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目錄

美國

證券交易委員會

華盛頓特區20549

表格10-Q

☒ 根據1934年證券交易所法第13或第15(d)條規定的季度報告

截至2024年6月30日季度結束 2024年9月30日

或

☐ 根據1934年證券交易所法第13條或第15(d)條的過渡報告

為過渡期從                到     

委員會檔案編號： 001-36666

wayfair公司。

（依憑章程所載的完整登記名稱）

特拉華州									36-4791999
(依據所在地或其他管轄區) 的註冊地或組織地點)									(國稅局雇主識別號碼) 識別號碼)
4 Copley Place			波士頓，			馬薩諸塞州			02116
(總部辦公地址)									（郵政編碼）

(617) 532-6100

(註冊公司之電話號碼，包括區號)

根據法案第12(b)條登記的證券：

每種類別的名稱			交易標的			每個註冊交易所的名稱
A類普通股，$0.001面值			W			紐約證券交易所

請在核選方格中表明：(1) 在前12個月內（或在申報人需要申報此類報告的較短時期內），已根據《1934年證券交易法》第13節或第15(d)條的要求提交所有報告；(2) 在過去90天中一直受到該申報要求的約束。 是 ☒否☐

請勾選，以表明申報人是否在過去12個月內（或申報人需要提交此類檔案的較短期間內）已按照S-t法規第405條（本章節第232.405條）的要求提交所有要求提交的互動資料文件。 是 ☒否☐

請勾選表示公司是否為大型快速申報人、加速申報人、非加速申報人、較小的報告人或新興成長公司。請參見《交易所法》第120億2條對「大型快速申報人」、「加速申報人」、「較小的報告人」和「新興成長公司」的定義。

大型加速報告人			☒			加速歸檔人			☐
非加速歸檔人			☐			小型報告公司			☐
						新興成長型企業			☐

如果是新興成長公司，請勾選指示，如果登記人已選擇不遵守根據《交易所法》第13(a)條規定提供的任何新的或修訂後的財務會計標準的擴展過渡期。o 

以勾號標示註冊人是否為外殼公司（如《交易法》第 120億 2 條所定義）。是☐否☒

Class A普通股						截至2024年10月25日，這是傑出的。
A類普通股，每股面值0.001美元。						99,627,299
B類普通股，每股面值0.001美元。						25,691,295

---

wayfair 公司。

十進制第10-Q報告指數

截至2024年9月30日季度結束

						頁面
第一部分 基本報表資料						1
项目1。			基本報表			1
			2024年9月30日和2023年12月31日的總體資產負債表摘要			1
			截至2024年9月30日和2023年，簡明綜合損益表			2
			截至2024年9月30日和2023年，簡明其他綜合損失表			3
			截至2024年9月30日和2023年，簡明股東權益赤字表			4
			截至2024年和2023年9月30日九個月的綜合現金流量簡明合併財務報表			6
			基本報表註記			8
项目2。			管理層對財務狀況和業績的討論與分析			19
项目3。			市場風險的定量和定性披露。			36
项目4。			內部控制及程序			36
第二部分. 其他資訊						36
项目1。			法律訴訟			36
项目1A。			風險因素			37
项目2。			股票權益的未註冊銷售和資金用途			37
项目5。			其他信息			37
第6項。			展品			38
簽名						39

---

目錄

第一部分 - 財務信息

項目 1. 基本報表

wayfair 公司。

縮表合併資產負債表

						九月三十日，						12月31日，
						2024						2023
						(未經查核)
						(除股票和每股數據外，以百萬計)
資產：
流動資產合計
現金及現金等價物						$	1,296					$	1,322
短期投資						32						29
應收帳款淨額						155						140
存貨						81						75
預付費用及其他流動資產						248						289
全部流動資產						1,812						1,855
營運租賃權使用資產						888						820
物業及設備，扣除折舊後淨值						658						748
其他非流動資產						56						51
資產總額						$	3,414					$	3,474
負債和股東權益不足：
流動負債
應付賬款						$	1,187					$	1,234
其他流動負債						982						949
流動負債合計						2,169						2,183
長期負債						3,061						3,092
營運租賃負債，扣除當期部分						884						862
其他非流動負債						33						44
總負債						6,147						6,181
承諾與事項（註5）
股東資本赤字：
2024年6月30日和2023年12月31日分別發行和流通的可轉換優先股，分別為$125,292.00、$100,912.65和$93,890.20。清算優先權為$242,381、$187,780、$108,696和$96,106。0.001 每股面額： 10,000,000 授權股份和 無 發行日期為2024年9月30日和2023年12月31日						—						—
A類普通股，面值$0.001 ， 500,000,000 股份已授權 97,888,601 和 92,457,562 於2024年9月30日和2023年12月31日分別發行和流通的股份						—						—
B類普通股，面值$0.001 ， 164,000,000 股份已授權 25,691,295 2024年9月30日和2023年12月31日發行並流通的股份數。						—						—
資本公積額額外增資						1,657						1,316
累積虧損						(4,382)						(4,018)
累積其他全面損失						(8)						(5)
股東權益總赤字						(2,733)						(2,707)
負債總額和股東權益總赤字						$	3,414					$	3,474

請參閱未經審計的簡明合併基本報表的附註。

1

---

目錄

威費爾股份有限公司

綜合營業損益匯縮陳述

(未經查核)

						截至九月三十日止三個月，												截至九月三十日止九個月
						2024						2023						2024						2023
						（以百萬計，每股數據除外）
淨收入						$	2,884					$	2,944					$	8,730					$	8,889
出售商品成本						2,011						2,027						6,097						6,166
毛利						873						917						2,633						2,723
營運費用：
客戶服務和商戶費用						112						136						350						419
廣告						354						337						1,043						1,016
銷售、營運、技術、一般及行政						480						596						1,503						1,850
減值及其他相關淨收費						1						—						2						14
重組費用						—						—						79						65
營運開支總額						947						1,069						2,977						3,364
營運損失						(74)						(152)						(344)						(641)
利息費用淨額						(5)						(5)						(15)						(15)
其他收入（費用），淨額						8						(4)						3						(2)
清除債務的收益						—						—						—						100
所得稅前損失						(71)						(161)						(356)						(558)
所得稅預備金，淨值						3						2						8						6
淨虧損						$	(74)					$	(163)					$	(364)					$	(564)
每股虧損：
基本						$	(0.60)					$	(1.40)					$	(2.98)					$	(4.99)
稀釋						$	(0.60)					$	(1.40)					$	(2.98)					$	(4.99)
加權-用於計算每股數目的平均未平均普通股數目：
基本						123						116						122						113
稀釋						123						116						122						113

請參閱未經審計的簡明合併基本報表的附註。

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目錄

wayfair 公司。

綜合損益簡明綜合財務報表 損失

(未經查核)

						截至九月三十日止三個月，												截至九月三十日止九個月
						2024						2023						2024						2023
						(以百萬計)
淨虧損						$	(74)					$	(163)					$	(364)					$	(564)
其他綜合（虧損）收入：
外幣轉換調整						(4)						(1)						(3)						—
可供出售投資的未實現收益淨額						—						—						—						1
全面損失						$	(78)					$	(164)					$	(367)					$	(563)

See notes to unaudited condensed consolidated financial statements.

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WAYFAIR INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(Unaudited)

						Three Months Ended
						Class A and Class B Common Stock
						Shares						Amount						Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Total Stockholders' Deficit
						(in millions)
Balance at June 30, 2023						113						$	—					$	988					$	(3,681)					$	(5)					$	(2,698)
Net loss						—						—						—						(163)						—						(163)
Other comprehensive loss						—						—						—						—						(1)						(1)
Issuance of common stock upon vesting of RSUs						3						—						—						—						—						—
Equity-based compensation						—						—						154						—						—						154
Balance at September 30, 2023						116						$	—					$	1,142					$	(3,844)					$	(6)					$	(2,708)
Balance at June 30, 2024						122						$	—					$	1,552					$	(4,308)					$	(4)					$	(2,760)
Net loss						—						—						—						(74)						—						(74)
Other comprehensive loss						—						—						—						—						(4)						(4)
Issuance of common stock upon vesting of RSUs						2						—						—						—						—						—
Equity-based compensation						—						—						105						—						—						105
Balance at September 30, 2024						124						$	—					$	1,657					$	(4,382)					$	(8)					$	(2,733)

See notes to unaudited condensed consolidated financial statements.

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WAYFAIR INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(Unaudited)

						Nine Months Ended
						Class A and Class B Common Stock
						Shares						Amount						Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Total Stockholders' Deficit
						(in millions)
Balance at December 31, 2022						109						$	—					$	737					$	(3,280)					$	(7)					$	(2,550)
Net loss						—						—						—						(564)						—						(564)
Other comprehensive income						—						—						—						—						1						1
Issuance of common stock upon vesting of RSUs						7						—						—						—						—						—
Equity-based compensation						—						—						492						—						—						492
Premiums paid for capped calls						—						—						(87)						—						—						(87)
Balance at September 30, 2023						116						$	—					$	1,142					$	(3,844)					$	(6)					$	(2,708)
Balance at December 31, 2023						118						$	—					$	1,316					$	(4,018)					$	(5)					$	(2,707)
Net loss						—						—						—						(364)						—						(364)
Other comprehensive loss						—						—						—						—						(3)						(3)
Issuance of common stock upon vesting of RSUs						6						—						—						—						—						—
Equity-based compensation						—						—						338						—						—						338
Unwind of capped calls						—						—						3						—						—						3
Balance at September 30, 2024						124						$	—					$	1,657					$	(4,382)					$	(8)					$	(2,733)

See notes to unaudited condensed consolidated financial statements.

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WAYFAIR INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

						Nine Months Ended September 30,
						2024						2023
						(in millions)
Cash flows from operating activities:
Net loss						$	(364)					$	(564)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization						297						312
Equity-based compensation expense						309						447
Amortization of discount and issuance costs on convertible notes						7						6
Impairment and other related net charges						2						14
Gain on debt extinguishment						—						(100)
Other non-cash adjustments						(5)						—
Changes in operating assets and liabilities:
Accounts receivable, net						(34)						140
Inventories						(7)						11
Prepaid expenses and other assets						3						19
Accounts payable and other liabilities						(53)						(94)
Net cash provided by operating activities						155						191
Cash flows for investing activities:
Purchase of short- and long-term investments						(37)						(4)
Sale and maturities of short- and long-term investments						33						229
Purchase of property and equipment						(53)						(101)
Site and software development costs						(121)						(154)
Net cash used in investing activities						(178)						(30)
Cash flows from financing activities:
Proceeds from issuance of convertible notes, net of issuance costs						—						678
Premiums paid for capped call confirmations						—						(87)
Payments to extinguish convertible debt						—						(514)
Other financing activities, net						3						—
Net cash provided by financing activities						3						77
Effect of exchange rate changes on cash, cash equivalents and restricted cash						(6)						3
Net (decrease) increase in cash, cash equivalents and restricted cash						(26)						241
Cash, cash equivalents and restricted cash
Beginning of period						$	1,326					$	1,050
End of period						$	1,300					$	1,291

See notes to unaudited condensed consolidated financial statements

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WAYFAIR INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

						Nine Months Ended September 30,
						2024						2023
						(in millions)
Supplemental cash flow information:
Cash paid for interest on long-term debt						$	49					$	40
Purchase of property and equipment included in accounts payable and other liabilities						$	20					$	(8)
Reconciliation of cash, cash equivalents and restricted cash to condensed consolidated balance sheets
Cash and cash equivalents						$	1,296					$	1,281
Restricted cash included within prepaid expenses and other current assets						4						10
Total cash, cash equivalents and restricted cash						$	1,300					$	1,291

See notes to unaudited condensed consolidated financial statements

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Wayfair Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q are those of Wayfair Inc. and its wholly-owned subsidiaries. Unless the context indicates otherwise, “Wayfair,” “the Company" or similar terms refer to Wayfair Inc. and its subsidiaries. In the Company’s opinion, the accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and applicable rules and regulations of the United States (“U.S.”) Securities and Exchange Commission ("SEC") regarding interim financial reporting and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of the interim periods presented. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Furthermore, interim results are not necessarily indicative of the results for the full year ended December 31, 2024 or future periods.

The Company has identified significant accounting policies that are critical to understanding its business and results of operations. Wayfair believes that there have been no significant changes during the three and nine months ended September 30, 2024 to the items disclosed in Note 1, Summary of Significant Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recently Issued Accounting Pronouncements

Segment Reporting

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied retrospectively to all prior periods presented in the financial statements. Wayfair is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

Income Taxes

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to update reportable income tax disclosure requirements, primarily through enhanced disclosures on the rate reconciliation table and other disclosures, including total income taxes paid by jurisdiction. The amendment is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendment should be applied prospectively, with retrospective adoption permitted. Wayfair is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statement disclosures.

2. Supplemental Financial Statement Disclosures

Accounts Receivable, Net

As of September 30, 2024, accounts receivable was $155 million, net of allowance for credit losses of $26 million. As of December 31, 2023, accounts receivable was $140 million, net of allowance for credit losses of $22 million. The changes in the allowance for credit losses were not material for the three and nine months ended September 30, 2024. Management believes credit risk is mitigated for the three and nine months ended September 30, 2024, as approximately 98.5% and 99.0%, respectively, of the net revenue recognized was collected in advance of recognition.

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Contract Liabilities

Contractual liabilities, included in other current liabilities, were $203 million at September 30, 2024 and $204 million at December 31, 2023. During the nine months ended September 30, 2024, Wayfair recognized $139 million of net revenue that was included within other current liabilities as of December 31, 2023.

Net revenue from contracts with customers is disaggregated by geographic region because this manner of disaggregation best depicts how the nature, amount, timing, and uncertainty of net revenue and cash flows are affected by economic factors. Refer to Note 10, Segment and Geographic Information, for additional information.

Restructuring Charges

In January 2024, Wayfair announced a workforce realignment plan, including a workforce reduction involving approximately 1,650 employees. As a result, during the nine months ended September 30, 2024, Wayfair incurred $79 million of charges recorded within restructuring charges on the condensed consolidated statements of operations. The charges consisted primarily of one-time employee severance and benefit costs. Wayfair does not expect to incur any further material charges related to this workforce reduction.

3. Cash, Cash Equivalents and Restricted Cash, Investments and Fair Value Measurements

Investments

As of September 30, 2024 and December 31, 2023, Wayfair’s marketable securities, which primarily consisted of corporate bonds and other government obligations that are priced at fair value, were classified as available-for-sale investments. During the three and nine months ended September 30, 2024 and 2023, Wayfair did not have any realized gains or losses. Interest income includes interest earned from cash and cash equivalents and marketable securities. During the three and nine months ended September 30, 2024, Wayfair recorded $13 million and $39 million of interest income, respectively, and during the three and nine months ended September 30, 2023, $13 million and $31 million of interest income, respectively.

During the three and nine months ended September 30, 2024 and 2023, Wayfair did not recognize any credit losses related to its available-for-sale debt securities. As of September 30, 2024 and December 31, 2023, Wayfair did not have an allowance for credit losses recorded related to its available-for-sale debt securities.

The following table presents details of Wayfair’s investment securities as of September 30, 2024 and December 31, 2023:

						September 30, 2024
						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value
						(in millions)
Short-term:
Investment securities						$	32					$	—					$	—					$	32
Total						$	32					$	—					$	—					$	32

						December 31, 2023
						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Estimated Fair Value
						(in millions)
Short-term:
Investment securities						$	29					$	—					$	—					$	29
Total						$	29					$	—					$	—					$	29

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Fair Value Measurements

Wayfair's financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The three levels of inputs used to measure fair value are as follows:

▪Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities

▪Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full-term of the asset or liability

▪Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability

This hierarchy requires Wayfair to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Wayfair classifies cash equivalents and certificate of deposits within Level 1 because these are valued using quoted market prices. The fair value of Level 1 financial assets is based on quoted market prices of the identical underlying security. Wayfair classifies short-term investments within Level 2 because unadjusted quoted prices for identical or similar assets in markets are not active. Wayfair does not have assets that are classified as Level 3.

The following tables set forth the fair value of Wayfair's financial assets measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023:

						September 30, 2024
						Level 1						Level 2						Level 3						Total
						(in millions)
Cash and cash equivalents:
Cash						$	466					$	—					$	—					$	466
Cash equivalents						830						—						—						830
Total cash and cash equivalents						1,296						—						—						1,296
Short-term investments:
Investment securities						—						32						—						32
Prepaid expenses and other current assets:
Certificate of deposit (1)						4						—						—						4
Total						$	1,300					$	32					$	—					$	1,332

						December 31, 2023
						Level 1						Level 2						Level 3						Total
						(in millions)
Cash and cash equivalents:
Cash						$	407					$	—					$	—					$	407
Cash equivalents						915						—						—						915
Total cash and cash equivalents						1,322						—						—						1,322
Short-term investments:
Investment securities						—						29						—						29
Prepaid expenses and other current assets:
Certificate of deposit (1)						4						—						—						4
Total						$	1,326					$	29					$	—					$	1,355

(1) The certificate of deposit is classified as restricted cash that is primarily restricted to funds held in collateral.

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4. Debt and Other Financing

The following table presents the outstanding principal amount and carrying value of debt and other financing:

						September 30, 2024																		December 31, 2023
Debt Instrument						Principal Amount						Unamortized Debt Discount						Net Carrying Amount						Principal Amount						Unamortized Debt Discount						Net Carrying Amount
						(in millions)
Revolving Credit Facility																		$	—																	$	—
2024 Notes						$	117					$	—					117						$	117					$	—					117
2025 Notes						754						(2)						752						754						(3)						751
2026 Notes						949						(3)						946						949						(5)						944
2027 Notes						690						(8)						682						690						(10)						680
2028 Notes						690						(9)						681						690						(11)						679
2025 Accreting Notes						38						—						38						38						—						38
Total Debt																		$	3,216																	$	3,209
Short-term debt (1)																		155																		117
Long-term debt																		$	3,061																	$	3,092

(1) Short-term debt consists of $117 million for the 2024 Notes and $38 million for the 2025 Accreting Notes, as of September 30, 2024, and $117 million for the 2024 Notes as of December 31, 2023. Short-term debt is presented within other current liabilities in the condensed consolidated balance sheets.

Revolving Credit Facility

Wayfair has a five-year senior secured revolving credit facility (the “Revolver”), which matures on March 24, 2026, and provides for non-amortizing revolving loans in an aggregate amount of $600 million. Under the Revolver, Wayfair may, from time to time, request letters of credit, which reduce the availability of credit under the Revolver. Wayfair had $72 million in outstanding letters of credit as of September 30, 2024, primarily as security for lease agreements. As of September 30, 2024, there were no revolving loans outstanding under the Revolver.

Senior Secured Notes

On October 8, 2024, Wayfair issued $800 million aggregate principal amount of 7.250% senior secured notes due 2029. Interest on the notes is payable semi-annually, in arrears, on April 15 and October 15 of each year, commencing on April 15, 2025, until their maturity date of October 31, 2029.

Convertible Non-Accreting Notes

The following table summarizes certain terms related to the Company’s current outstanding non-accreting convertible notes (collectively, the “Non-Accreting Notes” and together with the 2025 Accreting Notes, the “Notes”):

Convertible Non-Accreting Notes

Maturity Date

Annual Coupon Rate

Annual Effective Interest Rate

Payment Dates for Semi-Annual Interest Payments in Arrears

2024 Notes

November 1, 2024

1.125%

1.5%

May 1 and November 1

2025 Notes

October 1, 2025

0.625%

0.9%

April 1 and October 1

2026 Notes

August 15, 2026

1.000%

1.2%

February 15 and August 15

2027 Notes

September 15, 2027

3.250%

3.6%

March 15 and September 15

2028 Notes

November 15, 2028

3.500%

3.8%

May 15 and November 15

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Convertible Accreting Notes

No cash interest is payable on the 2025 Accreting Notes. Instead, the 2025 Accreting Notes accrue interest at a rate of 2.50% per annum, which accretes to the principal amount on April 1 and October 1 of each year. The 2025 Accreting Notes will mature on April 1, 2025, unless earlier purchased, redeemed or converted. The annual effective interest rate of the 2025 Accreting Notes is 2.7%.

Conversion and Redemption Terms of the Notes

Wayfair's Notes will mature at their maturity date unless earlier purchased, redeemed or converted. The Notes' initial conversion terms are summarized below:

Convertible Notes

Maturity Date

Free Convertibility Date

Initial Conversion Rate per $1,000 Principal

Initial Conversion Price

Redemption Date

2024 Notes

November 1, 2024

August 1, 2024

8.5910

$116.40

May 8, 2022

2025 Notes

October 1, 2025

July 1, 2025

2.3972

$417.15

October 4, 2022

2026 Notes

August 15, 2026

May 15, 2026

6.7349

$148.48

August 20, 2023

2027 Notes

September 15, 2027

June 15, 2027

15.7597

$63.45

September 20, 2025

2028 Notes

November 15, 2028

August 15, 2028

21.8341

$45.80

May 20, 2026

2025 Accreting Notes

April 1, 2025

-

13.7931

$72.50

May 9, 2023

The conversion rate is subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of Wayfair’s Class A common stock, but will not be adjusted for accrued and unpaid interest.

Wayfair will settle any conversions of the Non-Accreting Notes in cash, shares of Wayfair’s Class A common stock or a combination thereof, with the form of consideration determined at Wayfair’s election. The holders of the Non-Accreting Notes may convert all or a portion of such Notes prior to certain specified dates (each, a “Free Convertibility Date”) under the following circumstances (in each case, as applicable to each series of Non-Accreting Notes):

•during any calendar quarter (and only during such calendar quarter), if the last reported sale price of Wayfair’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•during the five-business day period after any ten consecutive trading day period (the “measurement period") in which the trading price (as defined in the applicable indenture) per $1,000 principal amount of the notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Wayfair’s Class A common stock and the conversion rate on each such trading day;

•if Wayfair calls the notes for redemption, at any time prior to 5:00 p.m. (New York City time) (“the close of business”) on the second scheduled trading day immediately preceding the redemption date; and

•upon the occurrence of specified corporate events (as set forth in the applicable indenture).

On or after the applicable Free Convertibility Date until the close of business on the second scheduled trading day immediately preceding the applicable maturity date, holders of the Non-Accreting Notes may convert their Non-Accreting Notes at any time.

The conditional conversion features of the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes were not triggered during the calendar quarter ended September 30, 2024, therefore, the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes are not convertible during the calendar quarter ended December 31, 2024 pursuant to the applicable last reported sales price conditions.

As of August 1, 2024, the 2024 Notes were freely convertible and the holders of the 2024 Notes could have converted all or a portion of their 2024 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date; however, no holders converted their 2024 Notes during this time period. On November 1, 2024, the 2024 Notes matured and Wayfair paid in cash the remaining outstanding principal of $117 million to the holders of the 2024 Notes.

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The holders of the 2025 Accreting Notes may convert all or a portion of their 2025 Accreting Notes at any time prior to the close of business on the second business day immediately preceding the maturity date. Wayfair will settle any conversion of 2025 Accreting Notes with a number of shares of Wayfair’s Class A common stock per $1,000 original principal amount of 2025 Accreting Notes equal to the accreted principal amount of such original principal amount of 2025 Accreting Notes divided by the conversion price.

Upon the occurrence of a fundamental change (as defined in the applicable indenture), holders of the applicable series of Notes may require Wayfair to repurchase all or a portion of such Notes for cash at a price equal to 100% of the principal amount (or accreted principal amount) of such Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date (such interest to be included in the accreted principal amount for the 2025 Accreting Notes). Holders of the Non-Accreting Notes who convert their respective Notes in connection with a make-whole fundamental change or a notice of redemption (each as defined in the applicable indenture) may be entitled to a premium in the form of an increase in the conversion rate of the respective Notes. Holders of the 2025 Accreting Notes who convert in connection with a make-whole fundamental change (as defined in the applicable indenture) may be entitled to a premium in the form of an increase in the conversion rate.

Wayfair may not redeem the Notes prior to certain dates (the “Redemption Date”). On or after the applicable Redemption Date, Wayfair may redeem for cash all or part of the applicable series of Notes if the last reported sale price of Wayfair’s Class A common stock equals or exceeds 130% (Non-Accreting Notes) or 276% (2025 Accreting Notes) of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which Wayfair provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which Wayfair provides notice of the redemption. The redemption price will be either 100% of the principal amount (or accreted principal amount) of the notes to be redeemed, plus accrued and unpaid interest, if any, or the if-converted value if the holder elects to convert their Notes upon receiving notice of redemption.

Conversions of Notes

During the three and nine months ended September 30, 2024, there were no conversions of the Notes.

Interest Expense

During the three months ended September 30, 2024, Wayfair recognized contractual interest expense and debt discount amortization of $17 million and $2 million, respectively, and during the nine months ended September 30, 2024, contractual interest expense and debt discount amortization of $48 million and $7 million, respectively.

During the three months ended September 30, 2023, Wayfair recognized contractual interest expense and debt discount amortization of $15 million and $3 million, respectively, and during the nine months ended September 30, 2023, contractual interest expense and debt discount amortization of $40 million and $6 million, respectively.

Fair Value of Notes

As of September 30, 2024, the estimated fair value of the 2024 Notes, 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes and 2025 Accreting Notes was $117 million, $722 million, $887 million, $830 million, $1.0 billion and $30 million, respectively. The estimated fair value of the Non-Accreting Notes was determined through consideration of quoted market prices. The estimated fair value of the 2025 Accreting Notes was determined through an option pricing model using Level 3 inputs including volatility and credit spread. The fair values of the Non-Accreting Notes and the 2025 Accreting Notes are classified as Level 2 and Level 3, respectively, as defined in Note 3, Cash, Cash Equivalents and Restricted Cash, Investments and Fair Value Measurements. As of September 30, 2024, the if-converted value of the 2028 Notes exceeded the principal value by $156 million, respectively. As of September 30, 2024, the if-converted value of the 2024 Notes, 2025 Notes, 2026 Notes, 2027 Notes and 2025 Accreting Notes did not exceed the principal value.

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Capped Calls

The 2025 Capped Calls, 2026 Capped Calls, 2027 Capped Calls and 2028 Capped Calls (collectively, the “Capped Calls”) are expected generally to reduce the potential dilution and/or offset the cash payments Wayfair is required to make in excess of the principal amount of the Non-Accreting Notes upon conversion of the Non-Accreting Notes if the market price per share of Wayfair’s Class A common stock is greater than the strike price of the applicable Capped Call (which corresponds to the initial conversion price of the applicable Non-Accreting Notes and is subject to certain adjustments under the terms of the applicable Capped Call), with such reduction and/or offset subject to a cap based on the cap price of the applicable Capped Calls (the “Initial Cap Price”). The Capped Calls can, at Wayfair’s option, remain outstanding until their maturity date, even if all or a portion of the Non-Accreting Notes are converted, repurchased or redeemed prior to such date.

Each of the Capped Calls has an initial cap price per share of Wayfair’s Class A common stock, which represented a premium over the last reported sale price (or, with respect to the 2025 Capped Calls, the volume-weighted average price) of Wayfair’s Class A common stock on the date the corresponding Non-Accreting Notes were priced (the “Cap Price Premium”), and is subject to certain adjustments under the terms of the corresponding agreements. Collectively, the Capped Calls cover, initially, the number of shares of Wayfair’s Class A common stock underlying the Non-Accreting Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Non-Accreting Notes.

The initial terms for the Capped Calls are presented below:

Capped Calls						Maturity Date						Initial Cap Price						Cap Price Premium
2025 Capped Calls						October 1, 2025						$787.08						150%
2026 Capped Calls						August 15, 2026						$280.15						150%
2027 Capped Calls						September 15, 2027						$97.62						100%
2028 Capped Calls						November 15, 2028						$73.28						100%

The Capped Calls are separate transactions from the Non-Accreting Notes, are not subject to the terms of the Non-Accreting Notes and will not affect any holder’s rights under the Non-Accreting Notes. Similarly, holders of the Non-Accreting Notes do not have any rights with respect to the Capped Calls. The Capped Calls do not meet the criteria for separate accounting as a derivative as they are indexed to Wayfair's stock and meet the requirements to be classified in equity. The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within stockholders’ deficit when they were entered.

2024 Capped Calls Unwind

During the nine months ended September 30, 2024, Wayfair completed an unwind of the 2024 Capped Calls. The proceeds received from the unwind were included as an increase to additional paid-in-capital within stockholders’ deficit.

5. Commitments and Contingencies

Legal Matters

From time to time, Wayfair is involved in litigation matters and other legal claims that arise during the ordinary course of business. The Company records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability. Litigation and legal claims are inherently unpredictable and claims cannot be predicted with certainty. An unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s results of operations or financial condition, and regardless of the outcome, these matters can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting Wayfair's overall operations. In addition, Wayfair may also find itself at greater risk to outside party claims as it increases its operations in jurisdictions where the laws with respect to the potential liability of online retailers are uncertain, unfavorable, or unclear.

However, Wayfair does not currently believe that the outcome of any legal matters will have a material adverse effect on Wayfair’s results of operations or financial condition.

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Canada Border Services Agency

The Canada Border Services Agency (“CBSA”) is examining Wayfair’s payment of duties under the Special Measures Import Act (the “CBSA review”) for goods imported into Canada for the years ended December 31, 2023 and 2022 and part of the year ended December 31, 2021. The estimated potential liability for the CBSA review, net of any amounts that may be recouped through the appeals process, is approximately $33 million, inclusive of duties and interest.

Related to the CBSA review, during the three and nine months ended September 30, 2024, Wayfair incurred approximately $2 million and $11 million, respectively, to cost of goods sold and incurred approximately $2 million during the nine months ended September 30, 2024, to selling, operations, technology, general and administrative within the condensed consolidated statement of operations. During the three and nine months ended September 30, 2024, Wayfair made payments of approximately $3 million and $13 million, respectively, of duties and $1 million and $3 million, respectively, of interest charges based on assessments received related to the year ended December 31, 2022 and part of the year ended December 31, 2021. Wayfair is required to pay all assessed amounts in order to exercise its appeal rights. Wayfair believes there are substantial factual and legal grounds to appeal and partially recuperate these amounts and is exploring other options to mitigate exposure.

As of September 30, 2024, approximately $5 million was recorded within other current liabilities in the condensed consolidated balance sheets.

Because loss contingencies are inherently unpredictable, this assessment is subjective and requires judgments about future events. As a result, it is at least reasonably possible that this estimate may change in the near term and the effect of the potential change could be material.

6. Stockholders’ Deficit

Common Stock

Since Wayfair's initial public offering through September 30, 2024, 56,347,119 shares of Class B common stock were converted to the same number of shares of Class A common stock.

Stock Repurchase Programs

During the three and nine months ended September 30, 2024 and 2023, Wayfair did not repurchase any shares of Class A common stock under its stock repurchase programs.

7. Equity-Based Compensation

In April 2023, Wayfair’s stockholders approved the 2023 Incentive Award Plan (the “2023 Plan”) to replace Wayfair’s 2014 Incentive Award Plan, as amended (the “2014 Plan” and, together with the 2023 Plan, the “Incentive Plans”). The Incentive Plans were adopted by the board of directors (the “Board”) to grant cash and equity incentive awards to eligible participants in order to attract, motivate and retain talent. The Incentive Plans are administered by the Board for awards to non-employee directors and by the compensation committee of the Board for other participants and provide for the issuance of equity-based awards including stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance awards and stock payments.

Under the 2023 Plan, 20,525,663 shares of Class A common stock initially were available for future award grants. As of September 30, 2024, 11,582,421 shares of Class A common stock remained available for future grant under the 2023 Plan.

The following table presents activity relating to RSUs for the nine months ended September 30, 2024:

						Shares						Weighted-Average Grant Date Fair Value
Unvested at December 31, 2023						5,186,886						$	93.68
RSUs granted						4,208,080						$	54.67
RSUs vested						(5,431,039)						$	73.44
RSUs forfeited/canceled						(981,642)						$	102.80
Unvested at September 30, 2024						2,982,285						$	72.46

As of September 30, 2024, unrecognized equity-based compensation expense related to RSUs expected to vest over time is $116 million with a weighted-average remaining vesting term of 0.4 years.

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The following table summarizes activity for the nine months ended September 30, 2024 and 2023:

												Nine Months Ended September 30,
																		2024						2023
Weighted average grant date fair value of RSUs																		$	54.67					$	45.41
Total fair value of vested RSUs (in millions)																		$	399					$	477
Intrinsic value of RSUs vested (in millions)																		$	310					$	411

As of September 30, 2024, the aggregate intrinsic value of unvested RSUs was $168 million.

Equity-based compensation was classified as follows in the condensed consolidated statements of operations:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
						(in millions)
Cost of goods sold						$	2					$	2					$	7					$	7
Customer service and merchant fees						4						6						14						22
Selling, operations, technology, general and administrative						89						131						288						418
Total equity-based compensation expense						$	95					$	139					$	309					$	447

Equity-based compensation costs capitalized as software costs were $10 million and $29 million for the three and nine months ended September 30, 2024, respectively, and $15 million and $45 million for the three and nine months ended September 30, 2023, respectively.

8. Income Taxes

The provision for income taxes, net recorded during the three and nine months ended September 30, 2024 is primarily related to income tax benefits for tax losses earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes, as well as related changes in increases in the Company’s valuation allowance on deferred tax assets, as well as some U.S. state minimum and foreign taxes. Wayfair had no material unrecognized tax benefits as of September 30, 2024 and December 31, 2023.

The Organization for Economic Co-operation and Development (“OECD”) has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 countries. Many non- U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar 2 model rules beginning in 2024 or announced their plans to enact legislation in future years. The currently enacted Pillar 2 model rules did not have a material impact on our provision for income taxes for the three and nine months ended September 30, 2024.

9. Loss per Share

Wayfair follows the two-class method when computing earnings or loss per share for its two issued classes of common stock - Class A and Class B. Basic earnings or loss per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted earnings or loss per share is computed using the weighted-average number of shares of common stock outstanding during the period plus, if dilutive, common stock equivalents outstanding during the period and stock issuable upon conversion of the convertible debt instruments. Wayfair's common stock equivalents consist of shares issuable upon the release of restricted stock units. The dilutive effect of these common stock equivalents is reflected in diluted earnings or loss per share by application of the treasury stock method. The dilutive effect of shares issuable upon conversion of the convertible debt instruments is included in the calculation of diluted earnings or loss per share under the if-converted method.

For periods in which Wayfair has reported net losses, diluted loss per share is the same as basic loss per share, as the effects of common stock equivalents outstanding and shares issuable upon conversion of convertible debt instruments are antidilutive and, therefore, excluded from the calculation of diluted loss per share.

Wayfair allocates undistributed earnings between the classes on a one-to-one basis when computing earnings or loss per share. As a result, basic and diluted earnings or loss per Class A and Class B shares are equivalent.

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The following table presents the calculation of basic and diluted loss per share:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
						(in millions, except per share data)
Numerator:
Numerator for basic and diluted loss per share - net loss						$	(74)					$	(163)					$	(364)					$	(564)
Denominator:
Denominator for basic and diluted loss per share - weighted-average number of shares of common stock outstanding						123						116						122						113
Loss per share
Basic						$	(0.60)					$	(1.40)					$	(2.98)					$	(4.99)
Diluted						$	(0.60)					$	(1.40)					$	(2.98)					$	(4.99)

The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted loss per share were as follows:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
			(in millions)
Unvested restricted stock units						3						6						3						6
Shares related to convertible debt instruments						36						36						36						36
Total						39						42						39						42

Wayfair may settle conversions of the Non-Accreting Notes in cash, shares of Wayfair’s Class A common stock or any combination thereof at its election. Wayfair will settle conversions of the 2025 Accreting Notes in shares of Wayfair’s Class A common stock. The Capped Calls are generally expected to reduce the potential dilution of Wayfair's Class A common stock upon any conversion of the Notes and/or offset the cash payments Wayfair is required to make in excess of the principal amount of the Notes upon conversion of the Notes to the extent the market price per share of Wayfair’s Class A common stock is greater than the strike price of the Capped Calls (which corresponds to the initial conversion prices of the Non-Accreting Notes, subject to certain adjustments under the terms of the Capped Calls), with such reduction and/or offset capped at the Initial Cap Price.

For more information on the structure of the Notes and the Capped Calls, see Note 4, Debt and Other Financing.

10. Segment and Geographic Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. Wayfair’s CODM is its Chief Executive Officer. 

Wayfair's operating and reportable segments are the U.S. and International. These segments reflect the way the CODM allocates resources and evaluates financial performance, which is based upon each segment's Adjusted EBITDA. Adjusted EBITDA is defined as net income or loss before depreciation and amortization, equity-based compensation and related taxes, interest income or expense, net, other income or expense, net, provision or benefit for income taxes, net, non-recurring items, and other items not indicative of ongoing operating performance. These charges are excluded from the evaluation of segment performance because it facilitates reportable segment performance comparisons on a period-to-period basis as these costs may vary independent of business performance. The accounting policies of the segments are the same as those described in Note 1, Summary of Significant Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

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Wayfair allocates certain operating expenses to the operating and reportable segments, including customer service and merchant fees and selling, operations, technology, general and administrative expenses based on the usage and relative contribution provided to the segments. It excludes from the allocations certain operating expense lines, including depreciation and amortization, equity-based compensation and related taxes, impairment and other related net charges and restructuring charges, as well as interest income or expense, net, other income or expense, net, gain or loss on debt extinguishment and provision or benefit for income taxes, net. There are no net revenue transactions between Wayfair's reportable segments.

U.S.

The U.S. segment primarily consists of amounts earned through product sales through Wayfair's family of sites in the U.S.

International

The International segment primarily consists of amounts earned through product sales through Wayfair's international sites.

Net revenue from external customers for each group of similar products and services are not reported to the CODM. Separate identification of this information for purposes of segment disclosure is impractical, as it is not readily available and the cost to develop it would be excessive. No individual country outside the U.S. provided greater than 10% of consolidated net revenue.

The following tables present net revenue and Adjusted EBITDA attributable to Wayfair’s reportable segments for the periods presented:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
						(in millions)
U.S. net revenue						$	2,512					$	2,572					$	7,633					$	7,772
International net revenue						372						372						1,097						1,117
Total net revenue						$	2,884					$	2,944					$	8,730					$	8,889

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
						(in millions)
Adjusted EBITDA:
U.S.						$	141					$	123					$	461					$	313
International						(22)						(23)						(104)						(99)
Total reportable segments Adjusted EBITDA						119						100						357						214
Less: reconciling items (1)						(193)						(263)						(721)						(778)
Net loss						$	(74)					$	(163)					$	(364)					$	(564)

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(1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net loss:

									Three Months Ended September 30,												Nine Months Ended September 30,
									2024						2023						2024						2023
									(in millions)
Depreciation and amortization									$	94					$	106					$	297					$	312
Equity-based compensation and related taxes									98						146						323						464
Interest expense, net									5						5						15						15
Other (income) expense, net									(8)						4						(3)						2
Provision for income taxes, net									3						2						8						6
Other:
Impairment and other related net charges (a)									1						—						2						14
Restructuring charges (b)									—						—						79						65
Gain on debt extinguishment (c)									—						—						—						(100)
Total reconciling items									$	193					$	263					$	721					$	778
(a)			During the three and nine months ended September 30, 2024, Wayfair recorded charges of $1 million and $2 million, respectively, related to changes in sublease market conditions for U.S. office locations. During the nine months ended September 30, 2023, Wayfair recorded charges of $14 million, inclusive of $5 million related to consolidation of certain customer service centers and $9 million related to construction in progress assets at identified U.S. locations.
(b)			During the nine months ended September 30, 2024, Wayfair incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reductions. During the nine months ended September 30, 2023, Wayfair incurred $65 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2023 workforce reductions.
(c)			During the nine months ended September 30, 2023, Wayfair recorded a $100 million gain on debt extinguishment upon repurchase of $83 million in aggregate principal amount of the 2024 Notes and $535 million in aggregate principal amount of the 2025 Notes.

11. Subsequent Events

Senior Secured Notes

On October 8, 2024, Wayfair issued $800 million aggregate principal amount of 7.250% senior secured notes due 2029. Interest on the notes is payable semi-annually, in arrears, on April 15 and October 15 of each year, commencing on April 15, 2025, until their maturity date of October 31, 2029.

Maturity of 2024 Notes

On November 1, 2024, the 2024 Notes matured and Wayfair paid in cash the remaining outstanding principal of $117 million to the holders of the 2024 Notes.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains 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 (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our investment plans and anticipated returns on those investments, our future customer growth, our future results of operations and financial position, including our financial outlook and profitability goals, the financial impact and expected savings of our January 2024 reduction in workforce, available liquidity and access to financing sources, our business strategy, plans and objectives of management for future operations, including our international expansion and omni-channel strategy, consumer activity and behaviors, developments in our technology and systems and anticipated results of those developments, and the impact of macroeconomic events, including interest rates and inflation, and our response to such events, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “continues,” “could,” “intends,” “goals,” “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 Wayfair’s 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 Quarterly Report on Form 10-Q and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise.

Factors that could cause or contribute to differences in our future results include, without limitation, the following:

•adverse macroeconomic conditions, including fluctuating interest rates, inflation, slower growth or the potential for recession, disruptions in the global supply chain and other conditions affecting the retail environment for products we sell, and other matters that influence consumer spending and preferences, as well as our ability to plan for and respond to the impact of these conditions;

•our ability to manage our growth and the impacts of our internal restructuring and workforce reduction;

•our ability to acquire and retain customers in a cost-effective manner;

•our ability to increase our net revenue per active customer;

•our ability to build and maintain strong brands;

•our ability to manage our growth and expansion initiatives;

•our ability to expand our business and compete successfully;

•disruptions, capacity constraints or inefficiencies in our information systems network, or any potential cybersecurity incident;

•geopolitical events, including the 2024 United States (“U.S.”) presidential election, natural disasters, public health emergencies, civil disturbances and terrorist attacks; and

•developments in, and the outcome of, legal and regulatory proceedings and investigations to which we are a party or are subject, and the liabilities, obligations and expenses, if any, that we may incur in connection therewith.

A further list and description of risks, uncertainties and other factors that could cause or contribute to differences in our future results include the cautionary statements herein and in our other filings with the Securities and Exchange Commission, including those set forth under Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2023. We qualify all of our forward-looking statements by these cautionary statements.

All dollar and percentage comparisons made herein refer to the three and nine months ended September 30, 2024, compared with the three and nine months ended September 30, 2023, unless otherwise noted.

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Overview

Wayfair is one of the world’s largest online destinations for the home. Through our e-commerce business model, we offer visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over 30 million products from over 20 thousand suppliers.

We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity for acquiring more market share. Our business model is designed to grow our net revenue by acquiring new customers as well as stimulating repeat purchases from our existing customers. Through increasing brand awareness as well as paid and unpaid advertising, we attract new and repeat customers to our family of sites. We turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey — offering best-in-class product discovery, purchasing, fulfillment and customer service.

During the three months ended September 30, 2024, net revenue decreased by 2.0% compared to the same period in 2023. As of September 30, 2024, we had 22 million active customers and during the three months ended September 30, 2024, 79.9% of orders came from repeat buyers. The lower sales were due to lower order volume, which was driven by challenges in the category, compared to the same period in 2023. We also continued to manage our advertising spend according to a return on investment-oriented approach that carefully tracks and monitors the results of advertising campaigns as we seek to maintain appropriate return targets.

Global Considerations

We are continuing to closely monitor macroeconomic impacts, including, but not limited to, geopolitical events and fluctuating interest rates and inflationary pressures on our business, results of operations and financial results. These developments have and may continue to negatively impact global economic activity and consumer behavior, which have and may continue to adversely affect our business and our results of operations. As our customers react to these global economic conditions, we may take additional precautionary measures to limit or delay expenditures and preserve capital and liquidity.

While it is difficult to quantify and predict all of the impacts these global economic events, including fluctuating interest rates and inflationary pressures, will have on our business and to predict consumer spending in the near term, we believe the long-term opportunity that we see for shopping for the home online remains unchanged.

We will continue to monitor economic conditions as we work to manage our business to meet the evolving needs of our customers, employees, suppliers, partners, stockholders and communities.

Factors Affecting our Performance

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2023.

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Key Financial Statement and Operating Metrics

We measure our business using the key financial statement and operating metrics that are reflected in the below table. See “Non-GAAP Financial Measures” below for more information regarding our use of Adjusted EBITDA, Free Cash Flow and Adjusted Diluted Earnings or Loss per Share and a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure.

Our Free Cash Flow and Adjusted Diluted Earnings or Loss per Share are measured on a consolidated basis, while our Adjusted EBITDA is measured on a consolidated and reportable segment basis. All other key financial statement and operating metrics are derived and reported from our consolidated net revenue.

We use the following metrics to assess the near and longer-term performance of our overall business:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
						(in millions, except LTM net revenue per active customer, average order value and per share data)
Key Financial Statement Metrics:
Net revenue						$	2,884					$	2,944					$	8,730					$	8,889
Gross profit						$	873					$	917					$	2,633					$	2,723
Loss from operations						$	(74)					$	(152)					$	(344)					$	(641)
Net loss						$	(74)					$	(163)					$	(364)					$	(564)
Loss per share:
Basic						$	(0.60)					$	(1.40)					$	(2.98)					$	(4.99)
Diluted						$	(0.60)					$	(1.40)					$	(2.98)					$	(4.99)
Net cash provided by operating activities						$	49					$	121					$	155					$	191
Key Operating Metrics:
Active customers (1)						22						22						22						22
LTM net revenue per active customer (2)						$	545					$	538					$	545					$	538
Orders delivered (3)						9						10						29						30
Average order value (4)						$	310					$	297					$	303					$	297
Non-GAAP Financial Measures:
Adjusted EBITDA						$	119					$	100					$	357					$	214
Free Cash Flow						$	(9)					$	42					$	(19)					$	(64)
Adjusted Diluted Earnings (Loss) per Share						$	0.22					$	(0.13)					$	0.38					$	(1.02)

(1) The number of active customers represents the total number of individual customers who have purchased at least once directly from our sites during the preceding twelve-month period. The change in active customers in a reported period captures both the inflow of new customers as well as the outflow of existing customers who have not made a purchase in the last twelve months. We view the number of active customers as a key indicator of our growth.

(2) Last twelve months (“LTM”) net revenue per active customer represents our total net revenue in the last twelve months divided by our total number of active customers for the same preceding twelve-month period. We view LTM net revenue per active customer as a key indicator of our customers’ purchasing patterns, including their initial and repeat purchase behavior.

(3) Orders delivered represent the total orders delivered in any period, inclusive of orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available, and as such we estimate delivery dates based on historical data. We recognize net revenue when an order is delivered, and therefore orders delivered, together with average order value, is an indicator of the net revenue we expect to recognize in a given period. We view orders delivered as a key indicator of our growth.

(4) We define average order value as total net revenue in a given period divided by the orders delivered in that period. We view average order value as a key indicator of the mix of products on our sites, the mix of offers and promotions and the purchasing behavior of our customers.

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Results of Consolidated Operations

Comparison of the three months ended September 30, 2024 and 2023

Net revenue

During the three months ended September 30, 2024, net revenue decreased by $60 million, or 2.0%, compared to the same period in 2023, which reflects continued macroeconomic pressures felt by consumers. The decrease in net revenue is due to lower order volume, which was driven by challenges in the category, compared to the same period in 2023.

During the three months ended September 30, 2024, our U.S. net revenue decreased by 2.3%. International net revenue and International Net Revenue Constant Currency Growth remained constant year over year (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

						Three Months Ended September 30,
						2024						2023						% Change
						(in millions)
U.S. net revenue						$	2,512					$	2,572					(2.3)		%
International net revenue						372						372						—		%
Net revenue						$	2,884					$	2,944					(2.0)		%

For more information on our segments, see Note 10, Segment and Geographic Information, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q.

Cost of goods sold

Cost of goods sold is sensitive to many factors, including quarter-to-quarter variability in product mix, pricing strategies, changes in wholesale, shipping and fulfillment costs, including associated applicable customs duties and fees earned for supplier services rendered. During the three months ended September 30, 2024, cost of goods sold decreased by $16 million, or 0.8%, compared to the same period in 2023. The decrease in cost of goods sold is driven by a combination of operational cost savings initiatives and lower order volume, which was driven by challenges in the category compared to the same period in 2023.

As a percentage of net revenue, cost of goods sold increased to 69.7% for the three months ended September 30, 2024 compared to 68.9% in the same period in 2023, primarily due to mix shifts.

						Three Months Ended September 30,
						2024						2023						% Change
						(in millions)
Cost of goods sold						$	2,011					$	2,027					(0.8)		%
As a percentage of net revenue						69.7		%				68.9		%

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Operating expenses

Operating expenses consist of customer service and merchant fees, advertising, selling, operations, technology, general and administrative expenses, impairment and other related net charges and restructuring charges. We disclose separately the equity-based compensation and related taxes that are included in customer service and merchant fees and selling, operations, technology and general and administrative expenses.

						Three Months Ended September 30,
						2024						2023						% Change
						(in millions)
Customer service and merchant fees (1)						$	112					$	136					(17.6)		%
Advertising						354						337						5.0		%
Selling, operations, technology, general and administrative (1)						480						596						(19.5)		%
Impairment and other related net charges						1						—						100.0		%
Total operating expenses						$	947					$	1,069					(11.4)		%
As a percentage of net revenue:
Customer service and merchant fees (1)						3.9		%				4.6		%
Advertising						12.3		%				11.4		%
Selling, operations, technology, general and administrative (1)						16.6		%				20.2		%
Impairment and other related net charges						—		%				—		%
						32.8		%				36.2		%

(1) Includes equity-based compensation and related taxes as follows:

						Three Months Ended September 30,
						2024						2023
						(in millions)
Customer service and merchant fees						$	4					$	7
Selling, operations, technology, general and administrative						$	92					$	137

During the three months ended September 30, 2024, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $48 million, or 33.3%, compared to the same period in 2023, primarily driven by a decrease in vested restricted stock units in 2024 compared to the same period in 2023.

The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes:

						Three Months Ended September 30,
						2024						2023
Customer service and merchant fees						3.7		%				4.4		%
Selling, operations, technology, general and administrative						13.5		%				15.6		%

Customer Service and Merchant Fees

During the three months ended September 30, 2024, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $21 million, or 16.3%, compared to the same period in 2023. The decrease in customer service and merchant fees is primarily due to decreased compensation costs in 2024 compared to the same period in 2023.

As a percentage of net revenue, total customer service and merchant fees decreased to 3.9% for the three months ended September 30, 2024 compared to 4.6% in the same period in 2023 primarily due to decreased compensation costs.

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Advertising

During the three months ended September 30, 2024, our advertising expenses increased by $17 million, or 5.0%, compared to the same period in 2023. The increase reflects our response to changing market conditions and renewed investment opportunities as we sought to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses increased to 12.3% for the three months ended September 30, 2024 compared to 11.4% in the same period in 2023 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

Selling, operations, technology, general and administrative

During the three months ended September 30, 2024, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $71 million, or 15.5%, compared to the same period in 2023. The decrease is primarily due to decreased compensation costs.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 16.6% for the three months ended September 30, 2024, compared to 20.2% in the same period in 2023, primarily due to decreased compensation costs.

Impairment and other related net charges

During the three months ended September 30, 2024, impairment and other related charges increased by $1 million or 100.0%, compared to the same period in 2023.

During the three months ended September 30, 2024, we recorded charges of $1 million related to changes in sublease market conditions for an identified U.S. office location.

Interest expense, net

During the three months ended September 30, 2024, interest expense, net remained constant at $5 million, compared to the same period in 2023.

						Three Months Ended September 30,
						2024						2023						% Change
						(in millions)
Interest expense, net						$	(5)					$	(5)					—		%

Other income (expense), net

During the three months ended September 30, 2024, other income (expense), net increased by $12 million or 300.0%, compared to the same period in 2023, primarily driven by foreign currency transaction gains. Included in other income (expense), net are changes in foreign currency transaction gains and losses and long-term investment income or losses.

						Three Months Ended September 30,
						2024						2023						% Change
						(in millions)
Other income (expense), net						$	8					$	(4)					(300.0)		%

Provision for income taxes, net

During the three months ended September 30, 2024, our provision for income taxes, net increased by $1 million or 50.0% compared to the same period in 2023, primarily related to the level and mix of income earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes. Refer to Note 8, Income Taxes, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information.

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						Three Months Ended September 30,
						2024						2023						% Change
						(in millions)
Provision for income taxes, net						$	3					$	2					50.0		%

Comparison of the nine months ended September 30, 2024 and 2023

Net revenue

During the nine months ended September 30, 2024, net revenue decreased by $159 million, or 1.8%, compared to the same period in 2023, which reflects continued macroeconomic pressures felt by consumers. The decrease in net revenue is due to lower order volume, which was driven by challenges in the category, compared to the same period in 2023.

During the nine months ended September 30, 2024, our U.S. net revenue decreased by 1.8% and International net revenue decreased by 1.8% compared to the same period in 2023. During the nine months ended September 30, 2024, International Net Revenue Constant Currency Growth was (1.9)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

						Nine Months Ended September 30,
						2024						2023						% Change
						(in millions)
U.S. net revenue						$	7,633					$	7,772					(1.8)		%
International net revenue						1,097						1,117						(1.8)		%
Net revenue						$	8,730					$	8,889					(1.8)		%

For more information on our segments, see Note 10, Segment and Geographic Information, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q.

Cost of goods sold

Cost of goods sold is sensitive to many factors, including quarter-to-quarter variability in product mix, pricing strategies, changes in wholesale, shipping and fulfillment costs, including associated applicable customs duties and fees earned for supplier services rendered. During the nine months ended September 30, 2024, cost of goods sold decreased by $69 million, or 1.1%, compared to the same period in 2023. The decrease in cost of goods sold is driven by a combination of operational cost savings initiatives and lower order volume, which was driven by challenges in the category compared to the same period in 2023.

As a percentage of net revenue, cost of goods sold increased to 69.8% for the nine months ended September 30, 2024, compared to 69.4% in the same period in 2023 due to mix shifts and lower net revenue.

						Nine Months Ended September 30,
						2024						2023						% Change
						(in millions)
Cost of goods sold						$	6,097					$	6,166					(1.1)		%
As a percentage of net revenue						69.8		%				69.4		%

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Operating expenses

Operating expenses are comprised of customer service and merchant fees, advertising, selling, operations, technology, general and administrative expenses, impairment and other related net charges and restructuring charges. We disclose separately the equity-based compensation and related taxes that are included in customer service and merchant fees and selling, operations, technology and general and administrative expenses.

						Nine Months Ended September 30,
						2024						2023						% Change
						(in millions)
Customer service and merchant fees (1)						$	350					$	419					(16.5)		%
Advertising						1,043						1,016						2.7		%
Selling, operations, technology, general and administrative (1)						1,503						1,850						(18.8)		%
Impairment and other related net charges						2						14						(85.7)		%
Restructuring charges						79						65						21.5		%
Total operating expenses						$	2,977					$	3,364					(11.5)		%
As a percentage of net revenue:
Customer service and merchant fees (1)						4.0		%				4.7		%
Advertising						11.9		%				11.4		%
Selling, operations, technology, general and administrative (1)						17.2		%				20.8		%
Impairment and other related net charges						—		%				0.2		%
Restructuring charges						0.9		%				0.7		%
						34.0		%				37.8		%

(1) Includes equity-based compensation and related taxes as follows:

						Nine Months Ended September 30,
						2024						2023
						(in millions)
Customer service and merchant fees						$	15					$	23
Selling, operations, technology, general and administrative						$	300					$	434

During the nine months ended September 30, 2024, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $142 million, or 31.1%, compared to the same period in 2023, driven by a decrease in vested restricted stock units in 2024 compared to the same period in 2023.

The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes:

						Nine Months Ended September 30,
						2024						2023
Customer service and merchant fees						3.8		%				4.5		%
Selling, operations, technology, general and administrative						13.8		%				15.9		%

Customer Service and Merchant Fees

During the nine months ended September 30, 2024, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $61 million, or 15.4%, compared to the same period in 2023. The decrease in customer service and merchant fees is primarily due to decreased compensation costs during the nine months ended September 30, 2024 compared to the same period in 2023.

As a percentage of net revenue, total customer service and merchant fees decreased to 4.0% for the nine months ended September 30, 2024, compared to 4.7% in the same period in 2023 due to decreased compensation costs.

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Advertising

During the nine months ended September 30, 2024, our advertising expenses increased by $27 million, or 2.7%, compared to the same period in 2023. The increase reflects our response to changing market conditions and renewed investment opportunities, as we sought to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses increased to 11.9% for the nine months ended September 30, 2024 compared to 11.4% in the same period in 2023 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

Selling, operations, technology, general and administrative

During the nine months ended September 30, 2024, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $213 million, or 15.0% compared to the same period in 2023. The decrease is primarily due to decreased compensation costs.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 17.2% for the nine months ended September 30, 2024, compared to 20.8% in the same period in 2023, primarily due to decreased compensation costs.

Impairment and other related net charges

During the nine months ended September 30, 2024, impairment and other related charges decreased by $12 million, or 85.7%. compared to the same period in 2023. As a percentage of net revenue, impairment and other related net charges decreased to 0.0% from 0.2% in the same period in 2023.

During the nine months ended September 30, 2024, we recorded charges of $2 million related to changes in sublease market conditions for U.S. office locations. During the nine months ended September 30, 2023, we recorded charges of $14 million, inclusive of $5 million related to consolidation of certain customer service centers and $9 million related to construction in progress assets at identified U.S. locations.

Restructuring charges

During the nine months ended September 30, 2024, restructuring charges increased by $14 million, or 21.5%, compared to the same period in 2023. As a percentage of net revenue, restructuring charges increased to 0.9% from 0.7% in the same period in 2023.

During the nine months ended September 30, 2024, we incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reductions. During the nine months ended September 30, 2023, we incurred $65 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2023 workforce reductions.

Interest expense, net

During the nine months ended September 30, 2024, interest expense, net remained constant compared to the same period in 2023.

						Nine Months Ended September 30,
						2024						2023						% Change
						(in millions)
Interest expense, net						$	(15)					$	(15)					—		%

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Other income (expense), net

During the nine months ended September 30, 2024, other income (expense), net increased by $5 million, or 250.0%, compared to the same period in 2023, primarily driven by foreign currency transaction gains. Included in other income (expense), net are changes in foreign currency transaction gains and losses and long-term investment income or losses.

						Nine Months Ended September 30,
						2024						2023						% Change
						(in millions)
Other income (expense), net						$	3					$	(2)					(250.0)		%

Gain on debt extinguishment

During the nine months ended September 30, 2024, gain on debt extinguishment decreased by $100 million, or 100.0%, compared to the same period in 2023.

During the nine months ended September 30, 2023, we recorded a $100 million gain on debt extinguishment, representing the difference between the cash paid for principal of $514 million and the combined net carrying value of the 2024 Notes and 2025 Notes of $614 million.

						Nine Months Ended September 30,
						2024						2023						% Change
						(in millions)
Gain on debt extinguishment						$	—					$	100					(100.0)		%

Provision for income taxes, net

During the nine months ended September 30, 2024, our provision for income taxes, net increased by $2 million, or 33.3%, compared to the same period in 2023, primarily related to the level and mix of income earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes. Refer to Note 8, Income Taxes, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q for additional information.

						Nine Months Ended September 30,
						2024						2023						% Change
						(in millions)
Provision for income taxes, net						$	8					$	6					33.3		%

Liquidity and Capital Resources

Sources of Liquidity

As of September 30, 2024, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.3 billion. Additionally, we have a $600 million senior secured revolving credit facility that matures on March 24, 2026 (the “Revolver”). As of September 30, 2024, there were no revolving loans outstanding under the Revolver. We had outstanding letters of credit, primarily as security for certain lease agreements, for $72 million as of September 30, 2024, which reduced the availability of credit under the Revolver. Excluding liquidity available through our Revolver, the following table shows sources of liquidity for the periods presented:

						September 30,						December 31,
						2024						2023
						(in millions)
Cash and cash equivalents						$	1,296					$	1,322
Short-term investments						32						29
Total liquidity						$	1,328					$	1,351

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We believe that our existing cash and cash equivalents and investments, cash generated from operations and the borrowing availability under our Revolver will be sufficient to meet our anticipated cash needs for at least the foreseeable future including planned capital expenditures, contractual obligations and other such requirements. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. In addition, we may elect to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Further, we may from time to time seek to retire, restructure, repurchase or redeem, or otherwise mitigate the equity dilution associated with our outstanding convertible debt through cash purchases, stock buybacks of some or all of the shares underlying convertible notes and/or exchanges for equity or debt in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, exchanges or liability management exercises, if any, will be upon such terms and at such prices and sizes as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those described herein and in our other filings with the SEC, including those set forth in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2023. In addition, macroeconomic events have caused disruption in the capital markets, fluctuating interest rates and moderate inflation, which could make obtaining financing more difficult and/or expensive. As a consequence, we may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. If we raise additional funds through the issuance of equity, equity-linked or debt financing arrangements, those securities and instruments may have rights, preferences or privileges senior to the rights of our common stock, and the holders of our equity securities may experience dilution. We will continue to monitor our liquidity during this time of historic disruption and volatility in the global capital markets.

Credit Agreement and Debt Arrangements

As of September 30, 2024, we had $3.2 billion principal amount of indebtedness outstanding.

Under the terms of our Revolver, we may use proceeds to finance working capital, to refinance existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes. Any amounts outstanding under the Revolver are due at maturity.

On October 8, 2024, we issued $800 million aggregate principal amount of 7.250% senior secured notes due 2029. Interest on the notes is payable semi-annually, in arrears, on April 15 and October 15 of each year, commencing on April 15, 2025, until their maturity date of October 31, 2029. We intend to use the net proceeds from the senior secured notes offering, together with cash on hand, for the repayment, at or prior to maturity, of a portion of the Notes and general corporate purposes.

The conditional conversion features of the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes were not triggered during the calendar quarter ended September 30, 2024, therefore, the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes are not convertible during the calendar quarter ended December 31, 2024 pursuant to the applicable last reported sales price conditions.

As of August 1, 2024, the 2024 Notes were freely convertible and the holders of the 2024 Notes could have converted all or a portion of their 2024 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date; however, no holders converted their 2024 Notes during this time period. On November 1, 2024, the 2024 Notes matured and Wayfair paid in cash the remaining outstanding principal of $117 million to the holders of the 2024 Notes.

Whether any of the Non-Accreting Notes will be convertible in future quarters will depend on the satisfaction of the applicable last reported sales price condition or another conversion condition in the future. If one or more holders elect to convert their Non-Accreting Notes at a time when any such Non-Accreting Notes are convertible, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.

The credit agreement and indentures governing our convertible notes contain restrictions and covenants that may limit our operating flexibility. Specifically, the Revolver contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict our ability, subject to negotiated exceptions, to incur additional indebtedness and additional liens on our assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, or change the nature of our businesses. The Revolver also requires us to maintain certain levels of performance in order to maintain our access to the Revolver. For instance, we are required to maintain a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the credit agreement governing the Revolver) of 4.0 to 1.0, subject to a 0.5 step-up

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following certain permitted acquisitions. For information regarding our credit agreement and convertible notes, see Note 4, Debt and Other Financing, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q and Note 6, Debt and Other Financing, included in Part II, Item 8, Financial Statements and Supplementary Data, in our Annual Report on Form 10-K for the year ended December 31, 2023. As of September 30, 2024, we were in compliance with all the terms and conditions of our debt agreements.

Stock Repurchase Program

On August 21, 2020, the board of directors (the “Board”) authorized the repurchase of up to $700 million of our Class A common stock in the open market, through privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan (the “2020 Repurchase Program”). On August 10, 2021, the Board authorized a new $1.0 billion share repurchase program on the same terms (the “2021 Repurchase Program” together with the 2020 Repurchase Program, the “Repurchase Programs”). There is no stated expiration date for the Share Repurchase Programs. We will begin repurchasing shares under the 2021 Repurchase Program upon the completion of the 2020 Repurchase Program.

The Repurchase Programs do not obligate us to purchase any shares of our Class A common stock and have no expiration but may be suspended or terminated by the Board at any time. The actual timing, number and value of shares repurchased under the Repurchase Programs in the future will be determined by us in our discretion and will depend on a number of factors, including market conditions, applicable legal requirements, our capital needs and whether there is a better alternative use of capital. As of September 30, 2024, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs.

Trends and Historical Cash Flows

						Nine Months Ended September 30,
						2024						2023
						(in millions)
Net loss						$	(364)					$	(564)
Net cash provided by operating activities						$	155					$	191
Net cash used in investing activities						$	(178)					$	(30)
Net cash provided by financing activities						$	3					$	77

Operating Activities

Cash flows in connection with operating activities consisted of net loss adjusted for certain non-cash items including depreciation and amortization, equity-based compensation and certain other non-cash expenses, as well as the effect of changes in working capital and other activities. Operating cash flows can be volatile and are sensitive to many factors, including changes in working capital and our net loss.

Cash flows provided by operating activities decreased by $36 million during the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to a decrease of $167 million for cash changes in operating assets and liabilities partially offset by an increase in net loss adjusted for non-cash items of $131 million.

Investing Activities

Cash flows used in investing activities increased by $148 million during the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to decreases in sales and maturities of short- and long-term investments of $196 million and increases in purchases of short- and long-term investments of $33 million, partially offset by decreases in purchases of property and equipment and site and software development costs of $81 million.

Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 2.0% of net revenue for the nine months ended September 30, 2024 and related primarily to equipment purchases and improvements for leased warehouses within our expanding logistics network and ongoing investments, including in our proprietary technology and operational platform.

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Financing Activities

Cash flows provided by financing activities decreased by $74 million during the nine months ended September 30, 2024, compared to the same period in 2023. The decrease was primarily due to the net impact of debt and other financing transactions that occurred during the nine months ended September 30, 2023.

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet activities. We do not have any off-balance sheet interest in variable interest entities, which include special purpose entities and other structured finance entities.

Contractual Obligations

During the nine months ended September 30, 2024, there have been no material changes to our contractual obligations and estimates as compared to the contractual obligations described in Contractual Obligations included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, 2023.

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, we have disclosed in this Quarterly Report on Form 10-Q the following non-GAAP financial measures: Adjusted EBITDA, Free Cash Flow, Adjusted Diluted Earnings or Loss per Share and Net Revenue Constant Currency Growth.

Adjusted EBITDA

We calculate Adjusted EBITDA as net income or loss before depreciation and amortization, equity-based compensation and related taxes, interest income or expense, net, other income or expense, net, provision or benefit for income taxes, net, non-recurring items and other items not indicative of our ongoing operating performance. We have provided a reconciliation below of Adjusted EBITDA to net income or loss, the most directly comparable GAAP financial measure. 

We disclose Adjusted EBITDA because it is a key measure used by our management and the Board to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis as these costs may vary independent of business performance. For instance, we exclude the impact of equity-based compensation and related taxes as we do not consider this item to be indicative of our core operating performance. Investors should, however, understand that equity-based compensation and related taxes 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 provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and the Board.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: 

•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•Adjusted EBITDA does not reflect equity-based compensation and related taxes;

•Adjusted EBITDA does not reflect changes in our working capital;

•Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;

•Adjusted EBITDA does not reflect interest expenses associated with our borrowings;

•Adjusted EBITDA does not include other items not indicative of our ongoing operating performance; and

•Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income or loss and our other GAAP results.

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The following table reflects the reconciliation of net income or loss to Adjusted EBITDA for each of the periods indicated:

									Three Months Ended September 30,												Nine Months Ended September 30,
									2024						2023						2024						2023
									(in millions)
Reconciliation of Adjusted EBITDA:
Net loss									$	(74)					$	(163)					$	(364)					$	(564)
Depreciation and amortization									94						106						297						312
Equity-based compensation and related taxes									98						146						323						464
Interest expense, net									5						5						15						15
Other (income) expense, net									(8)						4						(3)						2
Provision for income taxes, net									3						2						8						6
Other:
Impairment and other related net charges (1)									1						—						2						14
Restructuring charges (2)									—						—						79						65
Gain on debt extinguishment (3)									—						—						—						(100)
Adjusted EBITDA									$	119					$	100					$	357					$	214
(1)			During the three and nine months ended September 30, 2024, we recorded charges of $1 million and $2 million, respectively, related to changes in sublease market conditions for U.S. office locations. During the nine months ended September 30, 2023, we recorded charges of $14 million, inclusive of $5 million related to consolidation of certain customer service centers and $9 million related to construction in progress assets at identified U.S. locations.
(2)			During the nine months ended September 30, 2024, we incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reductions. During the nine months ended September 30, 2023, we incurred $65 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2023 workforce reductions.
(3)			During the nine months ended September 30, 2023, we recorded a $100 million gain on debt extinguishment upon repurchase of $83 million in aggregate principal amount of our 2024 Notes and $535 million in aggregate principal amount of our 2025 Notes.

Free Cash Flow

We calculate Free Cash Flow as net cash provided by or used in operating activities less Capital Expenditures. We have provided a reconciliation below of Free Cash Flow to net cash provided by or used in operating activities, the most directly comparable GAAP financial measure.

We disclose Free Cash Flow because it 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.

Free Cash Flow has limitations as an analytical tool because it omits certain components of the cash flow statement and does not represent the residual cash flow available for discretionary expenditures. Further, other companies, including companies in our industry, may calculate Free Cash Flow differently. Accordingly, you should not consider Free Cash Flow in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider Free Cash Flow alongside other financial performance measures, including net cash provided by or used in operating activities, Capital Expenditures, and our other GAAP results.

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The following table presents a reconciliation of net cash provided by or used in operating activities to Free Cash Flow for each of the periods indicated:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
						(in millions)
Net cash provided by operating activities						$	49					$	121					$	155					$	191
Purchase of property and equipment						(17)						(30)						(53)						(101)
Site and software development costs						(41)						(49)						(121)						(154)
Free Cash Flow						$	(9)					$	42					$	(19)					$	(64)

Adjusted Diluted Earnings or Loss per Share

We calculate Adjusted Diluted Earnings or Loss per Share as net income or loss plus equity-based compensation and related taxes, provision or benefit for income taxes, net, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method divided by the weighted-average number of shares of common stock used in the computation of diluted earnings or loss per share. Accordingly, we believe that these adjustments to our adjusted diluted net income or loss before calculating per share amounts for all periods presented provide a more meaningful comparison between our operating results from period to period.

Adjusted Diluted Earnings or Loss per Share has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted Diluted Earnings or Loss per Share, by their nature, excludes equity-based compensation and related taxes, provision or benefit for income taxes, net, non-recurring items, other items not indicative of our ongoing operating performance, and, if dilutive, interest expense associated with convertible debt instruments under the if-converted method.

Because of these limitations, you should consider Adjusted Diluted Earnings or Loss per Share alongside other financial performance measures.

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A reconciliation of the numerator and denominator for diluted earnings or loss per share, the most directly comparable GAAP financial measure, to the numerator and denominator for Adjusted Diluted Earnings or Loss per Share in order to calculate Adjusted Diluted Earnings or Loss per Share, is as follows:

						Three Months Ended September 30,												Nine Months Ended September 30,
						2024						2023						2024						2023
						(in millions, except per share data)
Numerator:
Numerator for basic and diluted loss per share - net loss						$	(74)					$	(163)					$	(364)					$	(564)
Adjustments to net loss
Equity-based compensation and related taxes						98						146						323						464
Provision for income taxes, net						3						2						8						6
Other:
Impairment and other related net charges						1						—						2						14
Restructuring charges						—						—						79						65
Gain on debt extinguishment						—						—						—						(100)
Numerator for Adjusted Diluted Earnings (Loss) per Share - Adjusted net income (loss)						$	28					$	(15)					$	48					$	(115)
Denominator:
Denominator for basic and diluted loss per share - weighted-average number of shares of common stock outstanding						123						116						122						113
Adjustments to effect of dilutive securities:
Restricted stock units						—						—						1						—
Denominator for Adjusted Diluted Earnings (Loss) per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities						123						116						123						113
Diluted Loss per Share						$	(0.60)					$	(1.40)					$	(2.98)					$	(4.99)
Adjusted Diluted Earnings (Loss) per Share						$	0.22					$	(0.13)					$	0.38					$	(1.02)

Net Revenue Constant Currency Growth

We calculate Net Revenue Constant Currency Growth by translating the current period local currency net revenue by the currency exchange rates used to translate our financial statements in the comparable prior-year period.

We disclose Net Revenue Constant Currency Growth because it is an important indicator of our operating results. Accordingly, we believe that Net Revenue Constant Currency Growth provides useful information to investors and others in understanding and evaluating trends in our operating results in the same manner as our management.

Net Revenue Constant Currency Growth has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example, Net Revenue Constant Currency Growth rates, by their nature, exclude the impact of foreign exchange, which may have a material impact on net revenue.

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Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, net revenue, costs and expenses and related disclosures. Accordingly, we evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

There have been no material changes to our critical accounting policies and estimates since December 31, 2023. See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, 2023 for a description of our critical accounting policies and estimates.

Recent Accounting Pronouncements

The information called for by this section is incorporated herein by reference to Note 1, Summary of Significant Accounting Policies, included in Part I, Item 1, Financial Statements, in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in our exposures to market risk since December 31, 2023. See Part II, Item 7A, Quantitative and Qualitative Disclosures about Market Risk included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion on our exposures to market risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in litigation matters and other legal claims that arise during the ordinary course of business. Litigation and legal claims are inherently unpredictable and cannot be predicted with certainty. An unfavorable resolution of one or more of these matters could have a material adverse effect on our results of operations or financial condition, and regardless of the outcome, these matters can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting our overall operations. In addition, we may be at greater risk to outside party claims as we increase our operations in jurisdictions where the laws with respect to the potential liability of online retailers are uncertain, unfavorable or unclear.

We do not believe that the outcome of any legal matters to which we are presently a party will have a material adverse effect on our results of operations or financial condition.

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Item 1A. Risk Factors

As of the date of this report, there are no material changes from the risk factors previously disclosed in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Purchases of Equity Securities

See Part II, Item 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Certain Information Regarding the Trading of Our Common Stock included in our Annual Report on Form 10-K for the year ended December 31, 2023 for information regarding our authorized share repurchase programs. As of September 30, 2024, the approximate dollar value of shares that may yet be purchased under the authorized share repurchase programs is $1.1 billion. There were no repurchases made during the three months ended September 30, 2024.

Item 5. Other Information

(c)    Rule 10b5-1 Trading Plans

During the three months ended September 30, 2024, the following directors or officers informed us of the adoption, modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(c) of Regulation S-K, that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c):

Plans

Name & Title

Action

Date

Rule 10b5-1 Plan

Non-Rule 10b5-1 Plan

Aggregate number/dollar value of securities to be purchased or sold (1)

Plan expiration date (2)

Steve Conine, Co-Chairman and Co-Founder

Terminated

August 15, 2024

X

Up to 650,000 shares to be sold

September 5, 2025

Steve Conine, Co-Chairman and Co-Founder

Adopted

August 15, 2024

X

Up to 1,670,000 shares to be sold

October 21, 2025

Niraj Shah, Chief Executive Officer, Co-Chairman and Co-Founder

Terminated

August 15, 2024

X

Up to 650,000 shares to be sold

September 5, 2025

Niraj Shah, Chief Executive Officer, Co-Chairman and Co-Founder

Adopted

August 15, 2024

X

Up to 1,670,000 shares to be sold

October 21, 2025

(1)

The “Aggregate number/dollar value of securities to be sold” represents the gross number or value of shares to be sold during the duration of the plan, before excluding any shares sold pursuant to the Company’s mandatory policies to cover necessary tax withholding obligations in connection with the vesting of the securities.

(2)

Except as indicated by footnote, each trading arrangement permitted or permits transactions through and including the earlier to occur of (a) the completion of all purchases or sales or (b) the date listed in the table. Each trading arrangement marked as a “Rule 10b5-1 Plan” only permitted or only permits transactions upon expiration of the applicable mandatory cooling-off period under Rule 10b5-1(c), as amended.

Other than those disclosed above, none of our directors or officers adopted, modified or terminated, a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” during the three months ended September 30, 2024.

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Item 6. Exhibits

Incorporated by Reference

Exhibit Number

Exhibit Description

Filed or Furnished Herewith

Form

File No.

Filing Date

Exhibit Number

4.1

Indenture, dated October 8, 2024, among Wayfair LLC, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and notes collateral agent

8-K

001-36666

10/8/2024

4.1

4.2

Form of Note (included in Exhibit 4.1)

8-K

001-36666

10/8/2024

4.2

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

32.1#

Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

32.2#

Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

X

101.SCH

XBRL Taxonomy Extension Schema Document

X

101.CAL

XBRL Taxonomy Calculation Linkbase Document

X

101.DEF

XBRL Taxonomy Definition Linkbase Document

X

101.LAB

XBRL Taxonomy Labels Linkbase Document

X

101.PRE

XBRL Taxonomy Presentation Linkbase Document

X

104

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)

X

# This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			WAYFAIR INC.
Date: November 1, 2024			By:			/s/ NIRAJ SHAH
						Niraj Shah
						Chief Executive Officer and President
						(Principal Executive Officer)
Date: November 1, 2024			By:			/s/ KATE GULLIVER
						Kate Gulliver
						Chief Financial Officer and Chief Administrative Officer
						(Principal Financial and Accounting Officer)

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