Image source: Wayfair.

What: Shares of Wayfair (W -1.94%) climbed 10.6% Thursday after the home furnishings e-commerce company reported better-than-expected fourth-quarter 2015 results.

So what: Quarterly revenue climbed 81% year over year to $739.8 million, including a 97.8% increase in direct retail revenue to $685.6 million. Wayfair also enjoyed 66.6% growth in active customers to 5.4 million. Meanwhile, Wayfair generated adjusted free cash flow of $78 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $2.8 million.

That translated to a GAAP net loss of $15.5 million, or $0.18 per share. On an adjusted (non-GAAP) basis, which adds perspective by excluding items like stock-based compensation, Wayfair saw its net loss narrow significantly to $5.7 million, or $0.07 per share, from $14.7 million, or $0.18 per share in the same year-ago period.

Analysts, on average, were anticipating lower revenue of $679.1 million to result in a wider adjusted net loss of $0.14 per share.

"We are excited to report an incredibly strong fourth quarter and tremendous overall growth for Wayfair in 2015 with the business reaching $2.25 billion in full-year net revenues," added Wayfair CEO Niraj Shah. "We continue to grow both our new customer base and our repeat business with an exceptional shopping experience that redefines what is possible in home retail."

Now what: Shah also elaborated that, as Wayfair continues to grow its brand in the U.S. in 2016, it will simultaneously ramp its investment in Europe and Canada.

During the subsequent conference call, Wayfair CFO Michael Fleisher explained, "We have an opportunity to roll out our U.S. playbook in additional markets and to continue to efficiently invest in the U.S. As we have said since our IPO, we believe the right long-term strategy for the business is to invest in a very disciplined way and gain share today."

Given these investments, Wayfair doesn't anticipate turning in positive adjusted EBITDA again until the fourth quarter of 2016. In the meantime, for the current quarter, Wayfair expects total revenue of $660 million to $700 million, including 70% to 80% growth in direct retail revenue to a range of $630 million to $665 million, and adjusted EBITDA margins of negative 3% to negative 3.5%. Analysts, for their part, were only looking for first-quarter 2016 revenue of $625.7 million.

In the end, Wayfair has shown a propensity for under-promising and over-delivering in the past. But this was a solid report that exceeded even the most optimistic expectations, and Wayfair is wisely set to invest with the aim of replicating its success in other promising markets. All things considered, it's no surprise the market so aggressively drove shares of Wayfair higher yesterday.