RVLV 10-K & 10-Q changes, risk factors and insider trading

Our business and operating results are subject to macroeconomic conditions and trends and their direct and indirect impacts on consumer discretionary spending in the markets in which we operate. Some of the factors and events that have negatively influenced consumer spending, and may do so in the future, include inflationary pressures, fluctuating interest rates and credit availability, increased tariffs and global trade instability, public health crises, high levels of unemployment, high consumer debt levels, reductions in net worth, declines in asset values and related market uncertainty, reductions in home values, home foreclosures, resumption of student loan payments, increases in mortgage rates and rents, adverse developments affecting the financial services industry, government shutdowns, labor strikes, fears of recession, fluctuating currency exchange rates, fluctuating fuel and other energy costs, fluctuating commodity prices, wars and conflicts in Ukraine/Russia, Israel/Gaza and the Middle East,conflicts, other geopolitical tensions, negative consumer sentiment toward U.S.-made products in our international markets, general uncertainty regarding the overall future political and economic environment, and social unrest. Economic conditions in certain regions may also be affected by natural disasters, such as earthquakes, hurricanes, tropical storms and wildfires. Consumer purchases of discretionary items, including the merchandise that we offer, generally decline during periods of economic uncertainty when disposable income is reduced or when there is a reduction in consumer confidence.

Our business requires us to manage a large volume of inventory effectively. We add new products to our sites every week and we depend on our forecasts of demand for and popularity of various products to make purchase decisions and to manage our inventory. Demand for products, however, is difficult to forecast and can change significantly between the time inventory is ordered and the date of sale, resulting in higher inventory levels that may adversely impact our operating results, or insufficient inventory that may adversely impact the conversion of demand for our merchandise. Demand may be affected by macroeconomic factors such as high inflation and low consumer confidence, public health crises, wars and other geopolitical tensions, seasonality, new product launches, rapid changes in product cycles and pricing, product defects, promotions, changes in consumer spending patterns, changes in consumer tastes with respect to our products, and various other factors, such as political instability and social unrest, and our consumers may not purchase products in the quantities that we expect.

Any failure to manage owned brand expansion or accurately forecast demand for owned brands could adversely affect growth, margins and inventory levels. In addition, our ability to meet customer demand may be negatively impacted by a shortage in inventory or appropriate assortment due to reduced inventory purchases or disruptions in the supply chain. Historically, a majority of our owned brand products and a substantial portion of the products we source from third parties have been manufactured in China. Various factors and events outside of our control impact our supply chain and may delay or prevent our manufacturing and may also increase the cost to manufacture or transport product that is sourced in China.China or other countries. In addition, the worsening of U.S.-ChinaU.S. relations with China or other countries, increased tariffs and global trade instability could also negatively impact our supply chain and negatively impact the cost to source from China.China and other countries. While we seek to further diversify our supply chain and sourcing, we may not be able to diversify in a cost-effective manner, or at all, for example as a result of the imposition of future tariffs, which may materially and adversely affect our business, financial condition and operating results. In addition, the supply chain worldwide has in the past been, and may in the future be, negatively impacted by events such as wars and geopolitical tensions, tariffs, public health crises, labor shortages, tariffsshortages and other factors, and diversification of the supply chain and sourcing therefore may not yield the targeted benefits.

We allow our customers to return products, subject to our return policy. If the rate of merchandise returns increases significantly or if merchandise return economics become less efficient, our business, financial condition and operating results could be harmed. Further, we modify our policies relating to returns from time to time, which may result in customer dissatisfaction or an increase in the number of product returns. From time to time our products are damaged in transit, which can increase return rates and harm our brand. We accept merchandise returns for full refund if returned within 30 days of the original purchase date and merchandise may be exchanged up to 60 days from the original purchase date. Due to our liberal return policy and consumer behavior, we have experienced and may in the future experience heightened levels of returns, which have and may continue to negatively impact our operating results and financial position. We have also experienced and may in the future experience increased levels of returns due to changes in consumer shopping behavior and discretionary spending as a result of changes in macroeconomic conditions or consumer confidence, including levels of unemployment, the size and timing of federal stimulus programs, salaries and wage rates, high inflation, high interest rates, recession or fears of recession, housing costs, energy and fuel costs, the resumption of student loan repayments, income tax rates and the timing of tax refunds, consumer perceptions of personal well-being and security, availability of consumer credit and consumer debt levels.

As part of our ongoing business strategy, we expect we will need to continue to introduce new products in our traditional product categories of apparel, footwear, beauty, accessoriesbeauty and home products,accessories, while also expanding our product launches into adjacent categories in which we may have little to no operating experience. The success of product launches in adjacent categories could be hampered by our relative inexperience operating in such categories, the strength of our competitors or any of the other risks referred to above. Furthermore, any expansion into new product categories may prove to be an operational and financial constraint which inhibits our ability to successfully accomplish such expansion. Our inability to introduce successful products in our traditional categories or in adjacent categories could limit our future growth and have a material adverse effect on our business, financial condition and operating results.

Use of social media and influencers may materially and adversely affect our reputation or subject us to regulatory and tax obligations, finesfines, lawsuits or other penalties.

Furthermore, as laws and regulations and public opinion rapidly evolve to govern the use of social media platforms, our ability to use certain platforms, including TikTok in particular, as marketing tools may become limited, restricted or more expensive or complicated, which could adversely impact our business and operating results. For example, on April 24, 2024, President Biden signed into law certainlegislation measuresthat requiringwould have required TikTok’s parent company to selldivest TikTok by January 2025 or face a total ban in the United States. PresidentSubsequent executive actions delayed the effectiveness of such restrictions. After months of negotiations, in January 2026, a deal was seemingly struck between the Trump issuedAdministration anand executiveTikTok orderthat would allow TikTok to delaycontinue to operate in the banUnited until April 2025.States. The failure by us, our employees, our network of social media influencers, our sponsors or third parties acting at our direction to abide by applicable laws and regulations in the use of social media platforms or otherwise, including intellectual property and consumer protection laws andas well as tax reporting and compliance requirements, could subject us to regulatory investigations, class action lawsuits, liability, taxes, fines or other penalties and have a material adverse effect on our business, financial condition and operating results.

In addition, an increase in the use of social media for product promotion and marketing may increase the risk that such content could contain problematic product or marketing claims in violation of applicable regulations. For example, in some cases, the Federal Trade Commission, or the FTC, has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser. Private parties have in the past and may in the future bring claims on a similar basis. We do not prescribe what our influencers post and if we were held responsible for the content of their posts or their actions, we could be fined or forced to alter our practices, which could have an adverse impact on our business.

We establish and maintain relationships with bothinfluencer and celebrity endorsers andas well as design, celebrity and brand collaborators in order to develop, evaluate and promote our products as well as strengthen our brand. In a competitive environment, the costs associated with the establishment and retention of these relationships may increase and there can be no assurance that our investments and efforts will ultimately result in new customers or increased sales to existing customers. If we are unable to maintain current associations or establish new associations in the future, this could adversely affect our brand visibility and strength and result in a negative impact to our financial results. In addition, any repeated or sustained negative shifts in the public or industry perception of any of our celebrity endorsers or collaborators could also seriously harm our brand image with customers and, as a result, could have a material adverse effect on our business, financial condition and operating results.

In an effort to further engage with our customers and build awareness of our brands, we sponsor unique events and experiences, including short-term pop-up retail experiences. WeIn also2024, recentlywe opened our first permanent brick-and-mortar store, arestore in processAspen, ofColorado openingand in 2025, we opened a second physical store in Los Angeles, California and may open additional physical stores in the future. We have limited experience in brick-and-mortar retail. We may not be successful in opening new physical stores and we may not successfully identify the correct markets in which to open stores. If we are unable to cost-effectively expand our presence through brick-and-mortar stores, our operating results and reputation could be materially adversely impacted. Our marketing initiatives have and may continue to become increasingly expensive as competition increases and generating a meaningful return on those initiatives may be difficult. If our marketing efforts are not successful in promoting awareness of our brands and products, driving customer engagement or attracting new customers, or if we are not able to cost-effectively manage our marketing expenses, our operating results will be adversely affected.

We obtain a significant amount of traffic via social networking websites or other channels used by our current and prospective customers. As eCommerce and social networking continue to rapidly evolve, we must continue to establish relationships with these channels and may be unable to develop or maintain these relationships on acceptable terms. We also use paid and non-paid advertising. We acquire and retain customers through paid search and product listing ads, affiliate marketing, paid social media marketing, retargeting, personalized email and SMS marketing and mobile “push” communications through our mobile apps. The recent introduction of AI and LLMs within search and other marketing channels may change consumer search behavior and our ability to cost effectively acquire and retain customers. For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality. If we are unable to adapt to this and similar changes, our net sales growth and profitability may be adversely affected. If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers and our financial condition would suffer.

Our ability to acquire customers in a cost-effective manner also depends on the rates we are charged by various third parties on which we rely, including vendors, suppliers and logistics providers such as UPS, FedEx and DHL.providers. When these third parties increase their rates or add incremental surcharges, it increases our costs. If these third parties continue to increase their rates and add surcharges, and we do not seek to pass them on to our customers, our financial results could be materially adversely impacted.

A majority of the merchandise we offer on our sites is sourced from third-party vendors and, as a result, we may be subject to price fluctuations or demand disruptions. Our operating results would be negatively impacted by increases in the prices of our merchandise and we have no guarantees that prices will not rise. In addition, as we expand into new categories and product types, we expect that we may not have strong purchasing power in these new areas, which could lead to higher prices than we have historically seen in our current categories. We may not be able to pass increased prices on to customers, which could adversely affect our operating results. As a result of supply chain challenges caused by a number of factors and events, such as public health crises, wars and geopolitical tensionstensions, intrade Ukraine/Russia,wars Israel/Gazawith China and theother Middle East,countries, port closures, extreme weather events, strikes and labor shortages, we have in the past experienced, and may in the future experience, delays in the manufacturing and delivery of goods to us. In the event of an extended and significant disruption in the supply of the fabrics or raw materials used in the manufacture of the merchandise we offer, we and the vendors that we work with might not be able to locate alternative suppliers of materials of comparable quality at the right time and at an acceptable price.

We do not own or operate any manufacturing facilities. We use multiple third-party suppliers and manufacturers based primarily in China and, to a lesser extent, the United States and other countries, including India, to source and manufacture all of our owned brand products. Public health crises have in the past led to, and may in the future lead to, the temporary closure and reduced capacity of our manufacturing partners for a period of time, which results in delayed delivery of product to us. In addition, the worsening of U.S.-China relationsrelations, including the U.S. government’s imposition of increased tariffs at various points in time on imports from China, has and may continue to negatively impact our supply chain and our cost to source from China.

We primarily rely on two major vendors for our shipping. If we are not able to negotiate acceptable pricing and other terms with these entities or if they experience capacity constraints, performance problems or other difficulties, it could negatively impact our operating results and our customer experience. Furthermore, volatility in the global oil markets, including as a consequence of wars and geopolitical tension in the Middle East,tensions, has in the past resulted, and may in the future result, in higher fuel prices, which many shipping companies pass on to their customers by increasing fuel surcharges. We have experienced such increased shipping costs, and may experience increasing shipping costs in the future. We have not historically passed on such increased costs to our customers, which may adversely impact our operating results. If we were to pass such cost increases on to our customers in the future, it could adversely impact the demand for our products and we may therefore not be able to pass on such cost increases.

In addition, our ability to receive inbound inventory efficiently and ship merchandise to customers may be negatively affected by public health crises, inclement weather, fire, flood, power loss, earthquakes, labor disputes, acts of war, geopolitical tensions, terrorism, trade embargoes, customs, tariffs and tax requirements, political crises, social unrest and other factors. For example, strikes at major international shipping ports have in the past adversely impacted inventory supply from our vendors. Future strikes, including at shipping ports or logistics providers may adversely impact our inventory supply and ability to ship merchandise to customers. Increased tensions and trade disputes between the United States and Chinaits trading partners have and may continue to lead to increased tariffs on our goods, restrict our useelimination of the de minimis exemption on imported goods, and restrictions in the international flow of our goods and restrictsupplies. As an example, the de minimis exemption for products from China was eliminated on May 2, 2025, and certain international postal items that were eligible for de minimis treatment are now subject to a unique tariff structure with significantly heightened and variable ad valorem or specific duties. These policies may result in adverse or unknown effects, including a potential disruption in the flow of our goods between the United States and China. The de minimis exemption for products from other countries was similarly eliminated on August 29, 2025.

fluctuations in net sales generated from the brands on our sites, including as a result of macroeconomic factors, seasonality trendsfactors and the timing and success of large, in-person events that we host;

inflation levels and our ability to control our costs, including employee wages and benefits, shipping costs, other variable selling costs, marketing costs and other operating expenses;

In addition, we believe that our quarterly operating results may vary in the future and that period-to-period comparisons of our operating results may not be meaningful. For example, our historical growth may have overshadowed the seasonal effects on our historical operating results. These seasonal effects may become more pronounced over time, which could also cause our operating results to fluctuate. You should not rely on the results of one quarter as an indication of future performance.

We base our current and future expense levels on our operating forecasts and estimates of future net sales and gross margins. Net sales and operating results are difficult to forecast because they generally depend on the volume, timing, value and type of the orders we receive, and return rates, all of which are uncertain. In addition, we cannot be sure the same growth rates, trends and other key performance metrics are meaningful predictors of future growth. Our business is affected by general economic and business conditions in the United States and in our international markets. The rapid changes and uncertainty in global trade practices, including tariff rates, make it difficult to predict sales, inventory levels and gross margin. In addition, we experience seasonal trends in our business and our mix of product offerings is highly variable from day-to-day and quarter-to-quarter. This variability makes it difficult to predict sales and could result in significant fluctuations in our net sales, margins and profitability from period-to-period.

target additional categories and price points beyond premium apparel for Millennial and Generation Z consumers, such as luxury, beauty and home products, and men’s apparel;

Our failure to adequately and effectively staff our fulfillment centers, through third parties or with our own employees,employees or through third parties, could adversely affect our customer experience and operating results.

We operate three fulfillment centers located in California and Pennsylvania. If we are unable to adequately staff our fulfillment centers to meet demand or if the cost of such staffing is higher than historical or projected costs due to mandated wage increases, labor shortages, regulatory changes and other business limitations and restrictions, international expansion or other factors, our operating results could be harmed. In addition, operating fulfillment centers comes with potential risks, such as workplace safety issues and employment claims for the failure or alleged failure to comply with labor laws or laws respecting union organizing activities. Various health and safety restrictions imposed by state and local authorities in response to public health crises have in the past and may in the future, adversely impacted our ability to staff our Los Angeles fulfillment center.centers. If government authorities increase regulation or impose new restrictions on businesses due to future public health crises or otherwise, including ones that would require closure of our fulfillment centers,centers or adversely impact our ability to hire and retain sufficient staff, we may not be able to meet customer demand in a timely way which would have a materially adverse impact on our business, operating results, financial condition and prospects. Any such issues may result in delays in shipping times or packing quality and our reputation and operating results may be harmed.

Labor is a significant portion of our cost structure and is subject to many external factors, including unemployment levels, inflation, prevailing wage rates, minimum wage laws, potential collective bargaining arrangements, health insurance costs and other insurance costs, and changes in employment and labor legislation or other workplace regulation. From time to time, legislative proposals are made to increase the federal minimum wage in the United States, as well as the minimum wage in California and a number of other states and municipalities, and to reform entitlement programs, such as health insurance and paid leave programs. As minimum wage rates increase or related laws and regulations change, we have and may need to continue to increase not only the wage rates of our minimum wage employees, but also the wages paid to our other hourly or salaried employees. Changes in immigration enforcement may also impact wages and the cost of recruiting and retaining employees. Any increase in the cost of our labor could have an adverse effect on our business, financial condition and results of operations or if we fail to pay such higher wages, we could suffer increased employee turnover. Increases in labor costs could force us to increase prices, which could adversely impact our sales. If competitive pressures or other factors prevent us from offsetting increased labor costs by increases in prices, our profitability may decline and could have a material adverse effect on our business, financial condition and results of operations. In particular, the job market in Southern California, where our principal offices and two of our fulfillment centers, including our largest fulfillment center, as well as the majority of our employees are located, is very competitive.

Our operating results could be adversely affected by natural disasters, such as wildfireswildfires, floods and earthquakes, public health crises, political crises, terrorist attacks, wars and geopolitical tensions, social unrest and other catastrophic events.

Our principal offices and data centers and two of our fulfillment centers, including our largest fulfillment center, are located in Southern California, an area which has a history of earthquakesearthquakes, power outages, floods and wildfires, and are thus vulnerable to damage. Natural disasters, such as earthquakes, wildfires, hurricanes, tornadoes, floods and other adverse weather and climate conditions; public health crises; political crises; terrorist attacks; wars and geopolitical tensions, including worsening U.S.-China relations; social unrest; and other catastrophic events, whether occurring in the United States or internationally, could disrupt our operations, or the operations of one or more of our third-party providers or vendors, and adversely affect our operating results.

Purchases using mobile devices by consumers generally, and by our customers specifically, have increased significantly and we expect this trend to continue. To optimize the mobile shopping experience, we are dependent on our customers downloading our specific mobile applications for their particular device or accessing our sites from an Internet browser on their mobile device. As new mobile devices and platforms are released, it is difficult to predict the problems we may encounter in developing applications for these alternative devices and platforms and we may need to devote significant resources to the creation, support and maintenance of such applications. In addition, our future growth and our results of operations could suffer if we experience difficulties in integrating our mobile applications into mobile devices, if problems arise with our relationships with providers of mobile operating systems or mobile application download stores, such as those of Apple Inc. or Alphabet Inc., if those providers impose restrictions on the data collection or use practices or other functionality of our applications, if our applications receive unfavorable treatment compared to competing applications, such as the order of our products in the Apple App Store, or if we face increased costs to distribute or have customers use our mobile applications. For example, Apple has imposed requirements for consumer disclosures regarding privacy practices and has implemented an application tracking transparency framework that requires opt-in consent for certain types of tracking. This transparency framework was launched in April 2021 and has negatively impacted the effectiveness of our advertising practices. Additionally, inIn June 2023, Apple announced new SDK privacy controls that it integrated into iOS 17, which was released in September 2023, including new protections designed to limit tracking or identification of user devices. Additionally, Apple Inc. recently updated Apple Mail, including automated inbox categorization, sender-level grouping, and AI-generated email previews. These changes may reduce the visibility and engagement rates of our email communications and may adversely impact our ability to reach customers effectively through the email channel. In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers’ ability to collect app and user data across Android devices. Google began rolling out the Privacy Sandbox on January 4, 2024, and in July 2024, announced its change from a previously-announced plan to phase out third-party cookies in the second half of 2024. We also depend on the interoperability of our sites with popular mobile operating systems that we do not control, such as iOS and Android, and any changes in such systems that degrade the functionality of our sites or give preferential treatment to competitive products could adversely affect the usage of our sites on mobile devices. In the event that it is more difficult for our customers to access and use our sites on their mobile devices, or if our customers choose not to access or to use our sites on their mobile devices or to use mobile products that do not offer access to our sites, our customer growth could be harmed and our business, financial condition and operating results may be materially and adversely affected.

We may expand our business through acquisitions, joint ventures, strategic investments and commercial collaborations, which may divert management’s attention, be difficult to integrate, disrupt our business, dilute stockholder value, prove to be unsuccessful and adversely affect our business, operating results and financial condition.

As part of our long-term growth plans, we have and may continue to acquire, invest in or partner with additional businesses, assets and technologies, and enter into commercial collaborations, which we believe could further complement or expand our business. Such transactions may divert management’s time and focus from operating our business, whether or not they are ultimately completed, and they also may require us to spend a substantial portion of our available cash, incur debt or other liabilities, amortize expenses related to intangible assets or incur write-offs of goodwill or other assets. In addition, integrating acquired businesses or technologies is risky. Completed and future transactions may result in unforeseen operational difficulties and expenditures associated with:

Moreover, we may not benefit from our acquisitions and other strategic transactions as we expect or in the timeframe we expect, which could adversely affect our business, operating results and financial condition. We also may issue additional equity securities in connection with such transactions, which could cause dilution to our stockholders. Finally, our acquisitions and other strategic transactions could be viewed negatively by analysts, investors or customers and cause our stock price to decline.

We purchase our merchandise from numerous domestic and international vendors. Failure of our vendors to comply with applicable laws and regulations and contractual requirements could lead to litigation against us, resulting in increased legal expenses and costs. In addition, the failure of any such vendors to provide safe and humane factory conditions and oversight at their facilities could damage our reputation with customers or result in actual or alleged legal claims against us.

We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and eCommerce.eCommerce, Existingincluding andbut futurenot limited to regulations and laws couldinvolving impedepricing the growth of the Internet, eCommerce or mobile commerce. These regulationspractices and laws may involve online payments, taxes, tariffs, privacy, data protection, data security, anti-spam, content protection, website accessibility, Internet neutrality, artificial intelligence,AI, automated decision making,decision-making, electronic contracts and communications, consumer protection, and gift cards. Additional examples include limitations oncards, marketplace scope or ownership, intermediary liability protections, online platform liability, content moderation, online child safety, marketplace seller regulation, packaging and recycling requirements, seller certification and representative requirements, and know-your-customer/businessbusiness. regulations.Compliance or failure to comply with applicable laws and regulations could impede the growth of our eCommerce or mobile commerce operations.

These laws and regulations are continuously evolving, and compliance is costly and can require changes to our business practices and significant management time and effort. It is not always clear how existing laws governing issues such as property ownership, libel, consumer protection, sales and other taxes, and consumer privacy apply to the Internet as many of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or eCommerce. It is possible that general business regulations and laws, or those specifically governing the Internet or eCommerce, may subject us to inconsistent obligations across jurisdictions.

We strive to comply with all applicable laws, and compliance is often complex and/or operationally challenging. In addition, applicable laws may conflict with each other or our practices and by complying with the laws or regulations of one jurisdiction, we may find that we are violating the laws or regulations of another jurisdiction. We cannot be sure that our practices have complied, comply or will comply fully with all such laws and regulations. Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business and proceedings or actions against us by governmental entities or others.private parties. Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our sites by consumers and suppliers and may result in the imposition of monetary liability. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any such laws or regulations.

We are subject to taxes in several jurisdictions, including the United States and the UK. We record tax expense based on current tax liabilities and our estimates of future tax liabilities, which may include reserves for estimates of probable settlements of tax audits. At any one time, multiple tax years are subject to audit by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. As a result, we expect that throughout the year there could be ongoing variability in our quarterly tax rates as taxable events occur and exposures are re-evaluated.

Further, our tax liability, after-tax profitability and effective tax rate in a given financial statement period may be materially impacted by changes in tax laws, including legislation implementing changes in taxation of international business activities, changes in the mix and level of earnings by taxing jurisdictions or changes to existing accounting rules or regulations. For example, the Inflation Reduction Act of 2022, among other things, imposed a one percent excise tax on certain stock repurchases by public companies. The Organization of Economic Cooperation and DevelopmentDevelopment, or OECD, proposed implementing a global minimum tax of fifteen percent, which has been adopted by many jurisdictions, including the UK, and is being considered by others for implementation. Although these rules are not currently applicable to us, we operate in participating countries that have implemented or are expected to implement these rules. On January 5, 2026, the OECD announced a “side-by-side” elective safe harbor that would exempt electing U.S.-parented multinational entities from the fifteen percent global minimum tax for taxable years beginning on or after January 1, 2026. We continue to evaluate the impact of these tax developments and those under other OECD and non-U.S. rules as new guidance and regulations are published and become applicable. Further, legislation commonly known as the One Big Beautiful Bill Act enacted in July 2025 modifies certain tax provisions that could impact our tax liability and financial condition. There are numerous other factors that could affect our effective tax rate, including, among others, intercompany transactions, losses incurred in jurisdictions for which we are not able to realize the related tax benefits, exercises of stock options and vesting of restricted stock units, and entry into new businesses and geographies. Fluctuations in our tax obligations and effective tax rate could adversely affect our business, financial condition and operating results.

REVOLVE is the next-generation fashion retailer for Millennial and Generation Z consumers. As a trusted premium lifestyle brand and a go-to online source for discovery and inspiration, we deliver exceptional service and an engaging customer experience with a vast yet curated offering totaling over 110,000140,000 apparel and footwear styles, as well as beauty, accessoriesbeauty and home products.accessories. Our dynamic platform connects a deeply engaged community of millions of consumers, thousands of global fashion influencers and over 1,4001,600 emerging, established and owned brands. Through more than 20 years of continued investment in technology, data analytics and innovative marketing and merchandising strategies, we have built a powerful platform and brand that we believe is connecting with the next generation of consumers and is redefining fashion retail for the 21st century.retail.

We sell merchandise through two complementary segments, REVOLVE and FWRD, that leverage one platform. Through REVOLVE, we offer an assortment of premium apparel, footwear, beauty, accessoriesbeauty and home productsaccessories from emerging, established and owned brands. Through FWRD, we offer an assortment of curated and elevated iconic and emerging luxury brands. REVOLVE has historically been focused on the discovery of trend-driven, ready-to-wear styles, while FWRD has been more heavily weighted toward the statement pieces in our customers’ wardrobe, such as shoes and handbags. We believe that FWRD provides our customer with a unique destination for luxury products as our customers’ spending power increases and their desire for fashion and inspiration remains central to their self-expression.

Non-routine items in 2025 primarily represent an accrual for certain pending legal matters. Non-routine items in 2024 included a $2.0 million non-routine loss related to a shipment theft incident, which wewas expect to recoverrecovered in full through our insurance in future periods,2025, and a $0.5 million charge for a settled matter related to non-routine import and export fees. Non-routine items in 2023 included $7.5 million in legal fees and charges for two separate settled legal matters and $2.8 million related to non-routine import and export fees. Non-routine items in 2022 included $6.3 million in legal fees and charges for a settled legal matter and $0.1 million in other non-routine items.

To provide investors with additional information regarding our financial results, we have also disclosed in the table above and elsewhere in this report free cash flow, a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used in purchases of property and equipmentequipment, and purchases of rental product, net of proceeds from the sale of rental product. We have provided below a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure.

The following table presents a reconciliation of free cash flow to net cash provided by operating activities, as well as information regarding net cash used in investing activities and net cash (used in) provided by financing activities, for each of the periods indicated:

We define average order value as the sum of the total gross sales from our sites in a given period, prior to product returns, divided by the total orders placed in that period. In 2024,2025, average order value for merchandise sold through the REVOLVE and FWRD segments was approximately $281$279 and $666,$640, respectively, reflecting the brands soldsold, category mix and typical profile of the shoppers on such sites. We believe our high average order value demonstrates the premium nature of our product assortment. We believe that average order value is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. Average order value varies depending on the site through which we sell merchandise, the percentage of sales at full price, and for sales at less than full price, the level of markdowns on these products, product mix, and the number of units per order. Average order value can be adversely impacted by negative consumer sentiment, including as a result of tariffs. A shift in product mix toward lower-priced products or categories may also reduce our average order value. In the near-term, average order value may decrease year-over-year given the challenging macroeconomic environment, as customers seek to purchase products at more accessible price points. We expect this potential decrease to be at least partially offset by price increases as a result of the actual or anticipated effects of incremental tariffs that were in effect at various times and rates over the course of 2025 and early 2026, though any long-term impact remains unclear. The impact of tariffs may also impair comparability of average order value with prior periods. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Average order value increaseddecreased slightly during 20242025 as compared to 2023,2024, primarily due to a higherlower percentageaverage ofselling salesprice atand fulla price.shift in product mix.

The overall economic environment and related changes in consumer behavior have a significant impact on our business. In general, positive conditions in the broader economy promote customer spending on our sites, while economic weakness, which generally results in a reduction of customer spending, may have a more pronounced negative effect on spending on our sites. Macro factors that can affect consumer confidence, shopping behavior and spending patterns, and thereby our near-term and long-term results of operations, include tariffs imposed by the U.S. or foreign governments or a global trade war, inflation levels, employment rates, business conditions, changes in the housing market, changes in the stock market, adverse developments affecting the financial services industry, the availability of credit, resumption of student loan payments, U.S. government stimulus payments, interest rates, foreign currency exchange rates, fuel, energy and raw material costs, supply chain challenges, and wars and geopolitical tensions. In addition, during periods of low unemployment, we generally experience higher labor costs.

If our marketing efforts do not connect with our customer or fail to cost-effectively promote our brands or convert impressions into new customers, our net sales growth and profitability will be adversely affected. Competition forThe social media and influencer-based marketing channelslandscape continues to increase,shift makingand itcompetition moreremains difficultintense, which may adversely impact our ability to differentiate ourselves and cost-effectively acquire and retain customers. Furthermore, changes in the user experience on search, social media and other platforms, including recent developments in artificial intelligence, or AI, and the introduction of large language models, or LLMs, a shift towards video and the level of recommended content as well as changes in privacy practices by third parties, may make it more difficult to gain customer awareness and cost effectivelycost-effectively acquire and retain customers. For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality, which may change consumer search behavior and affect our ability to cost-effectively acquire and retain customers. Additionally, Apple Inc. has imposed requirements for consumer disclosures regarding privacy practices, and has implemented an application tracking transparency framework that requires opt-in consent for certain types of tracking. This transparency framework was launched in April 2021 and has made it more difficult and costly to acquire and retain customers. Additionally, in June 2023, Apple announcedInc. introduced new software development kit, or SDK,SDK privacy controls in 2023 that it has integrated into iOS 17, which was released in September 2023, including new protections designed to limit tracking or identification of user devices. Apple Inc. has also updated Apple Mail, including automated inbox categorization, sender-level grouping, and AI-generated email previews. These changes may reduce the visibility and effectiveness of our email communications, which could negatively impact customer engagement and, over time, affect customer retention. In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers’ ability to collect app and user data across Android devices, and in July 2024, announced its change from a previously-announced plan to stop supporting third-party cookies in its Google Chrome browser as a part of this initiative.

The following chart illustrates the spending behavior of our customer cohorts over time, as reflected in customer purchases of our products annually. Cohort net sales retention rate is calculated as net sales attributable to a given customer cohort divided by the total net sales attributable to the same customer cohort from one year prior. Cohort net sales retention rate was 85%89% in 20242025 compared to 85% in 2024, 77% in 2023,2023 and 97% in 2022, 120% in 2021 and 74% in 2020.2022. If we are unable to maintain our historically strong retention rates, our operating results could be adversely impacted.

We offer merchandise across a variety of product types, brands and price points. The brands we sell on our platform consist of a mix of emerging third-party, established third-party (including iconic luxury brands) and owned brands. Our product mix consists primarily of apparel, footwear, beauty, accessoriesbeauty and home products.accessories.

The FWRDREVOLVE segment contributes to a smaller portionmajority of our overall net sales, representing 14.1%86.0% and 15.4%85.9% of our net sales for 20242025 and 2023,2024, respectively. During 20242025 and 2023,2024, FWRDREVOLVE generated $159.4$1,054.0 million and $164.2$970.5 million in net sales, respectively, representing aan decreaseincrease of 2.9%.8.6%. The net sales decreaseincrease in 20242025 compared to 20232024 was primarily due to aan decreaseincrease in the number of orders shipped.shipped and a lower proportion of returned purchases.

NetThe salesFWRD segment contributes to customersa insmaller theportion Unitedof Statesour contributedoverall tonet 80.0%sales, representing 14.0% and 81.4%14.1% of our net sales for 20242025 and 2023,2024, respectively. During 20242025 and 2023,2024, netFWRD salesgenerated to customers in the United States were $903.5$171.6 million and $870.4$159.4 million,million in net sales, respectively, representing an increase of 3.8%.7.7%. The net sales increase in 2025 compared to 2024 was primarily due to an increase in the number of orders shipped, partially offset by a lower average order value.

Net sales to customers outside ofin the United States contributed to 20.0%79.3% and 18.6%80.0% of our net sales for 20242025 and 2023,2024, respectively. During 20242025 and 2023,2024, net sales to customers outside ofin the United States were $226.4$972.4 million and $198.3$903.5 million, respectively, representing an increase of 14.2%.7.6%.

Net sales to customers outside of the United States are impacted by various factors including import and export taxes, currency fluctuations and other macroeconomic conditions described in “—Overall Economic Trends” above. In addition, any weakening of a local currency versus the U.S. dollar results in our products becoming more expensive in that local currency, which at times has had, and may continue to have, a negative impact on demand for our products in the geographies that use such currency.

Seasonality in our business has not historically followed that of traditional retailers which typically experience concentration of net sales in the fourth quarter in connection with the holidays. Our operating income has also been affected by these historical trends because many of our expenses are relatively fixed in the short term. If our growth rates moderate over the long-term, the impact of these seasonality trends on our results of operations may become more pronounced. Our seasonality trends have also been impacted by macroeconomic conditions described in “—Overall Economic Trends” above.

Net sales consist primarily of sales of women’s apparel, footwear, beauty, accessoriesbeauty and home products.accessories. We recognize product sales at the time control is transferred to the customer, which is when the product is shipped. Net sales represent the sales of these items and shipping revenue when applicable, net of estimated returns and promotional discounts. Net sales are primarily driven by growth in the number of our customers, the frequency with which customers purchase, the proportion of returned merchandise and average order value. Net sales may be impacted by tariffs and other changes to trade policy, particularly in the near term. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Cost of sales consists of our purchase price for merchandise sold to customers and includes import duties, net of drawback claims, and other taxes, inbound freight costs, receiving costs, defective merchandise returned from customers, inventory valuation adjustments, and other miscellaneous shrinkage. Cost of sales is primarily driven by the cost of the product, the number of total orders placed by customers, the mix of the product available for sale on our sites and transportation costs related to inventory receipts from our vendors. We expect our cost of sales to fluctuate as a percentage of net sales primarily due to how we manage our inventory and merchandise mix. We have recently experienced and may continue to experience an increase in the cost of goods due to an increase in the cost of materials.materials and as a result of increased tariffs, particularly on products with a China origin.

Marketing expenses consist primarily of costs to execute targeted online performance marketing costs,campaigns across free and paid channels, such as paid search/product listing ads, affiliate marketing, paid social, retargeting, search engine optimization, personalized email and SMS marketingmarketing, and mobile “push” communications through our mobile applications. Marketing expenses also consist of investment in brand marketing channels, including events, payments to influencers and other forms of online and offline marketing. Marketing expenses are primarily related to growing and retaining our customer base and building the REVOLVE and FWRD brands. Over the long term, we expect marketing expenses to increase in absolute dollars as we continue to scale our business, and may fluctuate as a percentage of sales depending on net sales volume, the level of marketing investment in a particular period and the competitive environment. We may make opportunistic investments in marketing initiatives that may increase marketing as a percentage of net sales to levels in excess of historical levels for certain quarters or periods of time in the future.

General and administrative expenses consist primarily of payroll and related benefit costs and equity-based compensation expense for our employees involved in general corporate functions, as well as costs associated with the use by these functions of facilities and equipment, such as depreciation, rent and other occupancy expenses. Over the long-term, we expect general and administrative expenses to continue to increase in absolute dollars to support business growth with general and administrative expenses as a percentage of net sales declining over the long-term as we leverage our investments and as our business scales. General and administrative expenses as a percentage of net sales may also increase if we are unable to adjust our cost structure for changes in customer demand and net sales.

Other income, net consists primarily of interest income on our money market funds, partially offset by foreign currency exchange gains and losses and fees associated with our line of credit. For 2025, other income, net includes $4.5 million of insurance proceeds related to a previously disclosed shipment theft incident and a $2.4 million loss on deconsolidation of a subsidiary. For 2024 and 2023, other income, net also includes $2.8 million and $5.1 million of insurance proceeds related to settled legal matters, respectively.

The increase in net sales for 20242025 compared to 20232024 was primarily due to a 6.9% increase in the number of orders shipped combined with a lower proportion of returned purchases, apartially 1.9%offset increase in the number of orders shipped, andby a 1.7%1.0% increasedecrease in the average order value.

Net sales in the REVOLVE segment increased 7.3%8.6% to $970.5$1,054.0 million in 20242025 compared to net sales of $904.5$970.5 million in 2023.2024. Net sales generated from our FWRD segment decreasedincreased 2.9%7.7% to $159.4$171.6 million in 20242025 as compared to net sales of $164.2$159.4 million in 2023.2024.

The increase in cost of sales in 2024,2025, as compared to 2023,2024, was primarily due to an increase in net sales and an increase in inbound shipping expenses to receive product merchandise from vendors.sales. The decrease in cost of sales as a percentage of net sales was primarily due to a higherlower mix of third-party brand sales and shallower markdowns within markdown sales, partially offset by a lower percentage of full price sales,sales partiallyand offsetthe byimpact of increased inboundimport shippingtariff rates and a higher mix of third-party brand sales.rates.

FulfillmentThe increase in fulfillment expenses in 2024 were higher2025, as compared to 2023,2024, was primarily due to increasedan occupancyincrease costs,in partiallythe offset by efficiencies gained from successful expansion and optimizationnumber of ourunits fulfillment network.processed. The decrease in fulfillment expenses as a percentage of net sales was primarily due to an increase in average order value and a lower proportion of returned purchases.purchases, partially offset by a decrease in average order value.

The decreaseincrease in selling and distribution expenses in 2024,2025, as compared to 2023,2024, was primarily due to increases in orders placed and net sales that resulted in a $7.1$8.1 million decreaseincrease in shipping and handling costs, a $0.4$2.4 million decreaseincrease in othercustomer sellingservice expenses, partially offset by a $5.6$2.2 million increase in merchant processing fees.fees and a $1.8 million increase in other selling expenses. The decrease in selling and distribution expenses as a percentage of net sales was primarily due to lowerefficiencies gained in our shipping rates,logistics and lower proportion of returned purchases and higher average order value,purchases, partially offset by higherlower merchantaverage processingorder fees.value.

The decreaseincrease in marketing expenses in 2024,2025, as compared to 2023,2024, was primarily due to a $8.7$16.5 million decreaseincrease in brandperformance marketing expense, partially offset by a $4.1$8.3 million increasedecrease in performancebrand marketing expense. The decrease in marketing expenses as a percentage of net sales was primarily due to efficiencies in our brand marketing and performance marketing investments.

The increase in general and administrative expenses in 2024,2025, as compared to 2023,2024, was primarily due to a $7.9 million increase in salaries and related benefits, a $6.0$7.2 million increase related to professional services and other occupancy costs, a $4.2$5.0 million increase in salaries and related benefits and equity-based compensation expense, a $1.1$0.7 million increase in studionon-routine and designtransaction costs and a $4.2$2.0 million increase in other operating expenses and transaction costs, partially offset by a $7.9 million decrease in non-routine expenses. The slight increase in general and administrative expenses as a percentage of net sales was driven by growthincreased investment in generalstrategic growth initiatives and administrativean expenses outpacing growthincrease in netnon-routine sales.and transaction costs.

The decreaseincrease in the effective tax rate forin 20242025, as compared to 20232024, was primarily due to ana increasedecrease in excess tax benefits related to the exercise of non-qualified stock options, partially offset by a lower proportion of foreign-derived intangible income and an increase in disallowed expenses related to Section 162(m) of the Internal Revenue Code for covered employee's compensation.options.

Since our inception, we have financed our operations and capital expenditures primarily through cash flows generated by operations,operations and to a much lesser extent private sales of equity securities, the incurrence of debt, the net proceeds we received through our IPO, as well as proceeds received from the exercise of stock options.

On MarchFebruary 23,2, 2021,2026, we amended and restated our existing credit agreement to, among other things, extend the expirationmaturity date from March 23, 20212026 to MarchFebruary 23,2, 2026. On May 11, 2023, we amended the credit agreement to replace the LIBO reference rate with a term SOFR reference rate and made conforming changes throughout the credit agreement.2031. The line of credit provides us with up to $75.0 million aggregate principal in revolver borrowings, based on eligible inventory and accounts receivable less reserves. Borrowings under the credit agreement accrue interest,interest at a per annum rate equal to, at our option, at (1) a base rate equal to the highest of (a) the federal funds rate, plus 0.50%, (b) the prime rate and (c) an adjusteda term SOFR rate determined on the basis of a one-month interest period, plus 1.00%, or (2) an adjusteda term SOFR rate, subject to a floor of 0.00%, in each case, plus a margin ranging from 0.25% to 0.75% per year in the case of base rate loans, and 1.25% to 1.75% per year in the case of term SOFR rate loans.loans, depending upon availability under the credit agreement as of the most recently ended fiscal quarter. No borrowings were outstanding as of December 31, 20242025 and 2023.2024.

We are also obligated to pay other customary fees for a credit facility of this size and type, including an unused commitment fee. The credit agreement also permits us, in certain circumstances, to request an increase in the facility by an additional amount of up to $25.0 million (in an initial minimum amount of $10.0 million and in increments of $5.0 million thereafter) at the same maturity, pricing and other terms.terms as the existing revolving commitments. Our obligations under the credit agreement are secured by substantially all of our assets.assets and the assets of our subsidiaries that are borrowers or guarantors under the credit agreement. The credit agreement also contains customary covenants restricting certain of our activities, including limitations on our ability to sell assets, engage in mergers and acquisitions, enter into transactions involving related parties, obtain letters of credit, incur indebtedness, repurchase stock or grant liens or negative pledges on our assets, make loans or make other investments. Under these covenants, we are prohibited from paying cash dividends with respect to our capital stock.stock, subject to certain exceptions. We wereare inalso compliancerequired withto allmaintain financiala covenantsminimum consolidated fixed charge coverage ratio of 1.00 to 1.00 for any twelve consecutive fiscal month period, determined as of Decemberthe 31,last 2024date andof 2023.each fiscal quarter.

We generated $26.7$59.4 million of operating cash flow in 20242025 compared to $43.3$26.7 million in 2023.2024. The decreaseincrease in our operating cash flow was primarily due to negative impact from changes in working capital, partially offset by higher net income adjusted for certain non-cash items.items and positive impact from changes in working capital.

Our primary investing activities have consisted of purchases of property and equipment to support our fulfillment centers and our overall business growth and internally developed software for the continued development of our proprietary technology infrastructure.infrastructure, Inleasehold addition,improvements for 2024,in our investingretail activitiesstore includedlocations, purchases of rental product and cashproceeds paidfrom forsale anof acquisition.rental product. Purchases of property and equipment may vary from period-to-period depending on the timing and extent of the expansion of our operations Net cash used in investing activities was $9.1 million and $4.2 million in 2024 and 2023, respectively.operations.

Net Cash (Used in) Provided by Financing Activities

Net cash used in financing activities was $1.4 million in 2025 compared to $5.4 million in 2024 and was primarily attributable to repurchases of shares of our Class A common stock under our stock repurchase program, partially offset by cash proceeds from the exercise of stock options. Net cash used in financing activities was $30.4 million in 2023 and was primarily attributable to repurchases of shares of our Class A common stock under our stock repurchase program.

For example, since February 2025, the U.S. government has imposed incremental tariffs on most goods imported from China,China and other U.S. trading partners including India, Turkey and Indonesia, from which we source a significant portion of our products, subject towith certain exceptions. These include reciprocal and fentanyl-related tariffs of 10% or more imposed under the IEEPA and a temporary import surcharge of 10% imposed under Section 122 of the Trade Act of 1974, which expired on July 24, 2026. At various points in 2025, the total tariff rate on our goods imported from China briefly reached 145.0%, before eventually decreasing to the current level of 10%.145.0%. These tariffs are in addition to a pre-existing Section 301 tariff of 7.5% and baseline HTS tariffs, which vary by product. In addition, U.S. tariffs on goods imported from certain other countries from which we source products included an incremental reciprocal tariff of 10% imposed since April 2025 and higher reciprocal tariff rates at certain points in time for many U.S. trading partners including Japan, Turkey, Indonesia and India.

In an effort to further engage with our customers and build awareness of our brands, we sponsor unique events and experiences, including short-term pop-up retail experiences. In 2024, we opened our first permanent brick-and-mortar store in Aspen, Colorado and in 2025, we opened a second physical store in Los Angeles, CaliforniaCalifornia. We expect to open a third physical store in Miami, Florida in 2026 and may open additional physical stores in the future. We have limited experience in brick-and-mortar retail. We may not be successful in opening new physical stores and we may not successfully identify the correct markets in which to open stores. If we are unable to cost-effectively expand our presence through brick-and-mortar stores, our operating results and reputation could be materially adversely impacted. Our marketing initiatives have and may continue to become increasingly expensive as competition increases and generating a meaningful return on those initiatives may be difficult. If our marketing efforts are not successful in promoting awareness of our brands and products, driving customer engagement or attracting new customers, or if we are not able to cost-effectively manage our marketing expenses, our operating results will be adversely affected.

We obtain a significant amount of traffic via social networking websites or other channels used by our current and prospective customers. As eCommerce and social networking continue to rapidly evolve, we must continue to establish relationships with these channels and may be unable to develop or maintain these relationships on acceptable terms. We also use paid and non-paid advertising. We acquire and retain customers through paid search and product listing ads, affiliate marketing, paid social media marketing, retargeting, personalized email and SMS marketing and mobile “push” communications through our mobile apps. TheWhile recentwe introductioncannot predict the ultimate impact on Google’s future operations of AIthe andU.S. LLMsDepartment withinof searchJustice’s andantitrust otherlawsuits marketingagainst channelsGoogle, isany changingresulting consumerreduction searchin behaviorthe andnumber mayof impactvisitors directed to our sites could negatively affect our ability to cost effectively acquire and retainnew customers. For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality. If we are unable to adapt to this and similar changes, our net sales growth and profitability may be adversely affected. If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers and our financial condition would suffer.

The growing use of AI and LLMs within search and other marketing channels is changing consumer search behavior and may increasingly enable consumers to discover, evaluate and purchase apparel and other products without visiting our sites directly, which may impact our ability to cost-effectively acquire and retain customers. For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality. If our products and brands become less widely discoverable through AI-driven search and agentic commerce, our net sales growth and profitability may be adversely affected Our ability to acquire customers in a cost-effective manner also depends on the rates we are charged by various third parties on which we rely, including vendors, suppliers and logistics providers. When these third parties increase their rates or add incremental surcharges, it increases our costs. If these third parties continue to increase their rates and add surcharges, and we do not seek to pass them on to our customers, our financial results could be materially adversely impacted.

We are also subject to risks of damage, theft or loss during delivery by our shipping vendors. If our merchandise is not delivered in a timely fashion or is damaged, stolen or lost during the delivery process, our customers could become dissatisfied and cease shopping from us, which would adversely affect our business and operating result.results.

expand internationally; and enter into strategic partnerships and pursue strategic acquisitions and investments.

We operate three primary fulfillment centers located in California and Pennsylvania. If we are unable to adequately staff our fulfillment centers to meet demand or if the cost of such staffing is higher than historical or projected costs due to mandated wage increases, employee turnover, labor shortages, regulatory changes and other business limitations and restrictions, international expansion or other factors, our operating results could be harmed. In addition, operating fulfillment centers comes with potential risks, such as workplace safety issues and employment claims for the failure or alleged failure to comply with labor laws or laws respecting union organizing activities. Various health and safety restrictions imposed by state and local authorities in response to public health crises have in the past and may in the future, adversely impacted our ability to staff our fulfillment centers. If government authorities increase regulation or impose new restrictions on businesses due to public health crises or otherwise, including ones that would require closure of our fulfillment centers or adversely impact our ability to hire and retain sufficient staff, we may not be able to meet customer demand in a timely way which would have a materially adverse impact on our business, operating results, financial condition and prospects. Any such issues may result in delays in shipping times or packing quality and our reputation and operating results may be harmed.

We participate in duty drawback programs that allowsallow us to recover customs duties paid on certain products imported into the U.S. and subsequently exported to another country. In addition, for merchandise returned by customers in certain countries, we refund the full amount of the customers purchase to the customer, including applicable duties and taxes and separately recover the amount of duties and taxes from the relevant government authority. The amounts eligible for recovery under these programs has increased over time as our international operations have grown.

Further, our tax liability, after-tax profitability and effective tax rate in a given financial statement period may be materially impacted by changes in tax laws, including legislation implementing changes in taxation of international business activities, changes in the mix and level of earnings by taxing jurisdictions or changes to existing accounting rules or regulations. For example, the Inflation Reduction Act of 2022, among other things, imposed a one percent excise tax on certain stock repurchases by public companies. The Organization offor Economic CooperationCo-operation and Development, or OECD, proposed implementing a global minimum tax of fifteen percent, which has been adopted by many jurisdictions, including the UK, and is being considered by others for implementation. Although these rules are not currently applicable to us, we operate in participating countries that have implemented or are expected to implement these rules. On January 5, 2026, the OECD announced a “side-by-side” elective safe harbor that would exempt electing U.S.-parented multinational entities from the fifteen percent global minimum tax for taxable years beginning on or after January 1, 2026. We continue to evaluate the impact of these tax developments and those under other OECD and non-U.S. rules as new guidance and regulations are published and become applicable. Further, legislation commonly known as the One Big Beautiful Bill Act enacted in July 2025 modifiesmodified certain tax provisions that couldhad an impact on, and may in the future have an additional impact on, our tax liability and financial condition. There are numerous other factors that could affect our effective tax rate, including, among others, intercompany transactions, losses incurred in jurisdictions for which we are not able to realize the related tax benefits, exercises of stock options and vesting of restricted stock units, and entry into new businesses and geographies. Fluctuations in our tax obligations and effective tax rate could adversely affect our business, financial condition and operating results.

The majority of our servers are located in close proximity to one another in Southern California and are vulnerable to power outages, telecommunications failures and catastrophic events. Like other online services, they are also vulnerable to computer viruses, malware, computer hacking, fraudulent use, credential stuffing attacks, unauthorized access, phishing or social engineering attacks, ransomware attacks, denial-of-service attacks, exploitation of bugs and vulnerabilities, system malfunctions, failures, terrorism, inadvertent or intentional acts by our employees and contractors and other real or perceived cyberattacks. Any of these incidents could lead to interruptions or shutdowns of our platform, loss, unavailability or corruption of data, or unauthorized access to or alteration, use, acquisition or disclosure of personal data or other sensitive information. Cyberattacks could also result in the theft of our intellectual property. We have been subject to phishing and social engineering attacks in the past and may continue to be subject to such attacks in the future. If we gain greater visibility, we may face a higher risk of being targeted by cyberattacks. Advances in computer capabilities, new technological discoveries or other developments may result in cyberattacks becoming more sophisticated and more difficult to detect. The increasing use and adoption of AI may increase the likelihood of security breaches and incidents, may lead to increased frequency and intensity of cyberattacks, and may magnify the impact of security breaches and incidents. For example, AI may be used to identify and exploit security vulnerabilities with volume and efficiency significantly greater than other methods not making use of AI. We and our third-party service providers may not have the resources or technical sophistication to anticipate or prevent all such cyberattacks, and we or they may face difficulties or delays in identifying and responding to cyberattacks and data security breaches and incidents. In particular, our vendors and service providers may also be the targets of cyberattacks, malicious software, phishing schemes, and fraud, and our third-party vendors’ and service providers’ systems and networks may be, or may have been, breached or contain exploitable defects or bugs that could result in a breach of or disruption to our or their systems and networks. Our ability to monitor our vendors and service providers’ data security is limited, and, in any event, third parties may be able to circumvent those security measures, resulting in the unauthorized access to, misuse, acquisition, disclosure, loss, alteration, or destruction of our and our customers’ data, including confidential, sensitive, and other information about individuals. Moreover, techniques used to obtain unauthorized access to systems change frequently and may not be known until launched against us or our third-party service providers. Security breaches and incidents can also occur as a result of non-technical issues, including phishing attacks, social engineering, and other intentional or inadvertent actions by our employees, our third-party service providers, or their personnel. Our third-party service providers also face these risks. Additionally, with many of our employees and employees of our service providers now working remotely, we and our service providers have less capability to monitor and enforce our data protection and data security policies and face increased privacy, data protection and data security risks.

We use AI and machine learning in our business to, among other things, optimize our product assortment and personalize our website experience through advanced search and product recommendations. We may expand our use of AI and machine learning into other areas of our business including the design and development of owned brand merchandise and general administrative functions. Issues relating to our use of new and evolving technologies such as AI may cause us to experience brand or reputational harm, competitive harm, legal liability and new or enhanced governmental or regulatory scrutiny, and to incur additional costs to resolve such issues. For example, AI algorithms are based on machine learning and predictive analytics, which can include unexpected biases and lead to discriminatory outcomes. Further, the use of AI can pose significant risks of data leakage, which could lead to loss, disclosure, dissemination, or other unauthorized processing of our data (including trade secrets or other confidential information, intellectual property, proprietary business information, and personal information), data that is maintained or otherwise processed on our behalf, or other assets, which could result in financial, legal, business and reputational harm to us. In addition, perceived or actual technical, legal, compliance, privacy, security, ethical or other issues relating to the use of AI could undermine the decisions, predictions or analysis that AI applications produce and create additional risks, such as risks of cybersecurity incidents, all of which could adversely affect our business and operating results. The use of AI involves significant technical complexity and requires specialized expertise. Any disruption or failure in our AI-based systems or technology infrastructure could result in delays or errors in our operations, which could harm our business and operating results. Moreover, developing, testing and deploying AI systems may also increase our operating expenses due to the nature of the computing costs involved in such systems.

Our Class A common stock has one vote per share and our Class B common stock has ten votes per share. As of MarchJune 31,30, 2026, our co-chief executive officers and MMMK Development, Inc., an entity controlled by our co-chief executive officers, collectively beneficially owned approximately 42%43% of the outstanding shares of common stock and collectively controlled approximately 88% of the voting power of our outstanding common stock. Our co-chief executive officers therefore are able to control all matters submitted to our stockholders for approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or our assets, even though their stockholdings represent less than 50% of the number of outstanding shares of our capital stock. Our co-chief executive officers may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership will limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to you or that may not be aligned with your interests.

We sell merchandise primarily through two complementary segments, REVOLVE and FWRD, that leverage one platform. Through REVOLVE, we offer an assortment of premium apparel, footwear, beauty and accessories from emerging, established and owned brands. Through FWRD, we offer an assortment of curated and elevated iconic and emerging luxury brands. REVOLVE has historically been focused on the discovery of trend-driven, ready-to-wear styles, while FWRD has been more heavily weighted toward the statement pieces in our customers’ wardrobe, such as shoes and handbags. We believe that FWRD provides our customer with a unique destination for luxury products as our customers’ spending power increases and their desire for fashion and inspiration remains central to their self-expression.

To date, we have successfully expanded internationally with limited investment and physical presence. Our ongoing initiative to elevate the international service levels and customer experience has been a key contributor to our growth. We also offer REVOLVE products on international marketplaces such as Tmall Global, REDGlobal and DouyinRED in China and Nykaa Fashion in India, to expand our distribution reach in these key geographies. We intend to continue to invest in and develop international markets while maintaining our focus on the core U.S. market.

A reconciliation of Adjusted EBITDA to net income for the three and six months ended MarchJune 31,30, 2026 and 2025 is as follows:

Active customers increased during the period ended MarchJune 31,30, 2026 compared to the same period in 2025 primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts.

Total orders placed increased in the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods in 2025, primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts.

We define average order value as the sum of the total gross sales from our sites in a given period, prior to product returns, divided by the total orders placed in that period. We believe that average order value is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. Average order value varies depending on the site through which we sell merchandise, the percentage of sales at full price, and for sales at less than full price, the level of markdowns on these products, product mix, and the number of units per order. Average order value can be adversely impacted by negative consumer sentiment, including as a result of tariffs. A shift in product mix toward lower-priced products or categories may also reduce our average order value. In the near-term, average order value may decrease year-over-year due to net sales of Grow-Good hair care products created in partnership with Cardi B following its successful launch in the second quarter of 2026. We expect this potential decrease to be at least partially offset by price increases as a result of the actual or anticipated effects of incremental tariffs that were in effect at various times and rates over the course of 2025 and early 2026, though any long-term impact remains unclear. The impact of tariffs may also impair comparability of average order value with prior periods. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Average order value increased in the three and six months ended MarchJune 31,30, 2026,2026 relativewas relatively flat compared to the same periodperiods in 2025, primarily due toas an increase in average selling price,price partiallywas offset by a decrease in units per order.order and a mix shift resulting from initial sales of Grow-Good hair care products, which have a much lower average order value.

For example, since February 2025, the U.S. government has imposed incremental tariffs on most goods imported from China,China and other U.S. trading partners including India, Turkey and Indonesia, from which we source a significant portion of our products, subject towith certain exceptions. These include reciprocal and fentanyl-related tariffs of 10% or more imposed under the International Emergency Economic Powers Act, or IEEPA, and a temporary import surcharge of 10% imposed under Section 122 of the Trade Act of 1974, which expired on July 24, 2026. At various points in 2025, the total tariff rate on our goods imported from China briefly reached 145.0%, before eventually decreasing to the current level of 10%.145.0%. These tariffs are in addition to a pre-existing Section 301 tariff of 7.5% and baseline Harmonized Tariff Schedule, or HTS, tariffs, which vary by product. In addition, U.S. tariffs on goods imported from certain other countries from which we source products included an incremental reciprocal tariff of 10% imposed since April 2025 and higher reciprocal tariff rates at certain points in time for many U.S. trading partners including Japan, Turkey, Indonesia and India.

The REVOLVE segment contributes to a majority of our net sales, representing 85.5%87.1% and 85.7%86.9% of our net sales for the three months ended MarchJune 31,30, 2026 and 2025, respectively.respectively, and 86.3% of our net sales for both the six months ended June 30, 2026 and 2025. During the three months ended MarchJune 31,30, 2026 and 2025, REVOLVE generated $293.2$302.5 million and $254.4$268.4 million in net sales, respectively, representing an increase of 15.3%.12.7%. During the six months ended June 30, 2026 and 2025, REVOLVE generated $595.8 million and $522.8 million in net sales, respectively, representing an increase of 14.0%. The net sales increase in the three and six months ended MarchJune 31,30, 2026, as compared to the same periodperiods in 2025, was primarily due to an increase in the number of orders shipped,shipped and a lower proportion of returned purchases and an increase in average order value.purchases.

The FWRD segment contributes to a smaller portion of our overall net sales, representing 14.5%12.9% and 14.3%13.1% of our net sales for the three months ended MarchJune 31,30, 2026 and 2025, respectively.respectively, and 13.7% of our net sales for both the six months ended June 30, 2026 and 2025. During the three months ended MarchJune 31,30, 2026 and 2025, FWRD generated $49.6$44.9 million and $42.3$40.6 million in net sales, respectively, representing an increase of 17.3%.10.7%. During the six months ended June 30, 2026 and 2025, FWRD generated $94.5 million and $82.9 million in net sales, respectively, representing an increase of 14.1%. The net sales increase in the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of orders shipped,shipped and a lower proportion of returned purchases, partially offset by a decrease in average order value. The net sales increase in the six months ended June 30, 2026, as compared to the same period in 2025, was primarily due to an increase in averagethe ordernumber valueof orders shipped and a lower proportion of returned purchases.

Net sales to customers in the United States contributed to 79.9%77.4% and 80.6%78.2% of our net sales for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 78.7% and 79.4% of our net sales for the six months ended June 30, 2026 and 2025, respectively. During the three months ended MarchJune 31,30, 2026 and 2025, net sales to customers in the United States were $274.0$269.1 million and $239.2$241.6 million, respectively, representing an increase of 14.5%.11.4%. During the six months ended June 30, 2026 and 2025, net sales to customers in the United States were $543.0 million and $480.9 million, respectively, representing an increase of 12.9%.

Net sales to customers outside of the United States contributed to 20.1%22.6% and 19.4%21.8% of our net sales for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 21.3% and 20.6% of our net sales for the six months ended June 30, 2026 and 2025, respectively. During the three months ended MarchJune 31,30, 2026 and 2025, net sales to customers outside of the United States were $68.9$78.4 million and $57.5$67.3 million, respectively, representing an increase of 19.9%.16.3%. During the six months ended June 30, 2026 and 2025, net sales to customers outside of the United States were $147.2 million and $124.8 million, respectively, representing an increase of 18.0%.

Other Income,(Income) Expense, Net

Other income,(income) expense, net consists primarily of interest income on our money market funds, foreign currency exchange gains and losses, and fees associated with our line of credit. For the three and six months ended June 30, 2025, other (income) expense, net also includes a $2.4 million loss on deconsolidation of subsidiary.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

The increase in net sales for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was primarily due to a 11.8%11.4% increase in the number of orders shipped,shipped and a lower proportion of returned purchases and a 1.0% increase in the average order value.purchases.

Net sales in the REVOLVE segment increased 15.3%12.7% to $293.2$302.5 million in the three months ended MarchJune 31,30, 2026 as compared to net sales of $254.4$268.4 million in the same period in 2025. Net sales in the FWRD segment increased 17.3%10.7% to $49.6$44.9 million in the three months ended MarchJune 31,30, 2026 as compared to net sales of $42.3$40.6 million in the same period in 2025.

The increase in cost of sales for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was primarily due to an increase in net sales. The decrease in cost of sales as a percentage of net sales was primarily driven by a $5.6 million reduction of cost of sales due to IEEPA tariff refunds, shallower markdowns within markdown sales and a lower mix of third-party brand sales, partially offset by a lower percentage of full price sales.sales and increased inventory valuation adjustments.

The increase in fulfillment expenses for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of units processed. The decreaseincrease in fulfillment expenses as a percentage of net sales was primarily due to higher compensation expense for fulfillment staff, partially offset by a lower proportion of returned purchases.

The increase in selling and distribution expenses for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was due to increases in orders placed and net sales that resulted in a $5.3$6.4 million increase in shipping and handling costs, a $1.8$1.3 million increase in merchant processing fees and a $0.6 million increase in other selling expenses. SellingThe increase in selling and distribution expenses as a percentage of net sales were flat as compared to the three months ended MarchJune 31,30, 2025, aswas primarily due to higher shipping ratesrates, werepartially offset by a lower proportion of returned purchases and an increase in average order value.purchases.

The increase in marketing expenses for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was due to a $6.3$8.2 million increase in performance marketing expense and a $5.5$2.2 million increase in brand marketing expense. The increase in marketing expenses as a percentage of net sales was primarily due to an increase in performance marketing investments and incremental marketing investments to support various longer-term growth initiatives, including the launch of our first-ever namesake label, REVOLVE Los Angeles, within our owned brandbrands assortment.assortment and the recent launch of our Grow-Good beauty assortment of hair care products in partnership with Cardi B.

The increase in general and administrative expenses for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was primarily due to a $2.0 million increase in salaries and related benefits and equity-based compensation expense, a $0.4$1.3 million increase in studio and design costs, a $1.1 million increase in other operating expenses to support business growth and a $0.6 million increase related to professional services and other occupancy costs and a $2.0 million increase in other operating expenses to support business growth.costs. The decreaseslight increase in general and administrative expenses as a percentage of net sales was driven by scaleincreased efficienciesinvestment within strategic growth in net sales outpacing growth in general and administrative expenses.initiatives.

The decrease in the effective tax rate for the three months ended MarchJune 31,30, 2026, as compared to the same period in 2025, was primarily due to the prior year increase in the valuation allowance against deferred tax assets,assets and the disallowance of intercompany write-offs, which did not recur in the current period.

As of MarchJune 31,30, 2026, the majority of our cash and cash equivalents was held for working capital purposes. We believe that our existing cash and cash equivalents, cash flows from operations and available borrowing capacity under our line of credit will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect and we could exhaust our available financial resources sooner than we currently expect. We may seek to borrow funds under our line of credit or raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in the “Risk Factors” section of this report. We may not be able to secure additional financing to meet our operating requirements on acceptable terms or at all.

On February 2, 2026, we amended our existing credit agreement to, among other things, extend the maturity date from March 23, 2026 to February 2, 2031, adjust the eligible inventory component of the borrowing base, amend certain of the reporting obligations and provide additional flexibility under certain of the negative covenants. The line of credit provides us with up to $75.0 million aggregate principal in revolver borrowings, based on eligible inventory and accounts receivable less reserves. Borrowings under the credit agreement accrue interest at a per annum rate equal to, at our option, (1) a base rate equal to the highest of (a) the federal funds rate, plus 0.50%, (b) the prime rate and (c) a term SOFR rate determined on the basis of a one-month interest period, plus 1.00%, or (2) a term SOFR rate, subject to a floor of 0.00%, in each case, plus a margin ranging from 0.25% to 0.75% per year in the case of base rate loans, and 1.25% to 1.75% per year in the case of term SOFR rate loans, depending upon availability under the credit agreement as of the most recently ended fiscal quarter. No borrowings were outstanding as of MarchJune 31,30, 2026 and December 31, 2025.

For the threesix months ended MarchJune 31,30, 2026, we generated $49.4$41.2 million of operating cash flow as compared to $45.1$57.8 million for the same period in 2025. The increasedecrease in our operating cash flow was primarily due to unfavorable impact from changes in working capital, partially offset by higher net income adjusted for certain non-cash items and favorable impact from changes in working capital.items.

Our primary investing activities have consisted of purchases of property and equipment to support our fulfillment centers and our overall business growth and internally developed software for the continued development of our proprietary technology infrastructure, leasehold improvements in our retail locations, purchases of rental product and proceeds from the sale of rental product. Purchases of property and equipment may vary from period-to-period depending on the timing and extent of the expansion of our operations.

Net cash used in investing activities was $15.5$21.8 million and $2.3$7.0 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The increase was primarily due to a $11.0$14.5 million investment in anunconsolidated equity method investeeentities made during the threesix months ended MarchJune 31,30, 2026.

Net cash used in financing activities was $0.5$10.2 million and $2.1 million for both the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, and was primarily attributable to tax withholdings on share-based payment awards, partially offset by proceeds from the exerciserepurchases of stockClass options.A common stock.

As of MarchJune 31,30, 2026, our principal contractual obligations consist of obligations under operating leases for office and fulfillment facilities and retail stores. There have been no material changes in our contractual obligations and commitments as compared to the contractual obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026.