Purple Innovation (PRPL) investor relations material

Executive summary

• Q3 revenue was $96.5M, down 18.7% YoY, as wholesale weakness outweighed improving DTC momentum; adjusted EBITDA was a $0.5M loss.

• Operating cash flow was positive for the third consecutive quarter; 9M cash from operations was $10.6M, up $38.7M YoY.

• Cash was $28.3M at quarter-end; debt due April 30, 2027 and uncertain financing plans resulted in substantial doubt about continued operations.

• Two Q3 showroom openings brought the network to 57; an early 2027 Essentials and Hybrid refresh covers nearly 90% of mattress unit volume.

Financial highlights

• Q3 revenue was $96.5M versus $118.8M; gross profit was $41.9M versus $56.5M, and operating expenses were $51.7M versus $68.6M.

• Gross margin was 43.4%, down 410 bps YoY; lower production leverage and inventory adjustments outweighed lower tariff costs and favorable channel mix.

• Operating loss improved to $9.8M from $12.1M; GAAP net loss attributable to common stockholders was $1.4M versus $11.7M.

• Q3 adjusted EBITDA was a $0.5M loss versus $0.2M positive; diluted GAAP EPS was $(0.33) versus $(2.71).

• 9M revenue was $290.5M versus $328.0M; net loss attributable to common stockholders was $35.2M versus $48.2M, including a $14.8M warrant fair-value gain.

Outlook and guidance

• FY2026 revenue guidance remains $420M–$440M, assuming stronger Q4 marketing, seasonal DTC strength and new products, partly offset by wholesale pressure.

• FY2026 adjusted EBITDA guidance was reduced to $15M–$20M from $20M–$25M, reflecting continued manufacturing volume deleverage.

• Essentials and Hybrid mattress collections are planned for launch across the next two quarters; Hybrid is planned to replace Restore.

• Management expects positive Q4 showroom same-store comps, positive full-year showroom comps and 60 showrooms by year-end; broader bedding demand is not expected to recover meaningfully in 2026.