptick from the previous quarter,…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.