As of September 30, 2024, 50,000,000 preferred shares were authorized and no shares were outstanding.
Stock Donations
In May 2024, the Company issued 178,572 shares of Class A common stock to the Warby Parker Impact Foundation (“WPIF”), a 501(c)(3) nonprofit organization. The Company recognized $2.2 million of charitable stock donation expense during the nine months ended September 30, 2024, representing the fair value of the shares on the date they were issued, which is recorded as a component of selling, general, and administrative expenses. Three of the Company’s directors serve on the board of directors of WPIF.
公司在第三方处租赁零售、办公、光学实验室和配送中心的空间，采取经营租赁方式。截至2024年9月30日，各租赁的总租期区间为 1 to 11 年。租赁一般包含续租选项和租金递增条款，并不时包括或有租金条款。续租选项可由公司自行决定行使，如果续租选项预期会被行使，则包含在租赁期限内。一般而言，在租赁开始时并不合理确定续租会被行使，因此续租不被包括在租赁期限内。
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share data)
The following table details the Company’s net lease expense:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Operating lease expense
$
9,029
$
7,853
$
25,605
$
22,784
Variable lease expense(1)
192
359
573
1,607
Net lease expense
$
9,221
$
8,212
$
26,178
$
24,391
(1) Variable lease expense primarily consists of contingent rent.
The following table presents the future maturity of lease liabilities:
Operating Leases(1)
2024
$
9,838
2025
37,413
2026
44,403
2027
41,755
2028
36,753
Thereafter
61,108
Future minimum lease payments
231,270
Impact of discounting
35,098
Present value of lease payments
$
196,172
(1) The years 2024 and 2025 include $2.5 million and $7.5 million of expected cash inflows from TIAs. Operating lease payments exclude $6.8 million of legally binding minimum lease payments related to executed leases for which the Company has not yet taken possession of the leased premises.
The following table presents other relevant lease information:
September 30, 2024
Weighted average remaining lease term (years)
5.6
Weighted average discount rate
5.4
%
9. Commitments and Contingencies
2022 Credit Facility
In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., (together, the "Borrowers") entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the "2022 Credit Facility"). The 2022 Credit Facility consisted of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes.
2024 Credit Facility
In February 2024, the Borrowers entered into a Credit Agreement with JPMorgan Chase Bank, N.A. and the lenders party thereto (the “2024 Credit Facility”), which replaced the 2022 Credit Facility. The 2024 Credit Facility consists of a $120.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $10.0 million for swingline loans. The 2024 Credit Facility includes an option for the Company to increase the available amount by up to $55.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2024 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share data)
The Company is permitted to repay borrowings under the 2024 Credit Facility at any time, in whole or in part, without penalty.
Under the 2024 Credit Facility, borrowings under the revolving credit facility bear interest on the principal amount outstanding, at the Company’s election, at (a) the greater of the prime rate (as defined in the credit agreement) or 2.5%, plus an applicable margin of 0.65% to 0.90% depending on the Company’s leverage ratio or (b) adjusted SOFR (as defined in the credit agreement), plus an applicable margin of 1.65% to 1.90% depending on the Company’s leverage ratio. The Company is charged an unused commitment fee of 0.20% to 0.25% depending on the Company's leverage ratio. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations.
The 2024 Credit Facility contains a financial maintenance covenant which only applies while total borrowings exceed $30.0 million, which requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2024 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as customary representations, warranties and event of default provisions. The obligations of the Borrowers under the 2024 Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company.
Other than letters of credit outstanding of $4.6 million and $4.3 million as of September 30, 2024 and December 31, 2023, respectively, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding.
Litigation
During the normal course of business, the Company may become subject to legal proceedings, claims and litigation. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated.
On March 13, 2023, a former employee, on behalf of herself and a proposed class of California hourly employees, filed a complaint against the Company, alleging violations of various California wage and hour laws, seeking wages, statutory penalties and attorneys’ fees. The matter (captioned Pham v. Warby Parker Inc., et al., Case No. 5:23-cv-01884-NC; N.D. Cal.) is currently pending in the United States District Court for the Northern District of California. On June 16, 2023, another former employee filed a related representative action (captioned Chery v. Warby Parker Inc., et al., Case No. 23CV417693; Cal. Super. Ct.) in the Santa Clara County Superior Court of California pursuant to California’s Private Attorneys General Act, asserting largely overlapping claims, seeking civil penalties on behalf of the state. Since that time, one additional follow on Private Attorneys General Act lawsuit was filed (captioned Jacobsen, et al. v. Warby Park Inc., et al., Case No. 23CV421588; Cal. Super. Ct.). Following a voluntary mediation in April 2024, the Company reached an agreement in principle with the plaintiffs to consolidate and settle the foregoing matters for a total of $1.95 million. The parties entered into a final settlement agreement on October 1, 2024, which will be submitted for preliminary approval by the court by the end of the year. If the court does not approve the settlement, the litigation will continue. The Company has accrued for the full amount of the proposed settlement.
In addition to the matters described above, as of September 30, 2024, the Company is currently involved in other legal proceedings which, in the opinion of the Company’s management, will not materially affect the Company’s financial position, results of operations, or cash flows should such litigation be resolved unfavorably.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Amounts in thousands, except share data)
10. Net Loss Per Share Attributable to Common Stockholders
The computation of net loss per share attributable to common stockholders is as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Numerator
Net loss attributable to common stockholders - basic and diluted
$
(4,072)
$
(17,413)
$
(13,513)
$
(44,150)
Denominator
Weighted average shares, basic and diluted
120,885,913
118,003,640
120,041,740
116,995,545
Earnings Per Share
Net loss per share attributable to common stockholders, basic and diluted
$
(0.03)
$
(0.15)
$
(0.11)
$
(0.38)
The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Stock options to purchase common stock
1,752,213
2,237,212
1,752,213
2,237,212
Unvested restricted stock units
3,219,460
3,487,721
3,219,460
3,487,721
Unvested performance stock units
4,397,688
4,397,688
4,397,688
4,397,688
ESPP purchase rights
338,252
423,869
338,252
423,869
11. Related-Party Transactions
As a private company, the Company issued secured promissory notes collateralized by the stock purchased by certain Company executives in relation to the exercise of employee stock options. As the promissory notes are secured by the underlying shares they have been treated as non-recourse notes in the condensed consolidated financial statements. The promissory notes were issued with a term of 8.5 years and an interest rate equal to the minimum applicable federal mid-term rate in the month the loan was issued. The secured promissory notes were recorded as a reduction to equity offsetting the amount in additional paid-in-capital related to the exercised options funded by the notes.
The loans had a balance of $2.5 million at both September 30, 2024 and December 31, 2023. No loans are outstanding with any of our named executive officers, and no new promissory notes were issued during the nine months ended September 30, 2024 and 2023. The loans outstanding had a weighted average remaining term of 4.8 years at September 30, 2024.
During both the three and nine months ended September 30, 2024 and 2023, the outstanding loan balance increased by an immaterial amount due to interest.
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on February 29, 2024 (the “Annual Report”). Data as of and for the three and nine months ended September 30, 2024 and 2023 has been derived from our unaudited condensed consolidated financial statements. Results for any interim period should not be construed as an inference of what our results would be for any full fiscal year or future period. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, which involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled“Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and in Part I, Item 1A, Risk Factors, in the Annual Report.
Overview
We are a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise.
Since day one, our focus on delighting customers and doing good has created a foundation for continuous innovation:
•We aim to provide customers with the highest-quality product possible by designing glasses at our headquarters in New York City, using custom materials, and selling direct to the customer. By cutting out the middleman, we are able to sell our products at a lower price than many of our competitors and pass the savings on to our customers. In addition to lower prices, we introduced simple, unified pricing (glasses starting at $95, including prescription lenses) to the eyewear market.
•We’ve built a seamless shopping experience that meets customers where and how they want to shop, whether that’s on our website, on our mobile app, or in our 269 retail stores as of September 30, 2024.
•We’ve crafted a holistic vision care offering that extends beyond glasses to include contacts, vision tests and eye exams, vision insurance, and beyond. We leverage leading (and in many cases proprietary) technology to enhance our customers’ experiences, whether it’s to help them find a better-fitting frame using our Virtual Try-On tool, or to update their prescription from home using Virtual Vision Test, our telehealth app.
•We recruit and retain highly engaged, motivated team members who are driven by our commitment to scaling a large, growing business while making an impact and are excited to connect their daily work back to our mission.
•We are a public benefit corporation focused on positively impacting all stakeholders, and hope to inspire other entrepreneurs and businesses to think along the same lines. Working closely with our nonprofit partners, we have distributed glasses to people in need in more than 80 countries globally and many parts of the United States. Over 15 million more people now have the glasses they need to learn, work, and achieve better economic outcomes through our Buy a Pair, Give a Pair program.
We generate revenue through selling our wide array of prescription and non-prescription eyewear, including glasses, sunglasses, and contact lenses. We also generate revenue from providing eye exams and vision tests, and selling eyewear accessories. We maintain data across the entire customer journey that allows us to develop deep insights, informing our innovation priorities and enabling us to create a highly personalized, brand-enhancing experience for our customers. We have built an integrated, multichannel presence that we believe deepens our relationship with existing customers while broadening reach and accessibility. And while we have the ability to track where our customers transact, we’re channel agnostic to where the transaction takes place and find that many of our customers engage with us across both digital and physical channels; for example, many customers who check out online also visit a store throughout their customer journey, while others choose to browse online before visiting one of our stores.
For the three months ended September 30, 2024 and 2023:
•we generated net revenue of $192.4 million and $169.8 million, respectively;
•we generated gross profit of $104.9 million and $92.7 million, respectively, representing a gross profit margin of 54.5% and 54.6%, respectively;
•we generated net loss of $4.1 million and $17.4 million, respectively; and
•we generated Adjusted EBITDA of $17.3 million and $11.0 million, respectively.
For the nine months ended September 30, 2024 and 2023:
•we generated net revenue of $580.7 million and $507.9 million, respectively;
•we generated gross profit of $323.7 million and $278.2 million, respectively, representing a gross profit margin of 55.7% and 54.8%, respectively;
•we generated net loss of $13.5 million and $44.2 million, respectively; and
•we generated Adjusted EBITDA of $59.3 million and $42.9 million, respectively.
For a definition of Adjusted EBITDA, a non-GAAP measure, and a reconciliation to the most directly comparable GAAP measure, see the section titled “Key Business Metrics and Certain Non-GAAP Financial Measures.”
Factors Affecting Our Financial Condition and Results of Operations
We believe that our performance and future success depend on a variety of factors that present significant opportunities for our business but also present risks and challenges that could adversely impact our growth and profitability, including those discussed below and in Part I, Item 1A. “Risk Factors” of the Annual Report.
Overall economic environment
The nature of our business, which involves the sale of products and services that are a medical necessity for many consumers, provides some insulation from swings in consumer sentiment and general economic conditions. However, our performance and growth are still impacted by these factors. Elevated inflation and interest rates, changing consumer commuting habits, and other negative economic factors may impact consumer spending habits as well as our cost of attracting and our ability to attract new customers. We believe our business model, focused on providing an exceptional value and experience to our customers, will help mitigate the impact of many of these macroeconomic factors, however, the extent of such mitigation and the impact on future results is uncertain. We also continue to diversify and expand our supply chain network, both internationally with our frame manufacturers and domestically with our wholly owned and partner optical laboratories, which we believe has helped to insulate us from supply chain disruption and allowed us to continue to meet growing customer demand over the last several years while maintaining our exceptional quality and customer satisfaction standards.
Key Business Metrics and Certain Non-GAAP Financial Measures
In addition to the measures presented in our condensed consolidated financial statements, we use the following key business metrics and certain non-GAAP financial measures to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions. The following table summarizes our key performance indicators and non-GAAP financial measures for each period presented below, which are unaudited.
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Active Customers (in thousands)
2,431
2,303
2,431
2,303
Store Count(1)
269
227
269
227
Adjusted EBITDA(2) (in thousands)
$
17,308
$
11,031
$
59,269
$
42,943
Adjusted EBITDA Margin(2)
9.0
%
6.5
%
10.2
%
8.5
%
__________________
(1)Store Count number at the end of the period indicated.
(2)Adjusted EBITDA and Adjusted EBITDA Margin are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to net loss or any other performance measure derived in accordance with GAAP.
The number of Active Customers is a key performance measure that we use to assess the reach of our physical retail stores and digital platform as well as our brand awareness. We define an Active Customer as a unique customer account that has made at least one purchase in the preceding 12-month period. We determine our number of Active Customers by counting the total number of customers who have made at least one purchase in the preceding 12-month period, measured from the last date of such period. Given our definition of a customer is a unique customer account that has made at least one purchase, it can include either an individual person or a household of more than one person utilizing a single account. We define Average Revenue per Customer as the sum of the total net revenues in the preceding 12-month period divided by the current period Active Customers.
Store Count
Store Count is a key performance measure that we use to reach consumers and generate incremental demand for our products. We define Store Count as the total number of retail stores open at the end of a given period. We believe our retail stores embody our brand, drive brand awareness, and serve as efficient customer acquisition vehicles. Our results of operations have been and will continue to be affected by the timing and number of retail stores that we operate.
As of September 30, 2024, 228 out of our 269 retail stores offered in-person eye exams.
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA as net income (loss) before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment costs, stock-based compensation expense and related employer payroll taxes, amortization of cloud-based software implementation costs, non-cash charitable donations, charges for certain legal matters outside the ordinary course of business, and non-recurring costs such as restructuring costs, major system implementation costs, and transaction costs. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by net revenue. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate Adjusted EBITDA and Adjusted EBITDA Margin in the same manner. We present Adjusted EBITDA and Adjusted EBITDA Margin because we consider these metrics to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.
Management uses Adjusted EBITDA and Adjusted EBITDA Margin:
•as a measurement of operating performance because they assist us in evaluating the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations;
•for planning purposes, including the preparation of our internal annual operating budget and financial projections;
•to evaluate the performance and effectiveness of our operational strategies; and
•to evaluate our capacity to expand our business.
By providing these non-GAAP financial measures, together with a reconciliation to the most directly comparable GAAP measure, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net loss or other financial statement data presented in our condensed consolidated financial statements as indicators of financial performance. Some of the limitations are:
•such measures do not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments;
•such measures do not reflect changes in, or cash requirements for, our working capital needs;
•such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•such measures do not reflect our tax expense or the cash requirements to pay our taxes;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
•other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.
Due to these limitations, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. Each of the adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measure, which is net loss:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Net loss
$
(4,072)
$
(17,413)
$
(13,513)
$
(44,150)
Adjusted to exclude the following:
Interest and other income, net
(2,842)
(2,655)
(7,965)
(6,815)
Provision for income taxes
301
301
782
538
Depreciation and amortization expense
11,829
9,760
33,533
28,184
Asset impairment charges
101
757
522
1,407
Stock-based compensation expense(1)
10,961
16,466
39,373
54,496
Non-cash charitable donation(2)
—
2,591
2,196
3,191
Amortization of cloud-based software implementation costs(3)
854
853
2,862
1,679
ERP implementation costs(4)
—
371
—
4,413
Other costs(5)
176
—
1,479
—
Adjusted EBITDA
$
17,308
$
11,031
$
59,269
$
42,943
Adjusted EBITDA Margin
9.0
%
6.5
%
10.2
%
8.5
%
__________________
(1) Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, and vesting of awards including the satisfaction of performance conditions, as well as the issuance of 48,486 Class A common stock to charitable donor advised funds in February 2024. For both of the three months ended September 30, 2024 and 2023, the amount includes $0.2 million of employer payroll taxes associated with releases of RSUs and option exercises. For the nine months ended September 30, 2024 and 2023, the amount includes $0.7 million and $0.4 million, respectively, of employer payroll taxes associated with releases of RSUs and option exercises.
(2) Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in both May 2024 and August 2023 to the Warby Parker Impact Foundation and 56,938 shares of Class A common stock to charitable donor advised funds in June 2023.
(3) Represents the amortization of costs capitalized in connection with the implementation of cloud-based software.
(4) Represents internal and external non-capitalized costs related to the implementation of our new Enterprise Resource Planning (“ERP”) system.
(5) Represents charges for certain legal matters outside the ordinary course of business.
The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q. The following tables set forth our results of operations for the periods presented in dollars and as a percentage of net revenue:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
(in thousands)
(in thousands)
Net revenue
$
192,447
$
169,849
$
580,672
$
507,910
Cost of goods sold
87,580
77,117
256,964
229,752
Gross profit
104,867
92,732
323,708
278,158
Selling, general, and administrative expenses
111,480
112,499
344,404
328,585
Loss from operations
(6,613)
(19,767)
(20,696)
(50,427)
Interest and other income, net
2,842
2,655
7,965
6,815
Loss before income taxes
(3,771)
(17,112)
(12,731)
(43,612)
Provision for income taxes
301
301
782
538
Net loss
$
(4,072)
$
(17,413)
$
(13,513)
$
(44,150)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
% of Net Revenue
% of Net Revenue
Net revenue
100.0
%
100.0
%
100.0
%
100.0
%
Cost of goods sold
45.5
%
45.4
%
44.3
%
45.2
%
Gross profit
54.5
%
54.6
%
55.7
%
54.8
%
Selling, general, and administrative expenses
57.9
%
66.2
%
59.3
%
64.7
%
Loss from operations
(3.4)
%
(11.6)
%
(3.6)
%
(9.9)
%
Interest and other income, net
1.5
%
1.5
%
1.4
%
1.3
%
Loss before income taxes
(1.9)
%
(10.1)
%
(2.2)
%
(8.6)
%
Provision for income taxes
0.2
%
0.2
%
0.1
%
0.1
%
Net loss
(2.1)
%
(10.3)
%
(2.3)
%
(8.7)
%
Components of Results of Operations
Net Revenue
We primarily derive revenue from the sales of eyewear products, optical services, and accessories. We sell products and services through our retail stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses and contact lenses. Revenue is recognized when the customer takes possession of the product, either at the point of delivery or in-store pickup, and is recorded net of returns and discounts. Revenue generated from services and other consists of in-person eye exams and prescriptions issued through the Virtual Vision Test app, eyewear accessories, lens replacements, and customer charges for optional expedited shipping. Revenue is recognized when the service is rendered and is recorded net of discounts.
Cost of Goods Sold
Cost of goods sold includes the costs incurred to acquire materials, assemble, and sell our finished products. Such costs include (i) product costs held at the lesser of cost and net realizable value, (ii) freight and import costs, (iii) optical laboratory costs, (iv) customer shipping, (v) occupancy and depreciation costs of retail stores, and (vi) employee-related costs associated with eye exams and optical laboratories, which includes salaries, benefits, bonuses, and stock-based
compensation. We expect our cost of goods sold to fluctuate as a percentage of net revenue primarily due to product mix, customer preferences and resulting demand, the cost and management of inventory, shipping costs, laboratory utilization, and the scaling of our eye exam and contacts businesses. Cost of goods sold also may change as we open or close retail stores because of the resulting change in related occupancy and depreciation costs.
Gross Profit and Gross Margin
We define gross profit as net revenues less cost of goods sold. Gross margin is gross profit expressed as a percentage of net revenues. Our gross margin has remained steady historically, but may fluctuate in the future based on a number of factors, including the cost at which we can obtain, transport, and assemble our inventory, the rate at which we open new retail stores, the mix of products we sell, and how effective we can be at controlling costs, in any given period.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses, or SG&A, primarily consist of employee-related costs including salaries, benefits, bonuses, and stock-based compensation for our corporate and retail employees, marketing, information technology, credit card processing fees, donations in connection with our Buy a Pair, Give a Pair program, facilities, legal, and other administrative costs associated with operating the business. Marketing costs, which consist of both online and offline advertising, include sponsored search, online advertising, marketing and retail events, and other initiatives. SG&A also includes costs associated with our Home Try-On program, which provides customers the opportunity to sample eyewear at home prior to purchase. We expect SG&A to increase in absolute dollars over time and to fluctuate as a percentage of revenue due to the anticipated growth of our business, intentional investments in marketing, and changing prices of goods and services caused by inflation and other macroeconomic factors. SG&A is expensed in the period in which it is incurred.
Interest and Other Income, Net
Interest and other income, net, consists primarily of interest generated from our cash and cash equivalents balances net of interest incurred on borrowings and fees on our undrawn line of credit, and are recognized as incurred. We expect our interest and other income costs to fluctuate based on our future bank balances, credit line utilization, and the interest rate environment.
Provision for Income Taxes
Provision for income taxes consists of income taxes related to foreign and domestic federal and state jurisdictions in which we conduct business, adjusted for allowable credits, deductions, and valuation allowance against deferred tax assets.
Comparison of the Three Months Ended September 30, 2024 and 2023
Net Revenue
Three Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Net revenue
$
192,447
$
169,849
$
22,598
13.3
%
Net revenue increased $22.6 million, or 13.3%, for the three months ended September 30, 2024 compared to the same period in 2023, primarily due an increase in Average Revenue per Customer, to $305 from $284 in the prior year period, as well as a 5.6% increase in Active Customers. Average Revenue per Customer growth was primarily driven by strong adoption of precision progressives, our highest priced lens option which launched in April 2023, an increase in units per order as customers took advantage of our bundling promotions and also purchased contacts or eye exams along with glasses in the same transaction, and continued uptake of our higher priced frames.
Cost of Goods Sold, Gross Profit, and Gross Margin
Three Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Cost of goods sold
$
87,580
$
77,117
$
10,463
13.6
%
Gross profit
104,867
92,732
12,135
13.1
%
Gross margin
54.5
%
54.6
%
(0.1)
%
Cost of goods sold increased by $10.5 million, or 13.6%, for the three months ended September 30, 2024 compared to the same period in 2023, and decreased as a percentage of revenue over the same period by 10 basis points, from 45.4% of revenue to 45.5% of revenue. The increase in cost of goods sold was primarily driven by increased product and fulfillment costs associated with our sales growth, particularly related to the growth in our contact lens offering, as well as increases in store occupancy, store depreciation, and doctor headcount due to new retail stores opened in 2023 and the first nine months of 2024.
Gross profit, calculated as net revenue less cost of goods sold, increased by $12.1 million, or 13.1%, for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to the increase in net revenue over the same period.
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, decreased by 10 basis points for the three months ended September 30, 2024 compared to the same period in 2023. The decrease in gross margin was primarily driven by the sales growth of contact lenses, which are sold at a lower margin than our other eyewear, and increased doctor headcount, as the number of stores offering eye exams grew from 183 at September 30, 2023 to 228 at September 30, 2024. These impacts were partially offset by efficiencies in our owned optical laboratories and lower outbound customer shipping costs as a percent of revenue, which were both driven by higher glasses growth.
Selling, General, and Administrative Expenses
Three Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Selling, general, and administrative expenses
$
111,480
$
112,499
$
(1,019)
(0.9)
%
As a percentage of net revenue
57.9
%
66.2
%
(8.3)
%
Selling, general, and administrative expenses decreased $1.0 million, or 0.9%, for the three months ended September 30, 2024 compared to the same period in 2023. This decrease was primarily driven by a $5.5 million decrease in stock-based compensation, mostly related to the Founders Grant (which is described in Note 7 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q), and lower corporate expenses, partially offset by higher payroll-related costs, primarily from growth in our retail workforce, and higher marketing expenses. As a percentage of revenue, SG&A decreased by 830 basis points, primarily driven by lower stock-based compensation and lower corporate expenses.
Interest and other income, net increased $0.2 million, or 7.0%, for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to higher interest rates on our increased cash and cash equivalents balance.
Provision for Income Taxes
Three Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Provision for income taxes
$
301
$
301
$
—
—
%
As a percentage of net revenue
0.2
%
0.2
%
—
%
Provision for income taxes was flat for the three months ended September 30, 2024 compared to the same period in 2023 primarily due to the change in pre-tax loss in addition to the tax effects of stock-based compensation expense, depreciation expense, and differences in tax rates in state jurisdictions.
Comparison of the Nine Months Ended September 30, 2024 and 2023
Net Revenue
Nine Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Net revenue
$
580,672
$
507,910
$
72,762
14.3
%
Net revenue increased $72.8 million, or 14.3%, for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due an increase in Average Revenue per Customer, to $305 from $284 in the prior year period, as well as a 5.6% increase in Active Customers. Average Revenue per Customer growth was primarily driven by strong adoption of precision progressives, our highest priced lens option which launched in April 2023, an increase in units per order as customers took advantage of our bundling promotions and also purchased contacts or eye exams along with glasses in the same transaction, and continued uptake of our higher priced frames.
Cost of Goods Sold, Gross Profit, and Gross Margin
Nine Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Cost of goods sold
$
256,964
$
229,752
$
27,212
11.8
%
Gross profit
323,708
278,158
45,550
16.4
%
Gross margin
55.7
%
54.8
%
0.9
%
Cost of goods sold increased by $27.2 million, or 11.8%, for the nine months ended September 30, 2024 compared to the same period in 2023, and decreased as a percentage of revenue over the same period by 90 basis points, from 45.2% of revenue to 44.3% of revenue. The increase in cost of goods sold was primarily driven by increased product and fulfillment costs associated with our sales growth, particularly related to the growth in our contact lens offering, as well as increases in store occupancy, store depreciation, and doctor headcount due to new retail stores opened in 2023 and the first nine months of 2024.
Gross profit, calculated as net revenue less cost of goods sold, increased by $45.6 million, or 16.4%, for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to the increase in net revenue over the same period.
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, increased by 90 basis points for the nine months ended September 30, 2024 compared to the same period in 2023. The increase in gross
margin was primarily driven by lower outbound customer shipping costs as a percent of revenue, faster growth in our glasses business which is our highest margin product category, and efficiencies in our owned optical laboratories. These impacts were partially offset by sales growth of contact lenses, which are sold at a lower margin than our other eyewear, and increased doctor headcount, as the number of stores offering eye exams grew from 183 at September 30, 2023 to 228 at September 30, 2024.
Selling, General, and Administrative Expenses
Nine Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Selling, general, and administrative expenses
$
344,404
$
328,585
$
15,819
4.8
%
As a percentage of net revenue
59.3
%
64.7
%
(5.4)
%
Selling, general, and administrative expenses increased $15.8 million, or 4.8%, for the nine months ended September 30, 2024 compared to the same period in 2023. This increase was primarily driven by higher payroll-related costs, primarily from growth in our retail workforce, and marketing expenses, partially offset by a $15.4 million decrease in stock-based compensation, mostly related to the Founders Grant (which is described in Note 7 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q). As a percentage of revenue, SG&A decreased by 540 basis points, primarily driven by lower stock-based compensation, partially offset by increased marketing expenses as a percentage of revenue.
Interest and Other Income, Net
Nine Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Interest and other income, net
$
7,965
$
6,815
$
1,150
16.9
%
As a percentage of net revenue
1.4
%
1.3
%
0.1
%
Interest and other income, net increased $1.2 million, or 16.9%, for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to higher interest rates on our increased cash and cash equivalents balance.
Provision for Income Taxes
Nine Months Ended September 30,
2024
2023
$ Change
% Change
(in thousands)
Provision for income taxes
$
782
$
538
$
244
45.4
%
As a percentage of net revenue
0.1
%
0.1
%
—
%
Provision for income taxes increased $0.2 million, or 45.4%, for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to the change in pre-tax loss in addition to the tax effects of stock-based compensation expense, depreciation expense, and differences in tax rates in state jurisdictions.
Seasonality
Historically, we have observed moderately higher seasonal demand during the month of December due in part to customer usage of health and flexible spending benefits in the final week of the year. Consistent with our policy to recognize revenue upon order delivery, any orders placed at the end of December are recognized as revenue upon
delivery, which may occur in the following year, and as such we typically see revenue increase sequentially from the fourth quarter to the first quarter of the following year.
Our business has historically experienced a higher proportion of costs in each subsequent quarter as a year progresses due to the overall growth of the business and operating costs to support that growth, including costs related to the opening of new retail stores and employee-related compensation to support growth. The fourth quarter, in particular, has historically experienced the highest amount of costs in a year to support the business demand in the quarter, even though a portion of the net revenue from that demand is not recognized until January of the following year, as discussed above. In the future, seasonal trends may cause fluctuations in our quarterly results, which may impact the predictability of our business and operating results.
Liquidity and Capital Resources
Since inception, we have financed our operations primarily from net proceeds from the sale of redeemable convertible preferred stock and cash flows from operating activities. As of September 30, 2024, we had cash and cash equivalents of $251.0 million, which was primarily held for working capital purposes, and an accumulated deficit of $680.3 million. As of December 31, 2023, we had cash and cash equivalents of $216.9 million, which was primarily held for working capital purposes, and an accumulated deficit of $666.8 million.
We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion of our business. We believe our existing cash and cash equivalents, funds available under our existing credit facility, and cash flows from operating activities will be sufficient to fund our operations for at least the next 12 months.
However, our future capital requirements will depend on many factors, including, but not limited to, growth in the number of retail stores, the needs of our optical laboratories and distribution network, expansion of our product offerings or service capabilities, and the timing of investments in technology and personnel to support the overall growth in our business. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for additional operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. In the event that additional financing is required from outside sources, we may not be able to negotiate terms acceptable to us or at all. In particular, rising interest and inflation rates, geopolitical unrest, and other macroeconomic factors have caused disruption in the global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.
Credit Facility
2022 Credit Facility
In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., (together, the "Borrowers") entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the "2022 Credit Facility"). The 2022 Credit Facility consisted of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes.
2024 Credit Facility
In February 2024, the Borrowers entered into a Credit Agreement with JPMorgan Chase Bank, N.A. and the lenders party thereto (the “2024 Credit Facility”), which replaced the 2022 Credit Facility. The 2024 Credit Facility consists of a $120.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $10.0 million for swingline loans. The 2024 Credit Facility includes an option for the Company to increase the available amount by up to $55.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2024 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2024 Credit Facility at any time, in whole or in part, without penalty.
Under the 2024 Credit Facility, borrowings under the revolving credit facility bear interest on the principal amount outstanding, at the Company’s election, at (a) the greater of the prime rate (as defined in the credit agreement) or 2.5%,
plus an applicable margin of 0.65% to 0.90% depending on the Company’s leverage ratio or (b) adjusted SOFR (as defined in the credit agreement), plus an applicable margin of 1.65% to 1.90% depending on the Company’s leverage ratio. The Company is charged an unused commitment fee of 0.20% to 0.25% depending on the Company's leverage ratio. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations.
The 2024 Credit Facility contains a financial maintenance covenant which only applies while total borrowings exceed $30.0 million, which requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2024 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as customary representations, warranties and event of default provisions. The obligations of the Borrowers under the 2024 Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company.
Other than letters of credit outstanding of $4.6 million and $4.3 million as of September 30, 2024 and December 31, 2023, respectively, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding.
Cash Flows
The following table summarizes our cash flows for the periods presented:
Nine Months Ended September 30,
2024
2023
(in thousands)
Net cash provided by operating activities
$
78,832
$
47,326
Net cash used in investing activities
(48,311)
(41,098)
Net cash provided by financing activities
3,754
2,141
Effect of exchange rates on cash
(137)
(989)
Net increase in cash and cash equivalents
$
34,138
$
7,380
Cash Flows from Operating Activities
Net cash provided by operating activities was $78.8 million for the nine months ended September 30, 2024, consisting of a net loss of $13.5 million adjusted for $77.8 million of non-cash expenses and $14.5 million of net cash provided as a result of changes in operating assets and liabilities. The non-cash charges included $38.7 million of stock-based compensation, $33.5 million of depreciation and amortization, $2.9 million of amortization of cloud-based software implementation costs, $2.2 million of non-cash charitable contributions, and $0.5 million of asset impairment charges. The changes in operating assets and liabilities were primarily driven by an increase in accounts payable and a decrease in inventory, partially offset by increased deferred revenue.
Net cash provided in operating activities was $47.3 million for the nine months ended September 30, 2023, consisting of a net loss of $44.2 million, adjusted for $88.6 million of non-cash expenses and $2.9 million of net cash used as a result of changes in operating assets and liabilities. The non-cash charges included $54.1 million of stock-based compensation, $28.2 million of depreciation and amortization, $3.2 million of non-cash charitable contributions, $1.7 million of amortization of cloud-based software implementation costs, and $1.4 million of asset impairment charges. The changes in operating assets and liabilities were primarily driven by a decrease in deferred revenue and accrued expenses, partially offset by decreases in inventory, net lease liabilities, other non-current assets, and accounts payable.
Cash Flows from Investing Activities
For the nine months ended September 30, 2024, net cash used in investing activities was $48.3 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores, investments in capitalized software development costs, and an investment in a private optical equipment company.
For the nine months ended September 30, 2023, net cash used in investing activities was $41.1 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores, investments in capitalized software development costs, and an investment in a private optical equipment company.
Cash Flows from Financing Activities
For the nine months ended September 30, 2024, net cash provided by financing activities was $3.8 million, which was primarily related to proceeds from stock option exercises and shares issued in connection with our ESPP.
For the nine months ended September 30, 2023, net cash provided by financing activities was $2.1 million, which was primarily related to proceeds from shares issued in connection with our ESPP and stock option exercises.
Contractual Obligations and Commitments
There have been no material changes to our contractual obligations from those described in the Annual Report.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Annual Report and the notes to the audited consolidated financial statements appearing elsewhere in the Annual Report, and in Note 2 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q. There were no significant changes to our critical accounting policies and estimates as reported in the Annual Report.
Recent Accounting Pronouncements
See Note 2 to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for more information regarding recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of loss that may impact our financial position because of adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure resulting from potential changes in currency rates, interest rates, or inflation.
Foreign Exchange Risk
We are exposed to changes in foreign currency rates as a result of our foreign operations and international suppliers from whom we purchase in Japanese yen and euros. Revenue and income generated by our operations in Canada and our cost of goods sold will increase or decrease compared to prior periods as a result of changes in foreign currency exchange rates. We do not believe that foreign exchange rates have a material effect on our business, financial condition or results of operations.
Interest Rate Risk
Our cash and cash equivalents as of September 30, 2024 consisted of $251.0 million in cash and money-market funds. Such interest-earning instruments carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate exposure. We believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents.
Inflation Risk
We believe that inflation, including from geopolitical unrest and other macroeconomic factors, has had a limited impact on our business, financial condition, and results of operations. Inflation may, however, have an impact on raw materials, transportation, labor, construction, rent, and other costs which materially impact operations. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with increased revenue. Our inability or failure to do so could harm our business, financial condition, and results of operations.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our co-principal executive officers and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, and as a result of the material weaknesses described below, our co-principal executive officers and principal financial officer concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level.
Material Weaknesses
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.
Management identified two material weaknesses related to (i) information technology general controls over our key accounting, reporting, and proprietary systems and (ii) certain process, application and management review controls within our financial reporting processes to enforce segregation of duties, validate completeness and accuracy of data and information used to reconcile and analyze certain key accounts, and perform the review of manual journal entries. We have concluded that these material weaknesses arose because we did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy our accounting and financial reporting requirements.
Remediation Measures
In order to remediate these material weaknesses, we have invested significantly in our IT environment and added critical resources to our team. We have made progress in the following areas, among others, since the identification of the material weaknesses:
•designed and implemented IT general controls to manage access and program changes across our key systems and improve IT-dependent and application controls within our proprietary systems;
•implemented the general ledger, supply chain, and inventory management components of a market leading ERP system, which will help prevent and detect errors, enforce segregation of duties, permit controls around the review of manual journal entries, and reduce our reliance on proprietary systems;
•engaged expert SOX consultants to assist in the coordination, development, and testing of our control environment and deficiency remediation efforts;
•conducted trainings for control owners covering proper control design, execution and review documentation, and source data validation;
•improved review controls and processes, documentation of the completeness and accuracy of source data, and timeliness of account reconciliations; and
•continued hiring of additional qualified accounting and financial reporting personnel with public company SOX experience.
Despite this progress, we will not be able to fully remediate these material weaknesses until all of these steps have been completed and have been operating effectively for a sufficient period of time. We have incurred significant costs in connection with these remediation efforts, and expect these efforts to require significant additional time, expense, and demands on our financial and operational resources. At this time, we cannot provide an estimate of the total costs expected to be incurred in connection with these remediation efforts.
Furthermore, we cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over
financial reporting or that they will prevent or avoid potential future material weaknesses. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.
Changes in Internal Control Over Financial Reporting
Other than the remediation measures described in “Remediation Measures” above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The information contained under the heading “Litigation” in Note 9 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q is incorporated by reference into this Item.
Item 1A. Risk Factors
There have been no material changes to the risk factors affecting our business, financial condition, or future results from those set forth in Part I, Item 1A, Risk Factors, in the Annual Report. However, you should carefully consider the factors discussed in the Annual Report and in this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
None.
Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)
None.
(b)
None.
(c)
Except as described below, during the quarter ended September 30, 2024, no director or officer, as defined in Rule 16a-1(f) of the Exchange Act, adopted or terminated a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K.
On September 13, 2024, Neil Blumenthal, our Co-Chief Executive Officer and director, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) providing for the sale of up to an aggregate of 1,250,000 shares of our Class A common stock. The trading arrangement will expire on June 30, 2025 or earlier if all transactions under the trading arrangement are completed.
On September 13, 2024, Dave Gilboa, our Co-Chief Executive Officer and director, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) providing for the sale of up to an aggregate of 950,000 shares of our Class A common stock. The trading arrangement will expire on June 30, 2025 or earlier if all transactions under the trading arrangement are completed.
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.