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

Risks Related to Macroeconomic Conditions and Industry Trends

Uncertainties in global economic conditions that are beyond our control have in the past impacted our business and may in the future materially adversely affect our business, results of operations, financial condition and stock price. These adverse conditions include economic instability, changes in tax laws, regulations and new or increased tariffs, including retaliatory tariffs, export controls, the impacts of inflation, slower growth or recession, sustained higher interest rates, high unemployment, decreased consumer confidence in the economy, armed hostilities, such as the ongoing conflicts between Russia and Ukraine, and other events related thereto, such as economic sanctions and trade restrictions, geopolitical tensions in China and other regions, foreign currency exchange rate fluctuations, conditions affecting the retail environment for products we sell, and other unexpected events, including public health crises.

Our business depends on consumer demand for our products. As a result, we believe that our sales are sensitive to a number of factors that influence consumer confidence and spending, both on a global level and in particular markets, that can, in turn, affect our business or the home goods industry generally. These factors include, among others, financial market volatility, inflationary pressures, the impacts of tariffs, negative financial news, conditions in the real estate and mortgage markets, including home equity loans and consumer credit, changes in net worth basedand onlevels of disposable income as a result of market changes and uncertainty, energy shortages and cost increases, high levels of unemployment, labor and healthcare costs, government actions and general uncertainty regarding the overall future economic environment. Consumers may view a substantial portion of the products we offer as discretionary items rather than necessities. As a result, our operating results are sensitive to changes in macroeconomic conditions that impact consumer spending, including discretionary spending. Declines in consumer spending have in the past resulted, and in the future may result, in decreased demand for our products and services which may have an adverse effect on our results of operations.

We are subject to risks from changes to the trade policies, including tariff and import/export regulationsregulations, byof the U.S. and/or other foreign governments.

Changes in trade policy, including trade restrictions, new or increased tariffs or quotas, embargoes, sanctions and countersanctions, safeguards or customs restrictions by the U.S. and/or other foreign governments could have a material adverse impact on our business.business and the business of our suppliers. The imposition of new tariffs or increases in existing tariffs on products imported from countries where we or our suppliers operate could result in increased costs for finished goods. These cost increases may reduce our margins, require us to raise prices, or make our products less competitive in the marketplace. In addition, other countries may change their business and trade policies in anticipation of or in response to increased import tariffs and other changes in trade policy and regulations already enacted or that may be enacted in the future. While some trade deals have been reached and trade negotiations are ongoing, overall the global trade environment remains fluid and highly uncertain. If we are unable to mitigate these risks through supply chain adjustments, pricing strategies, or other measures, our financial performance and growth prospects could be negatively affected. For example, the U.S. has continued to impose additional and expanded tariffs on imports from specific countries such as China, including furniture, home goods, and related components, has expanded tariffs on imports on specific sectors and product types and derivative products, such as those made of steel, aluminum and certain wooden upholstered seating, cabinets and vanities, and has eliminated the prior de minimis exemption for small-value shipments from China. These actions have resulted in higher effective tariff rates, including certain stacked tariffs on certain home-goods categories. Countries such as China and Canada have responded with retaliatory tariffs. A substantial portion of our products are manufactured in China. We continue to work with our suppliers to mitigate any exposure to current, scheduled, and any other potential tariffs and are seeking opportunities to engage with new suppliers outside of China, but there can be no assurance that we will be able to offset any increased costs or secure these new suppliers.

Our operations, or those of our suppliers, could be negatively impacted by various events beyond our control, including, without limitation, natural disasters, such as hurricanes, tornadoes, floods, earthquakes, extreme cold events and other adverse weather conditions; public health crises, such as pandemics and epidemics; political crises, such as terrorist attacks, war, labor unrest, and other political instability (including, without limitation, the ongoing conflicts between Russia and Ukraine),; negative global climate patterns, especially in water stressed regions; or other catastrophic events, such as fires or other disasters occurring at our distribution centers or our suppliers’ manufacturing facilities, or acts of violence and other crimes, whether occurring in the U.S. or internationally. These events could disrupt our business operations, including the operations of our corporate offices, physical retail locations, and warehouses, as well as the operations of our global supply chain and those of our third-party partners, including our suppliers, vendors and logistics carriers, and could make it more difficult and costly for us to deliver our products. Furthermore, these types of events could negatively impact consumer spending in the impacted regions or, depending upon the severity, globally. Disasters occurring at our suppliers’ manufacturing facilities could impact our reputation and customers' perception of the products we offer. To the extent any of these events occur, our operations and financial results could be adversely affected. In addition, the impacts of climate change could result in changes in regulations, which could in turn affect our business, operating results, and financial condition.

If we fail to manage our growth effectively, including regarding our employees, management and operations, our business, financial condition and operating results could be harmed.

Our historical growth rates may not be sustainable or indicative of future growth. To manage our growth effectively, we must continue to implementexecute oureffective operational plans and strategies, improve and expand our infrastructure of people and information systems and appropriately manage our employee base. If our new hires perform poorly, if we are unsuccessful in hiring, training, managing and integrating these new employees and staff,employees, or if we are not successful in retaining our existing employees and staff,employees, our business may be harmed. Moreover, beginning in 2022 and continuing inthrough 2023 and 2024,2025, in an effort to reduce our operational costs and improve our organizational efficiency, we implemented a cost efficiency plan, part of which included internal restructurings and workforce reductions to right-size our cost structure. Further inIn January 2025, we announced our decision to exit the German market, including a workforce reduction impacting approximately 730 employees, althoughand in March 2025, we expectannounced a workforce reduction involving approximately half340 members of theseour positionstechnology to relocate to other corporate offices.team. Any reduction in force may yield unintended consequences and costs, such as attrition beyond the intended reduction in force,reduction, the distraction of employees, reduced employee morale and adverse effects to our reputation as both an employer and with respect to customers, which could make it more difficult for us to hire new employees in the future and to retain and motivate key employees, and there is a risk that we may not achieve the anticipated benefits from the reductionreduction. Additionally, reductions in force.workforce or operating expenses may limit our ability to pursue long-term initiatives or respond effectively to changes in our business. We also face significant competition for personnel. Failure to manage our hiring needs effectively or successfully integrate our new hires may have a material adverse effect on our business, financial condition and operating results. Properly managing our global workforce will also require us to establish consistent policies across regions and functions, and a failure to do so could likewise harm our business. Further, we have a substantial number of hourly employees. While we are at or above current local and federal minimum wage requirements across the U.S., any future local or federal minimum wage increases may increase our labor costs, which may have an adverse effect on our results of operations.

Our success depends on our ability to acquire and retain customers in a cost-effective manner. In order to expand our customer base, we must appeal to and acquire customers who have historically used other means of commerce to purchase home goods and may prefer alternatives to our offerings, such as traditional brick and mortar retailers, the websites of our competitors or our suppliers' own websites. We have made significant investments related to customer acquisition and expect to continue to heavily invest to acquire additional customers and to reactivate prior customers. Our paid advertising efforts consist of television advertising, direct mail, catalog and print advertising, and online channel advertising, including display advertising, paid search advertising, social media advertising, search engine optimization, optimization for generative AI and AI-powered search platforms, and comparison shopping engine advertising. TheseWe effortsalso areengage expensivewith celebrities and mayinfluencers notas resultpart of our marketing efforts, and our perceived affiliation with these individuals could cause us brand or reputational damage in the cost-effectiveevent acquisitionthey ofare customers. Our marketing expenses have varied from period to period, and we expect this trend to continue as we test new channels and refine our marketing strategies. We may increase or decrease our marketing spend within a period, based on the degree of our achievement of intended results, which may result in increased or decreased customer engagement in any given period. We cannot assure you that the net profit from new or returning customers we acquire will ultimately exceed the cost of acquiring those customers. Additionally, actions by third parties to block or impose restrictions on the delivery of certain advertisements could also adversely impact our business. If we fail to deliver a quality shopping experience, or if consumers do not perceive the products we offerperceived to be of high value and quality, we may not be able to acquire new customers or retaintake existingactions customers. If we are unable to acquire new customers or reactivate prior customers who purchase products in numbers sufficient to grow our business, we may not be able to generate the scale necessary to drive beneficial network effectsinconsistent with our suppliers or efficiencies in our logistics network, our net revenue may decrease,brands and our business, financial condition and operating results may be materially adversely affected.values.

We also utilize non-paid advertising. Our non-paid advertising efforts include search engine optimization, non-paid social media, text message, mobile "push" notifications and email. We obtain a significant amount of traffic via search engines and, therefore, rely on search engines such as Google, Bing and Yahoo!. as well as AI-powered search and generative answer platforms. Although we employ search engine optimization and search engine marketing strategies, our ability to maintain and increase the number of visitors directed to our website and application is not entirely within our control. Search engines frequently update and change the logic that determines the placement and display of results of a user's search, such that the purchased or algorithmic placement of links to our sitessites, or whether and how our content is surfaced, cited or summarized in AI-generated responses, can be negatively affected. Moreover, a search engine could, for competitive or other purposes, alter its search algorithms or results, causing our sites to place lower in search query results. A major search engine could change its algorithms in a manner that negatively affects our paid or non-paid search ranking, and competitive dynamics could impact the effectiveness of search engine marketing or search engine optimization. In addition, if there are changes in the usage and functioning of search engines or decreases in consumer use of search engines, for example, as a result of the continued development of artificial intelligence technology, this could negatively impact our owned and operated and third-party publishers’ websites. We also obtain a significant amount of traffic via social networking websites or other channels used by our current and prospective customers. As e-commerce and social networking continue to rapidly evolve, we must continue to establish relationships and proficiency with these channels, and we may be unable to develop or maintain these relationships on acceptable terms. If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers, reactivate prior customers or retain our existing customers and our financial condition may suffer.

We also expect our new loyalty programprogram, which launched in 2024, to attract customers to our physical retail stores and to encourage purchases by our customers online. Our loyalty program offers customer rewards dollars that can be redeemed on future purchases. If we fail to execute the loyalty program,program effectively, if our customers do not respond positively to the program or if the program costs more than anticipated in reward redemptions, our competitors may be able to attract some of our customers and our financial results could be adversely impacted. In addition, customers increasingly face loyalty, membership, and subscription fatigue and may be less willing to renew or continue engaging with programs after an initial period of participation. Some customers may also be less likely to remain active in a loyalty program after completing larger or infrequent purchases, which can reduce ongoing engagement and limit the program’s effectiveness as a retention tool. Further, some of our new customers originate from word of mouth or other non-paid referrals from existing customers. If our efforts to satisfy our existing customers are not successful, we may not be able to acquire new customers or reactivate prior customers through these referrals, which may adversely affect how we continue to grow our business, or may require us to incur significantly higher marketing expenses in order to acquire new customers.

Our ability to grow our business depends on our ability to retain our existing customer base and generate increased net revenue and repeat purchases from this customer base and maintain high levels of customer engagement.engagement in a cost-effective manner. To do this, we must continue to provide our customers and potential customers with a unified, convenient, efficient and differentiated shopping experience by:

We have faced and may face price competition in the future. InCompetitors addition, competitors with whom we compete, or whothat can obtain better pricing, more favorable contractual terms and conditions, or more favorable allocations of products during periods of limited supply may be able to offer lower prices than we are able to offer. In addition, continued sales growth in the e-commerce industry has encouraged the entry of many new competitors, including discount retailers selling similar products at reduced prices and new business models, many of which are willing to spend significant funds and/or reduce pricing to gain market share. Our operating results and financial condition may be adversely affected by these and other industry-wide pricing pressures.

Our business depends on our ability to buildcurate, market, grow and maintain strong brands. We may not be able to maintain and enhance our brands if we receive unfavorable customer reviews, complaints, negative publicity or otherwise fail to live up to consumers' expectations, which could materially adversely affect our business, results of operations and growth prospects.

Maintaining and enhancing our brands is critical to expanding our base of customers and suppliers. Our ability to maintain and enhance our brands depends largely on our ability to maintain customer confidence in our product and service offerings, including by offering a product assortment that resonates with customers, which may change over time, and by maintaining product availability and delivering products on time and without damage. If customers do not have a satisfactory shopping experience, they may seek out alternative offerings from our competitors and may not return to our sites as often in the future, or at all. In addition, unfavorable publicity regarding, for example, our practices relating to privacy and data protection, employment matters, product quality or availability, poor customer service, delivery problems, return or exchange policies, competitive pressures, litigation or regulatory activity, could seriously harm our reputation. Such negative publicity could also have an adverse effect on the size, engagement and loyalty of our customer base and result in decreased net revenue, which could adversely affect our business and financial results. A significant portion of our customers' brand experience also depends on third parties outside our control, including our suppliers, assembly and installation service providers and logistics providers. If these third parties do not meet our or our customers' expectations, our brands may suffer irreparable damage.

In 2024,2025, we continued our expansion into physical retail with the opening of fivetwo new physical retailPerigold stores across our family of brands, and twofive new outlet stores. We believe that expansion into newadditional physical retail stores represents a growth opportunity for us. Our growth strategy is dependent on our ability to identify and open future store locations in new and existing markets. Our ability to open stores in a timely and successful manner depends on a number of factors, including: the availability of desirable store locations; the availability and costs of construction labor and materials; local permitting timelines; the ability to negotiate acceptable lease terms at reasonable rates, including the length of rental periods and renewal options and the ability to obtain termination rights; our ability to obtain all required approvals and comply with other regulatory requirements; our relationships with current and prospective landlords; the ability to secure and manage the inventory necessary for the launch and operation of new stores; the availability of capital funding for expansion; and general economic conditions. Any or all of these factors and conditions could materially adversely affect our business, financial condition and results of operations.

New store openings may negatively impact our financial results due to the costs of acquiring new store locations and opening new stores and lower sales during the initial period following opening.openings. New stores, particularly those in new markets, build their brand recognition and customer base over time and, as a result, may have lower margins and incur higher operating expenses relative to generated revenue. We may not anticipate all of the challenges posed by the expansion of our operations into new asset classes and geographic markets. We may not manage our expansion effectively, and our failure to achieve or properly execute our expansion plans could limit our growth or have a material adverse effect on our business, financial condition and results of operations.

Our business success depends to some extent on our ability to expand our customer offerings by launching new brands and services and by expanding our existing offerings into new geographic markets from time to time. For example, we launched Muse in 2025, Wayfair Rewards in 2024, Decorify in 2023,and Wayfair.ie in Ireland in 2022 and the Kelly Clarkson Home Collection in 2020.2022. Launching new brands, programs and services or expanding internationally is time-consuming,time-consuming and requires significant amounts of management time and resources,resources and substantial upfront investments, including investments in marketing, information technology and additional personnel. Expanding our brands internationally is particularly challenging because it requires us to gain country-specific knowledge about consumers, regional competitors and local laws, construct catalogs specific to the country, build local logistics capabilities and customize portions of our technology for local markets. We may not be able to generate satisfactory net revenue from these efforts to offset these costs. Any lack of market acceptance of our efforts to launch new brands, programs and services or to expand our existing offerings could have a material adverse effect on our business, prospects, financial condition and operating results. For example, in OctoberFebruary 2024,2025, we introduced WayfairMuse, Rewards,an aartificial newintelligence-powered loyalty program that provides a range of benefitstool, to membersinspire inand returnpersonalize forthe paymenthome ofshopping anexperience annualby membershipproviding fee.customers Wayfairinspiration Rewardsand is newideas to build their aspirational home. If customers perceive this tool as unhelpful, intrusive or insufficiently differentiated, our business and has not been tested prior to its introduction. Given that this type of loyalty program is new and untested, there can be no certainty as to exactly how our customers may react to the program over time or how the Wayfair Rewards’ rollout will affect ourprospects, financial results from quarter to quarter. Further, as we continue to expand our fulfillment capability or add new businesses with different requirements, our logistics networks become increasingly complexcondition and operating themresults becomes more challenging. There cancould be noadversely assurance that we will be able to operate our networks effectively.affected.

Implementation of our key strategic initiatives, including our technology transformation, expansion into physical retail and the continued expansion of our proprietary logistics network, require significant capital expenditures. A lack of available capital resources due to business performance or other financial commitments could prevent or delay the deployment of innovations in our business. We may reduce capital expenditures significantly or seek additional financing or issue additional securities, which may affect the timing and scope of our growth strategy. We cannot be certain that we will be able to obtain new financing on favorable terms, or at all.

During 2024,2025, our international net revenue accounted for approximately 12% of our total net revenue. Expanding our international operations to grow our business will require significant management attention and resources and expose us to additional risks. As we continue to expand our operations to other countries, we will also become subject to certain domestic laws, including the Foreign Corrupt Practices Act, as well as the laws of the foreign countries in which we operate, which may impose new or changing regulatory restrictions and requirements, including in the areas of data privacy and sustainability. Violations of these laws could subject us to actions from government regulatory authorities, including sanctions, import restrictions, and tariffs (including anti-dumping and countervailing duties), or other penalties that could have an adverse effect on our reputation, operating results and financial condition. For example, the Canada Border Services Agency (“CBSA”) is examining Wayfair’s payment of duties under the Special Measures Import Act (the “CBSA review”) for goods imported into Canada for the years ended December 31, 2023 and 2022 and part of the year ended December 31, 2021. We believe we have substantial factual and legal grounds to contest certain elements of the CBSA review, along with any claim for interest associated with such duty payments.

Because we generate net revenue in the local currencies of our international business, our financial results are impacted by fluctuations in currency exchange rates. The results of operations of our international business are exposed to currency exchange rate fluctuations as the financial results of the applicable subsidiaries are translated from the local currency to U.S. dollars for financial reporting purposes. Our consolidated financial statements are denominated in U.S. dollars and as a result fluctuations in currency exchange rates may adversely affect our results of operations or financial results. If the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated net revenues or expenses will result in increased U.S. dollar denominated net revenues and expenses. Similarly, if the U.S. dollar strengthens against foreign currencies, particularly the Euro, the British pound, or the Canadian dollar, our translation of foreign currency denominated net revenues or expenses will result in lower U.S. dollar denominated net revenues and expenses. Additionally, global events as well as geopolitical developments, including military conflicts in Ukraine and the Middle East,conflicts, fluctuating commodity prices, trade tariff developments and inflation have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which has recently and could continue to amplify the volatility of currency fluctuations. To date, we have not entered into any currency hedging contracts. As a result, we may not be able to effectively offset the adverse financial impacts that may result from unfavorable movements in foreign currency exchange rates, and therefore fluctuations in foreign exchange rates could significantly impact our financial results.

We use complex proprietary software in our technology infrastructure, which we continually seek to continually update and improve. We may not always be successful in executing these upgrades and improvements, and the operation of our systems may be subject to failure. In particular, we have in the past and may in the future experience slowdowns or interruptions in some or all of our sites when we are updating them, and new technologies or infrastructures may not be fully integrated with existing systems on a timely basis, or at all. Additionally, we have expanded our use of third-party services, including third-party “cloud” computing services, and as a result, our technology infrastructure may be subject to slowdowns or interruptions as a result of integration with such services and/or failures by such third-parties, which are out of our control. Our net revenue primarily depends on the number of visitors who shop on our sites and the volume of orders we can handle. Unavailability of our sites or reduced order fulfillment performance would reduce the volume of goods sold and could also materially adversely affect our ability to generate revenue and consumer perception of our brand.

We may experience periodic system interruptions from time to time. In addition, continued growth in our transaction volume, as well as surges in online traffic and orders associated with promotional activities and seasonal trends in our business, place additional demands on our technology platform and could cause or exacerbate slowdowns or interruptions. If there is a substantial increase in the volume of traffic on our sites or the number of orders placed by customers, we may be required to further expand and upgrade our technology, logistics network, transaction processing systems and network infrastructure. There can be no assurance that we will be able to accurately project the rate or timing of increases, if any, in the use of our sites or expand and upgrade our systems and infrastructure to accommodate such increases on a timely basis. In order to remain competitive, we must continue to enhance and improve the responsiveness, functionality and features of our sites, which is particularly challenging given the rapid rate at which new technologies, such as those related to artificial intelligence,AI, customer preferences and expectations, and industry standards and practices are evolving in the e-commerce industry. Accordingly, we redesign and enhance various functions on our sites on a regular basis, and we may experience instability and performance issues as a result of these changes.

Any slowdown, interruption or performance failure of our sites and the underlying technology and logistics infrastructure could harm our business, reputation and our ability to acquire, retain and serve our customers, which could materially adversely affect our results of operations. OurWe have implemented disaster recovery mechanisms, including systems to back up key data and production systems, but these systems may be inadequate or incomplete. For example, these disaster recovery systems may be susceptible to cyber-related events if insufficiently distributed across locations, not sufficiently separated from primary systems, not comprehensive, or not at a scale sufficient to replace our primary systems. Insufficient production and disaster recovery systems could, in the event of a cyber-related incident, harm our growth prospects, our business, and our reputation for maintaining trusted marketplaces. Thus, our disaster recovery plan may be inadequate, and our business interruption insurance may not be sufficient to compensate us for the losses that could occur.

Some of our current competitors have, and potential competitors may have, longer operating histories, greater brand recognition, larger fulfillment infrastructures, greater technical capabilities, faster and less costly shipping, lower prices, significantly greater financial, marketing and other resources and larger customer bases than we do. They may secure better terms from vendors, adopt more aggressive pricing strategies, and devote more resources to technology, infrastructure, fulfillment, and marketing. These factors may allow our competitors to derivegenerate greater net revenue and profits from their existing customer base, acquire customers at lower costs or respond more quickly than we can to new or emerging technologies and changes in consumer habits.

Our marketing efforts to help grow our business may not be effective, and failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our e-commerce and omnichannelomni-channel approach to shopping for home goods.

We depend on our ability to provide our customers with a wide range of products from qualified suppliers in a timely and efficient manner. Political and economic instability, global or regional adverse conditions, such as military conflicts, public health emergencies, pandemics or other disease outbreaks or natural disasters, the financial stabilityinstability or insolvency of our suppliers, our suppliers’ ability to meet our code of conduct and other business standards, labor problems experienced by our suppliers, the availabilityunavailability or cost of raw materials, merchandise quality issues, currency exchange rates, trade tariff developments, imposition of anti-dumping and countervailing duties or other trade-related sanctions, transport availability and cost, including import-related taxes, transport security, labor inflation and other factors relating to our suppliers are beyond our control. For example, while we experienced increased sales and order activity at times during the COVID-19 pandemic, the pandemic significantly disrupted the globalGlobal supply chain,chains periodically face disruptions, including many of our suppliers due to factory closures,shutdowns, transportation constraints, increases in raw material and labor inflationcosts, and risks of labor shortages, among other things.operational challenges impacting suppliers and logistics partners. Any ongoing or future disruptions could materially and adversely affect our suppliers’ ability to provide products in a timely manner, or at all, which may materially and adversely affect our business, financial condition and operating results.

We also are unable to predict whether any of the countries in which our suppliers’ products are currently manufactured or may be manufactured in the future will be subject to new, different, or additional trade restrictions imposed by the U.S. or foreign governments or the likelihood, type or effect of any such restrictions. Significant portions of the merchandise we source are manufactured outside of the U.S., and any event causing a disruption or delay of imports from suppliers with international manufacturing operations, including the imposition of increased tariffs or quotas, additional import restrictions, or restrictions on the transfer of funds, could increase the cost or reduce the supply of merchandise available to our customers and materially adversely affect our financial performance as well as our reputation and brand. For example, theRecent U.S. hastrade recentlyactions, imposedincluding expansions and adjustments to existing tariffs on goods imported from China, as well as heightened scrutiny of country-of-origin claims and potential new tariffs on Chinaa relatedbroader to the importationrange of certain product categoriescategories, andhave theincreased U.S.uncertainty hasin proposedour additionalsupply tariffschain. onAdditional goodsor shippedincreased from China, including the home goods category. China has responded withtariffs, retaliatory tariffs.measures Theseby tariffsother willcountries, likelyor enhanced enforcement efforts could increase the cost of our products and negatively impact our operating results. Although we are currently seeking opportunities to engage additional suppliers outside of China, there can be no assurance that we will be able to offset any increasedproduct costs or securedelay anyproduct additionalavailability. In addition, suppliers outsidemay ofadjust China.their Additionally,global themanufacturing availabilityfootprints of certain products could be affected if suppliers choose toor limit their exposure to U.S. markets in response to unfavorablechanging trade policies, andwhich wecould may be unable to source alternatives quickly enough to avoid interruptions inreduce product supply.availability or increase our lead times and operating costs.

In addition, with respect to our business with foreign suppliers, particularly for our international sites, we have in the past and may in the future be affected by changes in the value of the U.S. dollar relative to other foreign currencies. For example, any movement by any other foreign currency against the U.S. dollar may result in higher costs to us for those goods. Declines in foreign currencies and currency exchange rates might negatively affect the profitability and business prospects of one or more of our foreign suppliers. This, in turn, has caused and may in the future cause such foreign suppliers to demand higher prices for merchandise in their effort to offset any lost profits associated with any currency devaluation, delay merchandise shipments, or discontinue selling to us altogether, any of which could ultimately reduce our sales or increase our costs.

We have relationships with overapproximately 20 thousand suppliers. Our agreements with suppliers are generally terminable at will by either party upon short notice. If we do not maintain our existing relationships or build new relationships with suppliers on acceptable commercial terms, we may not be able to maintain a broad selection of merchandise, and our business and prospects would suffer severely.

As part of offering our suppliers’ products for sale, suppliers are often responsible for conducting a number of traditional retail operations with respect to their respective products, including maintaining inventory, preparing merchandise for shipment to our customers, and, in some cases, delivering products on our behalf. In these instances, we may be unable to ensure that suppliers will perform these services to our or our customers'customers’ satisfaction in a manner that provides our customercustomers with a unified brand experience or on commercially reasonable terms. If our customers become dissatisfied with the services provided by our suppliers, our business, reputation and brands could suffer.

Our financial and operating results are inherently uncertain and difficult to forecast because they generally depend on the volume, timing and type of orders we receive, all of which are uncertain. In particular, we cannot be sure that our historical growth rates, trends and other key performance metrics are meaningful predictors of future growth. In addition, 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 revenue from period-to-period. Our business is also affected by economic and business conditions in the U.S and globally, including inflation, slower growth or recession, new or increased tariffs and other changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment, consumer confidence in the economy, consumer debt levels, energy prices, currency fluctuations, and currencyconditions fluctuations.in the real estate and mortgage markets. As a result, forecasted financial and operating results may differ materially from actual results, which may materially adversely affect our financial condition and stock price. For example, if certain of our assumptions or estimates prove to be wrong, we may spend more than we anticipate acquiring and retaining customers or may generate less net revenue per active customer than anticipated, which could cause us to miss our earnings guidance or negatively impact the results we report, either of which could negatively impact our stock price.

Historically, we have experienced surges in online traffic and orders associated with promotional activities and seasonal trends. ThisIn particular, we typically experience higher sales volume during our fourth quarter, which ends December 31 and includes the November and December holiday sales period. Such increases in activity may place additional demands on our technology systems and logistics network and could cause or exacerbate slowdowns or interruptions. Any such system, site or service interruptions could prevent us from efficiently receiving or fulfilling orders, which may reduce the volume or quality of goods or services we sell and may cause customer dissatisfaction and harm our reputation and brand.

We regard our customer lists, trademarks, domain names, copyrights, patents, trade dress, trade secrets, proprietary technology and similar intellectual property as critical to our success, and we rely on a combination of trademark, copyright and patent law, trade dress, trade secret protection, agreements, and other methods together with the diligence of our employees and others to protect our proprietary rights. We might not be able to obtain broad protection in the U.S. or internationally for all of our intellectual property, and we might not be able to obtain effective intellectual property protection in every country in which we sell products or perform services.services, particularly as we continue to expand our business offerings. For example, we are the registrant of marks for our brands in numerous jurisdictions and of the Internet domain name for our websites at Wayfair.com, Wayfair.ca, Wayfair.co.uk, and Wayfair.ie and our other sites, as well as various related domain names. However, we have not registered our marks or domain names in all major international jurisdictionsjurisdictions, andwe may not be able to register or use such domain names in all of the countries in which we currently or intend to conduct business.business, and the laws of certain countries may not protect intellectual property rights to the same extent as the laws of the U.S. Further, we might not be able to prevent third parties from registering, using or retaining domain names that interfere with our consumer communications or infringe or otherwise decrease the value of our marks, domain names and other proprietary rights. The unauthorized reproduction, theft, or other misappropriation of our intellectual property could diminish the value of our brands or reputation and cause a decline in our sales.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the company, our operations and our present business environment. Our MD&A is provided as a supplement to — and should be read in conjunction with — our consolidated financial statements and the accompanying Notes thereto contained in Part II, Item 8, Financial Statements and Supplementary Data,Data in this Annual Report on Form 10-K.

Wayfair is the destination for all things home. Through our e-commerceomni-channel business model,strategy, we offer visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over 3040 million products from overapproximately 20 thousand suppliers.

We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity forto acquiringacquire more market share. Our business model is designed to grow our net revenue by acquiring new customers as well as stimulating repeat purchases from our existing customers. Through increasing brand awareness as well as paid and unpaid advertising, we attract new and repeat customers to our family of sites. We aim to turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey — offering best-in-class product discovery, purchasing, fulfillment and customer service. We complement our e-commerce experience with a growing physical retail presence, designed to strengthen our brands, deepen customer engagement, and enhance the end-to-end shopping experience During the year ended December 31, 2025, net revenue increased by 5.1% compared to the same period in 2024. As of December 31, 2025, we had 21 million active customers and during the year ended December 31, 2025, 80.3% of orders came from repeat buyers. The increased sales represents our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers. We also continued to manage our advertising spend according to a return on investment-oriented approach that carefully tracks and monitors the results of advertising campaigns as we seek to maintain appropriate return targets.

We continue to closely monitor additional macroeconomic conditions, including, but not limited to, general economic instability, changes in tax laws,laws or regulations andor newother governmental actions or increased tariffs, including based on the recent United States (“U.S.”) presidential election,policies, sustained higher interest rates and inflationary pressures,pressures on our business, results of operations and financial results. These types of developments have and may continue to negatively impact global economic activity and consumer behavior, which have and may continue to adversely affect our business and our results of operations. As our customers react to these global economic conditions, we may take additional precautionary measures to limit or delay expenditures and preserve capital and liquidity.

While it is difficult to quantify and predict all of the impacts on our business of these global and domestic economic events, including fluctuating interest ratesrates, inflationary pressures and inflationarychanges pressures,in willglobal havetrade on our businesspolicy, and to predict consumer spending in the near term, we believe the long-term opportunity that we see for shopping for the home online remains unchanged.

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed in Part I, Item 1A, Risk Factors, in this Annual Report on Form 10-K for the year ended December 31, 2024.10-K.

We measure our business using the key financial statement andstatement, operating metrics and non-GAAP financial measures that are reflected in the below table. See “Non-GAAP Financial Measures” below for more information regarding our use of Adjusted Gross Profit, Adjusted Gross Margin, Contribution Profit, Contribution Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Adjusted Diluted Earnings or Loss per Share and a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure that is prepared in accordance with accounting principles generally accepted in the United States of America or “GAAP.”

Our Adjusted Gross Profit, Adjusted Gross Margin, Contribution Profit, Contribution Margin, Free Cash Flow and Adjusted Diluted Earnings or Loss per Share are measured on a consolidated basis, while our Adjusted EBITDA and Adjusted EBITDA Margin is measured on a consolidated and reportable segment basis. All other key financial statement and operating metrics are derived and reported from our consolidated net revenue.

We use the following metrics to assess the near and longer-term performance of our overall business:

(3) Orders delivered represent the total orders delivered in any period, inclusive of orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available,available; andin asthose suchcases, we estimate delivery dates based onusing historical data. We recognize net revenue when an order is delivered, and therefore orders delivered, together with average order value, is an indicator of the net revenue we expect to recognize infor a giventhe period. We view orders delivered as a key indicator of our growth.

During the year ended December 31, 2024,2025, net revenue decreasedincreased by $152$606 million, or 1.3%,5.1%, compared to the same period in 2023,2024, which reflects continuedour ongoing execution of business initiatives amid persistent macroeconomic pressures felt byon consumers. The decreaseincrease in net revenue is due primarily to lowerhigher average order volume,value whichresulting wasfrom drivenbrand byand challengesconsumer mix shifts, in theaddition categoryto suchhigher as macroeconomic pressures, including consumer spending patterns and housing market conditions,orders compared to the same period in 2023.2024.

During the year ended December 31, 2024,2025, our U.S. net revenue decreasedincreased by 1.0%5.8% and International net revenue decreasedincreased by 2.8%0.4% compared to the same period in 2023.2024, driven by growth across our remaining international markets, partially offset by the exit of our German business. During the year ended December 31, 2024,2025, International Net Revenue Constant Currency Growth was (2.7)%0.2% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

For more information on our segments, see Note 13, Segment and Geographic Information, in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data, in this Annual Report on Form 10-K.

Cost of goods sold is sensitive to many factors, including quarter-to-quarter variability in product mix, pricing strategies, changes in wholesale, shipping and fulfillment costs, including associated applicable customs duties and fees earned for supplier services rendered. During the year ended December 31, 2024,2025, cost of goods sold decreasedincreased by $59$415 million, or 0.7%,5.0%, compared to the same period in 2023.2024. The decreaseincrease in cost of goods sold is driven by ahigher combinationnet of operational cost savings initiatives and lower order volume, which was driven by challenges in the category such as macroeconomic pressures, including consumer spending patterns and housing market conditions,revenue, compared to the same period in 2023.2024.

As a percentage of net revenue, cost of goods sold increasedremained torelatively constant at 69.8% for the year ended December 31, 2024,2025, compared to 69.4% in the same period in 2023 due to mix shifts and lower net revenue.2024.

Operating expenses are comprised of customer service and merchant fees, advertising, selling, operations, technology, general and administrative expenses, impairment and other related net charges and restructuring charges.and other charges, net. We disclose separately the equity-based compensation and related taxes that are included in customer service and merchant fees and selling, operations, technology and general and administrative expenses.

During the year ended December 31, 2024,2025, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $212$65 million, or 34.6%,16.2%, compared to the same period in 2023,2024, driven by aworkforce decrease in vested restricted stock units during the year ended December 31, 2024, compared to the same period in 2023.restructuring.

During the year ended December 31, 2024,2025, excluding the impact of equity-based compensation,compensation and related taxes, our expenses for customer service and merchant fees decreasedincreased by $77$6 million, or 14.6%,1% compared to the same period in 2023.2024. The decreaseincrease in customer service and merchant fees is primarily due to increased net revenue, partially offset by decreased compensation costs during the year ended December 31, 2024, compared to the same period in 2023.costs.

As a percentage of net revenue, total customer service and merchant fees decreased to 4.0%3.8% for the year ended December 31, 2024,2025, compared to 4.6%4.0% in the same period in 20232024 primarily due to increased net revenue, partially offset by decreased compensation costs.

During the year ended December 31, 2024,2025, our advertising expenses increaseddecreased by $75$47 million, or 5.4%,3.2%, compared to the same period in 2023.2024. The increasedecrease reflects our response to changing market conditions and renewed investment opportunities, as we sought to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses increaseddecreased to 12.4%11.4% for the year ended December 31, 20242025 compared to 11.6%12.4% in the same period in 20232024 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

During the year ended December 31, 2024,2025, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $268$141 million, or 14.4%8.8% compared to the same period in 2023.2024. The decrease is primarily due to decreased compensation costs.costs and amortization expense driven by workforce reductions.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 16.7%14.3% for the year ended December 31, 2024,2025, compared to 20.4%16.7% in the same period in 2023,2024, primarily due to decreased compensation costs.costs and amortization expense driven by workforce reductions.

During the year ended December 31, 2024,2025, impairment and other related charges increaseddecreased by $23$14 million, or 164.3%million compared to the same period in 2023.2024. As a percentage of net revenue, impairment and other related net charges increaseddecreased to 0.3%0.2% from 0.1%0.3% in the same period in 2023.2024.

During the year ended December 31, 2024,2025, we recorded net charges of $37$23 million, inclusive of $34$20 million associated with the Germany Restructuring and weakened macroeconomic conditions in connection with our German operations,operations $2and $3 million relatedassociated towith changes in sublease market conditions andfor $1a milliontechnology related to constructioncenter in progress assets at identifiedthe U.S. locations.

During the year ended December 31, 2023,2024, we recorded net charges of $14$37 million, inclusive of $5$34 million associated with weakened macroeconomic conditions in connection with our German operations, $2 million related to consolidationchanges ofin certainsublease customermarket service centersconditions and $9$1 million related to construction in progress assets at identified U.S. office locations.

During the year ended December 31, 2024,2025, restructuring chargesand increasedother charges,net decreased by $14$26 million, or 21.5%,32.9%, compared to the same period in 2023.2024. As a percentage of net revenue, restructuring chargesand increasedother charges,net decreased to 0.7%0.4% from 0.5%0.7% in the same period in 2023.2024.

During the year ended December 31, 2024,2025, interest expense, net increased to $29$119 million, compared to $17$29 million in the same period in 2023,2024, primarily driven by the issuances of the 2029 Secured Notes and 2028 Notes (as defined below) in October 20242024, the 2030 Secured Notes in March 2025, and Maythe 2023,2032 respectively.Secured Notes in November 2025.

Other income (expense) income,, net

During the year ended December 31, 2024,2025, other income (expense) income,, net increased by $22$52 million, or 2,200.0%,million compared to the same period in 2023,2024, primarily driven by foreign currency rate fluctuations between the U.S. Dollar and the Canadian Dollar. Included in other income (expense) income,, net are changes in foreign currency transaction gains and losses and long-term investment income or losses.

GainNM - Not Meaningful (Loss) gain on debt extinguishmentextinguishment, net

During the year ended December 31, 2024,2025, (loss) gain on debt extinguishmentextinguishment, net decreased by $71$262 million, or 71.0%,million compared to the same period in 2023.2024.

During the year ended December 31, 2023,2025, weWayfair recorded a $100$233 million gainloss on debt extinguishment, representingnet theupon differencerepurchase betweenof the$80 cashmillion, paid$696 formillion, $210 million, and $101 million,in aggregate principal of $514 million and the combined net carrying valueamount of the 20242025 NotesNotes, 2026 Notes, 2027 Notes, and 20252028 NotesNotes, (as defined below) of $614 million.respectively.

Refer to Note 6, Debt and Other Financing, in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data, in this Annual Report on Form 10-K for additional information.

During the year ended December 31, 2024,2025, our provision for income taxes, net increaseddecreased by $1 million, or 11.1%,10.0% compared to the same period in 2023,2024, primarily related to the level and mix of income earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes. Refer to Note 11, Income Taxes,in the notes to the consolidated financial statements,Taxes, included in Part II, Item 8, Financial Statements and Supplementary Data, in this Annual Report on Form 10-K for additional information.

We believe that our existing cash and cash equivalents and investments, cash generated from operations and the borrowing availability under our Revolver will be sufficient to meet our anticipated cash needs for at least the foreseeablenext futuretwelve months from the date of the filing of this report including planned capital expenditures, contractual obligations and other such requirements. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. In addition, weWe may elect to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Further, we have and may from time to time seek to retire, restructure, repurchase or redeem, or otherwise mitigate the equity dilution associated with our outstanding convertible debt through cash purchases, stock buybacks of some or all of the shares underlying convertible notes and/or exchanges for equity or debt in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, exchanges or liability management exercises, if any, will be upon such terms and at such prices and sizes as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those described herein and in our other filings with the SEC, including those set forth in Part I, Item 1A, Risk Factors in this Annual Report on Form 10-K. In addition, macroeconomic events have caused disruption in the capital markets, including increased inflation and interest rates, which could make obtaining financing more difficult and/or expensive. As a consequence, we may not be able to secure additional financing to meet our operating requirements or strategic goals on acceptable terms, in a timely manner, or at all. If we raise additional funds through the issuance of equity, equity-linked or debt financing arrangements, those securities and instruments may have rights, preferences or privileges senior to the rights of our common stock, and the holders of our equity securities may experience dilution. We will continue to monitor our liquidity during this time of historic disruption and volatility in the global capital markets.

On OctoberMarch 8,13, 2024,2025, Wayfair LLC (the “Issuer”), a subsidiary of Wayfair, issued $800$700 million aggregate principal amount of the 20292030 Secured Notes. The 20292030 Secured Notes will mature on OctoberSeptember 31,15, 2029,2030, unless earlier redeemed, in accordance with their terms or repurchased. On November 7, 2025, Wayfair LLC also issued $700 million aggregate principal amount of the 2032 Secured Notes. The indenture2032 containsSecured Notes will mature on November 15, 2032, unless earlier redeemed, in accordance with their terms or repurchased. Both indentures contain covenants that restrict the Issuer’s ability and the ability of its restricted subsidiaries to, among other things, incur additional indebtedness, declare or pay dividends, redeem stock or make other distributions or restricted payments, make certain investments, create certain liens, enter into certain transactions with affiliates, agree to certain restrictions on the ability of the Issuer’s restricted subsidiaries to make certain payments, sell or transfer certain assets and consolidate, merge, sell or otherwise dispose of all or substantially all of the Issuer’s or its restricted subsidiaries’ assets.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q are forward looking statements, including statements regarding our investment plans and anticipated returns on those investments; our plans for growth, including customer and revenue growth and growth rates; our future results of operations and financial position; available liquidity and access to financing sources; performance across our brands and segments; anticipated cost-cutting and liability and dilution management exercises and the expected results of such exercises; our business strategy; anticipated benefits of our strategic initiatives; plans and objectives of management for future operations, including regarding our physical retail stores and omni-channel strategy; investment in our logistics network; consumer activity and behaviors; developments in our technology and systems, including our use of artificial intelligence and machine learning technologies and the anticipated results of those developments; and the impact of macroeconomic events, including interest rates, tariffs and inflation, and our response to such events. In some cases, you can identify forward-looking statements by terms such as “aim,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “continues,” “could,” “intends,” “goals,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts” or “potential” or the negative of these terms or other similar expressions.

•our ability to increase our net revenue per active customer;

•our ability to curate, market, grow and maintain strong brands and to grow our customer base;

We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity to acquire more market share. Our business model is designed to grow our net revenue by acquiring new customers as well as stimulating repeat purchases from our existing customers. Through increasing brand awareness as well as paid and unpaid advertising, we attract new and repeat customers to our family of sites. We aim to turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey — offering best-in-class product discovery, purchasing, fulfillment and customer service. We complement our e-commerce experience with a growing physical retail presence, designed to strengthen our brands, deepen customer engagement, and enhance the end-to-end shopping experience During the three months ended MarchJune 31,30, 2026, net revenue increased by 7.4%7.5% compared to the same period in 2025. As of MarchJune 31,30, 2026, we had 2122 million active customers and during the three months ended MarchJune 31,30, 2026, 79.8%80.2% of orders came from repeat buyers. The increased sales represents our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers. We also continued to manage our advertising spend according to a return on investment-oriented approach that carefully tracks and monitors the results of advertising campaigns as we seek to maintain appropriate return targets.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

During the three months ended MarchJune 31,30, 2026, net revenue increased by $201$246 million, or 7.4%,7.5%, compared to the same period in 2025, which reflects our ongoing execution of business initiatives amid persistent macroeconomic pressures on consumers. The increase in net revenue is due primarily to higher average order valuevolume in addition to higher average order volume resulting from brand and consumer mix shifts,value, compared to the same period in 2025.

During the three months ended MarchJune 31,30, 2026, our U.S. net revenue increased by 7.5%. During the three months ended March 31, 2026, our International net revenue increased by 6.0%8.7% compared to the same period in 2025. During the three months ended MarchJune 31,30, 2026, our International net revenue decreased by 1.3% compared to the same period in 2025. During the three months ended June 30, 2026, International Net Revenue Constant Currency Growth was 1.7%(2.0)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).

Cost of goods sold is sensitive to many factors, including quarter-to-quarter variability in product mix, pricing strategies, changes in wholesale, shipping and fulfillment costs, including associated applicable customs duties and fees earned for supplier services rendered. During the three months ended MarchJune 31,30, 2026, cost of goods sold increased by $158$176 million, or 8.3%,7.7%, compared to the same period in 2025. The increase in cost of goods sold is driven by higher net revenue, in additioncompared to the absencesame ofperiod a one-time benefit of $38 million related to a resolution on the valuation of duties, partially offset by $5 million of expense related to duties assessments recognized during the three months ended March 31,in 2025.

As a percentage of net revenue, cost of goods sold increased to 70.0% for the three months ended MarchJune 31,30, 2026 compared to 69.3%69.9% in the same period in 2025, due to investments in the customer experience and a one-time benefit recognized during the three months ended March 31, 2025 related to a resolution on the valuation of duties,experience, partially offset by the growth of our supplier services.

Operating expenses consist of customer service and merchant fees; advertising; selling, operations, technology, general and administrative expenses; impairment and other related net charges and restructuring and other charges, net. We disclose separately the equity-based compensation and related taxes that are included in customer service and merchant fees and selling, operations, technology andtechnology, general and administrative expenses.

During the three months ended MarchJune 31,30, 2026, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative increaseddecreased by $4$29 million, or 6.1%,29.3%, compared to the same period in 2025, due to variability in our stock price on the grant dates of the restricted stock units granted during the three months ended June 30, 2025, partially offset by the expense recognized during the three months ended MarchJune 31,30, 2026 related to the PSUs, partially offset by variability in our stock price around the grant date of restricted stock units.PSUs.

During the three months ended MarchJune 31,30, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for customer service and merchant fees increased by $8 million, or 7.7%,6.8%, compared to the same period in 2025. The increase in customer service and merchant fees is due primarily due to increased net revenue.

As a percentage of net revenue, total customer service and merchant fees remaineddecreased relativelyto constant at 3.9%3.6% for the three months ended MarchJune 31,30, 2026 compared to 3.7% in the same period in 2025.2025 due to increased net revenue and decreased compensation costs.

During the three months ended MarchJune 31,30, 2026, our advertising expenses decreasedincreased by $15$20 million, or 4.4%,5.4%, compared to the same period in 2025. The decreaseincrease reflects our response to changing market conditions and changes in our advertising channel mix, as we seek to maintain our return targets across various channels.

As a percentage of net revenue, advertising expenses decreased to 11.2%11.1% for the three months ended MarchJune 31,30, 2026 compared to 12.6%11.4% in the same period in 2025 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.

During the three months ended MarchJune 31,30, 2026, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $10$9 million, or 2.7%,2.4%, compared to the same period in 2025. The decrease is due primarily due to decreasedamortization compensationexpenses and capitalized labor costs, drivenpartially offset by workforceincreases reduction.in technology spend.

As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 14.5%12.2% for the three months ended MarchJune 31,30, 2026, compared to 15.7%14.2% in the same period in 2025, primarily due to thedecreased increasecompensation incosts and increased net revenue.

During the three months ended MarchJune 31,30, 2026, impairment and other related charges decreasedincreased by $23$2 million, or 100.0%, compared to the same period in 2025. The decreaseincrease is due to impairmentthe chargesexit recognizedof a customer service center in the prior year related to the Germany Restructuring and weakened macroeconomic conditions in connection with the German operations.U.S. No impairment charges were recorded during the three months ended MarchJune 31,30, 2026.2025.

During the three months ended MarchJune 31,30, 2026, restructuring and other charges, net decreased by $32$9 million, or 57.1%,100.0%, compared to the same period in 2025. As a percentage of net revenue, restructuring and other charges, net decreased by 0.30% compared to 0.8% from 2.1% in the same period in 2025.

During the three months ended MarchJune 31,30, 2026, we incurred $24 million ofno charges related to arestructuring lossand onother terminationcharges, of an operating lease for a logistics facility.net. During the three months ended MarchJune 31,30, 2025, we incurred $56$9 million of charges consisting primarily of one-time employee severance, benefits, relocation and transition costs. This is inclusive of $40$6 million related to the Germany Restructuring and $16$3 million related to the March 2025 workforce reduction.

During the three months ended MarchJune 31,30, 2026, interest expense, net increased by $16$10 million compared to the same period in 2025, primarily driven by the issuances of the 2032 Secured Notes in November 2025 and of the 20302034 Secured Notes in May 2026, partially offset by redemptions of the 2027 Notes in March 2025.2026 and all of the 2028 Notes in June 2026.

During the three months ended MarchJune 31,30, 2026, we incurred $11$4 million of other (expense) income,, net primarily driven by foreign currency translation losses. During the three months ended MarchJune 31,30, 2025, we recognized $10$23 million of other (expense) income, netnet, primarily attributable to fluctuations between the U.S. Dollar and the Euro.Canadian Dollar. Included in other (expense) income, net are changes in foreign currency transaction gains and losses and long-term investment income or losses.

During the three months ended MarchJune 31,30, 2026, loss on debt extinguishment increased by $68$65 million compared to the same period in 2025.

During the three months ended MarchJune 31,30, 2026, we recorded a $43$59 million loss on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $99$148 million and the net carrying value of the 2028 Notes of $56$89 million.

During the three months ended MarchJune 31,30, 2026, our provision for income taxes, net decreasedincreased by $2$1 million, or 66.7%50.0% compared to the same period in 2025.