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What changed in Warby Parker Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Warby Parker Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+467 added−559 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Warby Parker Inc.'s 2025 10-K

467 paragraphs added · 559 removed · 367 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeApproximately 80% of contacts wearers purchase contact lenses at least once per year. • Increasing screen time usage : With the rising usage of smartphones, tablets, computers, and other devices, three out of four adults report experiencing digital eye strain at some point during the day, contributing significantly to increased vision correction needs and a steady influx of new customers within the eyewear market. • Acceleration of e-commerce penetration : While e-commerce penetration is at an all-time high in the U.S. and abroad, it is relatively small in the eyewear industry, representing approximately 10% of prescription eyeglasses sales in 2024 according to The Vision Council. • Increasing prominence of telehealth : The Vision Council reported that over 50% of adults that use eye products would be interested in having a virtual or telehealth eye exam.
Biggest changeAdditionally, over 54 8 Table of Contents million people in the United States wear contact lenses that are nearly all disposable in nature, replaced on a daily, weekly, or monthly basis, driving an under one year average repurchase frequency. • Increasing screen time usage : With the rising usage of smartphones, tablets, computers, and other devices, three out of four adults report experiencing digital eye strain at some point during the day, contributing significantly to increased vision correction needs and a steady influx of new customers within the eyewear market.
Item 1. Business Our Brand Warby Parker is a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise. We stand for fun, creativity, and doing good in the world.
Item 1. Business Our Company Warby Parker is a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise. We stand for fun, creativity, and doing good in the world.
From time to time, we have faced, and expect to face in the future, allegations from third parties, that we have infringed their intellectual property rights or that challenge the validity or enforceability of our intellectual property rights.
From time to time, we have faced, and expect to face in the future, allegations from third parties, that we have infringed their intellectual property rights or claims that challenge the validity or enforceability of our intellectual property rights.
Completing a yearly report, as benchmarked against the universally recognized GRI (Global Reporting Initiative) and SASB (Sustainability Accounting Standards 12 Table of Contents Board, now under the oversight of the International Financial Reporting Standards Foundation) frameworks, gives us the opportunity to examine how we’re aligning with our core values, assess if we’re growing responsibly, and to manage change more effectively.
Completing a yearly report, as 10 Table of Contents benchmarked against the universally recognized GRI (Global Reporting Initiative) and SASB (Sustainability Accounting Standards Board, now under the oversight of the International Financial Reporting Standards Foundation) frameworks, gives us the opportunity to examine how we’re aligning with our core values, assess if we’re growing responsibly, and to manage change more effectively.
Based on analysis we conducted with a third-party research firm in 2021, we expect that our retail footprint has room to expand in the U.S. to 900+ retail stores, which is still a fraction of the approximately 45,000 optical retail stores in the United States as of December 2024.
Based on analysis we conducted with a third-party research firm in 2021, we expect that our retail footprint has room to expand in the U.S. to over 900 stores, which is still a fraction of the approximately 45,000 optical stores in the United States as of December 2025.
To facilitate talent attraction, development and retention, we strive to make Warby Parker an inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by what we believe are strong compensation and benefits programs.
To facilitate talent attraction, development and retention, we strive to make Warby Parker an inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by what we believe are strong compensation and benefits programs. We believe that our employee relations are strong.
We are highly selective and discerning about each retail store we open, and we believe our retail stores embody the brand, are efficient customer acquisition vehicles, and will generate significant free cash flow over time. • Continuing to Invest in Technology and our Digital Experience.
We are highly selective with each store we open, and we believe our stores embody the brand, are efficient customer acquisition vehicles, and will generate significant free cash flow over time. • Continuing to invest in technology and our digital experience .
We also engage contractors and consultants from time to time. We have invested substantial time and resources in building our team. We are highly dependent on our management, highly skilled software engineers, Customer Experience and Retail teams, laboratory personnel, optometrists, opticians, and other professionals, and it is crucial that we continue to attract, develop and retain valuable employees.
We have invested substantial time and resources in building our team. We are highly dependent on our management, highly skilled software engineers, Customer Experience and Retail teams, laboratory personnel, optometrists, opticians, and other professionals, and it is crucial that we continue to attract, develop and retain valuable employees.
Every day, our team of over 3,500 employees is focused on our mission to inspire and impact the world with vision, purpose, and style (without charging a premium for it). Our ultimate objective is to provide vision for all.
Every day, our team of over 4,000 employees is focused on our mission to inspire and impact the world with vision, purpose, and style (without charging a premium for it). Our ultimate objective is to provide vision for all.
As we expand our business into new markets or introduce new products, features, or offerings into existing markets, regulatory bodies or courts may claim that we are subject to additional requirements, or that we are prohibited from conducting business in certain jurisdictions.
As we expand our business into new markets or introduce 11 Table of Contents new products, features, or offerings into existing markets, regulatory bodies or courts may claim that we are subject to additional requirements, or that we are prohibited from conducting business in certain jurisdictions.
Consistent with our policy to recognize revenue on order delivery, any orders placed at the end of December are recognized as revenue on 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.
Consistent with our policy to recognize product revenue when an order is delivered, any orders placed at the end of December are recognized as revenue when delivered, 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.
As provided in our current certificate of incorporation, the public benefits that we promote, and pursuant to which we manage our company, are to provide access to products and services that promote vision and eye health and to work towards positively impacting the communities in which we operate. Intellectual Property Our intellectual property is an important component of our business.
As provided in our current certificate of incorporation, the public benefits that we promote, and pursuant to which we manage our company, are to provide access to products and services that promote vision and eye health and to work towards positively impacting the communities in which we operate.
We provide free access to various reports that we file with, or furnish to, the United States Securities and Exchange Commission (the “SEC”) through our website at investors.warbyparker.com, as soon as reasonably practicable after they have been filed or furnished.
We provide free access to various reports that we file with, or furnish to, the SEC through our website at investors.warbyparker.com, as soon as reasonably practicable after they have been filed or furnished.
If a frame safety issue is ever suspected, our Product Strategy team will investigate the lot number, time of shipment, and vendor to identify and, if necessary, correct the problem.
If a frame safety issue is ever suspected, our Product Strategy team will investigate and, if necessary, correct the problem.
Manufacturing and Supply Chain The Warby Parker supply chain is an agile and integrated network that works to get the right order to the right place at the right time.
Throughout their shopping experience, our patients’ health and happiness is our top priority. Manufacturing and Supply Chain The Warby Parker supply chain is an agile and integrated network that works to get the right order to the right place at the right time.
In the future, seasonal trends may cause fluctuations in our quarterly results, which may impact the predictability of our business and operating results. Impact Reporting Since 2018, Warby Parker has published an annual Impact Report to evaluate and communicate the economic, environmental, and social impacts of our everyday business activities.
Impact Reporting Since 2018, Warby Parker has published an annual Impact Report to evaluate and communicate the economic, environmental, and social impacts of our everyday business activities.
We believe that our employee relations are strong. 13 Table of Contents Securities and Exchange Commission Filings We announce material information to the public about us, our products and services, and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts and the investor relations section of our website in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligation under Regulation FD.
For additional information on the laws and regulations applicable to us, see Item 1A, “ Risk Factors—Risks related to our Legal and Regulatory Environment. ” Securities and Exchange Commission Filings We announce material information to the public about us, our products and services, and other matters through a variety of means, including filings with the Securities and Exchange Commission (the “SEC”), press releases, public conference calls, webcasts and the investor relations section of our website in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligation under Regulation FD.
We rely on a combination of patent, trademark, copyright, trade secret, and other intellectual property laws, as well as confidentiality procedures, non-disclosure agreements, employee non-disclosure and invention assignment agreements, and other contractual restrictions to establish and protect our intellectual property rights. We own and maintain utility and design patents in the United States and in other jurisdictions around the world.
Intellectual Property Our intellectual property is an important component of our business. We rely on a combination of patent, trademark, copyright, trade secret, and other intellectual property laws, as well as confidentiality procedures, non-disclosure agreements, employee non-disclosure and invention assignment agreements, and other contractual restrictions to establish, protect, and enforce our intellectual property rights.
This includes strengthening our offering and position within: • Glasses. We release nearly 20 new eyewear collections each year; we will continue to scale our core glasses offering by introducing new sizes, shapes, widths, lens offerings, and more to ensure as many people as possible can find a frame that fits, functions, and looks great. • Contact Lenses.
We will continue to scale our core glasses offering by introducing new sizes, shapes, widths, and more to ensure as many people as possible can find a frame that fits, functions, and looks great. ◦ Progressives and other premium lenses .
The contact lens market is estimated at $11.8 billion as of December 31, 2024 and contributed only 10.2% to Warby Parker net revenue for the year ended December 31, 2024. • Eye Exams and Vision Care.
The contact lens market is estimated at $10.4 billion as of December 31, 2025 and over 80% of contacts wearers purchase contact lenses at least once per year, driving subscription-like purchasing. Contact lenses contributed only 11.1% to Warby Parker net revenue for the year ended December 31, 2025. ◦ Eye exams and vision care .
Our frames come standard with impact-resistant polycarbonate lenses that block 100% of UVA and UVB rays, plus all our glasses lenses are equipped, at no extra cost, with scratch-resistant and anti-reflective coatings. Customers can customize their prescription lenses with a variety of options, including single-vision, progressive, light-responsive, blue-light-filtering, and non-prescription lenses.
We select premium frame materials, ranging from custom-designed cellulose acetate to ultra-lightweight titanium. Our frames come standard with impact-resistant polycarbonate lenses that block 100% of UVA and UVB rays, and scratch-resistant and anti-reflective coatings. Customers can customize their lenses with a variety of options, including single-vision, progressive, light-responsive, polarized, blue-light-filtering, tinted, and non-prescription lenses.
We work directly with manufacturers and raw material suppliers, most notably in China, Japan, Vietnam, and Italy, so we know exactly where and how our products are being manufactured. We regularly bring Warby Parker liaisons to our partner facilities to help us better support and inspect our vendors in following our manufacturing specifications.
We work directly with manufacturers and raw material suppliers, most notably in China, Japan, Vietnam, Italy, and Thailand, so we know exactly where and how our products are being manufactured.
Product Quality Before a frame becomes a frame, we’re choosing vendors, selecting materials (we’ve been known to develop specialty acetates with the help of incredibly skilled partners), and performing rigorous product testing with the assistance of third-party agencies, all in the name of the highest quality and safety standards.
Product Quality Before a frame becomes a frame, we’re choosing vendors, selecting materials, and performing rigorous product testing with the assistance of third-party agencies, all in the name of the highest quality and safety standards. Our eyewear is considered a medical device by the U.S.
We partner with a large network of more than 30 partners for frame factories, lens and case/kit suppliers, distribution centers, optical laboratories, and freight-forwarding and logistics companies all over the globe. We also leverage our retail locations and in-house optical laboratories in Sloatsburg, New York, and Las Vegas, Nevada.
We work with a network of more than 30 partners, ranging from frame factories, lens and accessories suppliers, distribution centers, optical laboratories, and shipping companies all over the globe. We also leverage our stores and in-house optical laboratories in Sloatsburg, New York, and Las Vegas, Nevada. 9 Table of Contents Transparency is a crucial element in our vendor relationships.
The eye exams and vision care market is estimated at $10.7 billion as of December 31, 2024 and contributed only 5.3% to Warby Parker net revenue for the year ended December 31, 2024. • Vision Insurance .
The eye exams and vision care market is estimated at $11.4 billion as of December 31, 2025 and contributed only 6.4% to Warby Parker net revenue for the year ended December 31, 2025. • Scaling vision insurance . Insurance is used in approximately 60% of U.S. vision care purchases, yet insurance-backed orders contributed only 8.3% of our 2025 revenue.
We continually review our development efforts to assess the existence and registrability of new intellectual property and determine whether to seek patent protection or trademark or copyright registrations. While we believe our intellectual property rights in the aggregate are important to our competitive position, no single right is material to our business as a whole.
While we believe our intellectual property rights in the aggregate are important to our competitive position, no single right is material to our business as a whole.
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.
By designing our products in-house and cutting out the middleman, we are able to pass the savings on to customers and offer designer-quality eyewear at prices that are lower than many of our competitors. Our commitment to service, convenience and exceptional value has deepened customer relationships and strengthened brand loyalty.
At Warby Parker, we believe customers should be able to purchase high-quality eyewear online or in an engaging retail store environment with helpful, friendly associates committed to delivering a fun experience, all at a unified and transparent price.
Eyewear is both a style choice and a medical necessity, yet the traditional purchase experience has focused primarily on its medical aspects. At Warby Parker, we believe customers should be able to purchase high-quality eyewear online or in engaging retail environments, supported by helpful associates and transparent, unified pricing.
We have trademark rights in our name and other brand indicia in the United States and in other jurisdictions around the world. We also have registered copyrights in the United States. We register domain names for certain websites that we use in our business, such as www.warbyparker.com, as well as similar variations to protect our brands and marks from cybersquatters.
We register domain names for certain websites that we use in our business, such as www.warbyparker.com, as well as similar variations to protect our brands and marks from cybersquatters. We continually review our development efforts to assess the existence and registrability of new intellectual property and determine whether to seek patent protection or trademark or copyright registrations.
Throughout their shopping experience, our patients’ health and happiness is our top priority. 7 Table of Contents The Eyewear Market is Large, Growing, and Ripe for Disruption Large and Growing Market The U.S. eyewear market is large and growing.
The Eyewear Market is Large, Growing, and Ripe for Disruption Large and Growing Market The U.S. eyewear market is large and growing.
See It em 1A, “Risk Factors—Risks Related to Our Legal and Regulatory Environment—Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content, and adversely affect our ability to compete effectively.” Employees and Human Capital Resources As of December 31, 2024, we had a total of 3,780 employees, including 2,218 full-time employees and 1,562 part-time employees, across 276 retail stores, two in-house optical laboratories, and two offices in the United States.
See It em 1A, “ Risk Factors—Risks Related to Our Legal and Regulatory Environment—Failure to adequately maintain and protect our intellectual property and proprietary rights could harm our brand, devalue our proprietary content, and adversely affect our ability to compete effectively. ” Government Regulation We are subject to an extensive array of complex laws and regulations in the United States and other jurisdictions in which we operate.
We custom-cut and polish the edges of our lenses, and individually inspect and bench-align each pair before it’s packaged up and sent on its way to the customer. Contacts Warby Parker sells its own brand of contacts, Scout by Warby Parker, as well as third-party contact lenses; this allows us to provide customers a truly comprehensive vision care offering.
We custom-cut and polish the edges of our lenses and individually inspect and bench-align each pair before it’s sent to the customer. We also offer lens replacements, allowing customers to keep their favorite frames as their prescription changes. Contacts We offer a comprehensive selection of contact lenses from leading third-party manufacturers.
Every aspect of our business is oriented around delighting the customer, which we believe enhances customer loyalty and drives a leading NPS score. Our brand awareness stems from a combination of organic, word-of-mouth marketing, and social media, as well as television, digital, podcasts, and radio.
Our business is oriented around delighting the customer, which we believe enhances customer loyalty, drives organic word of mouth marketing and a leading NPS. Still, many customers, including long-time customers, continue to perceive us as primarily an online-only glasses company.
Our Competition Competition in the eyewear industry is principally on the basis of brand image and recognition, as well as product quality, price, innovation, and style. We believe that we successfully compete on the basis of our highly compelling price point combined with uncompromising quality, differentiated consumer experience, and an authentic brand promise.
Our Competition The legacy optical industry is highly concentrated among a small number of players that control much of the eyewear value chain, often limiting consumer choice and innovation. Competition in the eyewear industry is principally based on brand image and recognition, as well as product quality, price, innovation, and style.
Our eyewear is considered a medical device by the FDA and regulated as such and, where applicable, we follow the requirements set by the Consumer Product Safety Commission. We also comply with standards set by the American National Standards Institute for prescription eyewear and sunglasses (both prescription and non-prescription).
Food and Drug Administration (“FDA”) and regulated as such, and we comply with standards set by the American National Standards Institute for all of our eyewear and sunglasses.
This ongoing innovation is driven by our team’s commitment to solving real consumer problems while building a holistic vision care offering that is unparalleled within the market. Eyeglasses and Sunglasses Every pair of Warby Parker glasses and sunglasses is dreamed up in-house, where our team gathers inspiration, sketches designs, and maps out product details for prototyping.
Our Products and Services Eyeglasses and Sunglasses Every pair of Warby Parker glasses and sunglasses is dreamed up in-house, where our team gathers inspiration, sketches designs, and maps out product details for prototyping. Our eyewear collections are refreshed regularly and often incorporate patented, complex designs and extended sizing.
Independent optical retailers made up approximately 50% of all prescription optical retail sales in 2024, while optical retail chains made up the majority of the remainder. Globally, the eyewear market was approximately $150 billion in 2024, according to Statista, inclusive of optical retailers’ revenue from the sales of products (including glasses, sunglasses, and contact lenses).
Independent optical retailers made up approximately 40% of all prescription optical retail sales in 2025, while national optical retail chains made up the majority of the remainder.
It is estimated that at least 93% of people aged 65 and older wear corrective lenses, as older adults require more vision correction. • Consistent replenishment cycle : Glasses wearers purchase new glasses approximately every two years, according to the Vision Council.
The Vision Council also reported that in 2025 over 80% of adults in the United States use some form of vision correction. • Consistent replenishment cycle : Approximately 50% of glasses wearers purchase new glasses every year, and another 33% purchase every two years, according to the Vision Council.
From friendly and knowledgeable in-person exams at 236 of our retail stores as of December 31, 2024 to innovative telehealth services like our Virtual Vision Test app, we provide access to convenient and accessible vision services for primary vision care needs through optometrists employed either by us or by independent professional corporations or similar entities with whom we have contractual arrangements.
Our optometrists are either employed directly by us or by independent professional corporations or similar entities with whom we have contractual agreements. We also offer innovative telehealth services, such as our Virtual Vision Test app, which provides a convenient way to renew a prescription for those that meet the eligibility criteria.
The eyewear industry is resilient to economic cycles given its medical and non-discretionary nature and is defined by durable fundamentals and trends including: • Most people need vision correction : The Vision Council reported that approximately 80% of adults in the United States use some form of vision correction, equating to approximately 214 million people.
The Vision Council defines the U.S. eyewear market as a $70 billion industry as of December 2025 that has exhibited consistent, stable growth across multiple economic cycles given its medical and non-discretionary nature and is defined by durable fundamentals and trends including: • Most people need vision correction : The incidence of myopia continues to rise rapidly, and it’s estimated that by 2050, over half the world’s population will need corrective vision according to a study published by the American Academy of Ophthalmology.
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As a pioneer of the direct-to-consumer model, and now through our omnichannel business, we have unlocked access to affordable, quality eye care for millions.
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As a pioneer of the direct-to-consumer model, we design our glasses in-house at our New York City headquarters and sell directly to customers, enabling us to make high-quality, designer eyewear more accessible, with simple, unified pricing starting at $95 including prescription lenses.
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Since day one, Warby Parker’s 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.
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Since our launch, we’ve expanded beyond glasses to offer comprehensive eye care, including eye exams, contacts, lens enhancements and tech-enabled experiences like Virtual Try-On and Virtual Vision Test, with an aim to make Warby Parker a convenient, one-stop shop for all eye care needs.
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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 276 retail stores as of December 31, 2024. • We’ve crafted a holistic vision care offering that extends beyond glasses to include contacts, vision tests and eye exams, and more.
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We operate an integrated, omnichannel platform across digital commerce and 323 retail stores as of December 31, 2025, all designed to make shopping both convenient and fun. What Sets Us Apart • A customer-first brand that stands for exceptional value and customer experiences .
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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.
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At Warby Parker, we design every customer interaction, both in stores and online, to be consistently thoughtful, frictionless, and delightful. We aim to offer a seamless experience across all our channels, and our business model is designed to provide our customers the best quality at simple, accessible prices.
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We strive to benefit our employees, customers, communities, partners, and the environment by advancing access to eye care and living our core values. Working closely with our nonprofit partners, we distribute glasses to people in need in more than 80 countries globally and many parts of the United States.
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As a result, we have maintained an industry-leading Net Promoter Score (“NPS”) and observed consistent revenue retention across cohorts, with approximately 50% retention over 24 months and over 100% over 48 months. • Seamless experience across physical and online channels.
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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. Our Direct-to-Consumer Model An amazing customer experience at Warby Parker is no accident—it happens when every possible path to our product is as delightful and thoughtful as the next.
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Since our founding, we have reimagined how our customers shop for eyewear, transforming a category that has historically underinvested in innovation. We aim to create a seamless experience across channels and find that many of our customers start their journeys online, leveraging proprietary technology like our Virtual Try On, before visiting a store.
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When we started Warby Parker 15 years ago, there were not many examples of brands that had launched online. Yet we believed that building a digitally native, vertically integrated brand would enable us to circumvent traditional channels, directly build meaningful relationships with consumers, and offer high-quality products at a reasonable price.
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Similarly, many retail-first customers ultimately transact online, reflecting the flexibility of our omnichannel model. Each of our stores is uniquely designed, featuring local artists and drawing on the character of the local community, and our stores are strategically located in high-traffic lifestyle centers, malls, street locations, and grocery-anchored centers.
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Since then we have added many additional ways to engage with consumers—from our 276 retail stores to our Virtual Vision Test telehealth app—all with the intention of making the shopping process easy and fun for our customers. As we continuously seek to elevate the seamless customer experience, we leverage multiple components of our business model, including: • Customer-First, Direct-to-Consumer .
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Our stores are led by our tenured store leadership team, most of whom have been promoted from within the company, and we believe our ability to grow and retain talent remains key to our success. Ultimately, we are committed to meeting customers where and how they want to shop. • A culture of innovation .
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Since our founding, we have built a seamless customer experience, both in store and online, through which we believe we have deepened customer relationships and strengthened brand loyalty. We offer simple, unified pricing often at a lower price than many of our competitors, making the purchase process transparent, easy, and affordable.
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We maintain a regular cadence of product and technology development to differentiate our brand, operate with speed and efficiency, and enhance the customer experience across channels. We regularly launch new eyewear collections featuring new materials, constructions, and designs, and across all new initiatives we employ a test-and-learn approach, scaling after we validate customer demand and unit economics.
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Our retail stores provide fun, quirky, and stylized environments in which to shop alongside style and fit experts. Our website and mobile app make it quick and easy for our customers to browse, virtually try on, and purchase glasses.
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We have developed proprietary technologies and systems to improve convenience and support a seamless omnichannel experience, including the first true to scale Virtual Try-On, our Virtual Vision Test telehealth app, which enables eligible patients to renew their prescription at home, and our custom point-of-sale system.
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All of our infrastructure and customer service support our own brand, enabling us to optimize the look and feel of the user experience from browsing and trying on to purchase. Across all of our channels, we have Customer 6 Table of Contents Experience and Retail team members ready to help at a moment’s notice.
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Looking ahead, we plan to leverage emerging technologies, including artificial intelligence and machine learning (“artificial intelligence” or “AI”), to support innovation in product development and the shopping experience. • Data-driven operating model .
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Whenever we have room to improve, our teams are the first to know; our direct-to-consumer approach helps us to gather real-time customer feedback and act on it more quickly than our non-DTC competitors. • Sustainable, Predictable Growth . Eye care purchases are predominantly a non-discretionary medical necessity.
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By overseeing the entire customer journey, we capture key insights at every touchpoint, from the initial eye exam to final frame adjustment, and from repeat purchasing to retention across customer cohorts. This end-to-end visibility informs how we design new products, select store locations, and manage logistics.
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Prescription eyewear consumers purchase new glasses approximately every two years, while contact lens customers typically reorder every 12 months. Given our brand’s strength and replenishment cycle, we believe we have significant opportunity ahead to grow our market share, and delight more and more customers. • Vertical Integration . We design and sell glasses under our own brand name.
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We apply these same insights to acquire customers through a flexible media model that allows us to shift marketing spend in real-time across digital and 6 Table of Contents physical channels.
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Our integrated supply chain consists of owned optical and fulfillment laboratories as well as third-party manufacturing and laboratory partnerships that we have built over the years and gives us control over product quality and fulfillment speed.
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This direct relationship with our customer allows us to move faster, operate more efficiently, and create a highly personalized experience for every customer we serve. • Flexible, vertically integrated supply chain . Our integrated supply chain includes a mix of owned optical labs and long-standing manufacturing partnerships that allow us to be nimble and move quickly.
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We do this as we seek to ensure every part of the design, manufacturing, discovery, purchase, and delivery process is consistent with our brand and our commitment to delivering the highest quality products and remarkable customer experiences.
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This vertical integration allows us to maintain a continuous feedback loop that enables real-time refinement while ensuring that every stage, from initial design to final delivery, remains consistent with our brand standards.
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In addition, we own data across the entire end-to-end journey that allows us to develop deep customer insights, informing our innovation, and enabling us to create a highly personalized, brand-enhancing experience with each customer. • Strong Customer Economics .
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This level of control allows us to deliver high quality products and a remarkable experience, as reflected in our consistently high NPS. • Mission-driven culture and social impact . Warby Parker was founded on the belief that businesses can scale and do good in the world.
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We track our unit economics at the customer level, which we refer to as customer economics, since our customers shop through multiple channels. Our personalized and differentiated digital and retail store experiences are designed to delight the customer.
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Our mission to provide vision for all resonates deeply with both our team and customers, driving engagement and retention. As a public benefit corporation, social impact is built into our model.
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Our Holistic Vision Care Offering Since our launch, we have expanded our product and service offering, creating a seamless and convenient shopping experience for customers interested in not only buying eyeglasses and sunglasses but also contact lenses, eye exams and more. We’ve also introduced groundbreaking in-house technologies like Virtual Vision Test and Virtual Try-On to enhance the overall customer experience.
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Our Buy a Pair, Give a Pair program was integrated into our business operations from day one, and for every pair of glasses or sunglasses Warby Parker sells, a pair is distributed to someone in need. To date, over 20 million pairs of glasses have been distributed across the U.S. and more than 80 countries.
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We release nearly 20 new eyewear collections each year, often incorporating patented designs and extended sizing to offer our customers products that not only fit well but look great. As for frame materials, we select premium—from custom-designed cellulose acetate to ultra-lightweight titanium.
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Our Growth Strategies We plan to leverage the following growth strategies to achieve long-term, sustainable growth: • Growing brand awareness . Our brand is integral to the growth of our business and to the implementation of our business expansion strategies.
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Launched in 2019, Scout by Warby Parker contact lenses are a convenient and affordable daily contact option made from a super-moist material that resists drying for lasting hydration and comfort.
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To educate both new and existing customers about our expanded assortment of products, services, and store locations, we continue to invest in growing top of funnel awareness through our diversified media-mix model, strategic partnerships and collaborations, and stores. • Expanding our retail footprint . Our U.S. retail footprint has a long runway for expansion.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

242 edited+38 added−104 removed325 unchanged
Biggest changeEven if our net revenue continues to increase, our net revenue growth rates may decline in the future as a result of a variety of factors, including macroeconomic factors, increased 14 Table of Contents competition, and the maturation of our business.
Biggest changeOverall growth of our net revenue will depend on a number of factors, including those described under “ —We may not be successful in our retail growth and vision care expansion strategy. ” and “ —If we fail to cost-effectively retain our existing customers or to acquire new customers, our business, financial condition, and results of operations would be harmed. ” Even if our net revenue continues to increase, our net revenue growth rates may decline in the future as a result of a variety of factors, including 12 Table of Contents macroeconomic factors, increased competition, and the maturation of our business.
We rely heavily on our information technology (“IT”) and enterprise resource planning systems (“ERP”), many of which are proprietary, for many functions across our operations, including managing our supply chain and inventory, processing customer transactions in our stores, allocating orders to the appropriate laboratories, our financial accounting and reporting, compensating our employees, and operating our website, mobile applications and in-store systems, including point-of-sale systems.
We rely heavily on our information technology (“IT”) and enterprise resource planning (“ERP”) systems, many of which are proprietary, for many functions across our operations, including managing our supply chain and inventory, processing customer transactions in our stores, allocating orders to the appropriate laboratories, our financial accounting and reporting, compensating our employees, and operating our website, mobile applications and in-store systems, including point-of-sale systems.
Issues relating to our use of new technologies such as artificial intelligence may cause us to experience operational disruptions, negative publicity and reputational harm, competitive harm, criminal and civil liability and new or enhanced regulatory scrutiny, and to incur additional costs to resolve such issues.
Issues relating to our use of new technologies such as artificial intelligence may cause us to experience operational disruptions, negative publicity and reputational harm, competitive harm, new or enhanced regulatory scrutiny, or criminal and civil liability, and to incur additional costs to resolve such issues.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the federal physician self-referral law, commonly referred to as the Stark Law, that, subject to limited exceptions, prohibits physicians (defined to also include optometrists) from referring Medicare or Medicaid patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibit the entity from billing Medicare or Medicaid for such designated health services; • the federal civil and criminal false claims laws, including the civil False Claims Act, which can be enforced by the federal government or by private citizens on behalf of the government through civil whistleblower or qui tam actions, and prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the government, claims for payment or approval that are false or fraudulent, knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease, or conceal an obligation to pay money to the government.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the federal physician self-referral law, commonly referred to as the Stark Law, that, subject to limited exceptions, prohibits physicians (defined to also include optometrists) from referring Medicare or Medicaid patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibits the entity from billing Medicare or Medicaid for such designated health services; • the federal civil and criminal false claims laws, including the civil False Claims Act, which can be enforced by the federal government or by private citizens on behalf of the government through civil whistleblower or qui tam actions, and prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the government, claims for payment or approval that are false or fraudulent, knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease, or conceal an obligation to pay money to the government.
The Company paid a civil monetary penalty to OCR in December 2024 and the investigation was formally closed in February 2025. HIPAA imposes mandatory civil and criminal penalties for certain violations. HIPAA also authorizes state attorneys general to file suit on behalf of their residents.
The Company paid a civil monetary penalty to OCR in December 2024 and the investigation was formally closed in February 2025. HIPAA also imposes mandatory civil and criminal penalties for certain violations and authorizes state attorneys general to file suit on behalf of their residents.
Further, we are subject to the Payment Card Industry Data Security Standard (“PCI”), which is a multifaceted security standard that is designed to protect cardholder data as mandated by by the Payment Card Industry Security Standards Council. We work with our merchant services providers to ensure PCI compliance across our payment processing channels.
Further, we are subject to the Payment Card Industry Data Security Standard (“PCI”), which is a multifaceted security standard that is designed to protect cardholder data as mandated by the Payment Card Industry Security Standards Council. We work with our merchant services providers to ensure PCI compliance across our payment processing channels.
If we or are service providers are unable to comply with the security standards established by banks and the payment card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could materially and adversely affect our business.
If we or our service providers are unable to comply with the security standards established by banks and the payment card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could materially and adversely affect our business.
Our success depends, in a large degree, on our ability to attract consumers to our website, mobile applications, and select application partners and convert them into customers in a cost-effective manner.
Our success depends, to a large degree, on our ability to attract consumers to our website, mobile applications, and select application partners and convert them into customers in a cost-effective manner.
Any of these events could have a material adverse effect on our business, financial condition, and operating results. Risks Related to Our Existence as Public Benefit Corporation As a public benefit corporation, our duty to balance a variety of interests may result in actions that do not maximize stockholder value.
Any of these events could have a material adverse effect on our business, financial condition, and operating results. Risks Related to Our Existence as a Public Benefit Corporation As a public benefit corporation, our duty to balance a variety of interests may result in actions that do not maximize stockholder value.
See “— Failure to recruit and retain optometrists, opticians, and other vision care professionals for our retail stores could materially adversely affect our business, financial condition, and results of operations. ” Further, as we increase the scope of services that we provide and expand in the types of payments we receive from customers from cash-pay to vision plans and health plans, we will increasingly be subject to a number of federal and state healthcare regulatory laws, including federal and state anti-kickback, false claims, self-referral, and other healthcare fraud and abuse laws.
See “ —Failure to recruit and retain optometrists, opticians, and other eye care professionals for our retail stores could materially adversely affect our business, financial condition, and results of operations. ” Further, as we increase the scope of services that we provide and expand in the types of payments we receive from customers from cash-pay to vision plans and health plans, we will increasingly be subject to a number of federal and state healthcare regulatory laws, including federal and state anti-kickback, false claims, self-referral, and other healthcare fraud and abuse laws.
The trading price of our Class A common stock has been volatile and has fluctuated significantly since our direct listing and may continue to fluctuate or decline in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our results of operations; • the number of shares of our Class A common stock made available for trading; • changes in financial markets or macroeconomic conditions, including, for example, due to the effects of recession or slow economic growth in the United States and abroad, elevated inflation and interest rates, fuel prices, international currency fluctuations, corruption and political instability and geopolitical events; • changes in the financial projections we may provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • changes in costs of our inputs; • actual or anticipated changes in our growth rate relative to that of our competitors; • changes in the anticipated future size or growth rate of our addressable markets; • announcements of new products, or of acquisitions, strategic partnerships, joint ventures, or capital-raising activities or commitments, by us or by our competitors; • additions or departures of board members, management, or key personnel; • rumors and market speculation involving us or other companies in our industry; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to data privacy and cybersecurity in the United States or globally; • lawsuits threatened or filed against us, including as may result from government inquiries or proceedings; • geopolitical events and security issues (including incidents of terrorism, armed hostilities, and political conflicts, including those involving China or responses to these events), international trade disputes or disruptions, and similar events; • disruptions from natural or human-caused disasters (including health epidemics) or extreme weather (including as a result of climate change); and • sales or expectations with respect to sales of shares of our Class A common stock by us or our security holders.
The trading price of our Class A common stock has been volatile and has fluctuated significantly since our direct listing and may continue to fluctuate or decline in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our results of operations; • the number of shares of our Class A common stock made available for trading; • changes in financial markets or macroeconomic conditions, including, for example, due to the effects of recession or slow economic growth in the United States and abroad, elevated inflation and interest rates, fuel prices, international currency fluctuations, corruption and political instability and geopolitical events; • changes in the financial projections we may provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • changes in costs of our inputs; • actual or anticipated changes in our growth rate relative to that of our competitors; • changes in the anticipated future size or growth rate of our addressable markets; • announcements of new products, or of acquisitions, strategic partnerships, joint ventures, or capital-raising activities or commitments, by us or by our competitors; • additions or departures of board members, management, or key personnel; • rumors and market speculation involving us or other companies in our industry; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to data privacy and cybersecurity in the United States or globally; 43 Table of Contents • lawsuits threatened or filed against us, including as may result from government inquiries or proceedings; • geopolitical events and security issues (including incidents of terrorism, armed hostilities, and political conflicts, including those involving China or responses to these events), international trade disputes or disruptions, and similar events; • disruptions from natural or human-caused disasters (including health epidemics) or extreme weather (including as a result of climate change); and • sales or expectations with respect to sales of shares of our Class A common stock by us or our security holders.
Such events include, among others, difficulties or problems associated with our suppliers’ business, the financial instability and labor problems (including with respect to human rights or working conditions) of suppliers, inputs quality and safety issues, natural or man-made disasters, inclement weather conditions, geopolitical events, war, acts of terrorism and other political instability, economic conditions, shipment issues, the availability of their raw materials, and increased production costs.
Such events include, among others, difficulties or problems associated with our suppliers’ business, the financial instability and labor problems (including with respect to human rights or working conditions) of suppliers, inputs quality and safety issues, natural or man-made disasters, inclement weather conditions, geopolitical events, war, acts of terrorism and other political instability, economic conditions, shipment issues, the price and availability of their raw materials, and increased production costs.
Our ability to hire optometrists, opticians, and other vision care professionals and/or contract with optometrists or independent professional corporations or similar entities that employ optometrists for our retail stores that offer such eye exams is important to our operations as well as our growth strategy, but there is no assurance that we will be successful in recruiting such professionals.
Our ability to hire optometrists, opticians, and other eye care professionals and/or contract with optometrists or independent professional corporations or similar entities that employ optometrists for our retail stores that offer such eye exams is important to our operations as well as our growth strategy, but there is no assurance that we will be successful in recruiting such professionals.
Our transactions with our suppliers and vendors operating in foreign jurisdictions, including China, Italy, Vietnam, and Japan and our quality assurance presence in China and Vietnam, may subject us to such anti-corruption laws. If we expand our international sales and business, we may engage with business partners and third-party intermediaries to obtain necessary permits, licenses, and other regulatory approvals.
Our transactions with our suppliers and vendors operating in foreign jurisdictions, including China, Italy, Vietnam, Japan, and Thailand and our quality assurance presence in China and Vietnam, may subject us to such anti-corruption laws. If we expand our international sales and business, we may engage with business partners and third-party intermediaries to obtain necessary permits, licenses, and other regulatory approvals.
Effective patent, trademark, copyright, and trade secret protection may not be available to us or available in every jurisdiction in which we offer or intend to offer our services. Failure to adequately protect our intellectual property could harm our brand, devalue our proprietary technology and content, and adversely affect our ability to compete effectively.
Effective patent, trademark, copyright, and trade secret protection may not be available to us or available in every jurisdiction in which we offer or intend to offer our products and services. Failure to adequately protect our intellectual property could harm our brand, devalue our proprietary technology and content, and adversely affect our ability to compete effectively.
Other new or revised taxes and, in particular, digital taxes, sales taxes, VAT, and similar taxes could increase the cost of doing business online and decrease the attractiveness of selling products over the internet. New taxes and related rulings and regulations could also create significant increases in internal costs necessary to capture data and collect and remit taxes.
New or revised taxes and, in particular, digital taxes, sales taxes, VAT, and similar taxes could increase the cost of doing business online and decrease the attractiveness of selling products over the internet. New taxes and related rulings and regulations could also create significant increases in internal costs necessary to capture data and collect and remit taxes.
Following a voluntary mediation in April 2024, we reached an agreement in principle with the plaintiffs to consolidate and settle the foregoing matters, although the settlement remains subject to court approval. Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict.
Following a voluntary mediation in April 2024, we reached an agreement in principle with the plaintiffs to consolidate and settle the foregoing matters, although the settlement remains subject to final court approval. Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict.
In addition, because we source components from suppliers located in China, our inventory management may be adversely impacted by the recent enactment or further escalation of tariffs, import restrictions, foreign government regulations, trade restrictions, customs, and duties.
In addition, because we source components from suppliers located in China, our inventory management may be adversely impacted by the enactment or further escalation of tariffs, import restrictions, foreign government regulations, trade restrictions, customs, and duties.
Failure to recruit and retain optometrists, opticians, and other vision care professionals for our retail stores could materially adversely affect our business, financial condition, and results of operations. Our operations depend on our ability to offer eye exams for glasses and contact lenses.
Failure to recruit and retain optometrists, opticians, and other eye care professionals for our retail stores could materially adversely affect our business, financial condition, and results of operations. Our operations depend on our ability to offer eye exams for glasses and contact lenses.
If we fail to maintain, protect, and enhance our brand successfully or to maintain loyalty among customers, or if we incur substantial expenses in unsuccessful attempts to maintain, protect, and enhance our brand, we may fail to attract or increase the engagement of customers, and our business, financial condition, and results of operations may suffer.
If we fail to maintain, protect, and enhance our brand successfully or to maintain loyalty among customers, or if we incur substantial expenses in attempts to maintain, protect, and enhance our brand, we may fail to attract or increase the engagement of customers, and our business, financial condition, and results of operations may suffer.
However, the protective steps we have taken and plan to take may be inadequate to deter misappropriation or other violation of or otherwise protect our intellectual property rights. We may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.
The protective steps we have taken and plan to take may be inadequate to deter misappropriation or other violation of, or otherwise protect, our intellectual property rights. We may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.
Further, use of artificial intelligence platforms by our employees, whether authorized or unauthorized, may increase the risk that our proprietary information will be unintentionally disclosed or undermine our claims to certain intellectual property.
Further, use of artificial intelligence platforms by our employees, whether authorized or unauthorized, may also increase the risk that our proprietary information will be unintentionally disclosed or undermine our claims to certain intellectual property.
Our products, including contact lenses, eyeglasses, sunglasses, and our Virtual Vision Test mobile application, among others, are regulated as medical devices in the United States by the FDA pursuant to the FDCA and FDA regulations.
Our products, including contact lenses, prescription eyeglasses, sunglasses, and our Virtual Vision Test mobile application, among others, are regulated as medical devices in the United States by the FDA pursuant to the FDCA and FDA regulations.
We may not be able to, or it may not be cost-effective to, acquire or maintain all domain names that utilize the name “Warby Parker” in all of the countries in which we currently conduct or intend to conduct business.
Further, we may not be able to, or it may not be cost-effective to, acquire or maintain all domain names that utilize the name “Warby Parker” in all of the countries in which we currently conduct or intend to conduct business.
We or our third-party manufacturers are also subject to FDA regulations with respect to medical devices relating to clinical trials, establishment registration and device listing, sales and distribution, recordkeeping, advertising and promotion, recalls and field safety corrective actions, post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury, and import and export.
We or our third-party manufacturers are also subject to FDA regulations with respect to medical devices relating to clinical trials, establishment registration and device listing, sales and distribution, recordkeeping, advertising and promotion, reporting recalls (corrections and removals) and field safety corrective actions, post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury, and import and export.
Our and our third party providers’ IT and ERP systems may be subject to damage or interruption from power outages or damages, telecommunications problems, data corruption, software errors, network failures, acts of war or terrorist attacks, fire, flood, global pandemics, and natural disasters; and our existing safety systems, data backup, access protection, user management, and information technology emergency planning may not be sufficient to prevent data loss or long-term network outages.
Our and our third party providers’ IT and ERP systems may be subject to damage or interruption from power outages or damages, telecommunications problems, data corruption, software errors, network failures, acts of war or terrorist attacks, fire, flood, global pandemics, and natural disasters; and our existing safety systems, data backup, access protection, user management, and IT emergency planning may not be sufficient to prevent data loss or long-term network outages.
Moreover, even if more consumers begin to shop for glasses and contacts online, if we are unable to address their changing needs and anticipate or respond to market trends and new technologies, including the integration of artificial intelligence and machine learning, in a timely and cost-efficient manner, we could experience increased customer churn, which, in turn, would adversely affect our business and results of operations.
Moreover, even if more consumers begin to shop for glasses and contacts online, if we are unable to address their changing needs and anticipate or respond to market trends and new technologies, including the integration of artificial intelligence, in a timely and cost-efficient manner, we could experience increased customer churn, which, in turn, would adversely affect our business and results of operations.
We compete with other optical retail companies, health systems and group practices for vision care professionals. We, as well as the professional corporations or similar entities that employ optometrists in certain of our retail stores, could face difficulties attracting and retaining qualified professionals if we or such corporations fail to offer competitive compensation and benefits.
We compete with other optical retail companies, health systems and group practices for eye care professionals. We, as well as the professional corporations or similar entities that employ optometrists in certain of our retail stores, could face difficulties attracting and retaining qualified professionals if we or such corporations fail to offer competitive compensation and benefits.
Economic disruption and uncertainty resulting from these factors can negatively impact our business, resulting in: 52 Table of Contents • inflation and increased price pressure for our products and services; • increased cost to manufacture and sell our products and services; • reduced consumer spending power; • reduced demand for our products and services, delays in shipment of orders or increases in order cancellation; • increased risk of excess and obsolete inventory; and • delays in payment for our products and services.
Economic disruption and uncertainty resulting from these factors can negatively impact our business, resulting in: • inflation and increased price pressure for our products and services; 48 Table of Contents • increased cost to manufacture and sell our products and services; • reduced consumer spending power; • reduced demand for our products and services, delays in shipment of orders or increases in order cancellation; • increased risk of excess and obsolete inventory; and • delays in payment for our products and services.
All of the components that go into the manufacturing of our products and services are sourced from a limited number of third-party suppliers predominantly in the U.S., China, Italy, Vietnam, and Japan, and, in particular, over half of the cellulose acetate used to produce many of our frames is provided by a single supplier.
All of the components that go into the manufacturing of our products and services are sourced from a limited number of third-party suppliers predominantly in the U.S., China, Italy, Vietnam, and Japan, and, in particular, around half of the cellulose acetate used to produce many of our frames is provided by a single supplier.
Furthermore, our operations are subject to state licensing laws and many states require that opticians be licensed to dispense and fit glasses and contact lenses. Our ability to attract and retain optometrists, opticians and other vision care professionals and/or contract with optometrists or independent professional corporations or similar entities that employ optometrists depends on several factors.
Furthermore, our operations are subject to state licensing laws and many states require that opticians be licensed to dispense and fit glasses and contact lenses. Our ability to attract and retain optometrists, opticians and other eye care professionals and/or contract with optometrists or independent professional corporations or similar entities that employ optometrists depends on several factors.
Because of the ten-to-one voting ratio between our Class B and Class A common stock, our Co-Founders and Co-CEOs collectively control a significant percentage of the combined voting power of our common stock and therefore are able to exercise significant influence, and will be able to exercise significant control in the future, if they exercise and/or settle their options, RSUs and PSUs that will exercise or settle into Class B common stock, over all matters submitted to our stockholders for approval until the date of automatic 48 Table of Contents conversion (described further below), when all outstanding shares of Class B common stock will convert automatically into shares of Class A common stock.
Because of the ten-to-one voting ratio between our Class B and Class A common stock, our Co-Founders and Co-CEOs collectively control a significant percentage of the combined voting power of our common stock and therefore are able to exercise significant influence, and will be able to exercise significant control in the future, if they exercise and/or settle their options, RSUs and PSUs that will exercise or settle into Class B common stock, over all matters submitted to our stockholders for approval until the date of automatic conversion (described further below), when all outstanding shares of Class B common stock will convert automatically into shares of Class A common stock.
Climate change may also have indirect effects on our business, including for example, leading to increased costs (or unavailability) of property or other insurance policies. Additionally, governmental authorities have proposed, and are likely to continue to propose, legislation and regulation to reduce or mitigate the impacts of climate change, or to require substantial disclosures regarding same.
Climate change may also have indirect effects on our business, including for example, leading to increased costs (or unavailability) of property or other insurance policies. Additionally, governmental authorities have proposed, and may continue to propose, legislation and regulation to reduce or mitigate the impacts of climate change, or to require substantial disclosures regarding the same.
Increased compensation for vision care professionals could raise our costs and put pressure on our margins. The loss of or the inability by us or our affiliated professional entities to foster new relationships with such vision care professionals could impair our ability to provide services to our customers and/or cause our customers to go elsewhere for their optical needs.
Increased compensation for eye care professionals could raise our costs and put pressure on our margins. The loss of or the inability by us or our affiliated professional entities to foster new relationships with such eye care professionals could impair our ability to provide services to our customers and/or cause our customers to go elsewhere for their optical needs.
Despite our efforts, we may not be successful in achieving compliance with the rapidly evolving privacy, data security, and data protection requirements discussed above. Emerging technologies we utilize, including artificial intelligence and machine learning, may also become subject to regulation under new laws or new applications of existing laws.
Despite our efforts, we may not be successful in achieving compliance with the rapidly evolving privacy, data security, and data protection requirements discussed above. Emerging technologies we utilize, including artificial intelligence, may also become subject to regulation under new laws or new applications of existing laws.
Furthermore, manufacturers of medical devices are required to verify that their suppliers maintain facilities, procedures, and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors.
Furthermore, manufacturers of medical devices are required to verify that their suppliers maintain facilities, procedures, and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QMSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors.
Further, our competitors bid on terms like “Warby Parker” as paid keywords, and consumers searching for us could instead by directed to a third-party’s website, which could lead to reduced traffic to our website, which may have a material adverse effect on our business, financial condition, and results of operations.
Further, our competitors bid on terms like “Warby Parker” as paid keywords, and consumers searching for us could instead be directed to a third-party’s website, which could lead to reduced traffic to our website, which may have a material adverse effect on our business, financial condition, and results of operations.
For example: • we may choose to revise or implement policies in ways that we believe will be beneficial to our stakeholders, including suppliers, employees, and local communities, even though the changes may be costly; 46 Table of Contents • we may be influenced to pursue programs and services to demonstrate our commitment to the communities to which we serve even though there is no immediate return to our stockholders; and • in responding to a possible proposal to acquire the company, our board of directors may be influenced by the interests of our stakeholders, including suppliers, employees, and local communities, whose interests may be different from the interests of our stockholders.
For example: • we may choose to revise or implement policies in ways that we believe will be beneficial to our stakeholders, including suppliers, employees, and local communities, even though the changes may be costly; • we may be influenced to pursue programs and services to demonstrate our commitment to the communities to which we serve even though there is no immediate return to our stockholders; and • in responding to a possible proposal to acquire the company, our Board of Directors may be influenced by the interests of our stakeholders, including suppliers, employees, and local communities, whose interests may be different from the interests of our stockholders.
Although the majority of our revenues is derived from cash-pay consumers, we have contracts with certain vision plans, including Medicare Advantage health plans, which subject us to a number of federal and state healthcare regulatory laws, including federal and state anti-kickback, false claims, self-referral, and other healthcare fraud and abuse laws, 29 Table of Contents some of which apply to items or services reimbursed by any third-party payor, or by self-pay patients.
Although the majority of our revenues is derived from cash-pay consumers, we have contracts with certain vision plans, including Medicare Advantage health plans, which subject us to a number of federal and state healthcare regulatory laws, including federal and state anti-kickback, false claims, self-referral, and other healthcare fraud and abuse laws, some of which apply to items or services reimbursed by any third-party payor, or by self-pay patients.
In several states where we operate, state corporate practice of medicine and optometry laws prohibit a business corporation from practicing medicine or optometry, directly employing physicians or optometrists to provide professional services, or exercising control over treatment decisions by such professionals.
In many states where we operate, state corporate practice of medicine and optometry laws prohibit a business corporation from practicing medicine or optometry, directly employing physicians or optometrists to provide professional services, or exercising control over treatment decisions by such professionals.
We rely on a limited number of third-party suppliers and contract manufacturers for the components that go into the manufacturing of our products. In particular, over half of the cellulose acetate used to produce our frames is provided by a single supplier.
We rely on a limited number of third-party suppliers and contract manufacturers for the components that go into the manufacturing of our products. In particular, around half of the cellulose acetate used to produce our frames is provided by a single supplier.
In the United States, the methods used in, and the facilities used for, the manufacture of medical devices must comply with the FDA’s design control requirements and current Good Manufacturing Practices for medical devices, known as the Quality System Regulation, or QSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing, and shipping of medical devices.
In the United States, the methods used in, and the facilities used for, the manufacture of medical devices must comply with the FDA’s design control requirements and current Good Manufacturing Practices for medical devices, known as the Quality Management System Regulation, or QMSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing, and shipping of medical devices.
We must balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence because of changing customer requirements, fluctuating commodity prices, changes to our products, product transfers, or the life cycle of our products.
To be successful, we must balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence because of changing customer requirements, fluctuating commodity prices, changes to our products, product transfers, or the life cycle of our products.
These covenants may limit our ability and the ability of our subsidiaries, under certain circumstances, to, among other things: • incur additional indebtedness; ▪ create or incur liens; ▪ make capital expenditures; ▪ engage in certain fundamental changes, including mergers or consolidations; ▪ sell or transfer assets; ▪ make acquisitions, investments, loans or advances; ▪ pay or modify the terms of certain indebtedness; 28 Table of Contents ▪ engage in certain transactions with affiliates; and ▪ enter into negative pledge clauses.
These covenants may limit our ability and the ability of our subsidiaries, under certain circumstances, to, among other things: • incur additional indebtedness; ▪ create or incur liens; ▪ make capital expenditures; ▪ engage in certain fundamental changes, including mergers or consolidations; ▪ sell or transfer assets; ▪ make acquisitions, investments, loans or advances; ▪ pay or modify the terms of certain indebtedness; ▪ engage in certain transactions with affiliates; and ▪ enter into negative pledge clauses.
Such efforts will require significant time, expense, and attention as there is intense competition for such individuals, particularly in the New York City region, and new hires require significant training and time before they achieve full productivity, particularly in retail sales and Customer Experience.
Such efforts will require significant time, expense, and attention as there is intense competition for such individuals, particularly in the New York City region, and new hires require significant training and time before they achieve full productivity, particularly in retail sales.
In addition, we provide a six month no scratch guarantee on all of our glass lenses. If a customer has scratched lenses in the first six months, we replace the scratched lenses for free. We could incur significant costs to honor this guarantee.
In addition, we provide a six month no scratch guarantee on all of our eyeglass lenses. If a customer has scratched lenses in the first six months, we replace the scratched lenses for free. We could incur significant costs to honor this guarantee.
Because the Class C common stock carries no voting rights, is not convertible into any other capital stock and is not listed for trading on an exchange or registered for sale with the SEC, shares of Class C common stock may be less liquid and less attractive to any future recipients of these shares than shares of Class A common stock, although we may seek to list the Class C common stock for trading and register shares of Class C common stock for sale in the future.
Because the Class C common stock carries no voting rights, is not convertible into any other capital stock and is not listed for trading on an exchange or registered for sale with the SEC, shares of Class C common stock may be less liquid and less attractive to any future recipients of these shares than shares of Class A common stock, although we may seek to list the Class C common stock for 44 Table of Contents trading and register shares of Class C common stock for sale in the future.
In addition, existing laws and regulations are constantly evolving, and new laws and regulations that apply to our business are being introduced at every level of government in the United States, as well as internationally. 31 Table of Contents Many state legislatures have adopted legislation that regulates how businesses handle personal information, including measures relating to privacy, data security, and data breaches.
In addition, existing laws and regulations are constantly evolving, and new laws and regulations that apply to our business are being introduced at every level of government in the United States, as well as internationally. Many state legislatures have adopted legislation that regulates how businesses handle personal information, including measures relating to privacy, data security, and data breaches.
We may discover that these initiatives are more expensive than we currently anticipate, and we may not succeed in increasing our net revenue sufficiently to offset these expenses or realize any anticipated benefits. We will also face 22 Table of Contents greater compliance costs associated with the increased scope of our business and being a public company.
We may discover that these initiatives are more expensive than we currently anticipate, and we may not succeed in increasing our net revenue sufficiently to offset these expenses or realize any anticipated benefits. We will also face greater compliance costs associated with the increased scope of our business and being a public company.
If one or more of the search engines or other online sources on which we rely for traffic to our website and our mobile app were to modify its general methodology for how it displays our advertisements or keyword search results, resulting in fewer consumers clicking through to our website and our mobile applications, our business and operating results are likely to suffer.
If one or more of the search engines or other online sources on which we rely for traffic to our website and our mobile app were to modify its general methodology for how it displays our advertisements or keyword search results, resulting in fewer consumers clicking through 39 Table of Contents to our website and our mobile applications, our business and operating results are likely to suffer.
This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, takeover, or other business combination involving us that you, as a stockholder, may otherwise support, and could allow us to take actions that some of our stockholders do not view as 49 Table of Contents beneficial, which could reduce the trading price of our Class A common stock.
This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, takeover, or other business combination involving us that you, as a stockholder, may otherwise support, and could allow us to take actions that some of our stockholders do not view as beneficial, which could reduce the trading price of our Class A common stock.
Any of the foregoing may 25 Table of Contents require us to make additional investments in facilities and equipment, require us to incur additional costs for the collection of data and/or preparation of disclosures and associated internal controls, may impact the availability and cost of key raw materials used in the production of our products or the demand for our products, and, in turn, may adversely impact our business, operating results, and financial condition.
Any of the foregoing may require us to make additional investments in facilities and equipment, require us to incur additional costs for the collection of data and/or preparation of disclosures and associated internal controls, may impact the availability and cost of key raw materials used in the production of our products or the demand for our products, and, in turn, may adversely impact our business, operating results, and financial condition.
In addition, resolution of claims may 35 Table of Contents require us to redesign or rebrand our products, license rights from third parties on potentially unfavorable terms, cease using certain brand names or other intellectual property rights altogether, make substantial payments for royalty or license fees, legal fees, settlement payments or other costs or damages, or admit liability.
In addition, resolution of claims may require us to redesign or rebrand our products, license rights from third parties on potentially unfavorable terms, cease using certain brand names or other intellectual property rights altogether, make substantial payments for royalty or license fees, legal fees, settlement payments or other costs or damages, or admit liability.
Apple and Google have broad discretion to change their respective terms and conditions applicable to the distribution of our mobile applications, to interpret their respective terms and conditions in ways that may limit, eliminate or otherwise interfere with our ability to distribute 44 Table of Contents mobile app through their stores, the features we provide and the manner in which we market in-application products.
Apple and Google have broad discretion to change their respective terms and conditions applicable to the distribution of our mobile applications, to interpret their respective terms and conditions in ways that may limit, eliminate or otherwise interfere with our ability to distribute mobile app through their stores, the features we provide and the manner in which we market in-application products.
Our directors have a fiduciary duty to consider not only our stockholders’ pecuniary interests, but also our specific public benefit and the best interests of stakeholders materially affected by our actions. If a conflict between such interests arises, there is no guarantee such a conflict would be resolved in favor of our stockholders.
Our directors have a fiduciary duty to consider not only our stockholders’ pecuniary interests, but also our specific public benefit and the best interests of stakeholders materially affected by our 42 Table of Contents actions. If a conflict between such interests arises, there is no guarantee such a conflict would be resolved in favor of our stockholders.
Any provision in our certificate of incorporation, our bylaws, or Delaware law that has the effect of delaying or deterring a change in control 51 Table of Contents could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
Any provision in our certificate of incorporation, our bylaws, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
As a result of these covenants and restrictions, we may be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants.
As a result of these covenants and restrictions, we may be limited in how we conduct our business, and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business 25 Table of Contents opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants.
Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media 22 Table of Contents campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
The successful promotion of our brand and the market’s awareness of our products, retail stores, and services will depend on a number of factors, including fashion trends, our marketing efforts, ability to continue to develop our products and services, ability to successfully differentiate our offerings from competitive offerings, and ability to construct and design our retail store in line with our brand identity.
The successful promotion of our brand and the market’s awareness of our products, retail stores, and services will depend on a number of factors, including fashion trends, our marketing efforts, ability to continue to develop our products and services at competitive prices, ability to successfully differentiate our offerings from competitive offerings, and ability to construct and design our retail stores in line with our brand identity.
Also, as a public benefit corporation, our board of directors is required by the DGCL to manage or direct our business and affairs in a manner that balances the pecuniary interests of our stockholders, the best interests of those materially affected by our conduct, and the specific public benefits identified in our certificate of incorporation.
Also, as a public benefit corporation, our Board of Directors is required by the DGCL to manage or direct our business and affairs in a manner that balances the pecuniary interests of our stockholders, the best interests of 47 Table of Contents those materially affected by our conduct, and the specific public benefits identified in our certificate of incorporation.
Our results of operations may be 53 Table of Contents adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock.
Our suppliers may be forced to reduce their production, shut down their operations or file for 41 Table of Contents bankruptcy. The occurrence of one or more of these events could impact our ability to get products to our customers, result in disruptions to our operations, increase our costs and decrease our profitability.
Our suppliers may be forced to reduce their production, shut down their operations or file for bankruptcy. The occurrence of one or more of these events could impact our ability to get products to our customers, result in disruptions to our operations, increase our costs and decrease our profitability.
A decision to close the facilities without adequate notice or other unanticipated problems or disruptions could result in lengthy interruptions to our business. All of the aforementioned risks may be exacerbated if our business continuity and disaster recovery plans prove to be inadequate.
A decision to close the facilities without adequate notice or other unanticipated problems or disruptions could result in 38 Table of Contents lengthy interruptions to our business. All of the aforementioned risks may be exacerbated if our business continuity and disaster recovery plans prove to be inadequate.
Pursuant to our certificate of incorporation, we are authorized to issue 150,000,000 shares of Class C common stock, none of which were outstanding as of December 31, 2024.
Pursuant to our certificate of incorporation, we are authorized to issue 150,000,000 shares of Class C common stock, none of which were outstanding as of December 31, 2025.
The extent to which a jurisdiction considers particular actions or relationships to comply with the applicable standard of care is subject to change and to evolving interpretations by states medical boards and state 33 Table of Contents attorneys general, among others, each with broad discretion.
The extent to which a jurisdiction considers particular actions or relationships to comply with the applicable standard of care is subject to change and to evolving interpretations by states medical boards and state attorneys general, among others, each with broad discretion.
In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. We could incur significant liabilities related to, and significant costs in complying with, environmental, health, and safety laws and regulations.
In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. 35 Table of Contents We could incur significant liabilities related to, and significant costs in complying with, environmental, health, and safety laws and regulations.
To the extent that such changes have a negative impact on us, our suppliers or our customers, including as a result of related uncertainty, these changes may materially and adversely impact our business, financial condition, results of operations, and cash flows.
To the extent that such changes have a negative impact on us, our suppliers or our customers, including as a result of related uncertainty, these 41 Table of Contents changes may materially and adversely impact our business, financial condition, results of operations, and cash flows.
Any actual or perceived non-compliance could result in litigation and proceedings against us by governmental entities, customers or others, fines and civil or criminal penalties, limited ability or inability to operate our business, offer services, or market our business in certain jurisdictions, negative publicity and harm to our brand and reputation, and reduced overall demand for our products and services.
Any actual or perceived non-compliance could 29 Table of Contents result in litigation and proceedings against us by governmental entities, customers or others, fines and civil or criminal penalties, limited ability or inability to operate our business, offer services, or market our business in certain jurisdictions, negative publicity and harm to our brand and reputation, and reduced overall demand for our products and services.
Our customer agreement with AWS remains in effect until (i) terminated for convenience, which we may do for any reason by providing AWS notice and closing our account and which AWS may do for any reason by providing us at 43 Table of Contents least 30 days’ notice or (ii) terminated for cause, which either party may do if the other party has an uncured material breach and which AWS may do immediately upon notice.
Our customer agreement with AWS remains in effect until (i) terminated for convenience, which we may do for any reason by providing AWS notice and closing our account and which AWS may do for any reason by providing us at least 30 days’ notice or (ii) terminated for cause, which either party may do if the other party has an uncured material breach and which AWS may do immediately upon notice.
The dispensing of prescription eyeglasses is also regulated in most states in which we do business. In some states, we are required to register our stores as an optical retailer. The laws applicable to us are also subject to evolving interpretations.
The dispensing of prescription 26 Table of Contents eyeglasses is also regulated in most states in which we do business. In some states, we are required to register our stores as an optical retailer. The laws applicable to us are also subject to evolving interpretations.
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 24 Table of Contents January of the following year.
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.
Our failure, or failure by our third party vendor or manufacturers, to obtain the proper FDA marketing authorizations for our products could lead to FDA enforcement actions, such as a Warning Letter, market withdrawals, product recalls or civil or criminal penalties that could have a material adverse effect on our business.
Our failure, or failure by our third party vendor or manufacturers, to obtain the proper FDA marketing authorizations for our products could lead to FDA enforcement actions, such as a Warning Letter, market 32 Table of Contents withdrawals, product recalls or civil or criminal penalties that could have a material adverse effect on our business.
We generally enter into confidentiality and invention assignment agreements with our employees and consultants, as well as confidentiality agreements with other third parties, including suppliers and other partners. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how, and trade secrets.
We generally enter into confidentiality and invention assignment agreements with our employees and consultants, as well as confidentiality agreements with other relevant third parties. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how, and trade secrets.
We rely on a limited number of suppliers to supply the majority of the inputs to our products and are thus exposed to concentration of supplier risk. Approximately 18%, 18%, and 19% of cost of goods sold were from our top five suppliers for the years ended December 31, 2024, 2023, and 2022, respectively.
We rely on a limited number of suppliers to supply the majority of the inputs to our products and are thus exposed to concentration of supplier risk. Approximately 14%, 18%, and 18% of cost of goods sold were from our top five suppliers for the years ended December 31, 2025, 2024, and 2023, respectively.
Moreover, we cannot predict whether changes will be made to existing laws, regulations, or interpretations, or whether new ones will be enacted or adopted, which could cause us to be out of compliance with these requirements.
Moreover, we cannot predict whether changes will be made to existing laws, regulations, or 27 Table of Contents interpretations, or whether new ones will be enacted or adopted, which could cause us to be out of compliance with these requirements.
During the evaluation and testing process of our internal controls, if we identify future material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective.
During the evaluation and testing process of our internal controls, if we identify future material weaknesses in our internal control over financial reporting, we will be unable to certify that our 46 Table of Contents internal control over financial reporting is effective.
In addition, we must keep up to date with competitive technology trends, including the use of new or improved technology, such as artificial intelligence and machine learning, creative user interfaces, virtual and augmented reality, and other e-commerce marketing tools such as paid search and mobile application, among others, which may increase our costs and which may not increase sales or attract customers.
In addition, we must keep up to date with competitive technology trends, including the use of new or improved technology, such as AI, creative user interfaces, virtual and augmented reality, and other e-commerce marketing tools such as paid search and mobile application, among others, which may increase our costs and which may not increase sales or attract customers.
If we are not able to effectively add and retain employees, our ability to achieve our strategic objectives will be adversely impacted, and our business and future growth prospects will be harmed. We believe that our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be harmed.
If we are not able to effectively add and retain employees, our ability to achieve our strategic objectives will be adversely impacted, and our business and future growth prospects will be harmed. 23 Table of Contents We believe that our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be harmed.
Being a public company that is subject to these new rules and regulations has made it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or continue to incur substantially higher costs to obtain coverage.
Being a public company that is subject to these new 49 Table of Contents rules and regulations has made it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or continue to incur substantially higher costs to obtain coverage.
Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim, could distract our management from our business, could require us to cease use of such intellectual property, and could create ongoing obligations if we are subject to agreements or injunctions (stipulated or imposed) preventing us from engaging in certain acts.
Any claim of infringement by a third party, even those without merit, could cause us to incur substantial defense costs, distract our management, require us to cease use of such intellectual property, and create ongoing obligations if we are subject to agreements or injunctions (stipulated or imposed) preventing us from engaging in certain acts.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest change“ Risk Factors—Risks Related to Our Business and Industry—We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information; any significant failure, inadequacy, interruption, or cybersecurity incident could adversely affect our business, financial condition, and operations. ” Cybersecurity Governance Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to our Audit Committee oversight of cybersecurity and other information technology risks.
Biggest changeAny significant failure, inadequacy, interruption, or cybersecurity incident could adversely affect our business, financial condition, and operations. ” Cybersecurity Governance Our Board of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to our Audit Committee oversight of cybersecurity risks, including the implementation of our cybersecurity risk management program.
Our Audit Committee reports to the full board of directors regarding its activities, including those related to cybersecurity. The full board of directors also receives an annual briefing from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from the Chief Technology Officer (“CTO”) and the Senior Director of Information Security.
Our Audit Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The full Board of Directors also receives an annual briefing from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from the Chief Technology Officer (“CTO”) and the Vice President of Information Security.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our management team takes steps to stay informed and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
Our management team, including our CTO and Senior Director of Information Security, are responsible for assessing and managing our material risks from cybersecurity threats, and our Chief Financial Officer and General Counsel are responsible for associated materiality assessments.
Our management team, including our CTO and Vice President of Information Security, are responsible for assessing and managing our material risks from cybersecurity threats, and our Chief Financial Officer and General Counsel are responsible for associated materiality assessments.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See Item 1A.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework 1.1 (NIST CSF). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program includes: • Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • A security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security protocols and controls, and (3) our response to cybersecurity incidents; • The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security protocols and controls; • Cybersecurity awareness training of our employees, incident response personnel, and senior management; • A cybersecurity incident response plan that includes procedures for assessing and responding to cybersecurity incidents; and 54 Table of Contents • A third-party risk management process for service providers, suppliers, and vendors who have access to our critical systems and information.
Key elements of our cybersecurity risk management program include, but are not limited to the following: • Risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • A security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security protocols and controls, and (3) our response to cybersecurity incidents; 50 Table of Contents • The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • Cybersecurity awareness training of our employees, including incident response personnel, and senior management; • A cybersecurity incident response plan that includes procedures for assessing and responding to cybersecurity incidents; and • A third-party risk management process for key service providers, suppliers, and vendors based on our assessment of their criticality to our operations and respective risk profile.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework 2.0 (NIST CSF).
Our Audit Committee oversees management’s implementation of our cybersecurity risk management program. Our Audit Committee receives reports from management on our cybersecurity risks on at least a quarterly basis, and more frequently as needed. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
Our Audit Committee receives reports from management on our cybersecurity risks on at least a quarterly basis, and more frequently as needed. In addition, management updates the Audit Committee where it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant.
Added
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See Item 1A.
Added
“ Risk Factors—Risks Related to Our Business and Industry—We rely heavily on our information technology systems, as well as those of our third-party vendors, business partners, and service providers, for our business to effectively operate and to safeguard confidential information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table summarizes our domestic retail store locations by state, as of December 31, 2024: State Retail Store Count State Retail Store Count Alabama 3 Mississippi 1 Arizona 5 Missouri 5 Arkansas 1 Nebraska 1 California 33 Nevada 2 Colorado 6 New Jersey 13 Connecticut 6 New Mexico 1 District of Columbia 6 New York 26 Florida 20 North Carolina 9 Georgia 9 Ohio 6 Idaho 1 Oklahoma 2 Illinois 10 Oregon 2 Indiana 2 Pennsylvania 9 Iowa 1 Rhode Island 2 Kansas 2 South Carolina 3 Kentucky 2 Tennessee 4 Louisiana 2 Texas 21 Maryland 7 Utah 4 Massachusetts 14 Virginia 10 Michigan 7 Washington 5 Minnesota 5 Wisconsin 3 We believe our facilities are adequate and suitable for our current needs, and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Biggest changeThe following table summarizes our domestic retail store locations by state, as of December 31, 2025: State Retail Store Count State Retail Store Count Alabama 3 Mississippi 1 Arizona 6 Missouri 5 Arkansas 1 Nebraska 1 California 34 Nevada 2 Colorado 6 New Hampshire 2 Connecticut 8 New Jersey 17 District of Columbia 7 New Mexico 1 Florida 23 New York 29 Georgia 11 North Carolina 13 Idaho 1 Ohio 9 Illinois 13 Oklahoma 2 Indiana 2 Oregon 3 Iowa 1 Pennsylvania 12 Kansas 2 Rhode Island 2 Kentucky 2 South Carolina 3 Louisiana 2 Tennessee 4 Maine 1 Texas 23 Maryland 9 Utah 4 Massachusetts 16 Virginia 13 Michigan 8 Washington 6 Minnesota 7 Wisconsin 3 We believe our facilities are adequate and suitable for our current needs, and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Item 2. Properties Our corporate headquarters is located in New York, New York, where we lease approximately 52,983 square feet of space under a lease that expires in August 2036.
Item 2. Properties Our corporate headquarters is located in New York, New York, where we lease approximately 53,000 square feet of space under a lease that expires in August 2036.
All of our retail properties are leased or licensed from third parties under agreements expiring at various dates from 2025 to 55 Table of Contents 2036, and the average size of our retail stores is approximately 1,700 square feet as of December 31, 2024.
All of our retail properties are leased or licensed from third parties under agreements expiring at various dates from 2026 to 2036, and the average size of our retail stores is approximately 1,800 square feet as of December 31, 2025.
We also maintain other offices in Nashville, Tennessee, principally for our customer experience employees, where we lease approximately 21,867 square feet of space under a lease that expires in August 2026, as well an additional 11,074 square feet of space in an adjoining building under a lease that expires in 2027.
We also maintain other offices in Nashville, Tennessee, principally for our customer experience employees, where we lease approximately 22,000 square feet of space under a lease that expires in August 2026, and approximately 11,000 square feet of space in an adjoining building under a lease that expires in February 2027.
We operate optical laboratories in Sloatsburg, New York, where we lease approximately 51,803 square feet of space under a lease that expires in June 2026, and Las Vegas, Nevada, where we lease approximately 69,580 square feet of space under a lease that expires in August 2031.
We operate optical laboratories in Sloatsburg, New York, where we lease approximately 52,000 square feet of space under a lease that expires in June 2026, and Las Vegas, Nevada, where we lease approximately 70,000 square feet of space under a lease that expires in August 2031. 51 Table of Contents As of December 31, 2025, we operated 318 retail stores across the United States and five retail stores in Canada.
Removed
As of December 31, 2024, we operated 271 retail stores across the United States and five retail stores in Canada.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings See Note 11, “Commitments and Contingencies” in our consolidated financial statements included in Part II, Item 8 of this Form 10-K for information regarding legal proceedings, which discussion is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 56 Table of Contents Part II.
Biggest changeItem 3. Legal Proceedings See Note 11, “Commitments and Contingencies” in our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding legal proceedings, which discussion is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 52 Table of Contents Part II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of February 25, 2025, there were 3 holders of record of our Class A common stock and 12 holders of record of our Class B common stock. Dividends We have not paid dividends in the past and have no current plans to pay dividends on our common stock. Unregistered Sales of Equity Securities None.
Biggest changeHolders As of February 24, 2026, there were 2 holders of record of our Class A common stock and 13 holders of record of our Class B common stock. Dividends We have not paid dividends in the past and have no current plans to pay dividends on our common stock. Unregistered Sales of Equity Securities None.
Use of Proceeds None. 57 Table of Contents Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
Use of Proceeds None. 53 Table of Contents Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
The graph assumes an initial investment of $100.00 at the close of trading on September 29, 2021 and that all dividends paid by companies included in these indices have been reinvested. The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance. Item 6. Reserved 58 Table of Contents
The graph assumes an initial investment of $100.00 at the close of trading on September 29, 2021 and that all dividends paid by companies included in these indices have been reinvested. The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance. Item 6. Reserved 54 Table of Contents
The following graph depicts the total cumulative stockholder return on our Class A common stock from September 29, 2021, the first day of trading of our Class A common stock on the NYSE, through December 31, 2024, relative to the performance of the S&P 500 Index and the S&P Apparel, Accessories & Luxury Index.
The following graph depicts the total cumulative stockholder return on our Class A common stock from September 29, 2021, the first day of trading of our Class A common stock on the NYSE, through December 31, 2025, relative to the performance of the S&P 500 Index and the S&P Apparel, Accessories & Luxury Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInterest and Other Income, Net Year Ended December 31, 2023 2022 $ Change % Change ($ in thousands) Interest and other income, net $ 9,232 $ 1,307 $ 7,925 606.4 % As a percentage of net revenue 1.4 % 0.2 % 1.2 % Interest and other income, net increased by $7.9 million, or 606.4%, for the year ended December 31, 2023 compared to the same period in 2022 primarily due to higher interest rates on our cash and cash equivalents balance. 66 Table of Contents Provision for Income Taxes Year Ended December 31, 2023 2022 $ Change % Change ($ in thousands) Provision for income taxes $ 433 $ 497 $ (64) (12.9) % As a percentage of net revenue — % 0.1 % (0.1) % Provision for income taxes decreased $0.1 million, or 12.9%, for the year ended December 31, 2023 compared to the same period in 2022 primarily due to the 2022 establishment of a valuation allowance on our Canadian subsidiary, partially offset by higher state tax expense in 2023.
Biggest changeInterest and Other Income, Net Year Ended December 31, 2025 2024 $ Change % Change ($ in thousands) Interest and other income, net $ 8,379 $ 10,597 $ (2,218) (20.9) % As a percentage of net revenue 1.0 % 1.4 % (0.4) % Interest and other income, net decreased by $2.2 million, or 20.9%, for the year ended December 31, 2025 compared to the same period in 2024 primarily due to unfavorable fluctuations in foreign currency rates and lower interest rates on our increased cash and cash equivalents balance.
This increase was primarily driven by higher payroll-related costs, primarily from growth in our retail workforce, and investments in marketing, partially offset by a $23.2 million decrease in stock-based compensation, mostly related to the Founders Grant (as described in Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
This increase was primarily driven by higher payroll-related costs, primarily from growth in our retail workforce, and investments in marketing, partially offset by a $23.2 million decrease in stock-based compensation, mostly related to the 2021 Founders Grant (as described in Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
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 consolidated financial statements as indicators of financial performance.
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 income (loss) or other financial statement data presented in our consolidated financial statements as indicators of financial performance.
(2) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For more information regarding our use of these measures and a reconciliation of net loss to Adjusted EBITDA and Adjusted EBITDA Margin, see the section titled "Adjusted EBITDA and Adjusted EBITDA Margin” below.
(2) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For more information regarding our use of these measures and a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin, see the section titled "Adjusted EBITDA and Adjusted EBITDA Margin” below.
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.
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 20 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.
Cost of Goods Sold, Gross Profit, and Gross Margin Year Ended December 31, 2024 2023 $ Change % Change ($ in thousands) Cost of goods sold $ 344,481 $ 304,541 $ 39,940 13.1 % Gross profit 426,834 365,224 61,610 16.9 % Gross margin 55.3 % 54.5 % 0.8 % Cost of goods sold increased by $39.9 million, or 13.1%, for the year ended December 31, 2024 compared to the same period in 2023, and decreased as a percentage of revenue over the same period by 80 basis points, from 45.5% of revenue to 44.7% of revenue.
Cost of Goods Sold, Gross Profit, and Gross Margin Year Ended December 31, 2024 2023 $ Change % Change ($ in thousands) Cost of goods sold $ 344,481 $ 304,541 $ 39,940 13.1 % Gross profit 426,834 365,224 61,610 16.9 % Gross margin 55.3 % 54.5 % 0.8 % 62 Table of Contents Cost of goods sold increased by $39.9 million, or 13.1%, for the year ended December 31, 2024 compared to the same period in 2023, and decreased as a percentage of revenue over the same period by 80 basis points, from 45.5% of revenue to 44.7% of revenue.
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. We also have access to cash from our credit facility, which remains undrawn as of December 31, 2024.
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. We also have access to cash from our credit facility, which remains undrawn as of December 31, 2025.
Item 7. 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 audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K (“Form 10-K”).
Item 7. 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 audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Provision for Income Taxes Year Ended December 31, 2024 2023 $ Change % Change ($ in thousands) Provision for income taxes $ 875 $ 433 $ 442 102.1 % As a percentage of net revenue 0.1 % — % 0.1 % Provision for income taxes increased $0.4 million, or 102.1%, for the year ended December 31, 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.
Provision for Income Taxes Year Ended December 31, 2024 2023 $ Change % Change ($ in thousands) Provision for income taxes $ 875 $ 433 $ 442 102.1 % As a percentage of net revenue 0.1 % — % 0.1 % 63 Table of Contents Provision for income taxes increased $0.4 million, or 102.1%, for the year ended December 31, 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.
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.
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; 57 Table of Contents • 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.
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 276 retail stores as of December 31, 2024. • We’ve crafted a holistic vision care offering that extends beyond glasses to include contacts, vision tests and eye exams, vision insurance, and more.
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 323 retail stores as of December 31, 2025. • We’ve crafted a holistic vision care offering that extends beyond glasses to include contacts, vision tests and eye exams, vision insurance, and more.
Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.
Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
For the years ended December 31, 2024, 2023, and 2022, the amount includes $1.1 million, $0.6 million, and $0.6 million of employer payroll costs associated with releases of RSUs and option exercises, respectively.
For the years ended December 31, 2025, 2024, and 2023, the amount includes $1.6 million, $1.1 million, and $0.6 million of employer payroll costs associated with releases of RSUs and option exercises, respectively.
This discussion and other parts of this Form 10-K 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.
This discussion and other parts of this Annual Report on Form 10-K 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.
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 generate revenue through selling our wide array of eyewear, including glasses, sunglasses, and contact lenses. We also generate revenue from providing eye exams and vision tests, and selling eyewear accessories.
Adjustments for inventory shrink, representing the physical loss of inventory, are estimated based on historical experience and are adjusted based upon physical inventory counts. Actual results may differ from estimates due to the quantity and mix of products in inventory, consumer preferences, and economic and market conditions.
Adjustments for inventory shrink, representing the physical loss of inventory, are estimated based on historical experience and are 66 Table of Contents adjusted based upon physical inventory counts. Actual results may differ from estimates due to the quantity and mix of products in inventory, consumer preferences, and economic and market conditions.
Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies” in our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies” in our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a description of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.
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. Credit Facility 2022 Credit Facility In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc.
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. 2024 Credit Facility In February 2024, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc.
Key Business Metrics and Certain Non-GAAP Financial Measures In addition to the measures presented in our 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.
Key Business Metrics and Certain Non-GAAP Financial Measures In addition to the measures presented in our consolidated financial statements, we use the following key business metrics and certain non-GAAP financial measures to evaluate our business, measure our performance, 56 Table of Contents develop financial forecasts, and make strategic decisions.
(2) Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in each of May 2024, August 2023 and May 2022 to the Warby Parker Impact Foundation, 56,938 shares of Class A common stock to charitable donor advised funds in June 2023, and 34,528 shares of Class A common stock to charitable donor advised funds in November 2022.
(2) Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in each of May 2025, 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.
For the year ended December 31, 2023, net cash used in investing activities was $54.7 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores and capitalized software development costs, and an investment in a private optical equipment company.
For the year ended December 31, 2024, net cash used in investing activities was $66.0 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. 65 Table of Contents For the year ended December 31, 2023, net cash used in investing activities was $54.7 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.
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.
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.
Subsequent to December 31, 2024, we entered into four operating lease agreements and extended the term of one existing operating lease agreement for retail space in the U.S. Total commitments under these agreements are approximately $4.3 million.
Subsequent to December 31, 2025, we entered into ten operating lease agreements and extended the term of four existing operating lease agreement for retail space in the U.S. Total commitments under these agreements are approximately $14.3 million.
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, decreased by 250 basis points for the year ended December 31, 2023 compared to the same period in 2022.
Gross margin, expressed as a percentage and calculated as gross profit divided by net revenue, decreased by 130 basis points for the year ended December 31, 2025 compared to the same period in 2024.
Gross profit, calculated as net revenue less cost of goods sold, increased by $24.2 million, or 7.1%, for the year ended December 31, 2023 compared to the same period in 2022, primarily due to the increase in net revenue over the same period.
Gross profit, calculated as net revenue less cost of goods sold, increased by $43.7 million, or 10.2%, for the year ended December 31, 2025 compared to the same period in 2024, primarily due to the increase in net revenue over the same period.
We had cash and cash equivalents of $254.2 million, which was primarily held for working capital purposes, and an accumulated deficit of $687.2 million as of December 31, 2024. We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion of our business.
We had cash and cash equivalents of $286.4 million, which was primarily held for working capital purposes, and an accumulated deficit of $685.6 million as of December 31, 2025. We expect that operating losses could continue in the foreseeable future as we continue to invest in the expansion of our business.
For the year ended December 31, 2022, net cash provided by financing activities was $3.3 million, which was primarily related to proceeds from shares issued in connection with our ESPP and stock option exercises.
For the year ended December 31, 2024, net cash provided by financing activities was $5.0 million, which was primarily related to proceeds from stock option exercises, shares issued in connection with our ESPP, and other equity activity.
Cash Flows from Investing Activities For the year ended December 31, 2024, net cash used in investing activities was $66.0 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 Investing Activities For the year ended December 31, 2025, net cash used in investing activities was $67.0 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores and investments in capitalized software development costs.
Year Ended December 31, 2024 2023 2022 Active Customers ( in thousands ) 2,514 2,332 2,276 Store Count (1) 276 237 200 Adjusted EBITDA (2) ( in thousands ) $ 73,111 $ 52,352 $ 27,202 Adjusted EBITDA Margin (2) 9.5 % 7.8 % 4.5 % __________________ (1) Store Count number at the end of the period indicated.
Year Ended December 31, 2025 2024 2023 Active Customers ( in thousands ) 2,689 2,514 2,332 Store Count (1) 323 276 237 Adjusted EBITDA (2) ( in thousands ) $ 95,211 $ 73,111 $ 52,352 Adjusted EBITDA Margin (2) 10.9 % 9.5 % 7.8 % __________________ (1) Store Count number at the end of the period indicated.
The non-cash charges included $98.0 million of stock-based compensation, $31.9 million of depreciation and amortization, $3.8 million of non-cash charitable contributions, $1.6 million of non-cash impairment charges, and $0.2 million of amortization of cloud-based implementation costs.
The non-cash charges included $34.5 million of stock-based compensation, $50.3 million of depreciation and amortization, $3.4 million of amortization of cloud-based implementation costs, $2.8 million of non-cash charitable contributions, and $0.6 million of non-cash impairment charges.
(5) Represents employee severance and related costs for restructuring actions executed in October 2024 and August 2022 and charges for certain legal matters outside the ordinary course of business. Results of Operations The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this Annual Report on Form 10-K.
(5) Primarily represents restructuring costs incurred in the second quarter of 2025 and the fourth quarter of 2024 and charges for certain legal matters outside the ordinary course of business. Results of Operations The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this Annual Report on Form 10-K.
Financial Highlights For the years ended December 31, 2024, 2023, and 2022: • we generated net revenue of $771.3 million, $669.8 million, and $598.1 million, respectively; • we generated gross profit of $426.8 million, $365.2 million, and $341.1 million, respectively, representing a gross profit margin of 55.3%, 54.5%, and 57.0%, respectively; • we generated net loss of $20.4 million, $63.2 million, and $110.4 million, respectively; and 59 Table of Contents • we generated Adjusted EBITDA of $73.1 million, $52.4 million, and $27.2 million, respectively.
Financial Highlights For the years ended December 31, 2025, 2024, and 2023: • we generated net revenue of $871.9 million, $771.3 million, and $669.8 million, respectively; 55 Table of Contents • we generated gross profit of $470.6 million, $426.8 million, and $365.2 million, respectively, representing a gross margin of 54.0%, 55.3%, and 54.5%, respectively; • we generated net income of $1.6 million, and net loss of $20.4 million and $63.2 million, respectively; and • we generated Adjusted EBITDA of $95.2 million, $73.1 million, and $52.4 million, respectively, representing an Adjusted EBITDA Margin of 10.9%, 9.5%, and 7.8%, respectively.
“Risk Factors” of this Annual Report. Overall economic environment The nature of our business, which involves the sale of products and services that are a medical necessity for many consumers, provides some insulation from swings in consumer sentiment and general economic conditions. However, our performance and growth are still impacted by these factors.
Overall economic environment The nature of our business, which involves the sale of products and services that are a medical necessity for many consumers, provides some insulation from swings in consumer sentiment. However, our performance and growth are still subject to broader macroeconomic factors.
The following tables set forth our results of operations for the periods presented in dollars and as a percentage of net revenue: Year Ended December 31, 2024 2023 2022 ($ in thousands) Consolidated Statements of Operations Data: Net revenue $ 771,315 $ 669,765 $ 598,112 Cost of goods sold 344,481 304,541 257,050 Gross profit 426,834 365,224 341,062 Selling, general, and administrative expenses 456,946 437,220 452,265 Loss from operations (30,112) (71,996) (111,203) Interest and other income, net 10,597 9,232 1,307 Loss before income taxes (19,515) (62,764) (109,896) Provision for income taxes 875 433 497 Net loss $ (20,390) $ (63,197) $ (110,393) 62 Table of Contents Year Ended December 31, 2024 2023 2022 % of Net Revenue Consolidated Statements of Operations Data: Net revenue 100.0 % 100.0 % 100.0 % Cost of goods sold 44.7 % 45.5 % 43.0 % Gross profit 55.3 % 54.5 % 57.0 % Selling, general, and administrative expenses 59.2 % 65.3 % 75.6 % Loss from operations (3.9) % (10.8) % (18.6) % Interest and other income, net 1.4 % 1.4 % 0.2 % Loss before income taxes (2.5) % (9.4) % (18.4) % Provision for income taxes 0.1 % — % 0.1 % Net loss (2.6) % (9.4) % (18.5) % Components of Results of Operations Net Revenue We primarily derive revenue from the sales of eyewear products, optical services and accessories.
The following tables set forth our results of operations for the periods presented in dollars and as a percentage of net revenue: Year Ended December 31, 2025 2024 2023 ($ in thousands) Consolidated Statements of Operations Data: Net revenue $ 871,905 $ 771,315 $ 669,765 Cost of goods sold 401,326 344,481 304,541 Gross profit 470,579 426,834 365,224 Selling, general, and administrative expenses 475,915 456,946 437,220 Loss from operations (5,336) (30,112) (71,996) Interest and other income, net 8,379 10,597 9,232 Income (loss) before income taxes 3,043 (19,515) (62,764) Provision for income taxes 1,402 875 433 Net income (loss) $ 1,641 $ (20,390) $ (63,197) Year Ended December 31, 2025 2024 2023 % of Net Revenue Consolidated Statements of Operations Data: Net revenue 100.0 % 100.0 % 100.0 % Cost of goods sold 46.0 % 44.7 % 45.5 % Gross profit 54.0 % 55.3 % 54.5 % Selling, general, and administrative expenses 54.6 % 59.2 % 65.3 % Loss from operations (0.6) % (3.9) % (10.8) % Interest and other income, net 1.0 % 1.4 % 1.4 % Income (loss) before income taxes 0.4 % (2.5) % (9.4) % Provision for income taxes 0.2 % 0.1 % — % Net income (loss) 0.2 % (2.6) % (9.4) % Components of Results of Operations Net Revenue We primarily derive revenue from the sales of eyewear, contact lenses, and eye care.
SG&A is expensed in the period in which it is incurred. 63 Table of Contents 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 is recognized as 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 is recognized as incurred.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and commitments as of December 31, 2024: Payments Due by Period Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years ($ in thousands) Operating leases $ 274,882 $ 32,333 $ 97,204 $ 77,175 $ 68,170 Total $ 274,882 $ 32,333 $ 97,204 $ 77,175 $ 68,170 For additional discussion on our lease obligations, see Note 8, “Leases” in our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and commitments as of December 31, 2025: Payments Due by Period Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years ($ in thousands) Operating leases $ 279,312 $ 44,137 $ 105,561 $ 71,891 $ 57,723 Total $ 279,312 $ 44,137 $ 105,561 $ 71,891 $ 57,723 For additional discussion on our lease obligations, see Note 8, “Leases” in our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2024 2023 2022 ($ in thousands) Net cash provided by operating activities $ 98,744 $ 60,991 $ 10,370 Net cash used in investing activities (66,032) (54,671) (60,181) Net cash provided by financing activities 4,961 2,871 3,291 Effect of exchange rates on cash (404) (882) (1,311) Net increase (decrease) in cash and cash equivalents $ 37,267 $ 8,309 $ (47,831) Cash Flows from Operating Activities Net cash provided by operating activities was $98.7 million for the year ended December 31, 2024, consisting of a net loss of $20.4 million, adjusted for $99.9 million of non-cash expenses and $19.2 million of net cash from changes in operating assets and liabilities.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2025 2024 2023 ($ in thousands) Net cash provided by operating activities $ 110,785 $ 98,744 $ 60,991 Net cash used in investing activities (67,048) (66,032) (54,671) Net cash (used in) provided by financing activities (11,997) 4,959 2,871 Effect of exchange rates on cash 457 (404) (882) Net increase in cash and cash equivalents $ 32,197 $ 37,267 $ 8,309 Cash Flows from Operating Activities Net cash provided by operating activities was $110.8 million for the year ended December 31, 2025, consisting of a net income of $1.6 million, adjusted for $91.6 million of non-cash expenses and $17.6 million of net cash from changes in operating assets and liabilities.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” included elsewhere in this Form 10-K. Overview We are a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” included elsewhere in this Annual Report on Form 10-K.
We sell products and services through our stores, website, and mobile apps. Revenue generated from eyewear includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, lens replacements, and customer charges for optional expedited shipping. Revenue generated from vision care consists of in-person eye exams and prescriptions issued through the Virtual Vision Test app.
We sell products and services through our stores, website, and mobile apps. Revenue generated from eyewear includes the sales of 59 Table of Contents prescription and non-prescription optical glasses and sunglasses, eyewear accessories, lens replacements, and customer charges for optional expedited shipping.
In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company. 67 Table of Contents Other than letters of credit outstanding of $4.3 million as of both December 31, 2024 and 2023, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2024 Credit Facility.
Other than letters of credit outstanding of $4.3 million as of both December 31, 2025 and 2024, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2024 Credit Facility.
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 60 Table of Contents awareness, and serve as efficient customer acquisition vehicles.
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.
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.
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.
The increase in cost of goods sold was primarily driven by increased product and fulfillment costs associated with the growth in our contact lens offering and optical laboratory utilization, as well as an increase in store occupancy costs, including depreciation, and prescription services expenses due to new retail stores and optical exam rooms that opened in 2023.
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 and optical laboratory costs to support glasses growth, as well as increases in store occupancy costs and doctor headcount due to new retail stores.
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.
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 this Annual Report.
Net cash provided by operating activities was $10.4 million for the year ended December 31, 2022, consisting of a net loss of $110.4 million, adjusted for $135.5 million of non-cash expenses and $14.7 million of net cash used as a result of changes in operating assets and liabilities.
Net cash provided by operating activities was $98.7 million for the year ended December 31, 2024, consisting of a net loss of $20.4 million, adjusted for $99.9 million of non-cash expenses and $19.2 million of net cash from changes in operating assets and liabilities.
Each of the adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. 61 Table of Contents The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measure, which is net loss: Year Ended December 31, 2024 2023 2022 ($ in thousands) Net loss $ (20,390) $ (63,197) $ (110,393) Adjusted to exclude the following: Interest and other income, net (10,596) (9,232) (1,307) Provision for income taxes 875 433 497 Depreciation and amortization expense 45,865 38,554 31,864 Asset impairment charges 816 3,230 1,647 Stock-based compensation expense (1) 48,409 71,065 98,655 Non-cash charitable donations (2) 2,196 3,191 3,770 Amortization of cloud-based software implementation costs (3) 3,704 2,895 247 ERP implementation costs (4) — 4,413 687 Other costs (5) 2,232 1,000 1,535 Adjusted EBITDA $ 73,111 $ 52,352 $ 27,202 Adjusted EBITDA Margin 9.5 % 7.8 % 4.5 % __________________ (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, vesting of awards including the satisfaction of performance conditions, as well as the issuance of 48,486 shares of Class A common stock to charitable donor advised funds in February 2024.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measure, which is net income (loss): Year Ended December 31, 2025 2024 2023 ($ in thousands) Net income (loss) $ 1,641 $ (20,390) $ (63,197) Adjusted to exclude the following: Interest and other income, net (8,379) (10,596) (9,232) Provision for income taxes 1,402 875 433 Depreciation and amortization expense 50,280 45,865 38,554 Asset impairment charges 557 816 3,230 Stock-based compensation expense (1) 36,097 48,409 71,065 Non-cash charitable donations (2) 2,821 2,196 3,191 Amortization of cloud-based software implementation costs 3,405 3,704 2,895 System implementation costs (3) 1,883 — 4,413 Inventory write-downs (4) 2,456 — — Other costs (5) 3,048 2,232 1,000 Adjusted EBITDA $ 95,211 $ 73,111 $ 52,352 Adjusted EBITDA Margin 10.9 % 9.5 % 7.8 % 58 Table of Contents __________________ (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.
Our results of operations have been and will continue to be affected by the timing and number of retail stores that we operate. We have thoughtfully expanded our retail store footprint over the past several years. During the years ended December 31, 2024, 2023, and 2022, we opened 39, 37, and 39 net new retail stores, respectively.
We have thoughtfully expanded our retail store footprint over the past several years. During the years ended December 31, 2025, 2024, and 2023, we opened 47, 39, and 37 net new retail stores, respectively.
Cost of Goods Sold Cost of goods sold includes the costs incurred to acquire materials, assemble, and sell our finished products.
Revenue for services 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.
Selling, General, and Administrative Expenses Year Ended December 31, 2023 2022 $ Change % Change ($ in thousands) Selling, general, and administrative expenses $ 437,220 $ 452,265 $ (15,045) (3.3) % As a percentage of net revenue 65.3 % 75.6 % (10.3) % Selling, general, and administrative expenses decreased $15.0 million, or 3.3%, for the year ended December 31, 2023 compared to the same period in 2022.
Selling, General, and Administrative Expenses Year Ended December 31, 2024 2023 $ Change % Change ($ in thousands) Selling, general, and administrative expenses $ 456,946 $ 437,220 $ 19,726 4.5 % As a percentage of net revenue 59.2 % 65.3 % (6.1) % Selling, general, and administrative expenses increased $19.7 million, or 4.5%, for the year ended December 31, 2024 compared to the same period in 2023.
Revenue from products 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 for services is recognized when the service is rendered and is recorded net of discounts.
Revenue generated from eye care consists of in-person eye exams and prescriptions issued through the Virtual Vision Test app. Revenue from products 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.
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.
(together, the “Borrowers”) entered into a Credit Agreement with JPMorgan Chase Bank, N.A. and the lenders party thereto (the “2024 Credit Facility”), which replaced a previous 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 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, increased doctor salaries, as the number of stores offering eye exams grew, and increases in store occupancy costs as a percent of revenue as we grew our store base from 200 stores as of December 31, 2022 to 237 stores as of December 31, 2023.
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 194 stores as of December 31, 2023 to 236 stores as of December 31, 2024.
The changes in operating assets and liabilities were primarily driven by increases in net inventory to support the growth of our business, prepaid expenses and other assets, other non-current assets, and a net decrease in accounts payable and accrued expenses, partially offset by increases in net lease liabilities in connection with net retail leases entered into in 2022 and deferred revenue.
The changes in operating assets and liabilities were primarily driven by increases in accounts payable and lease liabilities and a decrease in inventory, partially offset by an increase in prepaid expenses and other assets.
Our historical estimates of these costs and the related provisions have not differed materially from actual results.
Our historical estimates of these costs and the related provisions have not differed materially from actual results. However, unforeseen adverse future economic and market conditions, such as those resulting from disease pandemics and other catastrophic events, could result in our actual results differing materially from our estimates.
As of December 31, 2024, 236 out of our 276 retail stores offered in-person eye exams.
As of December 31, 2025, 285 out of our 323 retail stores offered in-person eye exams, representing 88.2% of our fleet, compared to 85.5% and 81.9% as of December 31, 2024 and 2023, respectively.
For the year ended December 31, 2022, net cash used in investing activities was $60.2 million related to purchases of property and equipment to support our growth, primarily related to the build-out of new retail stores, as well as investments in our supply chain infrastructure and capitalized software development costs. 68 Table of Contents Cash Flows from Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $5.0 million, which was primarily related to proceeds from stock option exercises, shares issued in connection with our Employee Stock Purchase Plan (“ESPP”), and other equity activity.
Cash Flows from Financing Activities For the year ended December 31, 2025, net cash used in financing activities was $12.0 million, which was primarily related to cash paid for shares withheld for taxes for stock-based compensation, partially offset by proceeds shares issued in connection with our Employee Stock Purchase Plan (“ESPP”).
The growth in net revenue was primarily driven by an increase in Average Revenue per Customer, to $287 from $263 in the prior year period, as well as a 2.5% increase in Active Customers.
Driving this increase was our 47 new stores opened in 2025, a 7.0% increase in our Active Customers, and a 5.7% increase in Average Revenue per Customer to $324, from $307 in the prior year period.
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 194 stores as of December 31, 2023 to 236 stores as of December 31, 2024. 64 Table of Contents Selling, General, and Administrative Expenses Year Ended December 31, 2024 2023 $ Change % Change ($ in thousands) Selling, general, and administrative expenses $ 456,946 $ 437,220 $ 19,726 4.5 % As a percentage of net revenue 59.2 % 65.3 % (6.1) % Selling, general, and administrative expenses increased $19.7 million, or 4.5%, for the year ended December 31, 2024 compared to the same period in 2023.
Selling, General, and Administrative Expenses Year Ended December 31, 2025 2024 $ Change % Change ($ in thousands) Selling, general, and administrative expenses $ 475,915 $ 456,946 $ 18,969 4.2 % As a percentage of net revenue 54.6 % 59.2 % (4.6) % Selling, general, and administrative expenses increased $19.0 million, or 4.2%, for the year ended December 31, 2025 compared to the same period in 2024.
The decrease was partially offset by increased technology costs, mainly driven by the implementation of our new ERP system, and higher compensation costs from growth in our retail workforce.
This increase was primarily driven by higher payroll related costs from growth in our retail workforce and investments in marketing, partially offset by lower stock-based 61 Table of Contents compensation, mostly related to the 2021 Founders Grant.
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 helps 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.
Our ongoing efforts to expand our supply chain network, both through international frame manufacturing partnerships and our domestic optical laboratories, are a key strategy intended to insulate us from localized disruptions. While we continue to navigate these macroeconomic uncertainties, we remain committed to meeting growing customer demand while maintaining our exceptional quality and customer satisfaction standards.
Comparison of the Years Ended December 31, 2023 and 2022 Net Revenue Year Ended December 31, 2023 2022 $ Change % Change ($ in thousands) Net revenue $ 669,765 $ 598,112 $ 71,653 12.0 % Net revenue increased $71.7 million, or 12.0%, for the year ended December 31, 2023 compared to the same period in 2022.
We expect our provision to fluctuate based on changes in our operations, our income before taxes, and tax laws or regulations. 60 Table of Contents Comparison of the Years Ended December 31, 2025 and 2024 Net Revenue Year Ended December 31, 2025 2024 $ Change % Change ($ in thousands) Net revenue $ 871,905 $ 771,315 $ 100,590 13.0 % Net revenue increased $100.6 million, or 13.0%, for the year ended December 31, 2025 compared to the same period in 2024.
Average Revenue per Customer growth was driven by 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. 65 Table of Contents Cost of Goods Sold, Gross Profit, and Gross Margin Year Ended December 31, 2023 2022 $ Change % Change ($ in thousands) Cost of goods sold $ 304,541 $ 257,050 $ 47,491 18.5 % Gross profit 365,224 341,062 24,162 7.1 % Gross margin 54.5 % 57.0 % (2.5) % Cost of goods sold increased by $47.5 million, or 18.5%, for the year ended December 31, 2023 compared to the same period in 2022, and increased as a percentage of revenue over the same period by 250 basis points, from 43.0% of revenue to 45.5% of revenue.
Cost of Goods Sold, Gross Profit, and Gross Margin Year Ended December 31, 2025 2024 $ Change % Change ($ in thousands) Cost of goods sold $ 401,326 $ 344,481 $ 56,845 16.5 % Gross profit 470,579 426,834 43,745 10.2 % Gross margin 54.0 % 55.3 % (1.3) % Cost of goods sold increased by $56.8 million, or 16.5%, for the year ended December 31, 2025 compared to the same period in 2024, and increased as a percentage of revenue over the same period by 130 basis points, from 44.7% of revenue to 46.0% of revenue.
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Elevated inflation and interest rates, tariffs, and other negative economic factors may impact consumer spending habits as well as our cost of attracting and our ability to attract new customers.
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Overview We are a mission-driven, lifestyle brand that operates at the intersection of design, technology, healthcare, and social enterprise.
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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.
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For definitions of Adjusted EBITDA and Adjusted EBITDA Margin, non-GAAP measures, and a reconciliation to the most directly comparable GAAP measure, see the section titled “Key Business Metrics and Certain Non-GAAP Financial Measures.” Recent Business Developments In the second quarter of 2025, we announced a partnership with Google to develop AI-enabled glasses intended for all-day wear.
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Included in stock-based compensation expense for the year ended December 31, 2023 is $2.2 million of liability based awards resulting from accrued bonuses that were settled in equity in the first quarter of 2024.
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We are working closely with Google on the development of AI glasses and intend to launch a series of products over time. As part of this collaboration, Google has committed up to $75 million for our product development and commercialization costs.
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(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.
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In addition, Google has committed to investing up to $75 million in Warby Parker, at our option and subject to reaching certain collaboration milestones. During the year ended December 31, 2025, the Company reduced selling, general, and administrative expenses by $3.3 million related to costs which are reimbursable by Google and are thus fully offset within the period.
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These impacts were partially offset by increased progressives penetration, increased efficiencies in our owned optical laboratories, and lower outbound customer shipping costs as a percent of revenue.
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During 2025, we experienced pressure from a dynamic trade environment and fluctuating inflationary trends, which impacted both consumer discretionary spending and our internal cost structure. While elevated interest rates and government policy continue to influence consumer confidence, we remain focused on our core value proposition to mitigate these headwinds.
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This decrease was primarily driven by a $27.7 million decrease in stock-based compensation, mostly related to the Founders Grant (as described in Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K), and lower marketing costs, including costs associated with our Home Try-On program, in the first half of the year, which decreased to 12% of revenue in the year ended December 31, 2023 compared to 14% in the same period of 2022.
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Our 2025 results were affected by cost volatility related to evolving international trade policies and tariffs. We have taken proactive steps to manage these costs, including further diversifying our supplier base outside of China, making strategic price adjustments on select products, and disciplined expense management.
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(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.
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The complexity of the global trade landscape makes it difficult to predict the timing and extent of future policy changes. We believe our business model, which emphasizes an outstanding value-driven experience, provides a durable foundation.
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In February 2024, the 2022 Credit Facility was terminated and replaced by the 2024 Credit Facility as described below. 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.
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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.
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However, unforeseen adverse future economic and market conditions, such as those resulting from disease pandemics and other catastrophic events, could result in our actual results differing materially from our estimates. 69 Table of Contents Stock-Based Compensation We recognize compensation expense for stock-based awards based on the grant date fair value, on a straight-line basis over the requisite service period of the awards, which is generally the vesting term of the outstanding stock awards.
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(3) Represents costs related to the implementation of major new enterprise software systems. (4) Represents one-time inventory write-downs primarily related to the decision in the second quarter of 2025 to sunset our Home-Try On program at the end of 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInflation 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.
Biggest changeInflation 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.
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 December 31, 2024 consisted of $254.2 million in cash and money-market funds. Such interest-earning instruments carry a degree of interest rate risk.
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 December 31, 2025 consisted of $286.4 million in cash and money-market funds. Such interest-earning instruments carry a degree of interest rate risk.
We believe that we do not have a 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. 70 Table of Contents 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.
We believe that we do not have a 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.
Our inability or failure to do so could harm our business, financial condition, and results of operations. 71 Table of Contents
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. 67 Table of Contents

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