FIGS (FIGS) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenues grew 4.4% year-over-year to $144.2 million, with U.S. growth returning positive and international revenue up 32%, driven by increased orders from existing customers despite a lower average order value.

• Adjusted EBITDA margin was 9.0%, down from 13.7% in Q2 2023, and net income declined to $1.1 million (0.8% margin).

• Inventory declined 29% year-over-year, and active customers increased 6.1% to 2.6 million.

• Major Olympics partnership and marketing campaign launched, including outfitting Team USA Medical Team.

• Board authorized a $50 million share repurchase program, reflecting confidence in liquidity and long-term outlook.

Financial highlights

• Q2 2024 net revenues: $144.2 million, up 4.4% year-over-year, with gross margin at 67.4%, down from 69.5% in Q2 2023.

• Adjusted EBITDA: $12.9 million (9.0% margin), down from $19.1 million (13.7% margin) in Q2 2023.

• Net income: $1.1 million, or $0.01 diluted EPS, versus $4.6 million, or $0.02 diluted EPS, in Q2 2023.

• Free cash flow for the first half of 2024 was $18.7 million; Q2 free cash flow was $7.5 million.

• Cash and cash equivalents at June 30, 2024 were $131.8 million; no outstanding borrowings under the $100 million credit facility.

Outlook and guidance

• Full-year 2024 net revenues expected to be flat to +2% growth versus 2023, with adjusted EBITDA margin guidance of 9.5% to 10%.

• Gross margin for 2024 expected to be 150-200 basis points lower than 2023 due to product mix shift and new product ramp.

• Q3 2024 net revenue growth expected at approximately 1%, with adjusted EBITDA margin of 5.5%-6%.

• 2024 capital expenditures expected to be $18-$19 million, mainly for fulfillment enhancements.

• Fulfillment center transition to be completed by end of Q3 2024, with $2–3 million additional capex anticipated.