Chewy (CHWY) Q3 2025 earnings summary

Executive summary

• Q3 2024 net sales rose 4.8% year-over-year to $2.88 billion, surpassing guidance high end, driven by active customer growth and increased Autoship participation.

• Autoship customer sales reached $2.3 billion, 80% of net sales, up 8.7% year-over-year, reflecting strong recurring revenue.

• Adjusted EBITDA was $138.2 million (4.8% margin), up 67.4% year-over-year; free cash flow was $151.8 million, up 218%.

• Net income for Q3 was $3.9 million, reversing a prior year loss of $35.4 million.

• Active customers increased sequentially by 160,000 to 20.2 million, with net sales per active customer up 4.2% to $567.

Financial highlights

• Gross margin improved 80 basis points year-over-year to 29.3%, with gross profit at $844 million.

• Adjusted net income was $84.9 million, up 34% year-over-year; GAAP net income was $3.9 million ($0.01 EPS).

• Free cash flow for Q3 was $151.8 million; cash and equivalents at quarter-end were $506.6 million.

• Net margin for Q3 2024 was 0.1%, up from -1.3% in Q3 2023.

• Trailing 12-month free cash flow exceeded $343 million.

Outlook and guidance

• Q4 net sales expected between $3.18–$3.20 billion (approx. 13% year-over-year growth, including 53rd week).

• Full-year 2024 net sales outlook raised to $11.79–$11.81 billion (approx. 6% year-over-year growth).

• Full-year Adjusted EBITDA margin guidance raised to 4.6%–4.8%, with Q4 margin expected to decline sequentially due to seasonality.

• 2024 capital expenditures projected at low end of 1.5%–2% of net sales; free cash flow conversion to remain above 80%.

• Management expects liquidity to be sufficient for at least the next twelve months.