FIGS (FIGS) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenues were $140.2 million, down 1.5–2% year-over-year, mainly due to lower average order value and challenges in footwear and promotional timing, partially offset by increased orders from existing customers.

• Brand awareness surged from the Olympics campaign, generating over a billion earned media impressions and driving record international and TEAMS (B2B) revenues.

• Strategic investments included a $25 million minority stake in OOG, Inc., an AI-driven healthcare education platform, and continued expansion of community hubs and international markets.

• Completed transition to a new automated fulfillment center, impacting costs and operational ramp-up.

• Free cash flow for Q3 was $18.4 million, with $37.1 million year-to-date, and $7.3 million in share repurchases executed.

Financial highlights

• Net revenues were $140.2 million, down 1.5–2% year-over-year, with U.S. down 4% and international up 17%.

• Gross margin declined to 67.1% (down 1.3–1.4 percentage points), driven by higher discounts and product mix.

• Adjusted EBITDA was $4.8 million (3.4% margin), down from $21.7–24.4 million (17.2%) in Q3 2023.

• Net loss was $1.7 million (diluted EPS loss of $0.01), compared to net income of $6.1 million (EPS $0.03) last year.

• Cash, equivalents, and short-term investments totaled $281.7 million at quarter end, with no debt.

Outlook and guidance

• Full-year 2024 net revenue outlook revised to -1% to flat growth; adjusted EBITDA margin guidance lowered to approximately 8%.

• Full-year gross margin expected to be 150–170 bps lower than 2023.

• Q4 guidance reflects continued footwear headwinds and cautious holiday expectations.

• 2025 expected to benefit from normalization of marketing and fulfillment costs, with further details to be provided in February.

• Management expects existing cash, cash flows, and available credit to be sufficient for at least the next 12 months.