2021 revenue increased 37% to $540.8
million
Active customers increased 22% to 2.20
million
Warby Parker Inc. (NYSE: WRBY) (the “Company”), a
direct-to-consumer lifestyle brand focused on vision for all, today
announced financial results for the fourth quarter and full year
ended December 31, 2021.
“2021 was a milestone year for Warby Parker, and one filled with
moments that reinforce our commitment to driving scale and creating
impact,” said Co-Founder and Co-CEO Neil Blumenthal. “Despite the
ongoing impacts of the pandemic, our 2021 performance reflects the
strength of our brand, our unique value proposition, and the
resilience of our highly engaged team as we continue to deliver
long-term sustainable growth. As we turn the page to 2022, we’ve
never been more energized by the possibilities in front of us.”
“We operate in a large and growing category and are emerging
from the pandemic in a position of strength. During 2021, our
business grew significantly, expanded profitability, and gained
share,” added Co-Founder and Co-CEO Dave Gilboa. “From broadening
our glasses, contacts, and exam offerings to opening 40 new stores
and introducing first-to-market digital tools, this year we look
forward to solving more problems, delighting more customers, and
creating even more value and impact for our stakeholders.”
Fourth Quarter and Full Year 2021
Highlights
- Full year net revenue increased $147.1 million, or 37.4%, to
$540.8 million compared to full year 2020 and increased 46.0%
compared to full year 2019.
- Fourth quarter net revenue increased $20.1 million, or 17.8%,
to $132.9 million compared to the fourth quarter of 2020 and
increased 41.9% compared to the fourth quarter of 2019.
- Increased active customers 21.5% to 2.20 million year over
year.
- Average revenue per customer increased 13.0% year over year to
$246.
- Full year GAAP net loss of $144.3 million.
- Full year adjusted EBITDA of $24.9 million, with adjusted
EBITDA margin improvement of 270 basis points year over year to
4.6%.
- Opened 35 new stores during the year, ending 2021 with 161
stores.
- Doubled full year revenue of our contact lens offering year
over year.
- Maintained 80+ Net Promoter Score.
- Opened second in-house optical lab strengthening Warby Parker’s
vertically integrated supply chain.
- Reached over 10 million pairs of glasses distributed through
Warby Parker’s Buy a Pair, Give a Pair Program.
- Became the first public benefit corporation to go public
through a direct listing.
Fourth Quarter 2021 Financial
Results
For the fourth quarter of 2021, compared to the fourth quarter
of 2020:
- Net revenue increased $20.1 million, or 17.8%, to $132.9
million. Fourth quarter revenue was negatively impacted by the
Omicron variant, with disruption heightened in the last weeks of
December, coinciding with peak demand in the optical industry as
customers seek to utilize flexible spending dollars ahead of
December 31st expirations.
- Active customers increased by 390,000, or 21.5%, to 2.20
million.
- Gross profit dollars increased 17.0% to $76.3 million.
- Gross margin was 57.4% compared to 57.8% in the prior year.
Gross margin for the fourth quarter of 2020 includes a benefit of
approximately 70 basis points related to a tariff rebate received.
Excluding this 2020 benefit, gross margin would have improved year
over year, driven by the scaling of progressive lenses as well as
benefits from continued inventory and product strategy
optimization, partially offset by increased penetration of contacts
lenses, reflecting Warby Parker’s strategy to grow its contact lens
offering.
- Selling, general and administrative expenses (“SG&A”)
increased $51.9 million to $122.1 million, primarily driven by an
increase of $31.6 million in stock-based compensation expense and
related employer payroll taxes. Excluding these expenses in both
years, SG&A increased $73.3 million to $89.4 million, on an
adjusted basis(1). On this basis, SG&A as a percentage of
revenue increased 600 basis points to 67.3% from 61.3%, in-line
with pre-pandemic spend levels, primarily driven by strategic
investments in marketing to build awareness and support demand over
the important holiday and flexible spending expiry season.
- Net loss increased $41.6 million to $45.9 million, primarily as
a result of the increase in SG&A described above.
- Adjusted EBITDA(1) decreased $7.5 million to $(6.4)
million.
- Adjusted EBITDA margin(1) decreased 570 basis points to
(4.8)%.
- Warby Parker opened seven new stores during the quarter,
bringing year-to-date openings to 35, and ended the year with 161
stores.
Due to the impact of COVID-19, Warby Parker is making full year
2021 financial comparisons against full years 2020 and 2019. The
consolidated statements of operations for the fourth quarter and
full year of 2019 are included in the tables at the end of this
release for reference.
For the fourth quarter of 2021, compared to the fourth quarter
of 2019:
- Net revenue increased $39.3 million, or 41.9%, to $132.9
million.
- Gross margin was 57.4%, compared to 57.0% in 2019, primarily
driven by the scaling of progressive lenses as well as a benefits
from continued inventory and product strategy optimization,
partially offset by increased penetration of contacts lenses.
- SG&A increased $55.3 million to $122.1 million, primarily
driven by an increase of $28.3 million in stock-based compensation
expense and related employer payroll taxes. Excluding these
expenses in both years, SG&A increased $99.7 million to $89.4
million, on an adjusted basis(1). On this basis, SG&A as a
percentage of revenue increased 60 basis points, from 66.7% to
67.3%, primarily driven by strategic investments in marketing to
build awareness and support demand over the important holiday and
flexible spending expiry season, partially offset by leverage in
corporate salaries and general corporate overhead as a result of
net revenue growth outpacing expense growth.
- Net loss increased $34.0 million to $45.9 million, primarily as
a result of the increase in SG&A described above.
- Adjusted EBITDA(1) decreased $1.3 million to $(6.4)
million.
- Adjusted EBITDA margin(1) increased 60 basis points to
(4.8)%.
Full Year 2021 Financial
Results
For the full year 2021, compared to the full year 2020:
- Net revenue increased $147.1 million, or 37.4%, to $540.8
million.
- Active customers increased by 390,000, or 21.5%, to 2.20
million.
- Gross profit dollars increased 37.0% to $317.7 million.
- Gross margin was 58.8% compared to 58.9% in the prior year.
Gross margin for full year 2020 includes a benefit of approximately
40 basis points related to a tariff rebate received. When excluding
this 2020 benefit, gross margin expansion would have improved,
primarily driven by the impact of the temporary closure of our
retail stores in 2020 due to COVID-19, partially offset by
increased penetration of contacts lenses, reflecting Warby Parker’s
strategy to grow its contact lens offering.
- SG&A increased $173.8 million to $461.4 million, primarily
driven an increase in stock-based compensation expense and related
employer payroll taxes of $64.5 million, $28.3 million in direct
listing expenses, and $7.8 million in expense from a stock donation
to the Warby Parker Impact Foundation. Excluding these items
SG&A increased $20.3 million, on an adjusted basis. On this
basis(1), SG&A as a percentage of revenue improved by 320 basis
points, from 61.6% to 58.4%, primarily as a result of net revenue
growth outpacing SG&A expense growth as Warby Parker maintained
disciplined management of its expense profile.
- Net loss increased $88.4 million to $144.3 million, primarily
as a result of the increase in SG&A described above.
- Adjusted EBITDA(1) increased $17.2 million, or 224.6%, to $24.9
million.
- Adjusted EBITDA margin(1) increased 270 basis points to
4.6%.
- Warby Parker opened 35 net new stores, ending the year with 161
stores.
For the full year 2021, compared to the full year 2019:
- Net revenue increased $170.3 million, or 46.0%.
- Gross margin was 58.8%, compared to 60.2% in 2019, primarily
driven by increased penetration of contacts in 2021 versus
2019.
- SG&A increased $236.6 million to $461.4 million, primarily
driven by an increase in stock-based compensation expense and
related employer payroll taxes of $28.3 million, $28.3 million in
direct listing expenses, and $7.8 million in expense from a stock
donation to the Warby Parker Impact Foundation. Excluding these
items, SG&A increased $27.0 million, on an adjusted basis. On
this basis(1), SG&A as a percentage of revenue was flat at
58.4%, as strategic investments in marketing to build awareness and
support growth were offset by leverage across salaries and
corporate overhead as net revenue growth outpaced expense
growth.
- Net loss increased $144.3 million to $144.3 million, primarily
as a result of the increase in SG&A described above.
- Adjusted EBITDA(1) increased $3.0 million, or 13.7% to $24.9
million.
- Adjusted EBITDA margin(1) decreased 130 basis points to
4.6%.
Balance Sheet Highlights
Warby Parker ended 2021 with $256.4 million in cash and cash
equivalents.
2022 Outlook
For the full year 2022, Warby Parker expects:
- Net revenue of $650 to $660 million, representing growth 20% to
22% versus full year 2021. This outlook includes the impact of
approximately $15 million in lost sales, or 3 percentage points of
growth, related to the disruption caused by Omicron to the start of
the year.
- Adjusted EBITDA margin(1) of approximately 5.6% to 6.6%.
- 40 new store openings bringing total store count to 201.
“While the end of 2021 and the start of 2022 were impacted by
Omicron, we are incredibly proud to have delivered another year of
robust growth,” said Chief Financial Officer Steve Miller. “And as
we look ahead to 2022 and beyond, we are focused on executing Warby
Parker’s distinct growth strategies to increase our 1% market share
within the growing $160 billion eyewear market. At the heart of it
all remains our team’s commitment to designing and delivering
innovative products and services that will help the world see.”
The guidance and forward-looking statements made in this press
release and on our conference call are based on management's
expectations as of the date of this press release and do not
incorporate future unknown direct or indirect impacts from further
resurgences in COVID-19, including the Delta and Omicron
variants.
(1) Please see the reconciliation of non-GAAP financial measures
to the most comparable GAAP financial measure in the section titled
“Non-GAAP Financial Measures” below.
Webcast and Conference
Call
A conference call to discuss Warby Parker’s 2021 results as well
as Q1 and 2022 outlook is scheduled for 8:00 a.m. ET today. To
participate, please dial 844-200-6205 from the U.S. or 929-526-1599
from international locations. The conference passcode is 322754. A
live webcast of the conference call will be available on the
investors section of the Company’s website at
investors.warbyparker.com where presentation materials will also be
posted prior to the conference call. A replay will be made
available online approximately two hours following the live call
for a period of 90 days.
Forward-Looking
Statements
This press release and the related conference call, webcast and
presentation contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements may relate to, but are not limited to,
expectations of future operating results or financial performance,
including expectations regarding achieving profitability and our
GAAP and non-GAAP guidance for the for the quarter ending March 31,
2022 and the year ending December 31, 2022; management’s plans,
priorities, initiatives and strategies; and expectations regarding
growth of our business. Forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be
predicted or quantified. In some cases, you can identify
forward-looking statements because they contain words such as
“anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “target,” “toward,” “will,” or
“would,” or the negative of these words or other similar terms or
expressions. You should not put undue reliance on any
forward-looking statements. Forward-looking statements should not
be read as a guarantee of future performance or results and will
not necessarily be accurate indications of the times at, or by,
which such performance or results will be achieved, if at all.
Forward-looking statements are based on information available at
the time those statements are made and are based on current
expectations, estimates, forecasts, and projections as well as the
beliefs and assumptions of management as of that time with respect
to future events. These statements are subject to risks and
uncertainties, many of which involve factors or circumstances that
are beyond our control, that could cause actual performance or
results to differ materially from those expressed in or suggested
by the forward-looking statements. In light of these risks and
uncertainties, the forward-looking events and circumstances
discussed in this press release may not occur and actual results
could differ materially from those anticipated or implied in the
forward-looking statements. These risks and uncertainties include
our ability to manage our future growth effectively; our
expectations regarding cost of goods sold, gross margin, channel
mix, customer mix, and selling, general, and administrative
expenses; planned new retail stores in 2022 and going forward;
increases in component and shipping costs and changes in supply
chain; our ability to compete successfully; our ability to manage
our inventory balances and shrinkage; our ability to engage our
existing customers and obtain new customers; the growth of our
brand awareness; the effects of the ongoing COVID-19 pandemic; the
effects of seasonal trends on our results of operations; our
ability to stay in compliance with extensive laws and regulations
that apply to our business and operations; our ability to
adequately maintain and protect our intellectual property and
proprietary rights; our reliance on third parties for our products,
operation and infrastructure; our duties related to being a public
benefit corporation; the ability of our Co-Founders and Co-CEOs to
exercise significant influence over all matters submitted to
stockholders for approval; the effect of our multi-class structure
on the trading price of our Class A common stock; and the increased
expenses associated with being a public company. Additional
information regarding these and other risks and uncertainties that
could cause actual results to differ materially from the Company's
expectations is included in our Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2021, filed with the
Securities and Exchange Commission (the “SEC”), and our Annual
Report on Form 10-K for the year ended December 31, 2021, to be
filed with the SEC. Except as required by law, we do not undertake
any obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future
developments, or otherwise.
Additional information regarding these and other factors that
could affect the Company’s results is included in the Company’s SEC
filings, which may be obtained by visiting the SEC's website at
www.sec.gov. Information contained on, or that is referenced or can
be accessed through, our website does not constitute part of this
document and inclusions of any website addresses herein are
inactive textual references only.
Glossary
Active Customer is defined as a unique customer that has made at
least one purchase of any product or service in the preceding
12-month period.
Average Revenue per Customer is defined as net revenue for a
given period divided by the number of Active Customers as of the
end of that same period.
Non-GAAP Financial
Measures
We use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net
income, Adjusted earnings per share, Adjusted cost of goods sold
(“Adjusted COGS”), Adjusted gross profit, and Adjusted selling,
general, and administrative expenses (“Adjusted SG&A”) as
important indicators of our operating performance. Collectively, we
refer to these non-GAAP financial measures as our “Non-GAAP
Measures.” The Non-GAAP Measures, when taken collectively with our
GAAP results, may be helpful to investors because they provide
consistency and comparability with past financial performance and
assist in comparisons with other companies, some of which use
similar non-GAAP financial information to supplement their GAAP
results.
Adjusted EBITDA is defined as net income (loss) before interest
and other income (loss), taxes, and depreciation and amortization
as further adjusted for stock-based compensation expense and
related employer payroll taxes, non-cash charitable donations, and
non-recurring costs such as direct listing or other transaction
costs. Adjusted EBITDA margin is defined as Adjusted EBITDA divided
by net revenue.
Adjusted net income is defined as net income (loss) adjusted for
stock-based compensation expense and related employer payroll
taxes, non-cash charitable donations, and non-recurring costs such
as direct listing or other transaction costs, and as further
adjusted for estimated income tax on such adjusted items.
Adjusted earnings per share is defined as Adjusted net income
(loss) divided by weighted average shares outstanding.
Adjusted COGS is defined as cost of goods sold adjusted for
stock-based compensation expense and related employer payroll
taxes.
Adjusted gross profit is defined as net revenue minus Adjusted
COGS.
Adjusted SG&A is defined as SG&A adjusted for
stock-based compensation expense and related employer payroll
taxes, non-cash charitable donations, and non-recurring costs such
as direct listing or other transaction costs.
The Non-GAAP Measures are presented for supplemental
informational purposes only. A reconciliation of historical GAAP to
Non-GAAP financial information is included under “Selected
Financial Information” below.
We have not reconciled our Adjusted EBITDA margin guidance to
GAAP net income (loss) margin, or Net Margin, because we do not
provide guidance for GAAP Net Margin due to the uncertainty and
potential variability of stock-based compensation and taxes, which
are reconciling items between GAAP Net Margin and Adjusted EBITDA
margin. Because such items cannot be reasonably provided without
unreasonable efforts, we are unable to provide a reconciliation of
the Adjusted EBITDA Margin guidance to GAAP Net Margin. However,
such items could have a significant impact on GAAP Net Margin.
About Warby Parker
Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to
inspire and impact the world with vision, purpose, and
style–without charging a premium for it. Headquartered in New York
City, the co-founder-led lifestyle brand pioneers ideas, designs
products, and develops technologies that help people see, from
designer-quality prescription glasses (starting at $95) and
contacts, to eye exams and vision tests available online and in
more than 160 retail stores across the U.S. and Canada.
Warby Parker aims to demonstrate that businesses can scale, do
well, and do good in the world. Ultimately, the brand believes in
vision for all, which is why for every pair of glasses or
sunglasses sold, they distribute a pair to someone in need through
their Buy a Pair, Give a Pair program. To date, Warby Parker has
worked alongside its nonprofit partners to distribute more than 10
million glasses to people in need.
Selected Financial
Information
Warby Parker Inc. and
Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except
share data)
December 31,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
256,416
$
314,085
Accounts receivable, net
992
601
Inventory
57,095
38,468
Prepaid expenses and other current
assets
13,477
6,779
Total current assets
327,980
359,933
Property and equipment, net
112,195
84,534
Other assets
471
284
Total assets
$
440,646
$
444,751
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable
$
30,890
$
40,788
Accrued expenses
60,840
34,270
Deferred revenue
22,073
26,550
Other current liabilities
4,301
3,722
Total current liabilities
118,104
105,330
Deferred rent
36,544
27,997
Other liabilities
—
3,011
Total liabilities
154,648
136,338
Commitments and contingencies
Redeemable convertible preferred stock,
$.0001 par value, zero and 54,507,243 shares
authorized; zero and 54,041,904 shares issued and
outstanding as of December 31, 2021 and 2020,
respectively
—
506,510
Stockholders’ deficit:
Common stock, $0.0001 par value; Series A:
zero and 135,000,000 shares authorized, zero and
52,895,029 shares issued and outstanding as of December 31, 2021
and 2020, respectively; Series B: zero and
15,000,000 shares authorized, zero and 1,049,276
shares issued and outstanding as of December 31, 2021 and 2020,
respectively, convertible to Series A on a
one-to-one basis
—
5
Common stock, $0.0001 par value; Class A:
750,000,000 and zero shares authorized,
94,901,623 and zero shares issued and outstanding
as of December 31, 2021 and 2020, respectively;
Class B: 150,000,000 and zero shares authorized, 18,719,184 and
zero shares issued and outstanding as of December
31, 2021 and 2020, respectively, convertible to
Class A on a one-to-one basis
11
—
Additional paid-in capital
779,212
127,179
Accumulated deficit
(493,241
)
(325,390
)
Accumulated other comprehensive income
16
109
Total stockholders’ deficit
285,998
(198,097
)
Total liabilities, redeemable convertible
preferred stock, and stockholders’ deficit
$
440,646
$
444,751
Warby Parker Inc. and
Subsidiaries
Consolidated Statements of
Operations (Unaudited)
(Amounts in thousands, except
share and per share data)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2019
2021
2020
2019
Net revenue
$
132,892
$
112,837
$
93,620
$
540,798
$
393,719
$
370,463
Cost of goods sold
56,641
47,659
40,288
223,049
161,784
147,355
Gross profit
76,251
65,178
53,332
317,749
231,935
223,108
Selling, general, and administrative
expenses
122,146
70,295
66,855
461,410
287,567
224,771
Loss from operations
(45,895
)
(5,117
)
(13,523
)
(143,661
)
(55,632
)
(1,663
)
Interest and other income (loss), net
105
529
379
(347
)
(97
)
1,939
(Loss) income before income taxes
(45,790
)
(4,588
)
(13,144
)
(144,008
)
(55,729
)
276
Provision for income taxes
112
(287
)
(1,288
)
263
190
276
Net (loss) income
$
(45,902
)
$
(4,301
)
$
(11,856
)
$
(144,271
)
$
(55,919
)
$
—
Deemed dividend upon redemption of
redeemable convertible preferred stock
—
—
(711
)
(13,137
)
—
(57,537
)
Net (loss) income attributable to common
stockholders
$
(45,902
)
$
(4,301
)
$
(12,567
)
$
(157,408
)
$
(55,919
)
$
(57,537
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.41
)
$
(0.08
)
$
(0.24
)
$
(2.21
)
$
(1.05
)
$
(1.10
)
Weighted average shares used in computing
net loss per share attributable to common stockholders, basic and
diluted
112,501,252
53,671,842
52,541,206
71,249,257
53,033,936
52,424,978
Warby Parker Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows (Unaudited)
(Amounts in thousands)
Year Ended December
31,
2021
2020
2019
Cash flows from operating activities
Net (loss) income
$
(144,271
)
$
(55,919
)
$
—
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
21,868
18,377
14,516
Stock-based compensation
107,148
44,913
8,499
Non-cash charitable contribution
7,757
—
—
Change in operating assets and
liabilities:
Accounts receivable, net
(392
)
517
(644
)
Inventory
(18,624
)
(10,020
)
(12,610
)
Prepaid expenses and other assets
(6,887
)
(67
)
(940
)
Accounts payable
(11,114
)
5,898
5,525
Accrued expenses
9,486
16,604
1,364
Deferred revenue
(4,478
)
7,288
2,099
Other current liabilities
579
763
47
Deferred rent
8,547
2,149
3,570
Other liabilities
(1,613
)
2,255
(32
)
Net cash (used in) provided by operating
activities
(31,994
)
32,758
21,394
Cash flows from investing activities
Purchases of property and equipment
(48,513
)
(20,070
)
(32,632
)
Net cash used in investing activities
(48,513
)
(20,070
)
(32,632
)
Cash flows from financing activities
Proceeds from stock option and warrant
exercises
20,035
1,330
297
Employee tax withholding remitted in
connection with exercise or release of equity awards
(2,532
)
—
Cancellation of options for
consideration
—
—
(4,775
)
Proceeds from repayment of related party
loans
31,612
945
590
Repurchase of stock
(8,085
)
—
(79,474
)
Issuance of Series F redeemable
convertible preferred stock, net of issuance costs
—
124,717
—
Issuance of Series G redeemable
convertible preferred stock, net of issuance costs
—
118,944
—
Payment for Tender Offer
(18,031
)
—
—
Borrowings from Credit Facility
—
30,900
—
Repayment of Credit Facility
—
(30,900
)
—
Net cash provided by (used in) financing
activities
22,999
245,936
(83,362
)
Effect of exchange rates on cash
(161
)
37
237
Net (decrease) increase in cash and cash
equivalents
(57,669
)
258,661
(94,363
)
Cash and cash equivalents
Beginning of year
314,085
55,424
149,787
End of year
$
256,416
$
314,085
$
55,424
Supplemental disclosures
Cash paid for income taxes
$
356
$
230
$
369
Cash paid for interest
150
466
88
Non-cash investing and financing
activities:
Purchases of property and equipment
included in accounts payable and accrued expenses
4,158
3,150
4,231
Related party loans issued in connection
with stock option exercises
$
13,827
$
—
$
16,175
Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
The following table reflects a reconciliation of Adjusted EBITDA
to net loss, the most directly comparable financial measure
prepared in accordance with GAAP:
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2019
2021
2020
2019
(unaudited, in
thousands)
(unaudited, in
thousands)
Net loss
(45,902
)
(4,301
)
(11,855
)
(144,271
)
(55,919
)
—
Adjusted to exclude the following:
Interest and other (loss), net
(105
)
(529
)
(379
)
347
97
(1,939
)
Provision for income taxes
112
(287
)
(1,288
)
263
190
276
Depreciation and amortization expense
6,551
5,007
4,043
21,960
18,377
15,032
Stock-based compensation expense(1)
32,945
1,164
4,418
110,543
44,913
8,499
Non-cash charitable donation(2)
—
—
—
7,757
—
—
Transaction costs(3)
—
—
—
28,262
—
—
Adjusted EBITDA
(6,399
)
1,054
(5,061
)
24,861
7,658
21,868
Adjusted EBITDA margin
(4.8
) %
0.9
%
(5.4
) %
4.6
%
1.9
%
5.9
%
(1) Represents expenses related to the Company’s equity-based
compensation programs, which may vary significantly from period to
period depending upon various factors including the timing, number,
and the valuation of awards granted, vesting of awards including
the satisfaction of performance conditions, and the impact of
repurchases of awards from employees. The amount includes $1.8
million and $3.4 million of employer payroll costs associated with
the release of RSUs and option exercises for the three and twelve
months ended December 31, 2021, respectively.
(2) Represents charitable expense recorded in connection with
the donation of 178,572 shares of Series A common stock to the
Warby Parker Impact Foundation in August 2021.
(3) Represents (i) costs directly attributable to the
preparation for our Direct Listing and (ii) expenses incurred in
connection with a cash tender offer completed in June 2021 (the
“Tender Offer”).
Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
The following table presents our non-GAAP, or adjusted,
financial measures for the periods presented as a percentage of
revenue. Each cost and operating expense is adjusted for
transaction costs, stock-based compensation expense and related
employer payroll taxes, and a charitable stock donation.
Reported
Adjusted
Reported
Adjusted
Three Months Ended December
31,
Three Months Ended December
31,
Year Ended December
31,
Year Ended December
31,
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
(unaudited, in
millions)
(unaudited, in
millions)
(unaudited, in
millions)
(unaudited, in
millions)
Cost of goods sold
$
56.6
$
47.7
$
40.3
$
56.4
$
47.7
$
40.3
$
223.0
$
161.8
$
147.4
$
221.9
$
161.8
$
147.3
% of Revenue
42.6
%
42.2
%
43.0
%
42.5
%
42.2
%
43.0
%
41.2
%
41.1
%
39.8
%
41.0
%
41.1
%
39.8
%
Gross profit
$
76.3
$
65.2
$
53.3
$
76.5
$
65.2
$
53.3
$
317.7
$
231.9
$
223.1
$
318.9
$
231.9
$
223.1
% of Revenue
57.4
%
57.8
%
57.0
%
57.5
%
57.8
%
57.0
%
58.8
%
58.9
%
60.2
%
59.0
%
58.9
%
60.2
%
Selling, general, and administrative
expenses
$
122.1
$
70.3
$
66.9
$
89.4
$
69.1
$
62.4
$
461.4
$
287.6
$
224.8
$
316.0
$
242.7
$
216.3
% of Revenue
91.9
%
62.3
%
71.4
%
67.3
%
61.3
%
66.7
%
85.3
%
73.0
%
60.7
%
58.4
%
61.6
%
58.4
%
Net (loss) income
$
(45.9
)
$
(4.3
)
$
(11.9
)
$
(9.0
)
$
(2.4
)
$
(6.1
)
$
(144.3
)
$
(55.9
)
$
—
$
1.8
$
(7.6
)
$
6.1
% of Revenue
(34.5
) %
(3.8
) %
(12.7
) %
(6.8
) %
(2.1
) %
(6.5
) %
(26.7
) %
(14.2
) %
—
%
0.3
%
(1.9
) %
1.7
%
Warby Parker Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
The following table reflects a reconciliation of each non-GAAP,
or adjusted, financial measure to its most directly comparable
financial measure prepared in accordance with GAAP:
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2019
2021
2020
2019
(unaudited, in
thousands)
(unaudited, in
thousands)
Cost of goods sold
$
56,641
$
47,659
$
40,288
$
223,049
$
161,784
$
147,355
Adjusted to exclude the following:
Stock-based compensation expense(1)
223
—
3
1,145
1
14
Adjusted cost of goods sold
$
56,418
$
47,659
$
40,285
$
221,904
$
161,783
$
147,341
Gross profit
$
76,251
$
65,178
$
53,332
$
317,749
$
231,935
$
223,108
Adjusted to exclude the following:
Stock-based compensation expense(1)
223
—
3
1,145
1
14
Adjusted gross profit
$
76,474
$
65,178
$
53,335
$
318,894
$
231,936
$
223,122
Selling, general, and administrative
expenses
$
122,146
$
70,295
$
66,855
$
461,410
$
287,567
$
224,771
Adjusted to exclude the following:
Stock-based compensation expense(1)
32,723
1,164
4,415
109,399
44,912
8,485
Non-cash charitable donation(2)
—
—
—
7,757
—
—
Transaction costs(3)
—
—
—
28,262
—
—
Adjusted selling, general, and
administrative expenses
$
89,423
$
69,131
$
62,440
$
315,992
$
242,655
$
216,286
Net (loss) income
$
(45,902
)
$
(4,301
)
$
(11,856
)
$
(144,271
)
$
(55,919
)
—
Provision for income taxes
112
(287
)
(1,288
)
263
190
276
(Loss) income before income taxes
(45,790
)
(4,588
)
(13,144
)
(144,008
)
(55,729
)
276
Adjusted to exclude the following:
Stock-based compensation expense(1)
32,945
1,164
4,418
110,543
44,913
8,499
Non-cash charitable donation(2)
—
—
—
7,757
—
—
Transaction costs(3)
—
—
—
28,262
—
—
Adjusted provision for income taxes(4)
3,846
1,025
2,613
(765
)
3,238
(2,627
)
Adjusted net (loss) income
$
(8,999
)
$
(2,399
)
$
(6,113
)
$
1,789
$
(7,578
)
$
6,148
Less: undistributed adjusted net income
attributable to participating securities
—
—
(711
)
(13,137
)
—
(57,537
)
Adjusted net loss attributable to common
stock
$
(8,999
)
$
(2,399
)
$
(6,824
)
$
(11,348
)
$
(7,578
)
$
(51,389
)
Weighted average shares - diluted
112,501,252
53,671,842
52,541,206
71,249,257
53,033,936
52,424,978
Adjusted diluted loss per share
$
(0.08
)
$
(0.04
)
$
(0.13
)
$
(0.16
)
$
(0.14
)
$
(0.98
)
(1) Represents expenses related to the Company’s equity-based
compensation programs, which may vary significantly from period to
period depending upon various factors including the timing, number,
and the valuation of awards granted, vesting of awards including
the satisfaction of performance conditions, and the impact of
repurchases of awards from employees. The amount includes $1.8
million and $3.4 million of employer payroll costs associated with
the release of RSUs and option exercises for the three and twelve
months ended December 31, 2021, respectively, of which zero and
$0.2 million is included in COGS and $1.8 million and $3.2 million
is included in SG&A for the three and twelve months ended
December 31, 2021, respectively.
(2) Represents charitable expense recorded in connection with
the donation of 178,572 shares of Series A common stock to the
Warby Parker Impact Foundation in August 2021.
(3) Represents (i) costs directly attributable to the
preparation for our Direct Listing and (ii) expenses incurred in
connection with the Tender Offer.
(4) The adjusted provision for income taxes is based on
long-term estimated annual effective tax rates of 29.94%. The
Company may adjust its adjusted tax rate as additional information
becomes available or events occur which may materially affect this
rate, including impacts from the rapidly evolving global tax
environment, significant changes in our geographic mix, merger and
acquisition activity, or changes in our business outlook.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220316006154/en/
Investor Relations: Tina Romani Investors@warbyparker.com
Media: Lena Griffin lena@derris.com
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