Wayfair Q3 Earnings & Revenues Beat Estimates, Both Increase Y/Y

Wayfair W reported third-quarter 2025 non-GAAP earnings of 70 cents per share, which beat the Zacks Consensus Estimate by 52.17% and increased 218.2% year over year.

Net revenues for the third quarter of 2025 rose 8.1% year over year to $3.1 billion. Excluding the impact of the company’s exit from Germany, revenue growth stood at about 9% year over year. The figure beat the Zacks Consensus Estimate by 3.62%.

Last Twelve Months (LTM) net revenues per active customer increased 6.1% year over year to $578, which beat the Zacks Consensus Estimate by 5.75%.

Further, the active customer base declined. The metric decreased 2.3% year over year to 21.2 million, missing the consensus mark by 3.19%.

Wayfair Inc. Price, Consensus and EPS Surprise

Wayfair Inc. price-consensus-eps-surprise-chart | Wayfair Inc. Quote

Wayfair’s Q3 in Detail

Net revenues in the United States (87.5% of total net revenues) increased 8.6% year over year to $2.7 billion. The figure beat the Zacks Consensus Estimate by 4%.

International net revenues (12.5% of total net revenues) increased 4.6% year over year to $389 million. The number surpassed the consensus mark by 3.48%.

Orders per customer (LTM orders delivered divided by active customers) for the quarter were 1.87, up from 1.85 reported in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 3.32%.

The average order value increased from $310 to $317 year over year, which missed the consensus mark by 0.47%.

The total number of delivered orders in the reported quarter was 9.8 million, up 5.4% year over year and surpassed the Zacks Consensus Estimate by 3.98%.

Repeat customers placed 7.9 million orders (80.1% of total orders delivered) in the third quarter, which increased 6.8% year over year.

Additionally, 63% of total delivered orders were placed through mobile devices in the reported quarter compared with 62.9% in the year-ago quarter.

Operating Results of Wayfair

Wayfair’s third-quarter gross profit was $934 million, up 7% year over year, representing a gross margin of 30%, which narrowed 30 basis points (bps) due to a slightly unfavorable mix and higher fulfillment costs.

Adjusted EBITDA was $208 million in the reported quarter, up 74.8% year over year, representing an adjusted EBITDA margin of 6.7%, which expanded 250 bps.

Customer service and merchant fees increased 5.4% year over year to $118 million.

Advertising expenses decreased 6.8% year over year to $330 million. Selling, operations, technology and general and administrative expenses decreased 7.3% year over year to $445 million.

Wayfair reported GAAP operating income of $38 million for the third quarter, marking a strong turnaround from an operating loss of $74 million in the year-ago quarter.

Balance Sheet & Cash Flow of Wayfair

As of Sept. 30, 2025, cash, cash equivalents and short-term investments were $1.2 billion, down from $1.4 billion as of June 30, 2025.

Long-term debt, as of Sept. 30, 2025, was $2.7 billion compared with $2.9 billion as of June 30, 2025.

In the third quarter, net cash used in operations amounted to $155 million compared with $273 million cash from operations in the second quarter.

Wayfair reported non-GAAP free cash flow of $93 million in the third quarter.

Wayfair’s Q4 2025 Guidance

For the fourth quarter, Wayfair expects revenues to grow in the mid-single digits year over year, including an estimated 100 basis-point headwind from the closure of its German operations.

By the end of the fourth quarter of 2025, Wayfair anticipates gross margin to range between 30% and 31%.

The company expects customer service and merchant fees to remain just below 4% of net revenues, while advertising expenses are projected to represent 11-12% of net revenues in the fourth quarter.

Wayfair’s Zacks Rank & Other Stocks to Consider

Currently, Wayfair carries a Zacks Rank #2 (Buy).

Carvana CVNA, Amazon AMZN and Canada Goose GOOS are some similarly ranked stocks that investors can consider in the broader sector. Each stock presently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Carvana shares have surged 78.6% year to date. CVNA is set to report its third-quarter 2025 results on Oct. 29.

Amazon shares have returned 4.2% year to date. AMZN is scheduled to report its third-quarter 2025 results on Oct. 30.

Canada Goose shares have risen 40.4% year to date. GOOS is slated to report its second-quarter fiscal 2026 results on Nov. 6.

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This article originally published on Zacks Investment Research (zacks.com).

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