Exhibit 99.1
 
Wayfair Announces Second Quarter 2018 Results
Q2 Direct Retail Net Revenue Growth of 49% Year over Year to $1.6 billion
12.8 million Active Customers, up 34% Year over Year

BOSTON, MA — August 2, 2018 Wayfair Inc. (NYSE: W), one of the world’s largest online destinations for the home, today reported financial results for its second quarter ended June 30, 2018.
Second Quarter 2018 Financial Highlights
Direct Retail net revenue, consisting of sales generated primarily through Wayfair’s sites, increased $538.5 million to $1.6 billion, up 48.8% year over year
Gross profit was $385.0 million or 23.3% of total net revenue
GAAP net loss was $100.7 million
Adjusted EBITDA was $(34.8) million or (2.1)% of total net revenue
GAAP basic and diluted net loss per share was $1.13
Non-GAAP diluted net loss per share was $0.77
Non-GAAP free cash flow was $(7.5) million
At the end of the second quarter, cash, cash equivalents, and short-term and long-term investments totaled $585.2 million
"We are pleased to report a record second quarter and our largest yet year-over-year dollar growth in Direct Retail net revenue. This recent quarter included our biggest revenue day in the history of the company as we introduced Way Day, the first-ever retail holiday for home," said Niraj Shah, CEO, co-founder and co-chairman, Wayfair. "Our long-term investments in further developing our logistics networks, international business, and in scaling headcount to improve our product and service offerings are resonating strongly with new and returning customers. By focusing on bringing customers the best possible experience in shopping for the home, from the home, we are leading the way in our category. We are delighted with the progress that we are making and the way in which we are positioned to keep taking market share as dollars shift online."
Other Second Quarter Highlights 
The number of active customers in our Direct Retail business reached 12.8 million as of June 30, 2018, an increase of 34.0% year over year
LTM net revenue per active customer was $440 as of June 30, 2018, an increase of 9.5% year over year
Orders per customer, measured as LTM orders divided by active customers, was 1.82 for the second quarter of 2018, compared to 1.74 for the second quarter of 2017
Repeat customers placed 66.0% of total orders in the second quarter of 2018, compared to 61.3% in the second quarter of 2017
Repeat customers placed 4.3 million orders in the second quarter of 2018, an increase of 62.3% year over year
Orders delivered in the second quarter of 2018 were 6.5 million, an increase of 50.8% year over year
Average order value was $254 for the second quarter of 2018, compared to $258 in the second quarter of 2017
In the second quarter of 2018, 49.2% of total orders delivered for our Direct Retail business were placed via a mobile device, compared to 44.1% in the second quarter of 2017
Webcast and Conference Call
Wayfair will host a conference call and webcast to discuss its second quarter 2018 financial results today at 8 a.m. (ET). Investors and participants can access the call by dialing (833) 286-5803 in the U.S. and (647) 689-4448 internationally. The passcode for the conference line is 6854609. The call will also be available via live webcast at investor.wayfair.com along with supporting slides. An archive of the webcast conference call will be available shortly after the call ends. The archived webcast will be available at investor.wayfair.com.

1



About Wayfair
Wayfair believes everyone should live in a home they love. Through technology and innovation, Wayfair makes it possible for shoppers to quickly and easily find exactly what they want from a selection of more than 10 million items across home furnishings, décor, home improvement, housewares and more. Committed to delighting its customers every step of the way, Wayfair is reinventing the way people shop for their homes - from product discovery to final delivery.
The Wayfair family of sites includes:
Wayfair - Everything home for every budget
Joss & Main - Affordable discoveries for gorgeous living
AllModern - Unbelievable prices on everything modern
Birch Lane - Home of classic designs and fresh finds
Perigold - The widest-ever selection of premium home
Wayfair generated $5.7 billion in net revenue for the twelve months ended June 30, 2018. Headquartered in Boston, Massachusetts with operations throughout North America and Europe, the company employs more than 9,700 people.
Media Relations Contact:
Jane Carpenter, 617-502-7595
PR@wayfair.com

Investor Relations Contact:
Joe Wilson
IR@wayfair.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal and state securities laws. All statements other than statements of historical fact contained in this press release, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions.
Forward-looking statements are based on current expectations of future events. We cannot guarantee that any forward-looking statement will be accurate, although we believe that we have been reasonable in our expectations and assumptions. Investors should realize that if underlying assumptions prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements speak only as of the date of this press release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
A list and description of risks, uncertainties and other factors that could cause or contribute to differences in our results can be found under Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and the Company’s subsequent filings with the Securities and Exchange Commission. We qualify all of our forward-looking statements by these cautionary statements.
Non-GAAP Financial Measures
To supplement our unaudited consolidated and condensed financial statements presented in accordance with generally accepted accounting principles ("GAAP"), this earnings release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA as a percentage of total net revenue ("Adjusted EBITDA Margin"), free cash flow and non-GAAP net loss and diluted net loss per share. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We have provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure in this earnings release.
Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures that are calculated as income (loss) before depreciation and amortization, equity-based compensation and related taxes, interest and other income and expense, (benefit

2



from) provision for income taxes, and non-recurring items. We have included Adjusted EBITDA and Adjusted EBITDA Margin in this earnings release because they are key measures used by our management and our board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA and Adjusted EBITDA Margin facilitates operating performance comparisons on a period-to-period basis and, in the case of exclusion of the impact of equity-based compensation and related taxes, excludes an item that we do not consider to be indicative of our core operating performance. Investors should, however, understand that equity-based compensation will be a significant recurring expense in our business and an important part of the compensation provided to our employees. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Free cash flow is a non-GAAP financial measure that is calculated as net cash (used in) provided by operating activities less net cash used to purchase property and equipment and site and software development costs. We believe free cash flow is an important indicator of our business performance, as it measures the amount of cash we generate. Accordingly, we believe that free cash flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
Non-GAAP diluted net loss per share is a non-GAAP financial measure that is calculated as GAAP net loss plus equity-based compensation and related taxes, (benefit from) provision for income taxes, and non-recurring items divided by weighted average shares. We believe that adding back equity-based compensation expense and related taxes and (benefit from) provision for income taxes, and non-recurring items as adjustments to our GAAP diluted net loss before calculating per share amounts for all periods presented provides a more meaningful comparison between our operating results from period to period.
We do not, nor do we suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors should also note that the non-GAAP financial measures we use may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies, including other companies in our industry.
The following table reflects the reconciliation of net loss to Adjusted EBITDA and Adjusted EBITDA Margin for each of the periods indicated (in thousands):
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Reconciliation of Adjusted EBITDA
 
 

 
 

 
 

 
 

Net loss
 
$
(100,734
)
 
$
(38,875
)
 
$
(208,509
)
 
$
(95,414
)
Depreciation and amortization
 
28,920

 
19,323

 
54,882

 
39,675

Equity based compensation and related taxes
 
31,610

 
15,983

 
58,757

 
30,941

Interest expense, net
 
5,796

 
1,550

 
11,203

 
1,849

Other (income), net
 
(666
)
 
(451
)
 
(1,607
)
 
(627
)
Provision for income taxes
 
265

 
224

 
505

 
434

Adjusted EBITDA
 
$
(34,809
)
 
$
(2,246
)
 
$
(84,769
)
 
$
(23,142
)
 
 
 
 
 
 
 
 
 
Net revenue
 
$
1,655,256

 
$
1,122,856

 
$
3,059,525

 
$
2,083,681

Adjusted EBITDA Margin
 
(2.1
)%

(0.2
)%

(2.8
)%

(1.1
)%
The following table presents Adjusted EBITDA attributable to our segments, and the reconciliation of net loss to consolidated Adjusted EBITDA is presented in the preceding table (in thousands):
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Segment Adjusted EBITDA
 
 
 
 
 
 
 
 
U.S.
 
$
7,200

 
$
20,425

 
$
(738
)
 
$
24,153

International
 
(42,009
)
 
(22,671
)
 
(84,031
)
 
(47,295
)
Adjusted EBITDA
 
$
(34,809
)
 
$
(2,246
)
 
$
(84,769
)
 
$
(23,142
)

3



A reconciliation of GAAP net loss to non-GAAP diluted net loss, the most directly comparable GAAP financial measure, in order to calculate non-GAAP diluted net loss per share, is as follows (in thousands, except per share data):
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Net loss
 
$
(100,734
)
 
$
(38,875
)
 
$
(208,509
)
 
$
(95,414
)
Equity based compensation and related taxes
 
31,610

 
15,983

 
58,757

 
30,941

Provision for income taxes
 
265

 
224

 
505

 
434

Non-GAAP net loss
 
$
(68,859
)

$
(22,668
)

$
(149,247
)

$
(64,039
)
Non-GAAP net loss per share, basic and diluted
 
$
(0.77
)

$
(0.26
)

$
(1.68
)

$
(0.74
)
Weighted average common shares outstanding, basic and diluted
 
89,158

 
86,714

 
88,814

 
86,374

The following table presents a reconciliation of free cash flow to net cash used in operating activities for each of the periods indicated (in thousands):
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Net cash provided by (used in) operating activities
 
$
47,604

 
$
18,101

 
$
34,527

 
$
(27,997
)
Purchase of property and equipment
 
(39,730
)
 
(33,596
)
 
(61,093
)
 
(45,548
)
Site and software development costs
 
(15,419
)
 
(11,730
)
 
(28,573
)
 
(22,650
)
Free cash flow
 
$
(7,545
)
 
$
(27,225
)
 
$
(55,139
)
 
$
(96,195
)
Key Financial and Operating Metrics (in thousands, except LTM Net Revenue per Active Customer and Average Order Value)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Consolidated Financial Metrics
 
 

 
 

 
 

 
 

Net Revenue
 
$
1,655,256

 
$
1,122,856

 
$
3,059,525

 
$
2,083,681

Adjusted EBITDA
 
$
(34,809
)
 
$
(2,246
)
 
$
(84,769
)
 
$
(23,142
)
Free cash flow
 
$
(7,545
)
 
$
(27,225
)
 
$
(55,139
)
 
$
(96,195
)
Direct Retail Financial and Operating Metrics
 
 
 
 
 
 
 
 
Direct Retail Net Revenue
 
$
1,640,921

 
$
1,102,461

 
$
3,029,811

 
$
2,042,813

Active Customers
 
12,792

 
9,547

 
12,792

 
9,547

LTM Net Revenue per Active Customer
 
$
440

 
$
402

 
$
440

 
$
402

Orders Delivered
 
6,452

 
4,278

 
12,340

 
8,490

Average Order Value
 
$
254

 
$
258

 
$
246

 
$
241

The following table presents Direct Retail and Other net revenues attributable to the Company’s reportable segments for the periods presented (in thousands):
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
U.S. Direct Retail
 
$
1,397,009

 
$
976,673

 
$
2,583,214

 
$
1,814,229

U.S. Other
 
14,335

 
20,395

 
29,714

 
40,868

U.S. segment net revenue
 
1,411,344

 
997,068

 
2,612,928

 
1,855,097

International Direct Retail
 
243,912

 
125,788

 
446,597

 
228,584

International segment net revenue
 
243,912

 
125,788

 
446,597

 
228,584

Total net revenue
 
$
1,655,256

 
$
1,122,856

 
$
3,059,525

 
$
2,083,681



4



WAYFAIR INC.
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited) 
 
 
June 30,
2018
 
December 31,
2017
Assets
 
 

 
 

Current assets
 
 

 
 

Cash and cash equivalents
 
$
529,452

 
$
558,960

Short-term investments
 
45,934

 
61,032

Accounts receivable, net of allowance of $6,711 and $7,000 at June 30, 2018 and December 31, 2017, respectively
 
34,823

 
37,948

Inventories
 
30,710

 
28,042

Prepaid expenses and other current assets
 
153,042

 
130,838

Total current assets
 
793,961

 
816,820

Property and equipment, net
 
468,422

 
361,141

Goodwill and intangible assets, net
 
2,918

 
3,105

Long-term investments
 
9,767

 
21,561

Other noncurrent assets
 
12,200

 
10,776

Total assets
 
$
1,287,268

 
$
1,213,403

Liabilities and Stockholders' Equity
 
 

 
 

Current liabilities
 
 

 
 

Accounts payable
 
$
543,596

 
$
440,366

Accrued expenses
 
129,458

 
120,247

Deferred revenue
 
121,618

 
94,116

Other current liabilities
 
95,626

 
85,026

Total current liabilities
 
890,298

 
739,755

Lease financing obligation, net of current portion
 
141,025

 
82,580

Long-term debt
 
342,281

 
332,905

Other liabilities
 
109,142

 
106,492

Total liabilities
 
1,482,746

 
1,261,732

 
 
 
 
 
Convertible preferred stock, $0.001 par value per share: 10,000,000 shares authorized and none issued at June 30, 2018 and December 31, 2017
 

 

Stockholders’ equity:
 
 
 
 

Class A common stock, par value $0.001 per share, 500,000,000 shares authorized, 59,315,145 and 57,398,983 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
 
59

 
57

Class B common stock, par value $0.001 per share, 164,000,000 shares authorized, 30,161,725 and 30,809,627 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
 
30

 
31

Additional paid-in capital
 
593,460

 
537,212

Accumulated deficit
 
(787,118
)
 
(583,266
)
Accumulated other comprehensive (loss)
 
(1,909
)
 
(2,363
)
Total stockholders’ equity
 
(195,478
)
 
(48,329
)
Total liabilities and stockholders’ equity
 
$
1,287,268

 
$
1,213,403


5



WAYFAIR INC. 
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited) 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018
 
2017
 
2018
 
2017
Net revenue
 
$
1,655,256

 
$
1,122,856

 
$
3,059,525

 
$
2,083,681

Cost of goods sold (1)
 
1,270,249

 
853,390

 
2,350,694

 
1,577,332

Gross profit
 
385,007


269,466


708,831


506,349

Operating expenses:
 
 

 
 

 
 

 
 

Customer service and merchant fees (1)
 
61,792

 
39,125

 
115,676

 
74,183

Advertising
 
177,582

 
124,241

 
339,228

 
242,506

Selling, operations, technology, general and administrative (1)
 
240,972

 
143,652

 
452,335

 
283,418

Total operating expenses
 
480,346


307,018


907,239


600,107

Loss from operations
 
(95,339
)

(37,552
)

(198,408
)

(93,758
)
Interest expense, net
 
(5,796
)
 
(1,550
)
 
(11,203
)
 
(1,849
)
Other income, net
 
666

 
451

 
1,607

 
627

Loss before income taxes
 
(100,469
)

(38,651
)

(208,004
)

(94,980
)
Provision for income taxes
 
265

 
224

 
505

 
434

Net loss
 
$
(100,734
)

$
(38,875
)

$
(208,509
)

$
(95,414
)
Net loss per share, basic and diluted
 
$
(1.13
)

$
(0.45
)

$
(2.35
)

$
(1.10
)
Weighted average number of common stock outstanding used in computing per share amounts, basic and diluted
 
89,158

 
86,714

 
88,814

 
86,374

 
(1) Includes equity based compensation and related taxes as follows:
Cost of goods sold
 
$
637

 
$
205

 
$
1,202

 
$
350

Customer service and merchant fees
 
1,133

 
586

 
2,103

 
1,230

Selling, operations, technology, general and administrative
 
29,840

 
15,192

 
55,452

 
29,361

 
 
$
31,610

 
$
15,983

 
$
58,757

 
$
30,941


6



WAYFAIR INC.
 CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) 
 
 
Six months ended June 30,
 
 
2018
 
2017
Cash flows from operating activities
 
 

 
 

Net loss
 
$
(208,509
)
 
$
(95,414
)
Adjustments to reconcile net loss to net cash used in operating activities
 
 
 
 
Depreciation and amortization
 
54,882

 
39,675

Equity based compensation
 
54,213

 
28,462

Amortization of discount and issuance costs on convertible notes
 
9,353

 

Other non-cash adjustments
 
133

 
868

Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
3,058

 
(4,723
)
Inventories
 
(2,741
)
 
3,949

Prepaid expenses and other current assets
 
(22,354
)
 
(31,220
)
Accounts payable and accrued expenses
 
95,743

 
(137
)
Deferred revenue and other liabilities
 
52,211

 
30,660

Other assets
 
(1,462
)
 
(117
)
Net cash provided by (used in) operating activities
 
34,527

 
(27,997
)
 
 
 
 
 
Cash flows from investing activities
 
 
 
 

Purchase of short-term and long-term investments
 

 
(25,334
)
Sale and maturities of short-term investments
 
26,646

 
46,035

Purchase of property and equipment
 
(61,093
)
 
(45,548
)
Site and software development costs
 
(28,573
)
 
(22,650
)
Other investing activities
 
(267
)
 

Net cash used in investing activities
 
(63,287
)
 
(47,497
)
 
 
 
 
 
Cash flows from financing activities
 
 
 
 

Taxes paid related to net share settlement of equity awards
 
(635
)
 
(1,252
)
Net proceeds from exercise of stock options
 
74

 
162

Net cash used in financing activities
 
(561
)
 
(1,090
)
Effect of exchange rate changes on cash and cash equivalents
 
(187
)
 
554

Net decrease in cash and cash equivalents
 
(29,508
)
 
(76,030
)
 
 
 
 
 
Cash and cash equivalents
 
 

 
 

Beginning of period
 
558,960

 
279,840

End of period
 
$
529,452

 
$
203,810



7

View differences made from one to another to evaluate Wayfair Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Wayfair Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account