Wayfair (W) Q1 2026 earnings summary

Executive summary

• Net revenue grew 7.4% year-over-year in Q1 2026 to $2.93 billion, with U.S. up 7.5% and international up 6.0%.

• Net loss narrowed to $105 million from $113 million year-over-year, reflecting improved operational efficiency and lower restructuring costs.

• Active customers increased 1.4% year-over-year to 21.4 million, with 79.8% of orders from repeat buyers, highlighting strong customer retention.

• Adjusted EBITDA improved to $151 million (5.2% margin), the best Q1 result in five years.

• Strategic focus on profitable growth, leveraging technology, logistics, and marketing to widen share gains.

Financial highlights

• Gross profit reached $880 million, with gross margin at 30.0%–30.1% of net revenue.

• Contribution margin was 15% in Q1, up 70 basis points year-over-year.

• Adjusted EBITDA was $151 million, with a 5.2% margin, up from $106 million (3.9%) year-over-year.

• Free cash flow was negative $106 million, an improvement from negative $139 million in the prior year.

• Ended Q1 with $1.1 billion in cash and $1.5 billion in total liquidity.

Outlook and guidance

• Q2 2026 revenue expected to grow mid-single digits year-over-year, despite ongoing category contraction.

• Gross margin guidance for Q2 is 29.5%-30.5% of net revenue.

• Adjusted EBITDA margin expected in the 6%-7% range for Q2.

• Management remains confident in long-term online home goods growth and aims to outperform the category.

• Liquidity is sufficient for at least the next twelve months, with $1.1 billion in cash and investments and a $500 million undrawn revolver.