W earnings analysis
What we found in W's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Wayfair delivered Q2 revenue of $3.519 billion, up 7.5% year over year and above Q1 revenue of $2.931 billion, while operating income reached $104 million versus $17 million a year earlier. Gross margin was essentially stable at 30.0%, operating cash flow increased to $360 million, and free cash flow increased to $301 million. However, a $59 million debt-extinguishment loss resulted in GAAP diluted EPS of $(0.01), cash and short-term investments declined by $399 million from year-end to $1.143 billion, and International revenue fell 1.3%.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated to 7.5%
- Q2 revenue rose $246 million, or 7.5% year over year, to $3.519 billion from $3.273 billion, driven primarily by higher order volume and a higher average order value.
- Material operating leverage
- Operating income improved to $104 million from $17 million, lifting calculated operating margin to 3.0% from 0.5%. This also reversed Q1 operating loss of $11 million, or about -0.4% of revenue.
- U.S. segment drove consolidated growth
- U.S. revenue increased 8.7% to $3.125 billion, more than offsetting International revenue's 1.3% decline to $394 million.
- Customer and order metrics improved
- Active customers increased to 21.7 million from 21.0 million, orders delivered rose to 10.6 million from 10.0 million, and average order value grew to $332 from $328.
- Cash generation strengthened
- Q2 operating cash flow was $360 million versus $273 million a year earlier, and free cash flow was $301 million versus $230 million. First-half free cash flow reached $195 million versus $91 million.
- Underlying profitability expanded
- Adjusted EBITDA rose to $242 million from $205 million, with adjusted EBITDA margin expanding to 6.9% from 6.3%; adjusted diluted EPS increased to $0.95 from $0.87.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Debt charge kept GAAP earnings negative
- GAAP net income was a $1 million loss, versus $15 million of income a year earlier, and GAAP diluted EPS was $(0.01) versus $0.11. The quarter included a $59 million loss on debt extinguishment.
- Liquidity declined amid substantial debt load
- Cash and short-term investments fell to $1.143 billion at June 30, 2026 from $1.542 billion at December 31, 2025, while principal indebtedness remained $2.9 billion. Interest expense increased to $39 million from $29 million year over year.
- International business remains in decline
- International revenue declined 1.3% to $394 million, and fell 2.0% on a constant-currency basis, contrasting with 8.7% U.S. growth.
- Gross margin modestly compressed
- Gross margin edged down to 30.0% from 30.1% as cost of goods sold reached 70.0% of revenue versus 69.9%; management attributed the pressure to customer-experience investments, partly offset by supplier-services growth.
- No formal risk-factor changes; macro risk persists
- Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. Nonetheless, management identifies tariffs, inflation and interest rates as ongoing uncertainties, while the company has $82 million of letters of credit reducing its $500 million Revolver availability.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-0.01
- Gross margin
- 30.0%
- Operating margin
- 3.0%
- Segment
- U.S. net revenue: $3.125 billion, up 8.7% year over year from $2.874 billion.
- Segment
- International net revenue: $394 million, down 1.3% year over year from $399 million; constant-currency growth was -2.0%.
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS guidance. Management said existing cash, investments, operating cash generation and Revolver availability are expected to meet anticipated cash needs for at least the next 12 months; it also cited continuing macro, tariff, interest-rate and inflation uncertainty.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 30, 2026
- Wayfair reported Q1 2026 results with revenues of $2.93 billion, a notable 7.4% increase year-over-year. The diluted EPS improved to -$0.80, surpassing estimates, while active customers grew to 21.4 million. The company…
- 10-K · February 19, 2026
- Wayfair's 2025 10-K emphasizes an omni-channel strategy anchored by its Wayfair brand, investments in logistics (CastleGate, WDN) and AI (launched Muse in 2025), and a U.S.-centric revenue base (U.S. was 88% of…
- 10-Q · October 28, 2025
- Wayfair Inc. reported a strong performance in its third quarter of 2025, showcasing significant revenue growth and an impressive EPS beat. Revenues increased to $3.12 billion, a notable uptick from the previous quarter,…
- 10-Q · May 1, 2025
- Wayfair reported net revenue of $2,730 million for the quarter ended March 31, 2025, essentially flat year‑over‑year (+$1 million) but down versus the prior quarter ($3,121 million in 2024Q4, a decrease of $391…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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