Warby Parker Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Warby Parker Inc. operates as a mission-driven, lifestyle brand providing holistic vision care through an integrated omnichannel platform, including eyewear, contacts, and eye care services. As of the reporting date, the company operated 352 retail stores and reported 2.709 million active customers.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Net Revenue | $235.5 million | $214.5 million | $478.0 million | $438.3 million |
| Gross Profit | $136.5 million | $113.6 million | $267.5 million | $239.6 million |
| Gross Margin | 57.9% | 53.0% | 56.0% | 54.7% |
| Net Income (Loss) | $4.6 million | ($1.8 million) | $7.8 million | $1.7 million |
| Adjusted EBITDA | $32.9 million | $25.0 million | $62.4 million | $54.2 million |
| Operating Cash Flow (YTD) | $54.1 million (2026) vs $69.6 million (2025) | |||
| Cash & Equivalents | $292.7 million (as of June 30, 2026) | |||
| Debt | $0 outstanding borrowings; $4.3 million in letters of credit |
Material Changes vs. Prior Period
- Revenue Growth: Net revenue increased 9.8% in Q2 and 9.1% YTD, driven by a 4.1% increase in active customers and higher average revenue per customer ($336 vs. $316).
- Margin Expansion: Gross margin improved significantly (490 bps in Q2) primarily due to an $11.8 million benefit from IEEPA tariff refunds recognized in cost of goods sold.
- Profitability: The company returned to profitability, reporting net income of $4.6 million in Q2 compared to a net loss of $1.8 million in the prior year period.
- Expense Trends: Selling, general, and administrative (SG&A) expenses increased 12.8% in Q2, driven by higher retail payroll and technology costs, partially offset by $4.4 million in reimbursable costs from the Google AI partnership.
Outlook, Risks, and Unusual Items
- Strategic Partnerships: The company is developing AI-enabled glasses with Google. Google has committed up to $75 million for product development costs and up to $75 million in equity investment, subject to milestones. $9.7 million in reimbursable costs have been incurred to date.
- Tariff Environment: Following a Supreme Court ruling striking down certain IEEPA tariffs, the company recorded a $14.4 million receivable for refunds. While $3.4 million was collected by quarter-end, the remaining $11.2 million was collected subsequent to June 30, 2026. New tariffs under other authorities remain a risk.
- Capital Allocation: In February 2026, the Board authorized a $100 million share repurchase program. No shares were repurchased during the first half of 2026.
- Liquidity: The company maintains a $120 million revolving credit facility (undrawn) and believes existing cash and operating cash flows are sufficient for the next 12 months.
- Risks: Key risks include supply chain disruptions, changing trade policies/tariffs, reliance on IT systems, and the ability to manage growth while maintaining margins.
Investor Verification Checklist
- Verify the sustainability of gross margin expansion once the one-time $11.8 million tariff refund benefit is fully realized.
- Monitor the progress and milestone achievements of the Google AI glasses partnership to confirm the potential $75 million equity investment.
- Assess the impact of new tariff regimes on future cost of goods sold, given the company's reliance on imports from China, Italy, Vietnam, and Japan.
- Review the execution of the $100 million share repurchase program and its timing relative to stock price volatility.
- Track the growth of the "Eye Care" segment (revenue grew to $17.2M in Q2) as a driver of higher average revenue per customer.