Wayfair (W 8.02%), the major e-commerce retailer specializing in furniture and home goods, released results for its fiscal second quarter on August 4, 2025. The headline news: both revenue (GAAP) and profitability (non-GAAP EPS) came in well ahead of Wall Street estimates. Revenue was $3.3 billion (GAAP), exceeding the expected $3.13 billion (GAAP) and up 5.0% year over year. Adjusted Diluted Earnings per Share (Non-GAAP) reached $0.87, a sharp beat over the $0.33 Non-GAAP EPS estimate, representing 85.1% growth from Q2 2024. Offsetting these gains, the active customer base declined to 21.0 million, down 4.5% year over year, with repeat customer share slipping to 80.7%. Still, an increase in average order value to $328 from $313 in Q2 2024 and higher spending per customer helped offset this trend. Overall, results painted a picture of improved operating efficiency and margin control, though future demand trends warrant attention.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted Diluted EPS (Non-GAAP) | $0.87 | $0.33 | $0.47 | 85.1% |
| Revenue | $3.3 billion | $3.13 billion | $3.1 billion | 6.5 % |
| Adjusted EBITDA | $205 million | $163 million | 25.8% | |
| Free Cash Flow | $230 million | $183 million | 25.7 % | |
| Gross Profit | $984 million | $941 million | 4.6 % |
Source: Analyst estimates for the quarter provided by FactSet.
About Wayfair: Business Model and Strategic Priorities
Wayfair operates an online marketplace for home goods, offering everything from couches and rugs to appliances and decor. Its central appeal is scale—the platform hosts more than 30 million products from a vast network of 20,000 suppliers. This mix of breadth and supplier competition enables quick responses to consumer trends and broad price options.
Wayfair’s recent focus areas include strengthening its dedicated logistics systems, expanding its product range, and continuing heavy investment in technology and customer service. Scale depends on a frictionless delivery experience, variety across price points, and digital engagement. Success hinges on logistics like CastleGate for warehousing and delivery, technology innovation, and efficient supplier integration. Optimizing average order value and increasing repeat customer share are key measures tracked by management.
Quarter in Review: Financial and Operating Developments
Revenue (GAAP) increased 5.0% year over year, driven by both U.S. and international growth. U.S. net revenue (GAAP) reached $2.87 billion, up 5.3%. International net revenue increased 3.1% to $399 million. Excluding the impact from Wayfair’s exit from Germany, management highlighted a 6.0% revenue rise—the best since early 2021. Gross profit (GAAP) improved by 4.6% compared to Q2 2024, and gross margin (GAAP) remained level near 30%.
Operating expenses (GAAP) declined slightly to $967 million, coming in below last year ($976 million) despite higher sales. Notably, Adjusted EBITDA improved 25.8% to $205 million compared to Q2 2024, with Adjusted EBITDA margin expanding to 6.3% versus 5.2% in Q2 2024. Free cash flow (non-GAAP) rose to $230 million, a 25.7% increase compared to Q2 2024, while net income (GAAP) turned positive at $15 million, compared to a net loss last year.
Digital engagement remained high, with 62.9% of orders placed via mobile device. Mobile ordering is a key channel for the company’s customer experience. Average order value was $328, compared to $313 in Q2 2024. At the same time, last twelve months (LTM) revenue per active customer improved 5.9% to $572. These figures offset declines in the absolute number of active customers, which fell 4.5% year over year to 21.0 million. Orders delivered held steady at 10.0 million.
Customer trends mixed. Repeat customers accounted for 80.7% of delivered orders, down from 81.7% in Q2 2024. Orders per customer, measured as LTM orders divided by active customers, was 1.86, compared to 1.85 for the second quarter of 2024, suggesting more sales from loyal shoppers but not more frequent buying. Active customer count continued its gradual slide, raising questions about broad-based demand, but higher per-customer spend counteracted the decline. Supplier participation remained strong, with over 100 countries represented, supporting resilience in sourcing and competitiveness during shifting tariff conditions.
Wayfair’s technology investments expanded to new features now that major re-platforming is mostly complete. These include loyalty and rewards programs to promote return shopping, as well as tools for business buyers. Its logistics network, particularly CastleGate for pre-positioned inventory and the Wayfair Delivery Network for at-home delivery, is positioned to support margin gains and customer satisfaction. Management pointed to progress here as helping to insulate results from shifting trade and tariff risks. The company does not pay a dividend.
Looking Ahead: Guidance and Investor Focus
Instead, it repeated its ongoing goal to drive growth in adjusted EBITDA dollars and free cash flow. With gross margin guidance previously set in the 30–31% range, the current quarter result of 30.1% (GAAP) matched this aim. Leadership stated, “We couldn’t be more excited for what lies ahead in 2025 and beyond.” but stopped short of projecting specific figures.
Investors should watch several key trends in upcoming quarters: the pace of active customer declines, the ability to further expand average order value and per-customer revenue, and the ongoing impact of initiatives in loyalty, supplier engagement, and logistics. Any changes in trade policy or consumer spending habits may also bring volatility to growth and profit metrics. W does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
