Item 7. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion and other parts of this Annual Report on Form 10-K contain forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, which involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” included elsewhere in this Annual Report on Form 10-K.
Overview
We are a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise.
Since day one, our focus on delighting customers and doing good has created a foundation for continuous innovation:
•We aim to provide customers with the highest-quality product possible by designing glasses at our headquarters in New York City, using custom materials, and selling direct to the customer. By cutting out the middleman, we are able to sell our products at a lower price than many of our competitors and pass the savings on to our customers. In addition to lower prices, we introduced simple, unified pricing (glasses starting at $95, including prescription lenses) to the eyewear market.
•We’ve built a seamless shopping experience that meets customers where and how they want to shop, whether that’s on our website, on our mobile app, or in our 323 retail stores as of December 31, 2025.
•We’ve crafted a holistic vision care offering that extends beyond glasses to include contacts, vision tests and eye exams, vision insurance, and more. We leverage leading (and in many cases proprietary) technology to enhance our customers’ experiences, whether it’s to help them find a better-fitting frame using our Virtual Try-On tool, or to update their prescription from home using Virtual Vision Test, our telehealth app.
•We recruit and retain highly engaged, motivated team members who are driven by our commitment to scaling a large, growing business while making an impact and are excited to connect their daily work back to our mission.
•We are a public benefit corporation focused on positively impacting all stakeholders, and hope to inspire other entrepreneurs and businesses to think along the same lines. Working closely with our nonprofit partners, we have distributed glasses to people in need in more than 80 countries globally and many parts of the United States. Over 20 million more people now have the glasses they need to learn, work, and achieve better economic outcomes through our Buy a Pair, Give a Pair program.
We generate revenue through selling our wide array of eyewear, including glasses, sunglasses, and contact lenses. We also generate revenue from providing eye exams and vision tests, and selling eyewear accessories. We maintain data across the entire customer journey that allows us to develop deep insights, informing our innovation priorities and enabling us to create a highly personalized, brand-enhancing experience for our customers. We have built an integrated, omnichannel presence that we believe deepens our relationship with existing customers while broadening reach and accessibility. And while we have the ability to track where our customers transact, we’re channel agnostic to where the transaction takes place and find that many of our customers engage with us across both digital and physical channels; for example, many customers who check out online also visit a store throughout their customer journey, while others choose to browse online before visiting one of our stores.
Financial Highlights
For the years ended December 31, 2025, 2024, and 2023:
•we generated net revenue of $871.9 million, $771.3 million, and $669.8 million, respectively;
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•we generated gross profit of $470.6 million, $426.8 million, and $365.2 million, respectively, representing a gross margin of 54.0%, 55.3%, and 54.5%, respectively;
•we generated net income of $1.6 million, and net loss of $20.4 million and $63.2 million, respectively; and
•we generated Adjusted EBITDA of $95.2 million, $73.1 million, and $52.4 million, respectively, representing an Adjusted EBITDA Margin of 10.9%, 9.5%, and 7.8%, respectively.
For definitions of Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP measures, and a reconciliation to the most directly comparable GAAP measure, see the section titled “Key Business Metrics and Certain Non-GAAP Financial Measures.”
Recent Business Developments
In the second quarter of 2025, we announced a partnership with Google to develop AI-enabled glasses intended for all-day wear. We are working closely with Google on the development of AI glasses and intend to launch a series of products over time. As part of this collaboration, Google has committed up to $75 million for our product development and commercialization costs. In addition, Google has committed to investing up to $75 million in Warby Parker, at our option and subject to reaching certain collaboration milestones. During the year ended December 31, 2025, the Company reduced selling, general, and administrative expenses by $3.3 million related to costs which are reimbursable by Google and are thus fully offset within the period.
Factors Affecting Our Financial Condition and Results of Operations
We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed below and in Part I, Item 1A. “Risk Factors” of this Annual Report.
Overall economic environment
The nature of our business, which involves the sale of products and services that are a medical necessity for many consumers, provides some insulation from swings in consumer sentiment. However, our performance and growth are still subject to broader macroeconomic factors. During 2025, we experienced pressure from a dynamic trade environment and fluctuating inflationary trends, which impacted both consumer discretionary spending and our internal cost structure. While elevated interest rates and government policy continue to influence consumer confidence, we remain focused on our core value proposition to mitigate these headwinds.
Our 2025 results were affected by cost volatility related to evolving international trade policies and tariffs. We have taken proactive steps to manage these costs, including further diversifying our supplier base outside of China, making strategic price adjustments on select products, and disciplined expense management. The complexity of the global trade landscape makes it difficult to predict the timing and extent of future policy changes.
We believe our business model, which emphasizes an outstanding value-driven experience, provides a durable foundation. Our ongoing efforts to expand our supply chain network, both through international frame manufacturing partnerships and our domestic optical laboratories, are a key strategy intended to insulate us from localized disruptions. While we continue to navigate these macroeconomic uncertainties, we remain committed to meeting growing customer demand while maintaining our exceptional quality and customer satisfaction standards.
Key Business Metrics and Certain Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements, we use the following key business metrics and certain non-GAAP financial measures to evaluate our business, measure our performance,
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develop financial forecasts, and make strategic decisions. The following table summarizes our key performance indicators and non-GAAP financial measures for the periods presented, which are unaudited.
Year Ended December 31,
Adjusted EBITDA Margin(2) 10.9 % 9.5 % 7.8 %
__________________
(1)Store Count number at the end of the period indicated.
(2)Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For more information regarding our use of these measures and a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin, see the section titled "Adjusted EBITDA and Adjusted EBITDA Margin” below.
Active Customers
The number of Active Customers is a key performance measure that we use to assess the reach of our physical retail stores and digital platform as well as our brand awareness. We define an Active Customer as a unique customer account that has made at least one purchase in the trailing 12-month period. We determine our number of Active Customers by counting the total number of customer accounts that have made at least one purchase in the trailing 12-month period, measured from the last date of such period. Given our definition of a customer is a unique customer account that has made at least one purchase, it can include either an individual person or a household of more than one person utilizing a single account. We define Average Revenue per Customer as the sum of the total net revenues in the trailing 12-month period divided by the current period Active Customers.
Store Count
Store Count is a key performance measure that we track as we grow our retail footprint. Stores drive customer awareness of our brand and generate incremental demand for our products. We define Store Count as the total number of retail stores open at the end of a given period. We believe our retail stores embody our brand, drive brand awareness, and serve as efficient customer acquisition vehicles. Our results of operations have been and will continue to be affected by the timing and number of retail stores that we operate.
We have thoughtfully expanded our retail store footprint over the past several years. During the years ended December 31, 2025, 2024, and 2023, we opened 47, 39, and 37 net new retail stores, respectively. As of December 31, 2025, 285 out of our 323 retail stores offered in-person eye exams, representing 88.2% of our fleet, compared to 85.5% and 81.9% as of December 31, 2024 and 2023, respectively.
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA as net income (loss) before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment costs, stock-based compensation expense and related employer payroll taxes, amortization of cloud-based software implementation costs, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs and major system implementation costs. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net revenue. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate these measures in the same manner. We present Adjusted EBITDA and Adjusted EBITDA Margin because we consider these metrics to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.
Management uses Adjusted EBITDA and Adjusted EBITDA Margin:
•as a measurement of operating performance because they assist us in evaluating the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations;
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•for planning purposes, including the preparation of our internal annual operating budget and financial projections;
•to evaluate the performance and effectiveness of our operational strategies; and
•to evaluate our capacity to expand our business.
By providing these non-GAAP financial measures, together with a reconciliation to the most directly comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income (loss) or other financial statement data presented in our consolidated financial statements as indicators of financial performance. Some of the limitations are:
•such measures do not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments;
•such measures do not reflect changes in, or cash requirements for, our working capital needs;
•such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•such measures do not reflect our tax expense or the cash requirements to pay our taxes;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
•other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.
Due to these limitations, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. Each of the adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measure, which is net income (loss):
Year Ended December 31,
($ in thousands)
Adjusted to exclude the following:
Amortization of cloud-based software implementation costs 3,405 3,704 2,895
Inventory write-downs(4) 2,456 — —
Adjusted EBITDA Margin 10.9 % 9.5 % 7.8 %
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(1) Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions. For the years ended December 31, 2025, 2024, and 2023, the amount includes $1.6 million, $1.1 million, and $0.6 million of employer payroll costs associated with releases of RSUs and option exercises, respectively.
(2) Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in each of May 2025, May 2024, and August 2023 to the Warby Parker Impact Foundation, and 56,938 shares of Class A common stock to charitable donor advised funds in June 2023.
(3) Represents costs related to the implementation of major new enterprise software systems.
(4) Represents one-time inventory write-downs primarily related to the decision in the second quarter of 2025 to sunset our Home-Try On program at the end of 2025.
(5) Primarily represents restructuring costs incurred in the second quarter of 2025 and the fourth quarter of 2024 and charges for certain legal matters outside the ordinary course of business.
Results of Operations
The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this Annual Report on Form 10-K. The following tables set forth our results of operations for the periods presented in dollars and as a percentage of net revenue:
Year Ended December 31,
($ in thousands)
Consolidated Statements of Operations Data:
Year Ended December 31,
% of Net Revenue
Consolidated Statements of Operations Data:
Selling, general, and administrative expenses 54.6 % 59.2 % 65.3 %
Loss from operations (0.6) % (3.9) % (10.8) %
Interest and other income, net 1.0 % 1.4 % 1.4 %
Income (loss) before income taxes 0.4 % (2.5) % (9.4) %
Provision for income taxes 0.2 % 0.1 % — %
Net income (loss) 0.2 % (2.6) % (9.4) %
Components of Results of Operations
Net Revenue
We primarily derive revenue from the sales of eyewear, contact lenses, and eye care. We sell products and services through our stores, website, and mobile apps. Revenue generated from eyewear includes the sales of
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prescription and non-prescription optical glasses and sunglasses, eyewear accessories, lens replacements, and customer charges for optional expedited shipping. Revenue generated from eye care consists of in-person eye exams and prescriptions issued through the Virtual Vision Test app. Revenue from products is recognized when the customer takes possession of the product, either at the point of delivery or in-store pickup, and is recorded net of returns and discounts. Revenue for services is recognized when the service is rendered and is recorded net of discounts.
Cost of Goods Sold
Cost of goods sold includes the costs incurred to acquire materials, assemble, and sell our finished products.
Cost of goods sold includes the costs incurred to acquire materials, assemble and sell our finished products, purchase and fulfill contacts orders through our third-party distribution partner, and provide eye exams. Such costs include (i) product costs, including freight and import costs and adjustments to the lesser of cost and net realizable value, (ii) optical laboratory costs, (iii) customer shipping, (iv) occupancy and depreciation costs of retail stores, and (v) employee-related costs associated with eye exams, which includes salaries, benefits, bonuses, and stock-based compensation. We expect our cost of goods sold to fluctuate as a percentage of net revenue primarily due to product mix, customer preferences and resulting demand, the cost and management of inventory, shipping costs, laboratory utilization, and the scaling of our eye exam and contacts businesses. Cost of goods sold also may change as we open or close retail stores because of the resulting change in related occupancy and depreciation costs.
Gross Profit and Gross Margin
We define gross profit as net revenues less cost of goods sold. Gross margin is gross profit expressed as a percentage of net revenues. Our gross margin has remained steady historically, but may fluctuate in the future based on a number of factors, including the cost at which we can obtain, transport, and assemble our inventory, the rate at which we open new retail stores, the mix of products we sell, and how effective we can be at controlling costs, in any given period.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses, or SG&A, primarily consist of employee-related costs including salaries, benefits, bonuses, and stock-based compensation for our corporate and retail employees, marketing, information technology, credit card processing fees, donations in connection with our Buy a Pair, Give a Pair program, facilities, legal, and other administrative costs associated with operating the business. Marketing, which consist of both online and offline advertising, includes sponsored search, online advertising, Home Try-On program costs, and other initiatives. We expect SG&A to increase in absolute dollars over time and to fluctuate as a percentage of revenue due to the anticipated growth of our business, intentional investments in marketing, and changing prices of goods and services caused by inflation and other macroeconomic factors. SG&A is expensed in the period in which it is incurred.
Interest and Other Income, Net
Interest and other income, net, consists primarily of interest generated from our cash and cash equivalents balances net of interest incurred on borrowings and fees on our undrawn line of credit, and is recognized as incurred. We expect our interest and other income costs to fluctuate based on our future bank balances, credit line utilization, and the interest rate environment.
Provision for Income Taxes
Provision for income taxes consists of income taxes related to foreign and domestic federal and state jurisdictions in which we conduct business, adjusted for allowable credits, deductions, and valuation allowance against deferred tax assets. We expect our provision to fluctuate based on changes in our operations, our income before taxes, and tax laws or regulations.
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Comparison of the Years Ended December 31, 2025 and 2024
Net Revenue
Year Ended December 31,
($ in thousands)
Net revenue increased $100.6 million, or 13.0%, for the year ended December 31, 2025 compared to the same period in 2024. Driving this increase was our 47 new stores opened in 2025, a 7.0% increase in our Active Customers, and a 5.7% increase in Average Revenue per Customer to $324, from $307 in the prior year period. Average Revenue per Customer growth was primarily driven by our glasses business, which benefited from strong adoption of precision progressives and selective price increases during the second quarter, as well as by growth in our contacts and eye exam businesses which are often purchased together with glasses.
Cost of Goods Sold, Gross Profit, and Gross Margin
Year Ended December 31,
($ in thousands)
Cost of goods sold increased by $56.8 million, or 16.5%, for the year ended December 31, 2025 compared to the same period in 2024, and increased as a percentage of revenue over the same period by 130 basis points, from 44.7% of revenue to 46.0% of revenue. The increase in cost of goods sold was primarily driven by increased product and fulfillment costs associated with our sales growth, particularly related to the growth in our contact lens offering and optical laboratory costs to support glasses growth, as well as increases in store occupancy costs and doctor headcount due to new retail stores.
Gross profit, calculated as net revenue less cost of goods sold, increased by $43.7 million, or 10.2%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to the increase in net revenue over the same period.
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, decreased by 130 basis points for the year ended December 31, 2025 compared to the same period in 2024. The decrease in gross margin was primarily driven by tariff costs related to glasses, sales growth of contact lenses, which are sold at a lower margin than our other eyewear, increased doctor headcount as the number of exam stores grew by 21%, and increased customer shipping costs as a percent of revenue, partially offset by selective price increases in glasses taken in the second quarter and increased penetration of progressives and other lens enhancements.
Selling, General, and Administrative Expenses
Year Ended December 31,
($ in thousands)
As a percentage of net revenue 54.6 % 59.2 % (4.6) %
Selling, general, and administrative expenses increased $19.0 million, or 4.2%, for the year ended December 31, 2025 compared to the same period in 2024. This increase was primarily driven by higher payroll related costs from growth in our retail workforce and investments in marketing, partially offset by lower stock-based
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compensation, mostly related to the 2021 Founders Grant. As a percentage of revenue, SG&A decreased by 460 basis points, primarily driven by slower growth in corporate expenses, efficiencies in our customer experience operations, and reduced stock-based compensation.
Interest and Other Income, Net
Year Ended December 31,
($ in thousands)
As a percentage of net revenue 1.0 % 1.4 % (0.4) %
Interest and other income, net decreased by $2.2 million, or 20.9%, for the year ended December 31, 2025 compared to the same period in 2024 primarily due to unfavorable fluctuations in foreign currency rates and lower interest rates on our increased cash and cash equivalents balance.
Provision for Income Taxes
Year Ended December 31,
($ in thousands)
As a percentage of net revenue 0.2 % 0.1 % 0.1 %
Provision for income taxes increased $0.5 million, or 60.2%, for the year ended December 31, 2025 compared to the same period in 2024 primarily due to the change in pre-tax income (loss) in addition to the tax effects of stock-based compensation expense and depreciation expense.
Comparison of the Years Ended December 31, 2024 and 2023
Net Revenue
Year Ended December 31,
($ in thousands)
Net revenue increased $101.6 million, or 15.2%, for the year ended December 31, 2024 compared to the same period in 2023. Active Customers increased 7.8% and Average Revenue per Customer increased to $307 from $287 in the prior year period. Average Revenue per Customer growth was primarily driven by our glasses business, which saw strong adoption of precision progressives, our highest priced lens option which launched in April 2023, growth in our lens replacement service that was launched in the fourth quarter of 2023, and continued uptake of our higher priced frames, as well as by the impact of customers purchasing contacts or eye exams along with glasses in the same transaction.
Cost of Goods Sold, Gross Profit, and Gross Margin
Year Ended December 31,
($ in thousands)
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Cost of goods sold increased by $39.9 million, or 13.1%, for the year ended December 31, 2024 compared to the same period in 2023, and decreased as a percentage of revenue over the same period by 80 basis points, from 45.5% of revenue to 44.7% of revenue. The increase in cost of goods sold was primarily driven by increased product and fulfillment costs associated with our sales growth, particularly related to the growth in our contact lens offering, as well as increases in store occupancy, store depreciation, doctor headcount due to new retail stores opened in 2024, and optical laboratory costs to support glasses growth.
Gross profit, calculated as net revenue less cost of goods sold, increased by $61.6 million, or 16.9%, for the year ended December 31, 2024 compared to the same period in 2023, primarily due to the increase in net revenue over the same period.
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased by 80 basis points for the year ended December 31, 2024 compared to the same period in 2023. The increase in gross margin was primarily driven by faster growth in our glasses business which is our highest margin product category, lower outbound customer shipping costs as a percent of revenue, and efficiencies in our owned optical laboratories. These impacts were partially offset by sales growth of contact lenses, which are sold at a lower margin than our other eyewear, and increased doctor headcount, as the number of stores offering eye exams grew from 194 stores as of December 31, 2023 to 236 stores as of December 31, 2024.
Selling, General, and Administrative Expenses
Year Ended December 31,
($ in thousands)
As a percentage of net revenue 59.2 % 65.3 % (6.1) %
Selling, general, and administrative expenses increased $19.7 million, or 4.5%, for the year ended December 31, 2024 compared to the same period in 2023. This increase was primarily driven by higher payroll-related costs, primarily from growth in our retail workforce, and investments in marketing, partially offset by a $23.2 million decrease in stock-based compensation, mostly related to the 2021 Founders Grant (as described in Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
Interest and Other Income, Net
Year Ended December 31,
($ in thousands)
As a percentage of net revenue 1.4 % 1.4 % — %
Interest and other income, net increased by $1.4 million, or 14.8%, for the year ended December 31, 2024 compared to the same period in 2023 primarily due to interest on our increased cash and cash equivalents balance.
Provision for Income Taxes
Year Ended December 31,
($ in thousands)
As a percentage of net revenue 0.1 % — % 0.1 %
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Provision for income taxes increased $0.4 million, or 102.1%, for the year ended December 31, 2024 compared to the same period in 2023 primarily due to the change in pre-tax loss in addition to the tax effects of stock-based compensation expense, depreciation expense, and differences in tax rates in state jurisdictions.
Liquidity and Capital Resources
Since inception, we have financed our operations primarily from net proceeds from the sale of redeemable convertible preferred stock and cash flows from operating activities. We also have access to cash from our credit facility, which remains undrawn as of December 31, 2025. We had cash and cash equivalents of $286.4 million, which was primarily held for working capital purposes, and an accumulated deficit of $685.6 million as of December 31, 2025.
We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion of our business. We believe our existing cash and cash equivalents, funds available under our existing credit facility, and cash flows from operating activities will be sufficient to fund our operations for at least the next 12 months.
2024 Credit Facility
In February 2024, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc. (together, the “Borrowers”) entered into a Credit Agreement with JPMorgan Chase Bank, N.A. and the lenders party thereto (the “2024 Credit Facility”), which replaced a previous credit facility. The 2024 Credit Facility consists of a $120.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $10.0 million for swingline loans. The 2024 Credit Facility includes an option for the Company to increase the available amount by up to $55.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2024 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2024 Credit Facility at any time, in whole or in part, without penalty.
Under the 2024 Credit Facility, borrowings under the revolving credit facility bear interest on the principal amount outstanding, at the Company’s election, at (a) the greater of the prime rate (as defined in the credit agreement) or 2.5%, plus an applicable margin of 0.65% to 0.90% depending on the Company’s leverage ratio or (b) adjusted SOFR (as defined in the credit agreement), plus an applicable margin of 1.65% to 1.90% depending on the Company’s leverage ratio. The Company is charged an unused commitment fee of 0.20% to 0.25% depending on the Company's leverage ratio. Both interest on principal and commitment fees are included in interest expense on the consolidated statements of operations.
The 2024 Credit Facility contains a financial maintenance covenant which only applies while total borrowings exceed $30.0 million, which requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2024 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as representations, warranties and event of default provisions. The obligations of the Borrowers under the 2024 Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company.
Other than letters of credit outstanding of $4.3 million as of both December 31, 2025 and 2024, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2024 Credit Facility.
Share Repurchase Program
In February 2026, the Company’s Board of Directors authorized a share repurchase program to purchase up to $100.0 million of the Company’s Class A common stock (the “Share Repurchase Program”). Repurchases under the Share Repurchase Program may be made in the open market, in privately negotiated transactions, or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. The Share Repurchase Program does not have a fixed expiration date, does not obligate the Company to acquire any
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particular amount of Class A common stock, and may be modified, suspended, or terminated at any time at the discretion of the Company’s Board of Directors.
Cash Flows
The following table summarizes our cash flows for the periods presented:
Year Ended December 31,
($ in thousands)
Net cash (used in) provided by financing activities (11,997) 4,959 2,871
Effect of exchange rates on cash 457 (404) (882)
Cash Flows from Operating Activities
Net cash provided by operating activities was $110.8 million for the year ended December 31, 2025, consisting of a net income of $1.6 million, adjusted for $91.6 million of non-cash expenses and $17.6 million of net cash from changes in operating assets and liabilities. The non-cash charges included $34.5 million of stock-based compensation, $50.3 million of depreciation and amortization, $3.4 million of amortization of cloud-based implementation costs, $2.8 million of non-cash charitable contributions, and $0.6 million of non-cash impairment charges. The changes in operating assets and liabilities were primarily driven by increases in accounts payable and lease liabilities and a decrease in inventory, partially offset by an increase in prepaid expenses and other assets.
Net cash provided by operating activities was $98.7 million for the year ended December 31, 2024, consisting of a net loss of $20.4 million, adjusted for $99.9 million of non-cash expenses and $19.2 million of net cash from changes in operating assets and liabilities. The non-cash charges included $47.3 million of stock-based compensation, $45.9 million of depreciation and amortization, $3.7 million of amortization of cloud-based implementation costs, $2.2 million of non-cash charitable contributions, and $0.8 million of non-cash impairment charges. The changes in operating assets and liabilities were primarily driven by decreased inventory as we more closely manage stock on hand, increased accrued expenses, and increased net lease liabilities in connection with retail leases entered into in 2024, partially offset by an increase in prepaid expenses and other current assets.
Net cash provided by operating activities was $61.0 million for the year ended December 31, 2023, consisting of a net loss of $63.2 million, adjusted for $118.4 million of non-cash expenses and $5.8 million of net cash from changes in operating assets and liabilities. The non-cash charges included $70.5 million of stock-based compensation, $38.6 million of depreciation and amortization, $3.2 million of non-cash charitable contributions, $3.2 million of non-cash impairment charges, and $2.9 million of amortization of cloud-based implementation costs. The changes in operating assets and liabilities were primarily driven by decreased inventory and other non-current assets, and increased deferred revenue from sales growth, net lease liabilities in connection with retail leases entered into in 2023, and accounts payable, partially offset by a decrease in accrued expenses and an increase in prepaid expenses and other current assets.
Cash Flows from Investing Activities
For the year ended December 31, 2025, net cash used in investing activities was $67.0 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores and investments in capitalized software development costs.
For the year ended December 31, 2024, net cash used in investing activities was $66.0 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores, investments in capitalized software development costs, and an investment in a private optical equipment company.
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For the year ended December 31, 2023, net cash used in investing activities was $54.7 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores, investments in capitalized software development costs, and an investment in a private optical equipment company.
Cash Flows from Financing Activities
For the year ended December 31, 2025, net cash used in financing activities was $12.0 million, which was primarily related to cash paid for shares withheld for taxes for stock-based compensation, partially offset by proceeds shares issued in connection with our Employee Stock Purchase Plan (“ESPP”).
For the year ended December 31, 2024, net cash provided by financing activities was $5.0 million, which was primarily related to proceeds from stock option exercises, shares issued in connection with our ESPP, and other equity activity.
For the year ended December 31, 2023, net cash provided by financing activities was $2.9 million, which was primarily related to proceeds from shares issued in connection with our ESPP and stock option exercises.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations and commitments as of December 31, 2025:
Payments Due by Period
Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years
($ in thousands)
For additional discussion on our lease obligations, see Note 8, “Leases” in our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Subsequent to December 31, 2025, we entered into ten operating lease agreements and extended the term of four existing operating lease agreement for retail space in the U.S. Total commitments under these agreements are approximately $14.3 million.
Recent Accounting Pronouncements
See Note 2, “Summary of Significant Accounting Policies” in our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported revenue generated and expenses incurred during the reporting periods, and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the amount of revenue and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Inventory
Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis. We continuously evaluate the composition of our inventory and make adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of excess and obsolete inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, forecasts of future demand, and estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, are estimated based on historical experience and are
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adjusted based upon physical inventory counts. Actual results may differ from estimates due to the quantity and mix of products in inventory, consumer preferences, and economic and market conditions. Our historical estimates of these costs and the related provisions have not differed materially from actual results. However, unforeseen adverse future economic and market conditions, such as those resulting from disease pandemics and other catastrophic events, could result in our actual results differing materially from our estimates.
Income Taxes
Management makes estimates, assumptions, and judgments to determine our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. We utilize the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss, capital loss, and tax credit carryforwards. Valuation allowances are established against deferred tax assets if it is more likely than not that they will not be realized.
Our policy is to recognize interest and penalties expense, if any, related to unrecognized tax benefits as a component of income tax expense.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of loss that may impact our financial position because of adverse changes in financial market prices and rates. Our market risk exposure primarily results from potential changes in currency rates, interest rates, or inflation.
Foreign Exchange Risk
We are exposed to changes in foreign currency rates as a result of our foreign operations and international suppliers from whom we purchase in Japanese yen and euros. Revenue and income generated by our operations in Canada and our foreign denominated cost of goods sold are impacted by changes in foreign currency exchange rates. We do not believe that foreign exchange rates have a material effect on our business, financial condition or results of operations.
Interest Rate Risk
Our cash and cash equivalents as of December 31, 2025 consisted of $286.4 million in cash and money-market funds. Such interest-earning instruments carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate exposure. We believe that we do not have a material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents.
Inflation Risk
We believe that inflation, including from geopolitical unrest and other macroeconomic factors, has had a limited impact on our business, financial condition, and results of operations. Inflation may, however, have an impact on raw materials, transportation, labor, construction, rent, and other costs which materially impact operations. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with increased revenue. Our inability or failure to do so could harm our business, financial condition, and results of operations.
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Item 8. Financial Statements and Supplementary Data
Warby Parker Inc.
Index to Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) 69
Consolidated Balance Sheets 72
Consolidated Statements of Operations and Comprehensive Income (Loss) 73
Consolidated Statements of Changes in Stockholders’ Equity 74
Consolidated Statements of Cash Flows 75
Notes to Consolidated Financial Statements 76
Note 1 Description of Business 76
Note 2 Summary of Significant Accounting Policies 76
Note 3 Property and Equipment, Net 84
Note 4 Accrued Expenses 84
Note 5 Income Taxes 85
Note 6 Stockholders’ Equity 88
Note 7 Stock-Based Compensation 89
Note 8 Leases 92
Note 9 Segment Information 93
Note 10 Defined Contribution Retirement Plan 94
Note 11 Commitments and Contingencies 94
Note 12 Earnings Per Share 96
Note 13 Related-Party Transactions 96
Note 14 Subsequent Events 96
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Warby Parker Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Warby Parker Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
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Excess and Obsolete Inventory
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2014.
New York, New York
February 26, 2026
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Warby Parker Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Warby Parker Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Warby Parker Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 26, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s annual report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
February 26, 2026
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Warby Parker Inc. and Subsidiaries
Consolidated Balance Sheets
(Amounts in thousands, except par value)
December 31,
Assets
Current assets:
Prepaid expenses and other current assets 18,283 17,592
Liabilities and Stockholders’ Equity
Current liabilities:
Commitments and contingencies (see Note 11)
Stockholders’ equity:
Accumulated other comprehensive income (1,481) (1,938)
Total liabilities and stockholders’ equity $ 720,919 $ 676,490
The accompanying notes are an integral part of these consolidated financial statements.
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Warby Parker Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts in thousands, except per share data)
Year Ended December 31,
Earnings (loss) per share:
Weighted average shares outstanding:
Other comprehensive income (loss)
Foreign currency translation adjustment $ 457 $ (409) $ (882)
The accompanying notes are an integral part of these consolidated financial statements.
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Warby Parker Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
(Amounts in thousands)
Shares Amount
Restricted stock unit releases 1,275 — — — — —
Other comprehensive loss — — — (882) — (882)
Restricted stock unit releases 1,980 — — — — —
Other comprehensive loss — — — (409) — (409)
Restricted stock unit releases 1,801 — — — — —
Other equity activity 7 — 30 — — 30
Other comprehensive income — — — 457 — 457
The accompanying notes are an integral part of these consolidated financial statements.
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Warby Parker Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Amounts in thousands)
Year Ended December 31,
Cash flows from operating activities
Amortization of cloud-based software implementation costs 3,405 3,704 2,895
Change in operating assets and liabilities:
Cash flows from investing activities
Investment in optical equipment company — (2,000) (1,000)
Cash flows from financing activities
Shares withheld for taxes on stock-based compensation (14,390) — —
Proceeds from shares issued in connection with ESPP 2,204 1,925 1,835
Other financing activity 30 333 —
Net cash (used in) provided by financing activities (11,997) 4,959 2,871
Effect of exchange rates on cash 457 (404) (882)
Cash and cash equivalents
Supplemental disclosures
Non-cash investing and financing activities:
The accompanying notes are an integral part of these consolidated financial statements.
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Warby Parker Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
1. Description of Business
Warby Parker Inc., a public benefit corporation founded in 2010 (together with its wholly owned subsidiaries, the “Company”), is a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare and social enterprise. The Company provides holistic vision care by offering eyewear, contacts, and eye care directly to consumers through its integrated, omnichannel platform. For every pair of glasses or sunglasses sold, the Company helps distribute a pair of glasses to someone in need through its Buy a Pair, Give a Pair program. The Company is headquartered in New York, New York.
2. Summary of Significant Accounting Policies
Basis of Presentation
The Company’s consolidated financial statements are prepared and presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
Principles of Consolidation
The consolidated financial statements include the financial statements of Warby Parker Inc., and its wholly owned subsidiaries. The Company consolidates certain variable interest entities that it is the primary beneficiary of. The inclusion of these entities does not have a material impact on the consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The principles of U.S. GAAP require management to make certain estimates and assumptions during the preparation of the Company’s consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Management’s estimates are based on historical experience and various other market-specific and relevant assumptions that management believes to be reasonable. Significant estimates underlying the consolidated financial statements include, but are not limited to, the valuation of inventory, including the determination of the net realizable value, the useful lives and recoverability of long-lived assets, income taxes and valuation allowances, and assumptions related to the valuation of common stock and determination of stock-based compensation.
Concentration of Credit Risk and Major Suppliers
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in various accounts, which, at times, may exceed the limits insured by the Federal Deposit Insurance Corporation of $250 thousand per institution and the Canada Deposit Insurance Corporation of $100 thousand Canadian dollars. At December 31, 2025 and 2024, uninsured cash balances were approximately $284.9 million and $252.6 million, respectively. The Company has not experienced any concentration losses related to its cash and cash equivalents to date. The Company seeks to minimize its credit risk by maintaining its cash and cash equivalents with high-quality financial institutions and monitoring the credit standing of such institutions.
The Company’s top five inventory suppliers accounted for approximately 14%, 18%, and 18% of cost of goods sold for each of the years ended December 31, 2025, 2024, and 2023, respectively.
Interest Rate and Foreign Currency Risk
The Company’s cash and cash equivalents as of December 31, 2025 consisted of cash and money-market funds. Such interest-earning instruments carry a degree of interest rate risk. The goals of the Company’s investment policy are liquidity and capital preservation. The Company does not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage its interest rate exposure.
The Company is exposed to changes in foreign currency rates as a result of its foreign operations and international suppliers from whom it purchases in Japanese yen and euros. Revenue and income generated by the Company’s operations in Canada as well as the Company’s cost of goods sold will fluctuate as a result of changes in foreign currency exchange rates. The impact of changes in foreign currency rates on
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Warby Parker Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
the Company’s financial results is not material to the consolidated financial statements. The Company does not enter into currency hedges.
Cash and Cash Equivalents
The Company considers all highly liquid short-term investments with an original maturity of three months or less to be a cash equivalent. Cash and cash equivalents include both deposits with banks and financial institutions and receivables from credit card issuers and payment processors, which are typically converted into cash within two to four days of capture. As such, these receivables are recorded as a deposit in transit as a component of cash and cash equivalents on the consolidated balance sheets. At December 31, 2025 and 2024, the balance of cash and cash equivalents for these items was $11.1 million and $15.5 million, respectively.
Accounts Receivable, Net
The Company primarily sells directly to U.S. and Canadian consumers where payment is processed upon order approval or product shipment. In some instances, customers can utilize vision insurance benefits to cover the cost of their purchase. For these orders, the Company submits claims directly to the vision insurance carrier and receives reimbursement directly from the carrier. Accounts receivable primarily represents amounts due from insurance carriers. Receivables from customers and insurance carriers are typically collected within 30 days of the transaction and are included in accounts receivable, net on the consolidated balance sheets. The accounts receivable are net of an allowance for credit losses, which is established based on management’s best estimate of probable credit losses after considering several relevant factors such as counterparty creditworthiness, historical collections, receivable terms, and the size of the individual receivables when determining the reserve. The Company’s allowance for credit losses was $1.5 million and $0.9 million at December 31, 2025 and 2024, respectively.
Inventory
Inventory consists of approximately $12.6 million and $12.9 million of finished goods, including ready-to-wear sun frames and eyeglass cases, as of December 31, 2025 and 2024, respectively, and approximately $31.9 million and $39.4 million of component parts, including optical frames and prescription optical lenses, as of December 31, 2025 and 2024, respectively. Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis.
The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of excess and obsolete inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, includes estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates.
Investments
In 2023 and 2024, the Company invested a total of $3.0 million in a private optical equipment company. In connection with this investment, the Company will automatically receive shares of the entity or cash based on a conversion price dependent upon an ultimate conversion event. The investment is recorded within other assets on the consolidated balance sheets and is measured at cost less impairment, if any. No impairment has been recorded for the years ended December 31, 2025 and 2024.
Property and Equipment, Net
Property and equipment, net is stated at cost less accumulated depreciation. Repairs and maintenance and any gains or losses on dispositions are recognized as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and a gain or loss on disposition is reflected in current operations.Depreciation is recorded on a straight-line basis over the
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Warby Parker Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
following estimated useful lives:
Asset Category Depreciation Period
Computer equipment 3 years
Leasehold improvements 2 - 10 years (lesser of lease term and economic life)
Furniture and fixtures 7 years
Capitalized software 1 - 3 years
Equipment 5 - 7 years
Capitalized Software
The Company capitalizes as property and equipment certain qualified costs incurred in connection with the development of internal-use software. Capitalization of internal-use software begins when the preliminary project stage is completed, management with relevant authority authorizes and commits to funding the software project, and it is probable that the project will be completed and software will be used to perform the function intended. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful life of the software, not to exceed three years, beginning when the software is ready for its intended use.
Cloud-Based Software Implementation Costs
The Company enters into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on their long or short-term nature. All other related costs are expensed as incurred. Capitalized cloud-based software implementation costs are amortized on a straight-line basis, from the date the related software or module is ready for its intended use through the end of the contractual term of the hosting arrangement, inclusive of any reasonably certain renewal periods, as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement.
As of December 31, 2025, the Company had $20.3 million of gross capitalized cloud-based software implementation costs and $9.6 million of related accumulated amortization, for a net balance of $10.7 million, made up of $4.1 million recorded within prepaid expenses and other current assets and $6.6 million recorded within other assets on the consolidated balance sheet.
As of December 31, 2024, the Company had $13.6 million of gross capitalized cloud-based software implementation costs and $6.4 million of related accumulated amortization, for a net balance of $7.2 million, made up of $2.8 million recorded within prepaid expenses and other current assets and $4.4 million recorded within other assets on the consolidated balance sheet.
During the years ended December 31, 2025, 2024, and 2023, the Company incurred $3.4 million, $3.7 million, and $2.9 million of amortization of capitalized cloud-based software implementation costs, respectively.
Leases
The Company records a lease liability and corresponding right-of-use (“ROU”) asset at lease commencement. The lease liability is measured at the present value of non-cancellable future lease payments over the lease term, minus expected tenant improvement allowances (“TIAs”) determined to be lease incentives. The ROU asset is measured at the lease liability amount, adjusted for prepaid lease payments, TIAs, and any initial direct costs.
When calculating the present value of future lease payments, the Company utilizes an incremental borrowing rate, which incorporates several factors including the lease term, U.S. Treasury bond rates, financial ratios related to earnings and cash flows, and other comparisons with similarly sized companies.
The recognition of rent expense for an operating lease commences on the date at which control and possession of the property is obtained. Rent expense is calculated by recognizing total fixed minimum rental payments, net of any TIAs or other rental concessions, on a straight-line basis over the lease term.
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
Some of the Company’s retail leases contain percent of sales rent or similar provisions, which is expensed as incurred as variable rent. Retail, optical laboratory, and distribution center rent expense is recognized as a component of cost of goods sold and all other rent expense is recognized as a component of selling, general, and administrative expenses.
Asset Impairment
Long-lived assets, such as property and equipment, ROU assets, and capitalized cloud-based software implementation costs, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is evaluated by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as a component of selling, general, and administrative expenses in the amount by which the carrying amount exceeds the fair value of the asset group. The Company considers each store location to be its own asset group when evaluating for impairment.
Asset impairment charges, recorded as a component of selling, general, and administrative expenses, are $0.6 million, $0.8 million, and $3.2 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are primarily related to the write-off of assets in connection with retail stores and store closures, and the write-off of capitalized software and related cloud-based software implementation costs no longer being used.
Income Taxes
The Company utilizes the asset and liability method of accounting for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss, capital loss, and tax credit carryforwards. Valuation allowances are established against deferred tax assets if it is more likely than not that they will not be realized.
The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. The Company’s policy is to recognize interest and penalties expense, if any, related to unrecognized tax benefits as a component of income tax expense.
The Company has elected to treat taxes due on future U.S. inclusions in taxable income related to Global Intangible Low Taxed Income (“GILTI”) as a current period expense when incurred using the period cost method.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are classified in the following hierarchy:
•Level 1: Quoted prices in active markets for identical instruments.
•Level 2: Quoted prices in active markets for similar instruments or quoted prices for identical or similar instruments in markets that are not active or inputs other than quoted prices that are observable for the instrument.
•Level 3: Unobservable inputs for the instrument.
The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
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Warby Parker Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
The Company’s material financial instruments consists primarily of cash and cash equivalents, accounts receivable, net, accounts payable, and accrued expenses, which are measured at fair value using Level 1 inputs. The fair values of cash and cash equivalents, accounts receivable, net, accounts payable, and accrued expenses are approximately equal to their carrying values based on the short-term nature of these items.
Commitments and Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Foreign Currency
The Company’s foreign operations in Canada have a functional currency of Canadian dollars. Assets and liabilities are translated into U.S. dollars using the current exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the average exchange rates during the period. The resulting translation adjustments are recorded as a component of accumulated other comprehensive income on the consolidated balance sheets. Foreign currency impact on the consolidated statements of cash flows is translated to U.S. dollars using average exchange rates for the period, which approximates the timing of cash flows. Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured at period end using the period-end exchange rate. Gains and losses resulting from remeasurement are recorded in interest and other income, net on the consolidated statements of operations and comprehensive loss.
Revenue Recognition
The Company primarily derives revenue from the sales of eyewear, contacts, and eye care through its stores, website, and mobile apps. Revenue generated from eyewear includes the sales of prescription and non-prescription optical glasses and sunglasses, eyewear accessories, lens replacements, and customer charges for optional expedited shipping. Revenue generated from eye care consists of in-person eye exams and prescriptions issued through the Virtual Vision Test app. All revenue is reported net of sales taxes collected from customers on behalf of taxing authorities and variable consideration, including returns and discounts.
Revenue is recognized when performance obligations are satisfied through either the transfer of control of promised goods or the rendering of services to the Company's customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, which is generally determined to be the point of delivery or upon rendering of the service in the case of eye exams. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. In the normal course of business, payment may be collected from the customer prior to recognizing revenue and such cash receipts are included in deferred revenue until the order is delivered to the customer. Substantially all of the deferred revenue included on the balance sheet at December 31, 2024 was recognized as revenue in the first quarter of 2025 and the Company expects substantially all of the deferred revenue at December 31, 2025 to be recognized as revenue in the first quarter of 2026.
The Company’s sales policy allows customers to return merchandise for any reason within 30 days of receipt, generally for an exchange or refund. An allowance is recorded for expected future customer returns which the Company estimates using historical return patterns and its expectation of future returns. Any difference between the actual return and previous estimates is adjusted in the period in which such returns occur. Historical return estimates have not materially differed from actual returns in any of the periods presented. The allowance for returns was $3.6 million and $2.6 million at December 31, 2025 and 2024, respectively, and is included in other current liabilities on the consolidated balance sheets.
The Company offers non-expiring gift cards to its customers. Proceeds from the sale of gift cards are initially deferred and recognized within deferred revenue on the consolidated balance sheets, and are recognized as revenue when the product is received by the customer after the gift card has been tendered for payment. Based on historical experience, and to the extent there is no requirement to remit unclaimed card balances to government agencies under unclaimed property laws, an estimate of the gift card balances that will never be redeemed is recognized as revenue in proportion to gift cards which have been redeemed. While the Company will continue to honor all gift cards presented for payment, management
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Warby Parker Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity. The balance of unredeemed gift cards was $3.5 million and $3.1 million as of December 31, 2025 and 2024, respectively.
The following table disaggregates the Company’s revenue by product:
Year Ended December 31,
The following table disaggregates the Company’s revenue by channel:
Year Ended December 31,
Shipping and Handling Fees and Costs
The Company pays for shipping and handling costs which are generally not charged to the customer, except in the case of customer requested expedited shipments. The Company may also expedite shipping on orders in order to meet customer lead time expectations. The costs associated with shipping goods to customers are recorded as cost of goods sold. Shipping and handling fees billed to customers related to expedited shipments are recorded as revenue. Shipping and handling fees included in revenue were $3.7 million, $3.8 million, and $4.0 million in the years ended December 31, 2025, 2024, and 2023, respectively, while shipping and handling costs included in cost of goods sold were $25.2 million, $20.4 million, and $22.0 million in the years ended December 31, 2025, 2024, and 2023, respectively.
Cost of Goods Sold
Cost of goods sold includes the costs incurred to acquire materials, assemble, and sell the Company’s finished products. Such costs include (i) product costs, including freight and import costs and adjustments to the lesser of cost and net realizable value, (ii) optical laboratory costs, (iii) customer shipping, (iv) occupancy and depreciation costs of retail stores, and (v) compensation costs for doctors performing eye exams, which includes salaries, benefits, bonuses, and stock-based compensation.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses primarily consists of salaries, benefits, bonuses and stock-based compensation for corporate and retail employees, marketing, information technology, credit card processing fees, charitable donations, headquarters facilities and related depreciation, legal, and other administrative costs associated with operating the business. Marketing, which consists of both online and offline advertising, includes sponsored search, online advertising, Home Try-On program costs, and other initiatives.
Advertising costs are expensed as incurred, and were approximately $113.9 million, $95.8 million, and $76.1 million in the years ended December 31, 2025, 2024, and 2023 respectively.
Stock-Based Compensation
Stock-based compensation is recorded as a component of cost of goods sold or selling, general, and administrative expenses in the same manner as the compensation costs of the related employees. The Company recognizes compensation expense for stock-based awards based on the grant date fair value, on either (i) a straight-line basis for awards with only a service condition, or (ii) an accelerated attribution basis for awards with a performance condition, over the requisite service period of the awards, which is generally
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
the vesting term of the outstanding stock awards. Compensation expense for awards with a performance condition is recognized when it is determined that it is probable that the vesting conditions will be satisfied. The Company utilizes a narrow interpretation of award authorization and expense and stock-based compensation expense is recognized beginning on an award’s grant date.
The Company estimates the fair value of options and Employee Stock Purchase Plan (“ESPP”) purchase rights on the date of grant using the Black-Scholes option-pricing model, which utilizes inputs that may be subject to management estimate. These inputs include the expected term, the estimated volatility of the Company’s common stock price over the expected term, the fair value of the Company’s stock, the risk-free interest rate, and the expected dividend yield. Changes in these inputs can materially affect the estimate of fair value of stock-based awards. The Company accounts for forfeitures as they occur.
Prior to the Company’s direct listing, the fair value of restricted stock units (“RSUs”) was determined by the Board of Directors with input from management and independent third-party valuation specialists, as there was no public market for the Company’s common stock. Subsequent to the Company’s direct listing, the grant date fair value is determined by the closing price of the Company’s Class A common stock as reported on the date of grant.
Stock-based compensation expense related to stock awards with market-based or performance-based vesting conditions are measured based on the fair value of the awards granted. The Company determines the grant date fair value using equity valuation models, such as the Monte Carlo simulation, using assumptions and judgments made by management and third-party valuation specialists. The Company recognizes stock-based compensation expense for market or performance-based awards using the accelerated attribution method over the derived service period.
Earnings Per Share
Basic and diluted earnings per share is presented in conformity with the two-class method required for participating securities. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. The Company’s Class A and Class B common stock have, in effect, the same economic rights and share equally in undistributed net income, and as such, net income is allocated proportionately between the them.
Basic earnings per share is computed by dividing net income by the weighted-average number of shares of the Company’s common stock outstanding during a given period.
Diluted earnings per share is computed by dividing net income by the weighted-average number of fully diluted common shares outstanding. During periods when there is a net loss, potentially dilutive common stock equivalents are excluded as their effect is anti-dilutive. The Company uses the treasury stock method for its employee equity awards and ESPP purchase rights to determine if any incremental shares should be included in diluted earnings per share. If the effect of a conversion of an instrument is neutral to earnings per share, the Company considers the security to be dilutive. The Company excludes unvested employee awards when the vesting is contingent on a performance or market condition that is not met as of the evaluation date.
Recent Business Developments and Collaborative Arrangement
In the second quarter of 2025, we announced a partnership with Google to develop AI-enabled glasses intended for all-day wear. We are working closely with Google on the development of AI glasses and intend to launch a series of products over time. As part of this collaboration, Google has committed up to $75 million for our product development and commercialization costs. In addition, Google has committed to investing up to $75 million in Warby Parker, at our option and subject to reaching certain collaboration milestones.
The Company determined that its arrangement with Google should be accounted for under ASC 808, Collaborative Arrangements, as both parties are active participants and are exposed to significant risks and rewards dependent on the commercial success of the collaboration. The Company concluded that Google is not a customer under ASC 606, Revenue from Contracts with Customers, and as such the Company classifies payments to and from Google based on the nature of the items and the underlying activities. Reimbursements received from Google for specific expenses are recognized as a reduction to the related
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
expense incurred. During the year ended December 31, 2025, the Company reduced selling, general, and administrative expenses by $3.3 million related to costs which are reimbursable by Google and are thus fully offset within the period.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. The guidance requires disaggregated disclosure of income statement expenses for public entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The guidance clarifies and enhances the accounting for costs incurred in connection with the development, implementation, and maintenance of internal-use software, including cloud-based arrangements, by removing the previous project stage model for capitalization and introducing a principles-based framework. This ASU is effective for fiscal years beginning after December 15, 2027 and can be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes. The guidance requires public entities to annually disclose specific categories in the rate reconciliation, provide additional information for reconciling items that meet a quantitative threshold, and provide additional disclosures for income taxes paid by jurisdiction. The ASU is effective for annual periods beginning after December 15, 2024. The Company adopted the guidance using a prospective approach and included the required disclosures in Note 5. Income Taxes. This standard update did not affect the Company’s operating results.
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
3. Property and Equipment, Net
Property and equipment, net consists of the following:
December 31,
Less: accumulated depreciation and amortization (205,309) (158,643)
Depreciation and amortization expense consists of the following:
Year Ended December 31,
4. Accrued Expenses
Accrued expenses consists of the following:
December 31,
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
5. Income Taxes
Income (loss) before income taxes consists of the following:
December 31,
The provision for income taxes consists of the following:
December 31,
Current
Federal $ — $ — $ —
Deferred
Federal — — —
State — — —
Foreign — — —
Total provision for income taxes $ 1,402 $ 875 $ 433
The Company recorded a total provision for income taxes of $1.4 million, $0.9 million, and $0.4 million for the years ended December 31, 2025, 2024, and 2023 respectively.
A summary reconciliation of the effective tax rate by amount and percent is as follows:
$ %
U.S. federal statutory rate $ 639 21.0 %
State income taxes, net of federal income tax effect(1) 1,635 53.8 %
Foreign tax effects
Nontaxable or non-deductible items
Non-deductible stock-based compensation 4,629 152.1 %
Non-deductible meals, transportation, and entertainment 407 13.4 %
Other (5) (0.2) %
Change in valuation allowance (5,939) (195.2) %
__________________
(1)The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Texas, New York, Pennsylvania, and Illinois for 2025.
The Company's effective tax rate of 46.1% for the year ended December 31, 2025 differed from the statutory rate primarily due to non-deductible stock based compensation offset by a change in valuation allowance.
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
A summary reconciliation of the effective tax rate is as follows:
December 31,
U.S. federal statutory rate 21.0 % 21.0 %
Non-deductible stock-based compensation (30.4) (20.1)
Change in valuation allowance 4.5 2.3
Effective tax rate (4.5) % (0.7) %
The Company’s effective tax rate of (4.5)% as of December 31, 2024 and (0.7)% as of December 31, 2023 differed from the statutory rate primarily due to non-deductible stock based compensation offset by a change in valuation allowance.
A summary of income taxes paid (net of refunds) for the year ended December 31, 2025 is as follows:
Federal $ —
State
Foreign
Total foreign 111
Total cash paid during the period for income taxes $ 776
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
Deferred income taxes, included in other assets on the consolidated balance sheets, reflects the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The approximate tax effect of the significant components of the Company’s deferred tax assets and liabilities are as follows:
December 31,
Deferred tax assets:
Charitable contribution carryforward 5,216 12,289
Deferred tax liabilities:
Deferred tax assets, net $ — $ —
As of December 31, 2025, the Company had a net operating loss carryforward (“NOL”) of $299.9 million which represents the impact of current and historic operating losses available to reduce future income taxes. Federal NOLs of $68.9 million and state NOLs of $80.2 million will begin to expire at various points beginning in 2033, however, $150.8 million of federal NOLs are available for indefinite use.
As of December 31, 2025 and 2024, the Company recorded a valuation allowance of $56.3 million and $68.5 million, respectively, against its net deferred tax assets because it cannot be reasonably assured that deductible temporary differences and NOLs can be realized through future taxable income due to the Company’s history of losses. The Company will continue to assess the realizability of the deferred tax assets in each of the applicable jurisdictions going forward and assess the valuation allowance accordingly.
As of December 31, 2025 and 2024, there were no uncertain tax positions. As of December 31, 2025 and 2024, the Company was subject to federal, state, and provincial income taxes in the United States and Canada. As a result of the Company’s NOL carryforwards, substantially all of the tax years, beginning with December 31, 2011, remain open and subject to examination. It is the Company’s policy to record interest and penalties as a component of income tax expense. No interest or penalties were recognized in the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2025, 2024, or 2023.
In 2025, the Company calculated the impact of the changes to bonus depreciation and research and development expenditures, as provided by OBBBA. In 2024 and 2023, the Company calculated the impact of the mandatory capitalization and amortization of research and development expenditures, as required by the Tax Act. For the periods ending December 31, 2025, 2024, and 2023, these changes did not have a material impact on the Company’s consolidated financial statements.
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
As a result of the Tax Act, the Company's undistributed foreign earnings through 2017 were deemed to have been repatriated to the United States. The Company's intent is to indefinitely reinvest its foreign earnings generated outside of the United States starting in 2018. The Company's non-U.S. subsidiary will use any cash generated to finance foreign operations. If the Company decides at a later date to repatriate these earnings, the Company could be subject to additional income taxes. The income taxes applicable to such earnings and other outside basis differences are not readily determinable or practicable to calculate.
6. Stockholders’ Equity
Common Stock
As of December 31, 2025, the Company’s Twelfth Amended and Restated Certificate of Incorporation authorizes the issuance of up to 1,050,000 shares of common stock, par value of $0.0001 per share, of which 750,000 shares are designated Class A common stock, 150,000 shares are designated Class B common stock, and 150,000 shares are designated Class C common stock.
Voting Rights
Class A common stock receives one vote per share, Class B common stock receives ten votes per share, and Class C common stock has no voting rights except as required by Delaware law. The number of authorized shares of Class A, B, or C common stock may be increased or decreased (but not below the number of shares then outstanding) by the affirmative vote of the holders of a majority of the voting power of the Company’s stock entitled to vote. Common stock is not redeemable at the option of the holder.
Dividends
The holders of Class A, B, and C common stock shall be entitled to receive dividends in any fiscal year, when, as, and if declared by the Board of Directors, out of any assets at the time legally available therefore, with the holders of common stock and any then outstanding preferred stock sharing on a pari passu basis in such dividends. Through December 31, 2025, no dividends have been declared.
Liquidation
Upon the dissolution or liquidation of the Company, whether voluntary or involuntary, holders of common stock will be entitled to receive assets of the Company available for distribution to its stockholders ratably in proportion to the number of shares held by them, subject to the preferential rights of any then outstanding preferred stock.
Conversion of Class B Common Stock
A total of 2,000 and 2,009 shares of Class B common stock were converted to Class A common stock during the years ended December 31, 2025 and 2024, respectively.
Voluntary Conversion
Each share of Class B common stock is convertible into one share of Class A common stock at the option of the holder thereof with the prior written consent of the Company.
Automatic Conversion
Shares of Class B common stock are only held by Neil Blumenthal and Dave Gilboa, the Company’s Co-CEOs, and their permitted ownership group (as defined in the Certificate of Incorporation). Such shares will automatically convert into shares of Class A common stock on a one-for-one basis upon the earlier of (i) October 1, 2031, (ii) transfer of shares to a person or entity that is not in the transferor’s permitted ownership group, (iii) the date the holder is (a) no longer a member of the Board of Directors, or (b) no longer an employee, officer, or consultant of the Company or its subsidiaries, or (iv) 12 months following the death or disability of the holder.
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Notes to Consolidated Financial Statements
(Amounts in thousands, except per share data)
Outstanding Shares
As of December 31, 2025, outstanding shares of common stock as well as shares of common stock attributable to equity awards are as follows:
Class A Class B Class C
Employee stock options – outstanding 216 1,421 —
Restricted stock units – outstanding 2,042 934 —
Performance stock units – outstanding 236 4,398 —