Warby Parker Q1 2025 Earnings Summary: Returns to Profit with Strong Revenue and Customer Growth

Warby Parker reported first-quarter 2025 results that mark its first profitable quarter as a public company, fueled by double-digit revenue growth, improved operating leverage, and strong customer metrics.

Key Financial Highlights:
• Net revenue: $223.8 million, up 11.9% year-over-year
• Net income: $3.5 million, vs. a loss of $2.7 million in Q1 2024
• Adjusted EBITDA: $29.2 million, up from $22.4 million
• Adjusted EBITDA margin: 13.1%, compared to 11.2%
• Free cash flow: $13.2 million, more than doubled from $5.5 million
• Gross margin: 56.3%, slightly down from 56.7% due to higher contact lens sales and occupancy costs
• SG&A: $123.5 million (55.2% of revenue); Adjusted SG&A fell to 49.3% of revenue

Operational Metrics:
• Active Customers: 2.57 million, up 8.7%
• Average Revenue per Customer: $310, up 4.8%
• Net new store openings: 11; total store count reached 287

Balance Sheet:
• Cash and cash equivalents: $265.1 million
• No significant debt reported

2025 Outlook (Revised):
• Full-year revenue: $869–886 million (13–15% growth)
• Adjusted EBITDA: $91–97 million (margin of 10.5–11.0%)
• Planned store openings: 45, including 5 Target shop-in-shops

Co-CEOs Neil Blumenthal and Dave Gilboa highlighted strong e-commerce momentum and disciplined expense control as drivers of the quarter’s success. CFO Steve Miller emphasized sustainable growth and improved margin performance heading into the rest of 2025.

Warby Parker reported strong financial results for the fourth quarter and full-year 2024, achieving double-digit revenue growth and increased profitability while expanding its customer base and store footprint.

Key financial highlights:

Fourth Quarter 2024:
- Net revenue: $190.6 million, up 17.8% from Q4 2023
- Gross margin: 54.1%, an improvement from 53.8%
- Active customers: 2.51 million, up 7.8%
- Average revenue per customer: $307, up 6.8%
- GAAP net loss: $6.9 million, an improvement from a $19.0 million loss
- Adjusted EBITDA: $13.8 million, up from $9.4 million
- Adjusted EBITDA margin: 7.3%, an increase of 1.5 percentage points

Full-Year 2024:
- Net revenue: $771.3 million, up 15.2%
- Gross margin: 55.3%, an improvement from 54.5%
- GAAP net loss: $20.4 million, an improvement from a $63.2 million loss
- Adjusted EBITDA: $73.1 million, up 40% year-over-year
- Adjusted EBITDA margin: 9.5%, an increase of 1.7 percentage points
- Net cash provided by operating activities: $98.7 million, up from $61.0 million
- Free cash flow: $34.7 million, up from $7.3 million
- Opened 41 new stores, bringing the total to 276 locations

Recent developments:
- Announced a partnership with Target to launch five Warby Parker shop-in-shops in 2025, with potential for future expansion.

2025 outlook:
- Net revenue of $878 million to $893 million, reflecting 14% to 16% growth
- Adjusted EBITDA of approximately $97 million, with a margin of around 11%
- 45 new store openings, including five Target shop-in-shops

CEO commentary:
Co-founders and co-CEOs Dave Gilboa and Neil Blumenthal expressed confidence in the company’s strong foundation and strategic growth, emphasizing exceptional customer experiences, scaling vision care services, and increasing impact.

Conclusion:
Warby Parker continues to strengthen its position in the eyewear market, delivering revenue growth, customer expansion, and improving profitability. With increased store openings, new partnerships, and a focus on operational efficiency, the company is poised for further growth in 2025.

Evercore downgrades WRBY from outperform to hold