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What changed in Wayfair Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Wayfair Inc.'s 2023 and 2024 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 2024 report.

+282 added−273 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in Wayfair Inc.'s 2024 10-K

282 paragraphs added · 273 removed · 229 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe use personalization to create a more engaging consumer experience and we allow customers to create looks they love with tools such as our Room Ideas. More than half of the traffic coming to Wayfair.com is from mobile devices and our investment in mobile allows us to deliver value, convenience and inspiration to consumers anytime and anywhere.
Biggest changeMore than half of the traffic coming to Wayfair.com is from mobile devices and our investment in mobile allows us to deliver value, convenience and inspiration to consumers anytime and anywhere. Our mobile app also offers customers a powerful way to shop for their home from their home using our “View in Room 3D” augmented reality tool.
The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC, and the reference to our website is intended to be an inactive textual reference only.
The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC, and any reference to our website is intended to be an inactive textual reference only.
Compensation and Benefits Wayfair’s overall compensation program is structured to attract, motivate and retain highly qualified talent by paying them competitively and equitably, including offering market-competitive salaries, equity and benefits.
Compensation and Benefits Wayfair’s overall compensation program is structured to attract, motivate and retain highly qualified talent by paying competitively and equitably, including offering market-competitive salaries, equity and benefits.
We provide our suppliers with access to our large customer base, with 22 million active customers over the last twelve months, enabling our suppliers to increase their sales and access the growing e-commerce market. Suppliers can leverage our technological expertise to enhance their success on our platform.
We provide our suppliers with access to our large customer base, with 21 million active customers over the last twelve months, enabling our suppliers to increase their sales and access the growing e-commerce market. Suppliers can leverage our technological expertise to enhance their success on our platform.
Our competition includes furniture stores, big box retailers, department stores, specialty retailers and online retailers and marketplaces in the U.S., Canada, the United Kingdom, Germany and Ireland, including: • Furniture Stores: American Freight, Ashley Furniture, Bob's Discount Furniture, Havertys, Raymour & Flanigan and Rooms To Go; 10 T a ble of Contents • Big Box Retailers: Home Depot, IKEA, Lowe's, Target and Walmart; • Department Stores: JCPenney, Macy's and Neiman Marcus; • Specialty Retailers: Arhaus, At Home, Container Store, Crate and Barrel, Design Within Reach, Ethan Allen, Floor & Decor, LL Flooring, Restoration Hardware, Room & Board, Serena & Lily, TJX Companies and Williams Sonoma; • Online Retailers and Marketplaces: Amazon, Build.com, Houzz, eBay, Etsy and Bed Bath & Beyond; • International: Argos, Canadian Tire, John Lewis, Leon's, Next, Otto, Westwing, and XXXLutz, in addition to several of the companies listed above who also compete with us internationally.
Our competition includes furniture stores, big box retailers, department stores, specialty retailers and online retailers and marketplaces in the U.S., Canada, the United Kingdom and Ireland, including: • Furniture Stores: American Freight, Ashley Furniture, Bob's Discount Furniture, Havertys, Raymour & Flanigan and Rooms To Go; • Big Box Retailers: Home Depot, IKEA, Lowe's, Target and Walmart; • Department Stores: JCPenney, Macy's and Neiman Marcus; • Specialty Retailers: Arhaus, At Home, Container Store, Crate and Barrel, Design Within Reach, Ethan Allen, Floor & Decor, LL Flooring, Restoration Hardware, Room & Board, Serena & Lily, TJX Companies and Williams Sonoma; 10 Table of Contents • Online Retailers and Marketplaces: Amazon, Build.com, Houzz, eBay, Etsy and Bed Bath & Beyond; • International: Argos, Canadian Tire, John Lewis, Leon's, and Next in addition to several of the companies listed above who also compete with us internationally.
As used herein, “Wayfair,” “the company,” “we,” “us,” “our” and similar terms refer to Wayfair Inc. and its subsidiaries, unless the context indicates otherwise. Segments Our operating and reportable segments are the United States (“U.S.”) and International, which includes our businesses in Canada, the United Kingdom, Germany and Ireland.
As used herein, “Wayfair,” “the company,” “we,” “us,” “our” and similar terms refer to Wayfair Inc. and its subsidiaries, unless the context indicates otherwise. Segments Our operating and reportable segments are the United States (“U.S.”) and International, which includes our businesses in Canada, the United Kingdom, Ireland and Germany (through January 10, 2025).
See Note 13, Segment and Geographic Information, in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K. Net revenue of the U.S. segment represented 87% of consolidated net revenue for the year ended December 31, 2023.
See Note 13, Segment and Geographic Information, in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , in this Annual Report on Form 10-K. Net revenue of the U.S. segment represented 88% of consolidated net revenue for the year ended December 31, 2024.
Building on the initial success of our Shop Sustainably program, we have expanded the number of suppliers’ products that meet the standards for one or more of the third-party certifications included in the program, including energy or water efficiency, sustainably sourced wood, organic textile use, or Fair Trade Certified™.
Building on the initial success of our Shop Sustainably program, we have expanded the number of suppliers’ products that meet the standards for one or more of the third-party certifications included in this program. These certifications include energy or water efficiency, sustainably sourced wood, organic textile use, or Fair Trade Certified™.
Item 1. Business Overview Wayfair is one of the world's largest destinations for the home. Through our e-commerce platform, we offer customers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices. We are focused on bringing our customers an experience that is at the forefront of shopping for the home online.
Item 1. Business Overview Wayfair is the destination for all things home. Through our e-commerce platform, we offer customers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices. We are focused on bringing our customers an experience that is at the forefront of shopping for the home online.
Our global customer service locations are staffed with over 3,100 full-time highly-trained sales and service employees. 7 T a ble of Contents Our Growth Strategy Our goal is to further increase our leadership in the home goods market by pursuing the following key strategies: • continue to build our brands by delighting our customers; • increase repeat purchases from existing customers and acquire new customers; • invest in technology to further improve our customer and supplier experiences; • grow certain categories where we under-index the broader home goods market today; • increase delivery speed and improve the delivery experience for our customers through the continued build-out of our proprietary logistics network; • continue to expand internationally and; • continue to execute our omni-channel strategy with the launch of physical retail stores across our family of brands; and opportunistically pursue strategic acquisitions.
Our global customer service locations are staffed with ove r 2,000 full -time highly-trained sales and service employees. 7 Table of Contents Our Growth Strategy Our goal is to further increase our leadership in the home goods market by pursuing the following key strategies: • continue to build our brands by delighting our customers; • increase repeat purchases from existing customers and acquire new customers; • invest in technology to further improve our customer and supplier experiences; • grow certain categories where we under-index the broader home goods market today; • engage with our customers through our loyalty program; • increase delivery speed and improve the delivery experience for our customers through the continued build-out of our proprietary logistics network; • continue to grow internationally; • continue to execute our omni-channel strategy with the launch of physical retail stores across our family of brands; and • opportunistically pursue strategic acquisitions.
Health, Well-Being and Safety Wayfair is committed to protecting our team members’ health and wellness. We continue to evolve our programs to support our employees’ health and wellness needs. We also provide benefits and resources to employees aimed at addressing stress, burnout and mental health and the promotion of self-care.
Health, Well-Being and Safety Wayfair is committed to protecting our team members’ health and wellness. Our programs focus on supporting our employees’ health and wellness needs. We also provide benefits and resources to employees aimed at addressing stress, burnout and mental health and the promotion of self-care.
We sell products from over 20 thousand suppliers, many of which are small, family-run operations without well-known product brands and without easy retail access to a large customer base.
Key Benefits for Our Suppliers We give suppliers cost-effective access to our large customer base. We sell products from over 20 thousand suppliers, many of which are small, family-run operations without well-known product brands and without easy retail access to a large customer base.
More Information Additional information about our human capital management efforts, including our latest efforts related to DEI, can be found on our investor website at investor.wayfair.com.
More Information Additional information about our human capital management efforts can be found on our investor website at investor.wayfair.com.
Environmental, Social and Governance As a multinational retailer with a global supply chain, Wayfair is committed to responsible practices across our business—from showcasing more sustainable products through our Shop Sustainably program, to implementing waste reduction initiatives, lowering emissions and adopting sustainable business practices where practicable.
Corporate Responsibility As a multinational retailer with a global supply chain, Wayfair is committed to responsible practices across our business—from showcasing more sustainable products through our Shop Sustainably program, to implementing waste reduction initiatives, l owering emissions and adopting sustainable business practices.
This fulfillment network is a key component of our custom-built and seamlessly integrated technology and operational platform. 9 T a ble of Contents Technology We have custom-built large portions of our technology and operational platform to deliver the best experience for both our customers and suppliers.
Our logistics infrastructure allows us to ship directly to our customers from our suppliers or from our CastleGate warehouses. This fulfillment network is a key component of our custom-built and seamlessly integrated technology and operational platform. Technology We have custom-built large portions of our technology and operational platform to deliver the best experience for both our customers and suppliers.
As part of this agreement, Wayfair is contracted to offtake 15 MW of power from the solar project annually. Wayfair also continues to evaluate and incorporate energy efficiency features across its global facilities.
This past year, Wayfair made progress towards our emission goal by joining a second aggregated virtual power purchase agreement. As part of this agreement, Wayfair is contracted to offtake 20 MW of power annually from the solar project. Wayfair also continues to evaluate and incorporate energy efficiency features across its global facilities.
Wayfair represents a significant majority of our net revenue and is currently the only one of our sites that also operates internationally, operating as Wayfair.ca in Canada, Wayfair.co.uk in the United Kingdom, Wayfair.de in Germany and Wayfair.ie in Ireland. On our sites, we also feature certain products under our house brands, such as Three Posts® and Mercury Row®.
Wayfair represents a significant majority of our net revenue and is currently the only one of our sites that also operates internationally, operating as Wayfair.ca in Canada, Wayfair.co.uk in the United Kingdom and Wayfair.ie in Ireland. Wayfair also operated Wayfair.de in Germany until we exited the German market on January 10, 2025 (the “Germany Restructuring”).
Convenience and value are central to our offering. We are a one-stop shop for consumers in the home goods category, with competitive pricing reflecting the many supplier participants on our platform and a differentiated and robust merchandising experience.
We are a one-stop shop for consumers in the home goods category, with competitive pricing reflecting the many supplier participants on our platform and a differentiated and robust merchandising experience. For items shipped from our CastleGate warehouses, we are able to deliver many products to a majority of the U.S. population in two days or less.
We have one of the largest online selections of furniture, décor, housewares and home improvement products, with over 30 million products from over 20 thousand suppliers. We have built a portfolio of over one hundred house brands, which offer curated brand experience, making it easier for customers to discover styles, products and price points that appeal to them.
We have built a portfolio of over one hundred house brands, which offer curated brand experience, making it easier for customers to discover styles, products and price points that appeal to them. Convenience and value are central to our offering.
To meet our customers where they are, we offer a family of sites, each with a unique brand identity that offers a tailored shopping experience and rich product selection to a different target audience. • Wayfair: The destination for all things home. • Joss & Main: The ultimate style edit for home. • AllModern: All of modern, made simple. • Birch Lane: Classic style for joyful living.. • Perigold: The destination for luxury home. • Wayfair Professional: Just right for Pros.
To meet our customers where they are, we offer a family of sites, each with a unique brand identity that offers a tailored shopping experience and rich product selection to a different target audience. • Wayfair: Every style.
The information on our website is not, and shall not be 12 T a ble of Contents deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC, and any reference to our website is intended to be an inactive textual reference only.
The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC, and the reference to our website is intended to be an inactive textual reference only. 11 Table of Contents Government Regulation We are subject to domestic and foreign laws and regulations regarding general business, as well as laws and regulations governing the Internet and e-commerce, many of which are still evolving.
Additional information regarding laws and regulations applicable to our business is set forth in Part I, Item 1A, Risk Factors , in this Annual Report on Form 10-K. Seasonality Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter, which ends December 31 and includes the November and December holiday sales period.
Seasonality Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter, which ends December 31 and includes the November and December holiday sales period.
Our success has been built on a culture of data-driven decision-making, operational discipline and an unwavering focus on the customer. We believe that our internal control of our technology systems, which gives us the ability to update them often, is a competitive advantage.
Our success has been built on a culture of data-driven decision-making, operational discipline and an unwavering focus on the customer.
Our efforts include incident and hazard reporting, standard operating procedures aimed at reducing risk of injury, training, promotion of best practices, and measurement of key safety metrics.
Maintaining a safe work environment is also important to us, and our management team reaffirms our objectives each year to our frontline employees through our annual Commitment to Safety Statement. Our efforts include incident and hazard reporting, standard operating procedures aimed at reducing risk of injury, training, promotion of best practices, and measurement of key safety metrics.
Our team of engineers and data scientists has built a full set of technology solutions specific to the home goods market.
We believe that our internal control of our technology systems, which gives us the ability to update them often, is a competitive advantage. 9 Table of Contents Our team of engineers and data scientists has built a full set of technology solutions specific to the home goods market.
The majority of large parcel items are delivered to the customer through our WDN, which includes consolidation centers, cross docks and last mile delivery facilities. For smaller items, we partner with carriers to handle the delivery to the customer.
The majority of large parcel items are delivered to the customer through our WDN, which includes consolidation centers, cross docks and last mile delivery facilities. We believe that our proprietary logistics network has and will continue to help drive incremental sales by delighting our customers with faster delivery times, lower prices and a better home delivery experience.
Many consumers also seek first-rate customer service so they are not burdened with managing delivery, shipping and return logistics on their own.
Many consumers also seek first-rate customer service so they are not burdened with managing delivery, shipping 8 Table of Contents and return logistics on their own. However, we believe big box retailers that serve the mass market for home goods are often unable or unwilling to provide this level of service.
We believe we have a good relationship with our employees, which includes approximately 14,400 employees, of which approximately 12,800 are full-time equivalents, as of December 31, 2023. Our reported headcount includes a substantial majority of employees impacted by the workforce reduction we announced in January 2024.
We believe we have a good relationship with our employees, which includes approximately 13,500 employees, of whom approximately 12,100 w ere full-time equivalents, as of December 31, 2024. Our reported headcount includes the approximately 730 employees impacted by the Germany Restructuring, although we expect approximately half of these positions to relocate to other corporate offices.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. Diversity, Equity and Inclusion Wayfair is strongly dedicated to Diversity, Equity and Inclusion (“DEI”).
Additionally, we rely on independent contractors and temporary personnel to supplement our workforce, primarily in our logistics network. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
For items shipped from our CastleGate warehouses, we are able to deliver many products to a majority of the U.S. population in two days or less. We give customers inspirational content and an engaging shopping journey . To inspire customers, we produce beautiful imagery and highly-tailored editorial content both in house and through third parties.
We give customers inspirational content and an engaging shopping journey . To inspire customers, we produce beautiful imagery and highly-tailored editorial content both in house and through third parties. We use personalization to create a more engaging consumer experience and we allow customers to create looks they love with tools such as our Room Ideas.
Our private label and co-branded credit cards build loyalty and encourage repeat shopping with cash back rewards. Superior customer service is a core part of the experience we offer shoppers. Our customer service organization has over 3,100 full-time employees who help consumers navigate our sites, answer questions and complete orders, and offers specialists focused on specific product classes.
Our customer service organization has over 2,000 full-time employees w ho help consumers navigate our sites, answer questions and complete orders, and offers specialists focused on specific product classes. This team helps us build trust with consumers, build our brand awareness, enhance our reputation and drive sales.
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However, we believe big box retailers that serve the mass market for home goods are often unable or unwilling to provide this level of service. 8 T a ble of Contents Key Benefits for Our Customers We offer a broad selection and choice.
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Every home. • AllModern: Modern made simple. • Birch Lane: Classic style for joyful living. • Joss & Main: The ultimate style edit for home. • Perigold: The destination for luxury home. • Wayfair Professional: A one-stop Pro shop.
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Our mobile app also offers customers a powerful way to shop for their home from their home using our “View in Room 3D” augmented reality tool. We support our customers' shopping journey from start to finish through everything from financing solutions to customer support.
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For more information on the Germany Restructuring, see Note 14, Subsequent Events , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data, in this Annual Report on Form 10-K. On our sites, we also feature certain products under our house brands, such as Three Posts® and Mercury Row®.
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This team helps us build trust with consumers, build our brand awareness, enhance our reputation and drive sales. Key Benefits for Our Suppliers We give suppliers cost-effective access to our large customer base.
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Key Benefits for Our Customers We offer a broad selection and choice. We have one of the largest online selections of furniture, décor, housewares and home improvement products, with over 30 million products from over 20 thousand suppliers.
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Our logistics infrastructure allows us to ship directly to our customers from our suppliers or from our CastleGate warehouses.
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We support our customers' shopping journey from start to finish through everything from financing solutions to customer support. Our private label and co-branded credit cards build loyalty and encourage repeat shopping with cash back rewards. Wayfair Rewards, our recently introduced membership program, also encourages repeat shopping.
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We believe that our proprietary logistics network has and will continue to help drive incremental sales by delighting our customers with faster delivery times and a better home delivery experience. Over time we believe this network will also lower our costs per order by reducing damage rates and leveraging economies of scale in transportation.
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Membership provides cash back rewards, as well as other benefits, including free shipping, access to member only sales, and special offer and perks, designed to enhance the customer shopping experience and build long-term loyalty. Superior customer service is a core part of the experience we offer shoppers.
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The workforce reduction included approximately 1,650 employees, of which 1,200 are corporate employees, who will no longer be reflected in our headcount by the end of the first quarter of 2024. Additionally, we rely on independent contractors and temporary personnel to supplement our workforce, primarily in our logistics network.
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We have established and publicly announced our goals to achieve zero waste (90%+ waste diversion from landfill and incineration) across Wayfair operations globally by 2030 and to reduce our Scope 1 and 2 greenhouse gas emissions by 63% by 2035 compared to a 2020 baseline.
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Through cross-functional partnerships, our Head of DEI creates a center of excellence for our DEI strategy, aiming to ensure that all of our employees feel supported and can maximize their contributions and development opportunities. Through these cross-functional partnerships, the DEI team creates the strategy and identifies initiatives aimed at embedding a lens of inclusivity into all aspects of the business.
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Adverse legal or regulatory developments could substantially harm our business. Additional information regarding laws and regulations applicable to our business is set forth in Part I, Item 1A, Risk Factors , in this Annual Report on Form 10-K.
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We have worked to provide an equitable employee journey for all employees by giving them actionable feedback and training managers to lead with empathy and without bias.
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Additionally, we have partnered with groups across the business to leverage DEI principles in support of our broader company goals –– not only for our people, but for our customers, our suppliers and our partners .
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Maintaining a safe work environment is also important to us, and our management team reaffirms our objectives each year to our frontline employees through our annual Commitment to Safety 11 T a ble of Contents Statement.
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We have established and publicly announced our goal to reduce our Scope 1 and 2 greenhouse gas, or GHG, emissions by 63% by 2035 in comparison to the 2020 baseline. This past year, Wayfair made progress toward this goal by signing agreements to install on-site solar panels at several fulfillment centers and by joining an aggregated virtual power purchase agreement.
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Government Regulation We are subject to domestic and foreign laws and regulations regarding general business, as well as laws and regulations governing the Internet and e-commerce, many of which are still evolving. Adverse legal or regulatory developments could substantially harm our business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur Charter provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of Wayfair; (ii) action asserting a claim for or based on a breach of a fiduciary duty owed by any director, officer or other employee of Wayfair to Wayfair or Wayfair’s stockholders; (iii) action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”), the Charter, or the Company’s Amended and Restated Bylaws; or (iv) action asserting a claim that is governed by the internal affairs doctrine of the State of Delaware, in each case, will be the Delaware Court of Chancery located within the State of Delaware.
Biggest changeOur Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for any (A) (i) derivative action or proceeding brought on behalf of Wayfair; (ii) action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of Wayfair to Wayfair or Wayfair’s stockholders; (iii) action asserting a claim against Wayfair or its current directors, officers, employees or stockholders arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”), the Charter, or the Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery for the State of Delaware; or (iv) action asserting a claim against Wayfair or its current or former directors, officers, employees or stockholders governed by the internal affairs doctrine of the State of Delaware, in each case, will, to the fullest extent permitted by law, be the Court of Chancery for the State of Delaware or, solely if such court does not have subject matter jurisdiction thereof, in the other courts of competent jurisdiction in the State of Delaware or the U.S.
We rely on third parties to provide many of these payment methods and payment processing services, including certain Wayfair-branded programs and promotional financing. If we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and fraud.
We rely on third parties to provide many of these payment methods and payment processing services, including certain Wayfair-branded programs and promotional financing. If we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and payment fraud.
At maturity of the Non-Accreting Notes, unless earlier purchased, redeemed or converted, we will settle any conversions in cash, shares of Wayfair’s Class A common stock or a combination thereof, at our election. At maturity of the Accreting Notes, unless earlier purchased, redeemed or converted, we will settle any conversions in shares of Wayfair's Class A common stock.
At maturity of the Non-Accreting Notes, unless earlier purchased, redeemed or converted, we will settle any conversions in cash, shares of Wayfair’s Class A common stock or a combination thereof, at our election.
Our business is rapidly evolving and intensely competitive, with numerous competitors including furniture stores, big box retailers, department stores, specialty retailers and online retailers and marketplaces in the U.S., Canada, the United Kingdom, Ireland and Germany, including those listed in Part I, Item 1, Business . We expect competition in e-commerce generally to continue to increase.
Our business is rapidly evolving and intensely competitive, with numerous competitors including furniture stores, big box retailers, department stores, specialty retailers and online retailers and marketplaces in the U.S., Canada, the United Kingdom, and Ireland, including those listed in Part I, Item 1, Business . We expect competition in e-commerce generally to continue to increase.
We incurred losses in fiscal years 2022 and 2023, and we can provide no assurance that we will be profitable in future years or achieve our goal of sustained profitability. Because the market for purchasing home goods online is rapidly evolving, it is difficult for us to predict our future operating results.
We incurred losses in fiscal years 2022, 2023, and 2024 and we can provide no assurance that we will be profitable in future years or achieve our goal of sustained profitability. Because the market for purchasing home goods online is rapidly evolving, it is difficult for us to predict our future operating results.
These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims. We are engaged in legal proceedings that could cause us to incur unforeseen expenses and could occupy a significant amount of our management's time and attention.
These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims. We are engaged in legal proceedings from time to time that could cause us to incur unforeseen expenses and could occupy a significant amount of our management's time and attention.
Recent cybersecurity incidents impacting large institutions, including those resulting in the compromise of sensitive data and the disruption of critical systems, suggest that the risk of such cyber events is significant, even when reasonable measures to protect the confidentiality, integrity, and availability of information are implemented.
Cybersecurity incidents impacting large institutions, including those resulting in the compromise of sensitive data and the disruption of critical systems, suggest that the risk of such cyber events is significant, even when reasonable measures to protect the confidentiality, integrity, and availability of information are implemented.
We are subject to a variety of federal, state and international privacy laws and regulations that govern the collection, use, retention, sharing, processing, export and security of personal information. New laws and regulations are rapidly coming into effect while existing legislation is rapidly evolving.
We are subject to a variety of federal, state and international privacy laws and regulations that govern the collection, use, retention, sharing, processing, export and security of personal information. New laws and regulations are rapidly coming into effect while existing legislation is continuously evolving.
The expectations related to ESG and sustainability matters are rapidly evolving, and from time to time, we announce certain initiatives and goals, related to these matters. We could fail, or be perceived to fail to act responsibly, in our efforts, or we could fail in accurately reporting our progress on such initiatives and goals.
The expectations related to sustainability matters are rapidly evolving, and from time to time, we announce certain initiatives and goals related to these matters. We could fail, or be perceived to fail to act responsibly, in our efforts, or we could fail in accurately reporting our progress on such initiatives and goals.
The satisfactory performance, reliability and availability of our sites, transaction processing systems, logistics network and technology infrastructure are critical to our reputation and our ability to acquire and retain customers, as well as maintain adequate customer service levels.
The satisfactory performance, reliability, integrity and availability of our sites, transaction processing systems, logistics network and technology infrastructure are critical to our reputation and our ability to acquire and retain customers, as well as maintain adequate customer service levels.
Any lack of market acceptance of our efforts to launch new brands and services or to expand our existing offerings could have a material adverse effect on our business, prospects, financial condition and operating results.
Any lack of market acceptance of our efforts to launch new brands, programs and services or to expand our existing offerings could have a material adverse effect on our business, prospects, financial condition and operating results.
This may be as a result of deliberate malicious attempts to infiltrate our systems, including but not limited to, state-sponsored attackers or cybercriminal efforts, zero-day vulnerabilities, phishing attacks, software supply chain compromises, or non-malicious factors, including but not limited to, disruptions during the process of upgrading or replacing computer software or hardware, errors by the vendors we rely upon, or other disruptions that may jeopardize the security of our assets or information.
This may be as a result of deliberate malicious attempts to infiltrate our systems, including but not limited to, state-sponsored attackers or cybercriminal efforts such as ransomware attacks, zero-day vulnerabilities, phishing attacks, software supply chain compromises, or non-malicious factors, including but not limited to, disruptions during the process of upgrading or replacing computer software or hardware, errors by the vendors we rely upon, or other disruptions that may jeopardize the security of our assets or information.
Our efforts to expand our business into new brands, channels, products, services, technologies and geographic markets will subject us to additional business, legal, financial and competitive risks and may not be successful.
Our efforts to expand our business into new brands, channels, products, programs, services, technologies and geographic markets will subject us to additional business, legal, financial and competitive risks and may not be successful.
Launching new brands and services or expanding internationally is time-consuming, requires significant amounts of management time and resources, substantial upfront investments, including investments in marketing, information technology and additional personnel.
Launching new brands, programs and services or expanding internationally is time-consuming, requires significant amounts of management time and resources, substantial upfront investments, including investments in marketing, information technology and additional personnel.
We may also be contractually required to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any laws, regulations or other legal obligations relating to privacy or consumer protection or any inadvertent or unauthorized use or disclosure of data that we store or handle as part of operating our business. 32 T a ble of Contents If the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of Internet user information we collect would decrease, which could harm our business and operating results.
We may also be contractually required to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any laws, regulations or other legal obligations relating to privacy or consumer protection or any inadvertent or unauthorized use or disclosure of data that we store or handle as part of operating our business. 32 Table of Contents If the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of Internet user information we collect would decrease, which could harm our business and operating results.
Specific factors that could impact consumers’ willingness to purchase home goods from us online, especially in markets where we do not have physical stores, include: • concerns about buying products, and in particular larger products, without a physical storefront, face-to-face interaction with sales personnel and the inability to physically handle, examine and compare products; • delivery time associated with online orders; • actual or perceived lack of security of online transactions and concerns regarding the privacy or protection of personal information; • delayed shipments or shipments of incorrect or damaged products; • inconvenience associated with returning or exchanging items purchased online; • usability, functionality and features of our sites; and • our reputation and brand strength.
Specific factors that could impact consumers’ willingness to purchase home goods from us online, especially in markets where we do not have physical stores, include: • concerns about buying products, and in particular larger products, without a physical storefront, face-to-face interaction with sales personnel and the inability to physically handle, examine and compare products; • delivery time associated with online orders; 21 Table of Contents • actual or perceived lack of security of online transactions and concerns regarding the privacy or protection of personal information; • delayed shipments or shipments of incorrect or damaged products; • inconvenience associated with returning or exchanging items purchased online; • usability, functionality and features of our sites; and • our reputation and brand strength.
In addition to data loss and compromise, cybersecurity incidents or breaches of our security measures or those of our third-party service providers could result in interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment or training of additional personnel and protection technologies, responses to governmental investigations and media inquiries and coverage; engagement of third party experts and consultants; loss, litigation or regulatory action and other potential liabilities.
In addition to data loss and compromise, cybersecurity incidents or breaches of our security measures or those of our third-party service providers could result in interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment or training of additional personnel and protection technologies, responses to governmental investigations and media inquiries and coverage; engagement of third party experts and consultants; loss, litigation (including class action litigation) or regulatory action and other potential liabilities.
Our systems and operations, including our ability to fulfill customer orders through our logistics network, are also vulnerable to damage or interruption from inclement weather, fire, flood, power loss, telecommunications failure, terrorist attacks, labor disputes, cyber-attacks, data loss, acts of war, break-ins, other physical security threats, earthquake and similar events.
Our systems and operations, including our ability to fulfill customer orders through our logistics network, are also vulnerable to damage or interruption from inclement weather, fire, flood, power loss, telecommunications failure, terrorist attacks, labor disputes, cyber-attacks, data loss, acts of war, break-ins, other physical security threats, earthquakes and similar events.
Further, we may from time to time seek to retire, restructure, repurchase or redeem, or otherwise mitigate the equity dilution associated with, our outstanding convertible debt, through cash purchases, stock buybacks of some or all of the shares underlying convertible notes, and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
Further, we may from time to time seek to retire, restructure, repurchase or redeem, or otherwise mitigate the equity dilution associated with, our outstanding convertible debt, through cash purchases, stock buybacks of some or all of the shares underlying the Non-Accreting Notes, and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
Our business success depends to some extent on our ability to expand our customer offerings by launching new brands and services and by expanding our existing offerings into new geographic markets from time to time. For example, we launched Decorify in 2023, Wayfair.ie in Ireland in 2022 and the Kelly Clarkson Home Collection in 2020.
Our business success depends to some extent on our ability to expand our customer offerings by launching new brands and services and by expanding our existing offerings into new geographic markets from time to time. For example, we launched Wayfair Rewards in 2024, Decorify in 2023, Wayfair.ie in Ireland in 2022 and the Kelly Clarkson Home Collection in 2020.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 35 T a ble of Contents Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 35 Table of Contents Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.
If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card and debit card payments from consumers or to facilitate other types of online payments.
If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card and debit card payments from consumers or to 26 Table of Contents facilitate other types of online payments.
The capped calls are expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
The capped calls are expected generally to reduce the potential dilution upon conversion of the Non-Accreting Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Non-Accreting Notes, as the case may be, with such reduction and/or offset subject to a cap.
In addition, the amount, timing, and execution of our Repurchase Programs may fluctuate based on our priorities for the use of cash for other purposes, and because of changes in cash flows, tax laws, and the market price of our Class A common stock, the Repurchase Programs could diminish our cash reserves. 29 T a ble of Contents Risks Related to our Indebtedness and Capital Raising Our outstanding indebtedness, or additional indebtedness that we may incur, could limit our operating flexibility and adversely affect our financial condition.
In addition, the amount, timing, and execution of our Repurchase Programs may fluctuate based on our priorities for the use of cash for other purposes, and because of changes in cash flows, tax laws, and the market price of our Class A common stock, the Repurchase Programs could diminish our cash reserves. 29 Table of Contents Risks Related to our Indebtedness and Capital Raising Our outstanding indebtedness, or additional indebtedness that we may incur, could limit our operating flexibility and adversely affect our financial condition.
We may sell Class A common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. Our convertible notes are and any future issuance of equity or equity-linked securities would be dilutive to holders of our Class A common stock.
We may sell Class A common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. Our Non-Accreting Notes are and any future issuance of equity or equity-linked securities would be dilutive to holders of our Class A common stock.
For example, we are the registrant of marks for our brands in numerous jurisdictions and of the Internet domain name for the websites of Wayfair.com, Wayfair.ca, Wayfair.co.uk, Wayfair.de and Wayfair.ie and our other sites, as well as various related domain names.
For example, we are the registrant of marks for our brands in numerous jurisdictions and of the Internet domain name for our websites at Wayfair.com, Wayfair.ca, Wayfair.co.uk, and Wayfair.ie and our other sites, as well as various related domain names.
Changes in the legal or regulatory environment affecting ESG, climate change, and sustainability disclosure, responsible sourcing, supply chain transparency, or environmental protection, among others, including regulations to limit carbon dioxide and other greenhouse gas emissions, to discourage the use of plastic or to limit or to impose additional costs on commercial water use may result in increased compliance costs for us and our business partners, all of which may negatively impact our results of operations, financial condition and cash flows.
Changes in the legal or regulatory environment affecting sustainability, climate change, and sustainability disclosure, responsible sourcing, supply chain transparency, or environmental protection, among others, including regulations to limit carbon dioxide and other GHG emissions, to discourage the use of plastic or to limit or to impose additional costs on commercial water use may result in increased compliance costs for us and our business partners, all of which may negatively impact our results of operations, financial condition and cash flows.
If we are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be materially adversely affected. 14 T a ble of Contents If we fail to acquire new customers, reactivate prior customers or retain existing customers, or fail to do so in a cost-effective manner, our business, financial condition and operating results could be harmed.
If we are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be materially adversely affected. 14 Table of Contents If we fail to acquire new customers, reactivate prior customers or retain existing customers, or fail to do so in a cost-effective manner, our business, financial condition and operating results could be harmed.
Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data security and other laws and regulations, and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition and operating results.
Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data security and other laws and regulations, and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect 20 Table of Contents on our business, financial condition and operating results.
Our election to publicly report on ESG matters in accordance with voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others.
Our election to publicly report on sustainability matters in accordance with voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others.
Acquisitions involve numerous risks, any of which could harm our business, including: difficulties in integrating the technologies, operations, existing contracts and personnel of an acquired company; difficulties in supporting and transitioning customers and suppliers, if any, of an acquired company; diversion of financial and management resources from existing operations or alternative acquisition opportunities; failure to realize the anticipated benefits or synergies of a transaction; failure to identify all of the problems, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, liabilities related to data security and privacy of customer data, the acquired company's internal controls over financial reporting, including revenue recognition or other accounting practices; employee or customer issues; risks of entering new markets in which we have limited or no experience; potential loss of senior management or other key employees, customers and suppliers from either our current business or an acquired company's business; inability to generate sufficient net revenue to offset acquisition costs; additional costs or equity dilution associated with funding the acquisition; and possible write-offs or impairment charges relating to acquired businesses, and these liabilities may be greater than the warranty and indemnity limitations we negotiate.
Acquisitions involve numerous risks, any of which could harm our business, including: difficulties in integrating the technologies, operations, existing contracts and personnel of an acquired company; difficulties in supporting and transitioning customers and suppliers, if any, of an acquired company; diversion of financial and management resources from existing operations or alternative acquisition opportunities; failure to realize the anticipated benefits or synergies of a transaction; failure to identify all of the problems, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, liabilities related to data security and privacy of customer data, the acquired company's internal controls over financial reporting, including revenue recognition or other accounting practices; employee or customer issues; risks of entering new markets in which we have limited or no experience; potential loss of senior management or other key employees, customers and suppliers from either our current business or an acquired company's business; inability to generate sufficient net revenue to offset acquisition costs; additional costs or equity dilution associated with funding the acquisition; and possible write-offs or impairment charges relating to acquired businesses, and these liabilities may be greater than the warranty and indemnity limitations we negotiate. 27 Table of Contents In addition, our investments in properties may not be fully realized.
New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our Class A common stock or our convertible notes. These alternative strategies may not be implemented on satisfactory terms, if at all.
New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our Class A common stock or our Non-Accreting Notes. These alternative strategies may not be implemented on satisfactory terms, if at all.
Any reduction in force may yield unintended consequences and costs, such as the loss of institutional knowledge, relationships and expertise for certain critical roles, attrition beyond the intended reduction in force, the distraction of employees, reduced employee morale and adverse effects to our reputation as an employer, which could make it more difficult for us to hire new employees in the future, and the risk that we may not achieve the anticipated benefits from the reduction in workforce.
Any reorganization or reduction in force may yield unintended consequences and costs, such as the loss of institutional knowledge, relationships and expertise for certain critical roles, attrition beyond the intended plan, the distraction of employees, reduced employee morale and adverse effects to our reputation as an employer, which could make it more difficult for us to hire new employees in the future, and the risk that we may not achieve the anticipated benefits from the process.
To do this, we must continue to provide our customers and potential customers with a unified, convenient, efficient and differentiated shopping experience by: • providing imagery, tools and technology that attract customers who historically would have bought elsewhere; • maintaining a high-quality and diverse portfolio of products and services; • providing adequate customer service; 15 T a ble of Contents • delivering products on time and without damage; and • maintaining and further developing our mobile platforms.
To do this, we must continue to provide our customers and potential customers with a unified, convenient, efficient and differentiated shopping experience by: • providing imagery, tools and technology that attract customers who historically would have bought elsewhere; 15 Table of Contents • maintaining a high-quality and diverse portfolio of products and services; • providing excellent customer service; • delivering products on time and without damage; and • maintaining and further developing our mobile platforms.
The amounts involved may be material. 30 T a ble of Contents Current capital market conditions, including the impact of inflation, have increased borrowing rates and can be expected to significantly increase our cost of capital as compared to prior periods should we seek additional funding. Quantitative tightening by the U.S.
The amounts involved may be material. 30 Table of Contents Current capital market conditions, including the impact of inflation, have increased borrowing rates and can be expected to significantly increase our cost of capital as compared to prior periods should we seek additional funding. Quantitative tightening by the U.S.
Properly managing our growth will also require us to establish consistent policies across regions and functions, and a failure to do so could likewise harm our business. Further, we have a substantial number of hourly employees.
Properly managing our global workforce will also require us to establish consistent policies across regions and functions, and a failure to do so could likewise harm our business. Further, we have a substantial number of hourly employees.
Any slowdown, interruption or performance failure of our sites and the underlying technology and logistics infrastructure could harm our business, reputation and our ability to acquire, retain and serve our customers, which could materially adversely affect our results of operations.
Any slowdown, interruption or performance failure of our sites and the underlying technology and logistics infrastructure could harm our business, reputation and our ability to acquire, retain and serve our customers, which could materially adversely 19 Table of Contents affect our results of operations.
In the U.S., online tracking technologies are regulated by state privacy laws, such as the California Consumer Privacy Act, federal laws, and self-regulatory frameworks that may be binding on companies that provide online advertising technology services. These laws and frameworks may require companies to offer consumers the right to opt out of many of these activities.
In the U.S., online tracking technologies are regulated by state privacy laws, such as the CPRA, federal laws, and self-regulatory frameworks that may be binding on companies that provide online advertising technology services. These laws and frameworks may require companies to offer consumers the right to opt out of many of these activities.
To date, we have not entered into any currency hedging contracts. As a result, we may not be able to effectively offset the adverse financial impacts that may result from unfavorable movements in foreign currency exchange rates, and therefore fluctuations in foreign exchange rates could significantly impact our financial results.
To date, we 18 Table of Contents have not entered into any currency hedging contracts. As a result, we may not be able to effectively offset the adverse financial impacts that may result from unfavorable movements in foreign currency exchange rates, and therefore fluctuations in foreign exchange rates could significantly impact our financial results.
Alternatively, if a court were to find the choice-of- forum provisions contained in the Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
Alternatively, if a court were to find the exclusive forum provisions contained in our Bylaws or Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
We will incur additional costs complying with these additional obligations and any failure or perceived failure to comply would adversely affect our business and reputation. 31 T a ble of Contents In addition, there is also uncertainty regarding potential laws, regulations and policies related to ESG, climate change laws and regulations, and global environmental sustainability matters, including disclosure obligations and reporting on such matters.
We will incur additional costs complying with these additional obligations and any failure or perceived failure to comply would adversely affect our business and reputation. 31 Table of Contents In addition, there is also uncertainty regarding potential laws, regulations and policies related to sustainability, climate change laws and regulations, and global environmental sustainability matters, including disclosure obligations and reporting on such matters.
This control may materially adversely affect the market price of our Class A common stock. Additionally, holders of our Class B common stock may cause us to make strategic decisions or pursue acquisitions that could involve risks to you or may not 34 T a ble of Contents be aligned with your interests.
This control may materially adversely affect the market price of our Class A common stock. Additionally, holders of our Class B common stock may cause us to make strategic decisions or pursue acquisitions that could involve risks to you or may not be aligned with your interests.
Further, as we continue to expand our fulfillment capability or add new businesses with different requirements, our logistics networks become increasingly complex and operating them becomes more challenging. There can be no assurance that we will be able to operate our networks effectively.
Further, as we continue to expand our fulfillment capability or add new businesses with different 17 Table of Contents requirements, our logistics networks become increasingly complex and operating them becomes more challenging. There can be no assurance that we will be able to operate our networks effectively.
We believe that our ability to compete successfully depends upon many factors both within and beyond our control, including: • the size and composition of our customer base; • the number of suppliers and products we feature on our sites; • our selling and marketing efforts; • our ability to anticipate consumer demand and preferences; • the quality, price and reliability of products we offer; • the convenience of the shopping experience that we provide; • the adequacy of our customer service; • our ability to distribute our products and manage our operations; and • our reputation and brand strength.
We believe that our ability to compete successfully depends upon many factors both within and beyond our control, including: • the size and composition of our customer base; • the number of suppliers and products we feature on our sites; • our selling and marketing efforts; • our ability to anticipate consumer demand and preferences; • the quality, price and reliability of products we offer; • the convenience of the shopping experience that we provide; • the adequacy of our customer service; • our ability to distribute our products and manage our operations; • our ability to effectively utilize technological advancements, including artificial intelligence; and • our reputation and brand strength.
We have in the past, and may in the future, suffer losses as a result of orders placed with fraudulent credit card data even if the associated financial institution approved payment of 26 T a ble of Contents the orders. Under current credit card practices, we may be liable for fraudulent credit card transactions.
We have in the past, and may in the future, suffer losses as a result of orders placed with fraudulent credit card data even if the associated financial institution approved payment of the orders. Under current credit card practices, we may be liable for fraudulent credit card transactions.
Our ability to achieve any ESG objective is subject to numerous risks, some of which are outside of our control.
Our ability to achieve any sustainability objective is subject to numerous risks, some of which are outside of our control.
Other new or revised taxes, such as 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 rulings could also 33 T a ble of Contents create significant increases in internal costs necessary to capture data and collect and remit taxes.
Other new or revised taxes, such as 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 rulings could also create significant increases in internal costs necessary to capture data and collect and remit taxes.
If our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation or our attractiveness as an investment, business partner, service provider or employer could be negatively impacted. Our newly opened physical retail stores may not achieve sales or operations targets and may negatively impact our financial results.
If our sustainability practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation or our attractiveness as an investment, business partner, service provider or employer could be negatively impacted. Our expansion into physical retail stores may not achieve sales or operations targets and may negatively impact our financial results.
During 2023, our international net revenue accounted for approximately 13% of our total net revenue. Expanding our international operations to grow our business will require significant management attention and resources and expose us to additional risks.
During 2024, our international net revenue accounted for approximately 12% of our total net revenue. Expanding our international operations to grow our business will require significant management attention and resources and expose us to additional risks.
Our ability to efficiently ship products to customers may be negatively affected by factors beyond our and our carriers’ control, including inclement weather, natural disasters, system interruptions and technology failures, labor activism, supply chain issues, including congestion and delays, labor inflation and increased costs, political instability, military conflicts, health pandemics and epidemics or bioterrorism.
Our ability to efficiently ship products to customers has been and may be in the future negatively affected by factors beyond our and our carriers’ control, which may include inclement weather, natural disasters, system interruptions and technology failures, labor activism, supply chain issues, including congestion and delays, labor inflation and increased costs, political instability, military conflicts, health pandemics and epidemics or bioterrorism.
These choice of forum provisions may increase costs to bring a claim, discourage claims or limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or the Wayfair’s directors, officers or other employees, which may discourage such lawsuits against the Wayfair or the Wayfair’s directors, officers and other employees.
These exclusive forum provisions may increase costs to bring a claim, discourage claims or limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or Wayfair’s current or former directors, officers, other employees or stockholders, which may discourage such lawsuits against Wayfair or Wayfair’s current or former directors, officers, other employees and stockholders.
In addition, if we do not have a clear and relevant promotional calendar to engage our customers, especially in the current macroeconomic environment, our customers may purchase fewer goods from us or we may have to increase our promotional 21 T a ble of Contents activities.
In addition, if we do not have a clear and relevant promotional calendar to engage our customers, especially in the current macroeconomic environment, our customers may purchase fewer goods from us or we may have to increase our promotional activities.
Further, the proliferation of social media may increase the likelihood, speed, and magnitude of such negative events. Our aspirations and disclosures related to environmental, social and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance.
Further, the proliferation of social media may increase the likelihood, speed, and magnitude of such negative events. Our aspirations and disclosures related to corporate responsibility matters expose us to risks that could adversely affect our reputation and performance.
Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management.
Provisions in our Charter and Bylaws may have the effect of delaying or preventing a change of control or changes in our management.
Our operations, or those of our suppliers, could be negatively impacted by various events beyond our control, including, without limitation, natural disasters, such as hurricanes, tornadoes, floods, earthquakes, extreme cold events and other adverse weather conditions; public health crises, such as the COVID-19 pandemic and other pandemics and epidemics; political crises, such as terrorist attacks, war, labor unrest, and other political instability (including, without limitation, the ongoing conflicts between Russia and Ukraine and Israel and Hamas), negative global climate patterns, especially in water stressed regions; or other catastrophic events, such as fires or other disasters occurring at our distribution centers or our suppliers’ manufacturing facilities, whether occurring in the United States or internationally.
Our operations, or those of our suppliers, could be negatively impacted by various events beyond our control, including, without limitation, natural disasters, such as hurricanes, tornadoes, floods, earthquakes, extreme cold events and other adverse weather conditions; public health crises, such as pandemics and epidemics; political crises, such as terrorist attacks, war, labor unrest, and other political instability (including, without limitation, the ongoing conflicts between Russia and Ukraine), negative 13 Table of Contents global climate patterns, especially in water stressed regions; or other catastrophic events, such as fires or other disasters occurring at our distribution centers or our suppliers’ manufacturing facilities, whether occurring in the U.S. or internationally.
If products are not delivered in a timely fashion or are damaged during the delivery process, or if we are not able to provide adequate customer support or other services or offerings, our customers could become dissatisfied and cease buying products through our sites, which would adversely affect our operating results.
If products are not delivered in a timely fashion or are damaged during the delivery process by any of our third party transportation companies, or if we are not able to provide adequate customer support or other services or offerings, our customers could become dissatisfied and cease buying products through our sites, which would adversely affect our operating results.
For example, these stockholders are able to control elections of directors, amendments of our certificate of incorporation or bylaws, increases to the number of shares available for issuance under our equity incentive plans or adoption of new equity incentive plans and approval of any merger or sale of assets for the foreseeable future.
For example, these stockholders are able to control elections of directors, 34 Table of Contents amendments of our Charter or Bylaws, increases to the number of shares available for issuance under our equity incentive plans or adoption of new equity incentive plans and approval of any merger or sale of assets for the foreseeable future.
As we expand, we also become subject to certain laws, including the Foreign Corrupt Practices Act, as well as the laws of the foreign countries in which we operate, which may impose new or changing regulatory restrictions and requirements, including in the areas of data privacy and sustainability.
As we continue to expand our operations to other countries, we will also become subject to certain domestic laws, including the Foreign Corrupt Practices Act, as well as the laws of the foreign countries in which we operate, which may impose new or changing regulatory restrictions and requirements, including in the areas of data privacy and sustainability.
In addition, if hosting costs increase over time, or we are unable to optimize our applications for a cloud environment, or we require more computing or 19 T a ble of Contents storage capacity, our costs could increase disproportionately.
In addition, if hosting costs increase over time, or we are unable to optimize our applications for a cloud environment, or we require more computing or storage capacity, our costs could increase disproportionately.
Any event causing a disruption or delay of imports from suppliers with international manufacturing operations, including the imposition of additional import restrictions, restrictions on the transfer of funds or increased tariffs or quotas, could increase the cost or reduce the supply of merchandise available to our customers and materially adversely affect our financial performance as well as our reputation and brand.
Significant portions of the merchandise we source are manufactured outside of the U.S., and any event causing a disruption or delay of imports from suppliers with international manufacturing operations, including the imposition of increased tariffs or quotas, additional import restrictions, or restrictions on the transfer of funds, could increase the cost or reduce the supply of merchandise available to our customers and materially adversely affect our financial performance as well as our reputation and brand.
Any of these events may materially adversely affect our business, financial condition and operating results. 27 T a ble of Contents We may not be able to adequately protect our intellectual property rights.
Any of these events may materially adversely affect our business, financial condition and operating results. We may not be able to adequately protect our intellectual property rights.
We are also subject to risks of fraud from our suppliers. 22 T a ble of Contents We also are unable to predict whether any of the countries in which our suppliers’ products are currently manufactured or may be manufactured in the future will be subject to new, different, or additional trade restrictions imposed by the U.S. or foreign governments or the likelihood, type or effect of any such restrictions.
We also are unable to predict whether any of the countries in which our suppliers’ products are currently manufactured or may be manufactured in the future will be subject to new, different, or additional trade restrictions imposed by the U.S. or foreign governments or the likelihood, type or effect of any such restrictions.
Our certificate of incorporation and bylaws include provisions that: • permit the Board to establish the number of directors and fill any vacancies and newly created directorships; • when the outstanding shares of our Class B common stock represent less than 10% of the then outstanding shares of Class A common stock and Class B common stock, provide that the Board will be classified into three classes with staggered, three year terms and that directors may only be removed for cause; • require super-majority voting to amend some provisions in our certificate of incorporation and bylaws; • authorize the issuance of “blank check” preferred stock that the Board could use to implement a stockholder rights plan; • eliminate the ability of our stockholders to call special meetings of stockholders; • when the outstanding shares of our Class B common stock represent less than 10% of the then outstanding shares of Class A common stock and Class B common stock, prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the Board is expressly authorized to make, alter or repeal our bylaws; • restrict the forum for certain litigation against us to Delaware; • reflect the dual class structure of our common stock, as discussed above; and • establish advance notice requirements for nominations for election to the Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Our Charter and Bylaws include provisions that: • permit the Board to establish the number of directors and fill any vacancies and newly created directorships; • when the outstanding shares of our Class B common stock represent less than 10% of the then outstanding shares of Class A common stock and Class B common stock, provide that the Board will be classified into three classes with staggered, three year terms and that directors may only be removed for cause; • require super-majority voting to amend some provisions in our Charter and Bylaws; • authorize the issuance of “blank check” preferred stock that the Board could use to implement a stockholder rights plan; • eliminate the ability of our stockholders to call special meetings of stockholders; • when the outstanding shares of our Class B common stock represent less than 10% of the then outstanding shares of Class A common stock and Class B common stock, prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the Board is expressly authorized to make, alter or repeal our Bylaws; • our Charter and Bylaws restrict the forum for certain litigation against us to Delaware, and our Bylaws restrict the forum for certain other litigation against us to the U.S.
Methodologies for reporting ESG data may be updated 16 T a ble of Contents and previously reported ESG data may be adjusted to reflect improvement in availability and quality of data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances.
Methodologies for reporting sustainability data may be updated and previously reported sustainability data may be adjusted to reflect improvement in availability and quality of data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances.
Our indebtedness includes unsecured 1.125% Convertible Senior Notes due 2024 that mature on November 1, 2024 (the “2024 Notes”), unsecured 0.625% Convertible Senior Notes due 2025 that mature on October 1, 2025 (the “2025 Notes”), unsecured 1.00% Convertible Senior Notes due 2026 that mature on August 15, 2026 (the “2026 Notes”), unsecured 3.25% Convertible Senior Notes due 2027 that mature on September 15, 2027 (the “2027 Notes”), unsecured 3.50% Convertible Senior Notes due 2028 that mature on November 15, 2028 (the “2028 Notes” and together with the 2024 Notes, 2025 Notes, 2026 Notes and the 2027 Notes, the “Non-Accreting Notes”), and unsecured 2.50% Accreting Convertible Senior Notes due 2025 that mature on April 1, 2025 (the “2025 Accreting Notes” and together with the Non-Accreting Notes, the “Notes”).
Our indebtedness includes unsecured 0.625% Convertible Senior Notes due 2025 that mature on October 1, 2025 (the “2025 Notes”), unsecured 1.00% Convertible Senior Notes due 2026 that mature on August 15, 2026 (the “2026 Notes”), unsecured 3.25% Convertible Senior Notes due 2027 that mature on September 15, 2027 (the “2027 Notes”), unsecured 3.50% Convertible Senior Notes due 2028 that mature on November 15, 2028 (the “2028 Notes”, and together with the 2025 Notes, 2026 Notes and 2027 Notes, the “Non-Accreting Notes”), and 7.250% Senior Secured Notes due 2029 that mature on October 31, 2029 (the “2029 Secured Notes” and together with the Non-Accreting Notes, the “Notes”).
As of December 31, 2023, our co-founders and th eir affiliates owned shares representing approximately 23.3% of the economic interest and 74.0% of the voting power of our outstanding capital stock. This concentrated control limits your ability to influence corporate matters for the foreseeable future.
As of December 31, 2024, our co-founders and th eir affiliates owned shares representing approximately 21.4% of the economic interest and 69.6% of the voting power of our outstanding capital stock. This concentrated control limits your ability to influence corporate matters for the foreseeable future.
Moreover, beginning in 2022 and continuing in 2023, in an effort to reduce our operational costs and improve our organizational efficiency, we implemented a cost efficiency plan, part of which included an internal restructuring and a workforce reduction.
Moreover, beginning in 2022 and continuing in 2023 and 2024, in an effort to reduce our operational costs and improve our organizational efficiency, we implemented a cost efficiency plan, part of which included internal restructurings and workforce reductions to right-size our cost structure.
As such, any issue, or perceived issue, regarding the quality and safety of any items we sell, regardless of the cause, could adversely affect our brand, reputation, operations and financial results.
As such, any issue, or perceived issue, regarding the quality and safety of any items we sell, regardless of the cause, could adversely affect our brand, reputation, operations and financial results. We are also subject to risks of fraud from our suppliers.
If we are unable to develop and maintain relationships with suppliers that would allow us to offer a sufficient amount and variety of quality merchandise on acceptable commercial terms, our ability to satisfy our customers’ needs, and therefore our long-term growth prospects, would be materially adversely affected.
If we are unable to develop and maintain relationships with suppliers that would allow us to offer a sufficient amount and variety of quality merchandise on acceptable commercial terms, our ability to satisfy our customers’ needs, and therefore our long-term growth prospects, would be materially adversely affected. 22 Table of Contents Further, we rely on our suppliers’ representations of product quality, safety and compliance with applicable laws and standards.
We continue to invest in more robust technology and resources to manage those reporting requirements. Implementing the appropriate changes to our internal controls may distract our officers and employees, result in substantial costs and require significant time to complete. Any difficulties or delays in implementing these controls could impact our ability to timely report our financial results.
Implementing the appropriate changes to our internal controls may distract our officers and employees, result in substantial costs and require significant time to complete. Any difficulties or delays in implementing these controls could impact our ability to timely report our financial results.
As of December 31, 2023, we had $3.2 billion of principal indebtedness outstandin g, $117 million of w hich is characterized as short-term debt and presented within other current liabilities in the consolidated balance sheets .
As of December 31, 2024, we had $3.2 billion of principal indebtedness outstanding, $236 million of which is characterized as short-term debt and presented within other current liabilities in the consolidated balance sheets.
We may have to develop alternative systems, which may be less effective, to analyze our customers’ behavior and preferences, customize their online experience, or efficiently market to them if customers block cookies or regulations introduce additional barriers to collecting cookie data.
For example, Google previously proposed phasing out third-party cookies in its Chrome browser. We may have to develop alternative systems, which may be less effective, to analyze our customers’ behavior and preferences, customize their online experience, or efficiently market to them if customers block cookies or regulations introduce additional barriers to collecting cookie data.
Further, we rely on our suppliers’ representations of product quality, safety and compliance with applicable laws and standards. If our suppliers or other vendors violate our agreements, applicable laws or regulations, or implement practices regarded as fraudulent, unethical, unsafe, or hazardous to the environment, it could harm our business, reputation and brands and our operating results may be negatively affected.
If our suppliers or other vendors violate our agreements, applicable laws or regulations, or implement practices regarded as fraudulent, unethical, unsafe, or hazardous to the environment, it could harm our business, reputation and brands and our operating results may be negatively affected.
Many potential litigants, including patent holding companies, have the ability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
In addition, some of our larger competitors have extensive portfolios of issued patents. Many potential litigants, including patent holding companies, have the ability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
We might also be required to seek a license and pay royalties for the use of such intellectual property, which may not be available on commercially acceptable terms, or at all.
We might also be required to seek a license and pay royalties for the use of such intellectual property, which may not be available on commercially acceptable terms, or at all. Alternatively, we may be required to develop non-infringing technology or intellectual property, which could require significant effort and expense and may ultimately not be successful.
These assumptions are inherently difficult to predict, particularly in the long term. 24 T a ble of Contents We generally state possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to imply that actual results could not fall outside of the suggested ranges.
We generally state possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to imply that actual results could not fall outside of the suggested ranges.
Some of those key assumptions include broader macroeconomic conditions and the resulting impact of these factors on future consumer spending patterns and our business.
Some of those key assumptions include broader macroeconomic conditions and the resulting impact of these factors on future consumer spending patterns and our business. These assumptions are inherently difficult to predict, particularly in the long term.
Any such system, site or service interruptions could prevent us from efficiently receiving or fulfilling orders, which may reduce the volume or quality of goods or services we sell and may cause customer dissatisfaction and harm our reputation and brand.
Any such system, site or service interruptions could prevent us from efficiently receiving or fulfilling orders, which may reduce the volume or quality of goods or services we sell and may cause customer dissatisfaction and harm our reputation and brand. Our business may be adversely affected if we are unable to respond and adapt to rapid changes in technology.
In addition, our investments in properties may not be fully realized. We continually review our operations and facilities in an effort to reduce costs and increase efficiencies. For strategic or other operational reasons, we may decide to consolidate or co-locate certain aspects of our business operations or dispose of one or more of our properties.
We continually review our operations and facilities in an effort to reduce costs and increase efficiencies. For strategic or other operational reasons, we may decide to consolidate or co-locate certain aspects of our business operations or dispose of one or more of our properties. For example, we have increasingly moved to virtualize certain customer service centers.
In addition, consumer confidence and spending can be materially adversely affected in response to financial market volatility, inflationary pressures, negative financial news, conditions in the real estate and mortgage markets, including home equity loans and consumer credit, changes in net worth based on market changes and uncertainty, energy shortages and cost increases, labor and healthcare costs, government actions and general uncertainty regarding the overall future economic environment.
These factors include, among others, financial market volatility, inflationary pressures, the impacts of tariffs, negative financial news, conditions in the real estate and mortgage markets, including home equity loans and consumer credit, changes in net worth based on market changes and uncertainty, energy shortages and cost increases, labor and healthcare costs, government actions and general uncertainty regarding the overall future economic environment.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe use various security tools and processes to help prevent, identify, escalate, investigate, resolve and recover from identified vulnerabilities and security incidents in a timely manner, including, but not limited to, internal reporting, monitoring and detection tools and a vulnerability identification program. 36 T a ble of Contents Recognizing the complexity and evolving nature of cybersecurity threats, Wayfair engages with a range of external experts, including cybersecurity assessors, consultants, and auditors in evaluating and testing our risk management systems.
Biggest changeWe use various security tools and processes to help prevent, 36 Table of Contents identify, escalate, investigate, resolve and recover from identified vulnerabilities and security incidents in a timely manner, including, but not limited to, internal reporting, monitoring and detection tools and a vulnerability identification program.
Governance Our Board of Directors (the “Board”) is ultimately responsible for the risk oversight of the company, including, cybersecurity and privacy risks. Our Board has delegated responsibility for oversight of cybersecurity risks to the Audit Committee. The Audit Committee is composed of board members with diverse expertise including risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.
Governance Our Board is ultimately responsible for the risk oversight of the company, including, cybersecurity and privacy risks. Our Board has delegated responsibility for oversight of cybersecurity risks to the Audit Committee. The Audit Committee is composed of board members with diverse expertise including risk management, technology and finance, equipping them to oversee cybersecurity risks effectively.
Our Global Incident Response Plan also includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. 37 T a ble of Contents
Our Global Incident Response Plan also includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. 37 Table of Contents
These partnerships enable us to leverage specialized knowledge and insights, with a goal of ensuring our cybersecurity strategies and processes remain at the forefront of industry best practices. Our collaboration with these third-parties includes regular audits, threat assessments, and consultation on security enhancements.
Working with these external experts enables us to leverage specialized knowledge and insights, with a goal of ensuring our cybersecurity strategies and processes remain at the forefront of industry best practices. Our collaboration with these third parties includes regular audits, threat assessments and consultation on security enhancements.
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Recognizing the complexity and evolving nature of cybersecurity threats, Wayfair engages with a range of external experts, including cybersecurity assessors, consultants and auditors in evaluating and testing our risk management systems.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of December 31, 2023, we operated the following facilities: Leased Square Footage (1) Reportable Segment (square footage in thousands) Description of Use: Logistics 18,099 United States Logistics 3,502 International Customer service 329 United States Retail 271 United States Boston headquarters 1,402 United States Office space 87 United States Office space 222 International Total 23,912 (1) Represents the total leased space excluding subleases and leases that have not yet commenced.
Biggest changeProperties As of December 31, 2024, we operated the following facilities: Leased Square Footage (1) Reportable Segment (square footage in thousands) Description of Use: Logistics 18,878 United States Logistics 3,510 International Customer service 125 United States Customer service 30 International Retail 420 United States Boston headquarters 1,341 United States Office space 132 United States Office space 311 International Total 24,747 (1) Represents the total leased space excluding subleases and leases that have not yet commenced.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Our Common Stock As of February 15, 2024, there were 229 holders of record of shares of our Class A common stock and 252 holders of record of shares of our Class B common stock.
Biggest changeHolders of Our Common Stock As of February 13, 2025, there were 205 holders of record of shares of our Class A common stock and 257 holders of record of shares of our Class B common stock.
As of December 31, 2023, the approximate aggregate dollar value of shares that may yet be purchased under the authorized Repurchase Programs is $1.1 billion. There were no repurchases made during the three months ended December 31, 2023. Item 6. Reserved Not applicable.
As of December 31, 2024, the approximate aggregate dollar value of shares that may yet be purchased under the authorized Repurchase Programs is $1.1 billion. There were no repurchases made during the three months ended December 31, 2024. Item 6. Reserved Not applicable.
Dividends We have never declared or paid any cash dividends on our capital stock, and we do not currently anticipate paying any cash dividends in the foreseeable future. 38 T a ble of Contents Securities Authorized for Issuance Under Equity Compensation Plans Information regarding our equity compensation plans and securities authorized for issuance thereunder is set forth under Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , in this Annual Report on Form 10-K.
Dividends We have never declared or paid any cash dividends on our capital stock, and we do not currently anticipate paying any cash dividends in the foreseeable future. 38 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans Information regarding our equity compensation plans and securities authorized for issuance thereunder is set forth under Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , in this Annual Report on Form 10-K.

Item 7. Management's Discussion & Analysis

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

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Biggest changeUnder the terms of our Revolver, we may use proceeds to finance working capital, to refinance existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes. Any amounts outstanding under the Revolver are due at maturity.
Biggest changeOur indebtedness includes unsecured 0.625% Convertible Senior Notes due 2025 that mature on October 1, 2025 (the “2025 Notes”), unsecured 1.00% Convertible Senior Notes due 2026 that mature on August 15, 2026 (the “2026 Notes”), unsecured 3.25% Convertible Senior Notes due 2027 that mature on September 15, 2027 (the “2027 Notes”), unsecured 3.50% Convertible Senior Notes due 2028 that mature on November 15, 2028 (the “2028 Notes”, and together with the 2025 Notes, 2026 Notes and 2027 Notes, the “Non-Accreting Notes”), and 7.250% Senior Secured Notes due 2029 that mature on October 31, 2029 (the “2029 Secured Notes” and together with the Non-Accreting Notes, the “Notes”) Under the terms of our Revolver, we may use proceeds to finance working capital, to refinance existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes.
For information regarding our credit agreement and convertible notes, see Note 6, Debt and Other Financing , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , in this Annual Report on Form 10-K.
For information regarding our credit agreement and other notes, see Note 6, Debt and Other Financing , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , in this Annual Report on Form 10-K.
(3) During the year ended December 31, 2023, we recorded a $100 million gain on debt extinguishment upon repurchase of $83 million in aggregate principal amount of the 2024 Notes and $535 million in aggregate principal amount of the 2025 Notes.
During the year ended December 31, 2023, we recorded a $100 million gain on debt extinguishment upon repurchase of $83 million in aggregate principal amount of the 2024 Notes and $535 million in aggregate principal amount of the 2025 Notes.
During the year ended December 31, 2022, we recorded net charges of $31 million of lease impairment and other charges related to changes in market conditions around future sublease income for one office location in the U.S. and charges of $8 million related to construction in progress assets at an International warehouse.
During the year ended December 31, 2022, we recorded net charges of $39 million, inclusive of $31 million of lease impairment and other net charges related to changes in market conditions around future sublease income for one office location in the U.S. and charges of $8 million related to construction in progress assets at an International warehouse.
For information regarding our convertible notes, see Note 6, Debt and Other Financing , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data, in this Annual Report on Form 10-K. (2) Represents the future minimum lease payments under non-cancellable leases.
For information regarding the Notes, see Note 6, Debt and Other Financing , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , in this Annual Report on Form 10-K. (2) Represents the future minimum lease payments under non-cancellable leases.
Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and the Board. 49 T a ble of Contents Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and the Board. 49 Table of Contents Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
Additionally, we have a $600 million senior secured revolving credit facility that matures on March 24, 2026 (the “Revolver”). As of December 31, 2023, there were no revolving loans outstanding under the Revolver.
Additionally, we have a $600 million senior secured revolving credit facility that matures on March 24, 2026 (the “Revolver”). As of December 31, 2024, there were no revolving loans outstanding under the Revolver.
All dollar and percentage comparisons made in our MD&A refer to the year ended December 31, 2023 financial results, compared with the year ended December 31, 2022 financial results, unless otherwise noted.
All dollar and percentage comparisons made in our MD&A refer to the year ended December 31, 2024 financial results, compared with the year ended December 31, 2023 financial results, unless otherwise noted.
While it is difficult to quantify and predict all of the impacts these global economic events, including rising and fluctuating inflation and interest rates, will have on our business and to predict consumer spending in the near term, we believe the long-term opportunity that we see for shopping for the home online remains unchanged.
While it is difficult to quantify and predict all of the impacts these global economic events, including fluctuating interest rates and inflationary pressures, will have on our business and to predict consumer spending in the near term, we believe the long-term opportunity that we see for shopping for the home online remains unchanged.
Refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the year ended December 31, 2022 for a comparative discussion of our year ended December 31, 2022 financial results as compared to our year ended December 31, 2021 financial results filed with the SEC on February 23, 2023.
Refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the year ended December 31, 2023 for a comparative discussion of our year ended December 31, 2023 financial results as compared to our year ended December 31, 2022 financial results filed with the SEC on February 22, 2024.
During the year ended December 31, 2023, we incurred $65 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2023 workforce reductions. During the year ended December 31, 2022, we incurred $31 million of charges consisting primarily of one-time employee severance and benefit costs associated with the August 2022 workforce reductions.
During the year ended December 31, 2022, we incurred $31 million of charges consisting primarily of one-time employee severance and benefit costs associated with the August 2022 workforce reductions.
We will continue to monitor our liquidity during this time of historic disruption and volatility in the global capital markets. Credit Agreement and Convertible Debt As of December 31, 2023, we had $3.2 billion principal amount of indebtedness outstanding.
We will continue to monitor our liquidity during this time of historic disruption and volatility in the global capital markets. Credit Agreement and Debt Arrangements As of December 31, 2024, we had $3.2 billion principal amount of indebtedness outstanding.
As of December 31, 2023, we were in compliance with all the terms and conditions of our debt agreements.
As of December 31, 2024, we were in compliance with all the terms and conditions of our debt agreements.
If we determine that actual or expected returns or allowances are significantly higher or lower than the reserves established, we record a reduction or increase, as appropriate to net revenue in the period in which we make such a determination.
If we determine that actual or expected returns or 53 Table of Contents allowances are significantly higher or lower than the reserves established, we record a reduction or increase, as appropriate to net revenue in the period in which we make such a determination.
Excluding liquidity available through our Revolver, the following table shows sources of liquidity for the periods presented: December 31, 2023 2022 (in millions) Cash and cash equivalents $ 1,322 $ 1,050 Short-term investments 29 228 Total liquidity $ 1,351 $ 1,278 We believe that our existing cash and cash equivalents and investments, cash generated from operations and the borrowing availability under our Revolver will be sufficient to meet our anticipated cash needs for at least the foreseeable future including planned capital expenditures, contractual obligations and other such requirements.
Excluding liquidity available through our Revolver, the following table shows sources of liquidity for the periods presented: December 31, 2024 2023 (in millions) Cash and cash equivalents $ 1,316 $ 1,322 Short-term investments 56 29 Total liquidity $ 1,372 $ 1,351 We believe that our existing cash and cash equivalents and investments, cash generated from operations and the borrowing availability under our Revolver will be sufficient to meet our anticipated cash needs for at least the foreseeable future including planned capital expenditures, contractual obligations and other such requirements.
(2) During the year ended December 31, 2023, we incurred $65 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2023 workforce reductions. During the year ended December 31, 2022, we incurred $31 million of charges consisting primarily of one-time employee severance and benefit costs associated with the August 2022 workforce reductions.
(2) During the year ended December 31, 2024, we incurred $79 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2024 workforce reductions. During the year ended December 31, 2023, we incurred $65 million of charges consisting primarily of one-time employee severance and benefit costs associated with the January 2023 workforce reductions.
The following table presents a reconciliation of net cash provided by or used in operating activities to Free Cash Flow for each of the periods indicated: Year Ended December 31, 2023 2022 2021 (in millions) Net cash provided by (used in) operating activities $ 349 $ (674) $ 410 Purchase of property and equipment (148) (186) (101) Site and software development costs (203) (272) (179) Free Cash Flow $ (2) $ (1,132) $ 130 Net Revenue Constant Currency Growth We calculate Net Revenue Constant Currency Growth by translating the current period local currency net revenue by the currency exchange rates used to translate our financial statements in the comparable prior-year period.
The following table presents a reconciliation of net cash provided by or used in operating activities to Free Cash Flow for each of the periods indicated: Year Ended December 31, 2024 2023 2022 (in millions) Net cash provided by (used in) operating activities $ 317 $ 349 $ (674) Purchase of property and equipment (73) (148) (186) Site and software development costs (161) (203) (272) Free Cash Flow $ 83 $ (2) $ (1,132) Net Revenue Constant Currency Growth We calculate Net Revenue Constant Currency Growth by translating the current period local currency net revenue by the currency exchange rates used to translate our financial statements in the comparable prior-year period.
Included in other income (expense), net are changes in foreign currency transaction gains and losses and long-term investment income or losses.
Dollar and the Canadian Dollar. Included in other (expense) income, net are changes in foreign currency transaction gains and losses and long-term investment income or losses.
Year Ended December 31, 2023 2022 % Change (in millions) U.S. net revenue $ 10,482 $ 10,464 0.2 % International net revenue 1,521 1,754 (13.3) % Net revenue $ 12,003 $ 12,218 (1.8) % For more information on our segments, see Note 13 Segment and Geographic Information , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , in this Annual Report on Form 10-K.
Year Ended December 31, 2024 2023 % Change (in millions) U.S. net revenue $ 10,373 $ 10,482 (1.0) % International net revenue 1,478 1,521 (2.8) % Net revenue $ 11,851 $ 12,003 (1.3) % For more information on our segments, see Note 13, Segment and Geographic Information , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , in this Annual Report on Form 10-K.
The following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ from those referred to herein due to a number of factors, including but not limited to risks described in Part I, Item 1A, Risk Factors in this Annual Report on Form 10-K.
The following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ from those referred to herein due to a number of factors, including but not limited to risks described in Part I, Item 1A, Risk Factors in this Annual Report on Form 10-K. Overview Wayfair is the destination for all things home.
As of December 31, 2023, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs. 47 T a ble of Contents Trends and Historical Cash Flows Year Ended December 31, 2023 2022 2021 (in millions) Net loss $ (738) $ (1,331) $ (131) Net cash provided by (used in) operating activities $ 349 $ (674) $ 410 Net cash (used in) provided by investing activities $ (152) $ 1 $ (515) Net cash provided by (used in) financing activities $ 77 $ 16 $ (303) Operating Activities Cash flows in connection with operating activities consisted of net loss adjusted for certain non-cash items including depreciation and amortization, equity-based compensation and certain other non-cash expenses, as well as the effect of changes in working capital and other activities.
As of December 31, 2024, we have repurchased 2,354,491 shares of Class A common stock for approximately $612 million under the Repurchase Programs. 47 Table of Contents Trends and Historical Cash Flows Year Ended December 31, 2024 2023 2022 (in millions) Net loss $ (492) $ (738) $ (1,331) Net cash provided by (used in) operating activities $ 317 $ 349 $ (674) Net cash (used in) provided by investing activities $ (262) $ (152) $ 1 Net cash (used in) provided by financing activities $ (69) $ 77 $ 16 Operating Activities Cash flows in connection with operating activities consisted of net loss adjusted for certain non-cash items including depreciation and amortization, equity-based compensation and certain other non-cash expenses, as well as the effect of changes in working capital and other activities.
Wayfair controls products when it is the entity responsible for fulfilling the promise to the customer and takes responsibility for the acceptability of the goods, assumes inventory risk from shipment through the delivery date, has discretion in establishing prices and selects the suppliers of products sold.
Wayfair controls products when it is the entity responsible for fulfilling the promise to the customer and takes responsibility for the acceptability of the goods, assumes inventory risk from shipment through the delivery date, has discretion in establishing prices and selects the suppliers of products sold. We recognize net revenue when the product has been delivered to the customer.
We view average order value as a key indicator of the mix of products on our sites, the mix of offers and promotions and the purchasing behavior of our customers. 41 T a ble of Contents Results of Consolidated Operations Net revenue During the year ended December 31, 2023, net revenue decreased by $215 million, or 1.8%, compared to the same period in 2022, which reflects recent macroeconomic pressures felt by consumers.
We view average order value as a key indicator of the mix of products on our sites, the mix of offers and promotions and the purchasing behavior of our customers. 41 Table of Contents Results of Consolidated Operations Net revenue During the year ended December 31, 2024, net revenue decreased by $152 million , or 1.3%, compared to the same period in 2023, which reflects continued macroeconomic pressures felt by consumers.
Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 2.9% of net revenue for the year ended December 31, 2023 and related primarily to equipment purchases and improvements for leased warehouses within our expanding logistics network and ongoing investments, including in our proprietary technology and operational platform.
Purchases of property and equipment and site and software development costs (collectively, “Capital Expenditures”) were 2.0% of net revenue for the year ended December 31, 2024 and related primarily to equipment purchases and improvements for leased warehouses within our expanding logistics network and ongoing investments, including our physical retail store expansion, proprietary technology and operational platform.
Investing Activities Cash flows used in investing activities increased by $153 million during the year ended December 31, 2023 compared to the same period in 2022, primarily due to decreases in sales and maturities of short- and long-term investments of $656 million, partially offset by decreases in purchases of short- and long-term investments of $394 million, decreases in purchases of property and equipment and site and software development costs of $107 million, and decreases in other investing activities of $2 million.
Investing Activities Cash flows used in investing activities increased by $110 million during the year ended December 31, 2024, compared to the same period in 2023, primarily due to decreases in sales and maturities of short- and long-term investments of $194 million, increases in purchases of short- and long-term investments of $31 million and decreases of other investing activities of $2 million, partially offset by decreases in purchases of property and equipment and site and software development costs of $117 million.
Year Ended December 31, 2023 2022 % Change (in millions) Cost of goods sold $ 8,336 $ 8,802 (5.3) % As a percentage of net revenue 69.4 % 72.0 % 42 T a ble of Contents Operating expenses Operating expenses are comprised of customer service and merchant fees, advertising, selling, operations, technology, general and administrative expenses, impairment and other related net charges and restructuring charges.
Year Ended December 31, 2024 2023 % Change (in millions) Cost of goods sold $ 8,277 $ 8,336 (0.7) % As a percentage of net revenue 69.8 % 69.4 % 42 Table of Contents Operating expenses Operating expenses are comprised of customer service and merchant fees, advertising, selling, operations, technology, general and administrative expenses, impairment and other related net charges and restructuring charges.
Restructuring charges During the year ended December 31, 2023, restructuring charges increased by $34 million or 109.7% as compared to the same period in 2022. As a percentage of net revenue, restructuring charges increased to 0.5% from 0.3% in the same period in 2022.
Restructuring charges During the year ended December 31, 2024, restructuring charges increased by $14 million, or 21.5%, compared to the same period in 2023. As a percentage of net revenue, restructuring charges increased to 0.7% from 0.5% in the same period in 2023.
The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes: Year Ended December 31, 2023 2022 Customer service and merchant fees 4.4 % 4.9 % Selling, operations, technology, general and administrative 15.5 % 17.5 % Customer Service and Merchant Fees During the year ended December 31, 2023, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $70 million, or 11.7% compared to the same period in 2022.
The following table summarizes operating expenses as a percentage of net revenue, excluding equity-based compensation and related taxes: Year Ended December 31, 2024 2023 Customer service and merchant fees 3.8 % 4.4 % Selling, operations, technology, general and administrative 13.5 % 15.5 % Customer Service and Merchant Fees During the year ended December 31, 2024, excluding the impact of equity-based compensation, our expenses for customer service and merchant fees decreased by $77 million, or 14.6%, compared to the same period in 2023.
Because of these limitations, you should consider Adjusted Diluted Earnings or Loss per Share alongside other financial performance measures. 51 T a ble of Contents A reconciliation of the numerator and denominator for diluted earnings or loss per share, the most directly comparable GAAP financial measure, to the numerator and denominator for Adjusted Diluted Earnings or Loss per Share in order to calculate Adjusted Diluted Earnings or Loss per Share, is as follows: Year Ended December 31, 2023 2022 2021 (in millions, except per share data) Numerator: Numerator for basic and diluted loss per share - net loss $ (738) $ (1,331) $ (131) Adjustments to net loss Interest expense associated with convertible debt instruments — — 20 Equity-based compensation and related taxes 623 527 374 Provision for income taxes, net 9 12 1 Other: Impairment and other related net charges 14 39 12 Restructuring charges 65 31 — Gain on debt extinguishment (100) (96) — Numerator for Adjusted Diluted (Loss) Earnings per Share - Adjusted net (loss) income $ (127) $ (818) $ 276 Denominator: Denominator for basic and diluted loss per share - weighted-average number of shares of common stock outstanding after the effect of dilutive securities 114 106 104 Adjustments to effect of dilutive securities: Restricted stock units — — 3 Convertible debt instruments — — 12 Denominator for Adjusted Diluted (Loss) Earnings per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 114 106 119 Diluted Loss per Share $ (6.47) $ (12.54) $ (1.26) Adjusted Diluted (Loss) Earnings per Share $ (1.13) $ (7.71) $ 2.32 Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the U.S.
Because of these limitations, you should consider Adjusted Diluted Earnings or Loss per Share alongside other financial performance measures. 52 Table of Contents A reconciliation of the numerator and denominator for diluted earnings or loss per share, the most directly comparable GAAP financial measure, to the numerator and denominator for Adjusted Diluted Earnings or Loss per Share in order to calculate Adjusted Diluted Earnings or Loss per Share, is as follows: Year Ended December 31, 2024 2023 2022 (in millions, except per share data) Numerator: Numerator for basic and diluted loss per share - net loss $ (492) $ (738) $ (1,331) Adjustments to net loss Equity-based compensation and related taxes 411 623 527 Provision for income taxes, net 10 9 12 Other: Impairment and other related net charges 37 14 39 Restructuring charges 79 65 31 Gain on debt extinguishment (29) (100) (96) Numerator for Adjusted Diluted Earnings (Loss) per Share - Adjusted net income (loss) $ 16 $ (127) $ (818) Denominator: Denominator for basic and diluted loss per share - weighted-average number of shares of common stock outstanding 123 114 106 Adjustments to effect of dilutive securities: Restricted stock units 1 — — Denominator for Adjusted Diluted Earnings (Loss) per Share - Adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 124 114 106 Diluted Loss per Share $ (4.01) $ (6.47) $ (12.54) Adjusted Diluted Earnings (Loss) per Share $ 0.13 $ (1.13) $ (7.71) Critical Accounting Policies and Estimates Our financial statements are prepared in accordance with accounting principles generally accepted in the U.S.
As a percentage of net revenue, total customer service and merchant fees decreased to 4.6% for the year ended December 31, 2023 compared to 5.2% in the same period in 2022 due to decreased compensation costs. 43 T a ble of Contents Advertising During the year ended December 31, 2023, our advertising expenses decreased by $76 million or 5.2% as compared to the same period in 2022.
As a percentage of net revenue, total customer service and merchant fees decreased to 4.0% for the year ended December 31, 2024, compared to 4.6% in the same period in 2023 due to decreased compensation costs. 43 Table of Contents Advertising During the year ended December 31, 2024, our advertising expenses increased by $75 million, or 5.4%, c ompared to the same period in 2023.
Year Ended December 31, 2023 2022 % Change (in millions) Gain on debt extinguishment $ 100 $ 96 4.2 % Provision for income taxes, net During the year ended December 31, 2023, our provision for income taxes, net decreased by $3 million or 25.0% compared to the same period in 2022, primarily related to the level and mix of income earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes.
Year Ended December 31, 2024 2023 % Change (in millions) Gain on debt extinguishment $ 29 $ 100 (71.0) % Provision for income taxes, net During the year ended December 31, 2024, our provision for income taxes, net increased by $1 million, or 11.1%, compared to the same period in 2023, primarily related to the level and mix of income earned in the U.S. and certain foreign jurisdictions and U.S. state income taxes.
We use the following metrics to assess the near and longer-term performance of our overall business: Year Ended December 31, 2023 2022 2021 (in millions, except LTM net revenue per active customer, average order value and per share data) Key Financial Statement Metrics: Net revenue $ 12,003 $ 12,218 $ 13,708 Gross profit $ 3,667 $ 3,416 $ 3,895 Loss from operations $ (813) $ (1,384) $ (94) Net loss $ (738) $ (1,331) $ (131) Loss per share: Basic $ (6.47) $ (12.54) $ (1.26) Diluted $ (6.47) $ (12.54) $ (1.26) Net cash provided by (used in) operating activities $ 349 $ (674) $ 410 Key Operating Metrics: Active customers (1) 22 22 27 LTM net revenue per active customer (2) $ 537 $ 553 $ 501 Orders delivered (3) 41 40 52 Average order value (4) $ 292 $ 305 $ 265 Non-GAAP Financial Measures: Adjusted EBITDA $ 306 $ (416) $ 614 Free Cash Flow $ (2) $ (1,132) $ 130 Adjusted Diluted (Loss) Earnings per share $ (1.13) $ (7.71) $ 2.32 (1) The number of active customers represents the total number of individual customers who have purchased at least once directly from our sites during the preceding twelve-month period.
All other key financial statement and operating metrics are derived and reported from our consolidated net revenue. 40 Table of Contents We use the following metrics to assess the near and longer-term performance of our overall business: Year Ended December 31, 2024 2023 2022 (in millions, except LTM net revenue per active customer, average order value and per share data) Key Financial Statement Metrics: Net revenue $ 11,851 $ 12,003 $ 12,218 Gross profit $ 3,574 $ 3,667 $ 3,416 Loss from operations $ (461) $ (813) $ (1,384) Net loss $ (492) $ (738) $ (1,331) Loss per share: Basic $ (4.01) $ (6.47) $ (12.54) Diluted $ (4.01) $ (6.47) $ (12.54) Net cash provided by (used in) operating activities $ 317 $ 349 $ (674) Key Operating Metrics: Active customers (1) 21 22 22 LTM net revenue per active customer (2) $ 555 $ 537 $ 553 Orders delivered (3) 40 41 40 Average order value (4) $ 300 $ 292 $ 305 Non-GAAP Financial Measures: Adjusted EBITDA $ 453 $ 306 $ (416) Free Cash Flow $ 83 $ (2) $ (1,132) Adjusted Diluted Earnings (Loss) per Share $ 0.13 $ (1.13) $ (7.71) (1) The number of active customers represents the total number of individual customers who have purchased at least once directly from our sites during the preceding twelve-month period.
Impairment and other related net charges During the year ended December 31, 2023, impairment and other related charges decreased by $25 million or 64.1% as compared to the same period in 2022. As a percentage of net revenue, impairment and other related net charges decreased to 0.1% from 0.3% in the same period in 2022.
Impairment and other related net charges During the year ended December 31, 2024, impairment and other related charge s increased by $23 million, or 164.3% compared to the same period in 2023. As a percentage of net revenue, impairment and other related net charge s increased to 0.3% from 0.1% in the same period in 2023.
Year Ended December 31, 2023 2022 % Change (in millions) Other income (expense), net $ 1 $ (4) (125.0) % Gain on debt extinguishment During the year ended December 31, 2023, our gain on debt extinguishment increased by $4 million or 4.2% compared to the same period in 2022.
Year Ended December 31, 2024 2023 % Change (in millions) Other (expense) income, net $ (21) $ 1 (2,200.0) % Gain on debt extinguishment During the year ended December 31, 2024, gain on debt extinguishment decreased by $71 million, or 71.0%, compared to the same period in 2023.
We had outstanding letters of credit, primarily as security for certain lease agreements, for $76 million as of December 31, 2023, which reduced the availability of credit under the Revolver.
We had outstanding letters of credit, primarily as security for certain lease agreements, fo r $71 million a s of December 31, 2024, which reduced the availability of credit under the Revolver.
The decrease in customer service and merchant fees is primarily due to decreased compensation costs in 2023 compared to the same period in 2022.
The decrease in customer service and merchant fees is primarily due to decreased compensation costs during the year ended December 31, 2024, compared to the same period in 2023.
Year Ended December 31, 2023 2022 % Change (in millions) Provision for income taxes, net $ 9 $ 12 (25.0) % 45 T a ble of Contents Liquidity and Capital Resources Sources of Liquidity At December 31, 2023, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.4 billion.
Year Ended December 31, 2024 2023 % Change (in millions) Provision for income taxes, net $ 10 $ 9 11.1 % 45 Table of Contents Liquidity and Capital Resources Sources of Liquidity As of December 31, 2024, our principal source of liquidity was cash and cash equivalents and short-term investments totaling $1.4 billion .
Year Ended December 31, 2023 2022 % Change (in millions) Customer service and merchant fees (1) $ 557 $ 632 (11.9) % Advertising 1,397 1,473 (5.2) % Selling, operations, technology, general and administrative (1) 2,447 2,625 (6.8) % Impairment and other related net charges 14 39 (64.1) % Restructuring charges 65 31 109.7 % Total operating expenses $ 4,480 $ 4,800 (6.7) % As a percentage of net revenue: Customer service and merchant fees (1) 4.6 % 5.2 % Advertising 11.6 % 12.1 % Selling, operations, technology, general and administrative (1) 20.4 % 21.5 % Impairment and other related net charges 0.1 % 0.3 % Restructuring charges 0.5 % 0.3 % 37.2 % 39.4 % (1) Includes equity-based compensation and related taxes as follows: Year Ended December 31, 2023 2022 (in millions) Customer service and merchant fees $ 29 $ 34 Selling, operations, technology, general and administrative $ 584 $ 482 During the year ended December 31, 2023, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative increased by $97 million, or 18.8% compared to the same period in 2022, driven by an increase in vested restricted stock units in 2023 compared to the same period in 2022.
Year Ended December 31, 2024 2023 % Change (in millions) Customer service and merchant fees (1) $ 470 $ 557 (15.6) % Advertising 1,472 1,397 5.4 % Selling, operations, technology, general and administrative (1) 1,977 2,447 (19.2) % Impairment and other related net charges 37 14 164.3 % Restructuring charges 79 65 21.5 % Total operating expenses $ 4,035 $ 4,480 (9.9) % As a percentage of net revenue: Customer service and merchant fees (1) 4.0 % 4.6 % Advertising 12.4 % 11.6 % Selling, operations, technology, general and administrative (1) 16.7 % 20.4 % Impairment and other related net charges 0.3 % 0.1 % Restructuring charges 0.7 % 0.5 % 34.1 % 37.2 % (1) Includes equity-based compensation and related taxes as follows: Year Ended December 31, 2024 2023 (in millions) Customer service and merchant fees $ 19 $ 29 Selling, operations, technology, general and administrative $ 382 $ 584 During the year ended December 31, 2024, our equity-based compensation and related taxes included in customer service and merchant fees and selling, operations, technology, general and administrative decreased by $212 million, or 34.6%, compared to the same period in 2023, driven by a decrease in vested restricted stock units during the year ended December 31, 2024, compared to the same period in 2023.
Factors Affecting our Performance We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed in Part I, Item 1A, Risk Factors, in this Annual Report on Form 10-K for the year ended December 31, 2023. 40 T a ble of Contents Key Financial Statement and Operating Metrics We measure our business using the key financial statement and operating metrics that are reflected in the below table.
Factors Affecting our Performance We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed in Part I, Item 1A, Risk Factors, in this Annual Report on Form 10-K for the year ended December 31, 2024.
Because of these limitations, you should consider Free Cash Flow alongside other financial performance measures, including net cash provided by or used in operating activities, Capital Expenditures, and our other GAAP results.
Accordingly, you should not consider Free Cash Flow in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider Free Cash Flow 51 Table of Contents alongside other financial performance measures, including net cash provided by or used in operating activities, Capital Expenditures, and our other GAAP results.
As a percentage of net revenue, cost of goods sold decreased to 69.4% for the year ended December 31, 2023 compared to 72.0% in the same period in 2022 due to mix shifts, operational efficiencies and decreased logistics costs.
As a percentage of net revenue, cost of goods sold increased to 69.8% for the year ended December 31, 2024, compared to 69.4% in the same period in 2023 due to mix shifts and lower net revenue.
Cash flows provided by operating activities increased by $1.0 billion during the year ended December 31, 2023 compared to the same period in 2022, primarily due to an increase in net cash adjusted for non-cash items of $658 million and an increase of $365 million for cash provided by changes in operating assets and liabilities.
Cash flows provided by operating activities decreased by $32 million during the year ended December 31, 2024, compared to the same period in 2023, primarily due to a decrease of $135 million for cash changes in operating assets and liabilities partially offset by an increase in net loss adjusted for non-cash items of $103 million.
We do not have any off-balance sheet interest in variable interest entities, which include special purpose entities and other structured finance entities. 48 T a ble of Contents Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2023: Payment Due by Period Total Less than 1 year 1 - 3 Years 3 - 5 Years More than 5 Years (in millions) Short-term and long-term debt (1) $ 3,450 $ 179 $ 1,820 $ 1,451 $ — Operating leases (2) $ 1,331 $ 205 $ 417 $ 295 $ 414 Purchase obligations (3) $ 460 $ 206 $ 245 $ 9 $ — Other commitments (4) $ 144 $ 4 $ 21 $ 22 $ 97 (1) Represents future interest and principal payments on the Notes.
We do not have any off-balance sheet interest in variable interest entities, which include special purpose entities and other structured finance entities. 48 Table of Contents Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2024: Payment Due by Period Total Less than 1 year 1 - 3 Years 3 - 5 Years More than 5 Years (in millions) Short-term and long-term debt (1) $ 3,622 $ 349 $ 1,640 $ 1,633 $ — Operating leases (2) $ 1,437 $ 224 $ 466 $ 291 $ 456 Purchase obligations (3) $ 311 $ 249 $ 57 $ 5 $ — Other commitments (4) $ 16 $ — $ 3 $ 4 $ 9 (1) Represents future interest and principal payments on the Notes.
In connection with the issuance of our 2028 Notes, we recorded a $100 million gain on debt extinguishment, representing the difference between the cash paid for principal of $514 million and the combined net carrying value of the 2024 Notes and 2025 Notes of $614 million.
During the year ended December 31, 2023, we recorded a $100 million gain on debt extinguishment, representing the difference between the cash paid for principal of $514 million and the combined net carrying value of the 2024 Notes and 2025 Notes (as defined below) of $614 million.
See “Non-GAAP Financial Measures” below for more information regarding our use of Adjusted EBITDA, Free Cash Flow and Adjusted Diluted Earnings or Loss per Share and a reconciliation of these non-U.S. generally accepted accounting principles (“GAAP’) financial measures to the most directly comparable GAAP financial measure.
See “Non-GAAP Financial Measures” below for more information regarding our use of Adjusted EBITDA, Free Cash Flow and Adjusted Diluted Earnings or Loss per Share and a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure that is prepared in accordance with accounting principles generally accepted in the United States of America or “GAAP.” Our Free Cash Flow and Adjusted Diluted Earnings or Loss per Share are measured on a consolidated basis, while our Adjusted EBITDA is measured on a consolidated and reportable segment basis.
Selling, operations, technology, general and administrative During the year ended December 31, 2023, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activities decreased by $280 million, or 13.1% compared to the same period in 2022.
Selling, operations, technology, general and administrative During the year ended December 31, 2024, excluding the impact of equity-based compensation and related taxes, our expenses for selling, operations, technology, general and administrative activiti es decreased by $268 million, or 14.4% co mpared to the same period in 2023. The decrease is primarily due to decreased compensation costs.
We have provided a reconciliation below of Free Cash Flow to net cash provided by or used in operating activities, the most directly comparable GAAP financial measure. We disclose Free Cash Flow because it is an important indicator of our business performance as it measures the amount of cash we generate.
Free Cash Flow We calculate Free Cash Flow as net cash provided by or used in operating activities less Capital Expenditures. We have provided a reconciliation below of Free Cash Flow to net cash provided by or used in operating activities, the most directly comparable GAAP financial measure.
During the year ended December 31, 2022, we recorded a $96 million gain on debt extinguishment upon repurchase of $375 million in aggregate principal amount of the 2024 Notes and $229 million in aggregate principal amount of the 2025 Notes. 50 T a ble of Contents Free Cash Flow We calculate Free Cash Flow as net cash provided by or used in operating activities less Capital Expenditures.
During the year ended December 31, 2022, we recorded a $96 million gain on debt extinguishment upon repurchase of $375 million in aggregate principal amount of the 2024 Notes and $229 million in aggregate principal amount of the 2025 Notes.
During the year ended December 31, 2023, International Net Revenue Constant Currency Growth was (11.6)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).
During the year ended December 31, 2024, our U.S. net revenue decreased by 1.0% and International net revenue decreased by 2.8% compared to the same period in 2023. During the year ended December 31, 2024, International Net Revenue Constant Currency Growth was (2.7)% (see “Non-GAAP Financial Measures” below for more information regarding our use of Net Revenue Constant Currency Growth).
The following table reflects the reconciliation of net income or loss to Adjusted EBITDA for each of the periods indicated: Year Ended December 31, 2023 2022 2021 (in millions) Reconciliation of Adjusted EBITDA: Net loss $ (738) $ (1,331) $ (131) Depreciation and amortization 417 371 322 Equity-based compensation and related taxes 623 527 374 Interest expense, net 17 27 32 Other (income) expense, net (1) 4 4 Provision for income taxes, net 9 12 1 Other: Impairment and other related net charges (1) 14 39 12 Restructuring charges (2) 65 31 — Gain on debt extinguishment (3) (100) (96) — Adjusted EBITDA $ 306 $ (416) $ 614 (1) During the year ended December 31, 2023, we recorded net charges of $14 million, inclusive of $5 million related to consolidation of certain customer service centers and $9 million related to construction in progress assets at identified U.S. locations.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income or loss and our other GAAP results. 50 Table of Contents The following table reflects the reconciliation of net income or loss to Adjusted EBITDA for each of the periods indicated: Year Ended December 31, 2024 2023 2022 (in millions) Reconciliation of Adjusted EBITDA: Net loss $ (492) $ (738) $ (1,331) Depreciation and amortization 387 417 371 Equity-based compensation and related taxes 411 623 527 Interest expense, net 29 17 27 Other expense (income), net 21 (1) 4 Provision for income taxes, net 10 9 12 Other: Impairment and other related net charges (1) 37 14 39 Restructuring charges (2) 79 65 31 Gain on debt extinguishment (3) (29) (100) (96) Adjusted EBITDA $ 453 $ 306 $ (416) (1) During the year ended December 31, 2024, we recorded net charges of $37 million, inclusive of $34 million associated with weakened macroeconomic conditions in connection with our German operations , $2 million related to changes in sublease market conditions and $1 million related to construction in progress assets at identified U.S. locations.
Overview Wayfair is one of the world’s largest online destinations for the home. Through our e-commerce business model, we offer visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over 30 million products from over 20 thousand suppliers.
Through our e-commerce business model, we offer visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over 30 million products from over 20 thousand suppliers. We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity for acquiring more market share.
The decrease is primarily due to decreased personnel and information technology costs, partially offset by increased depreciation and amortization. As a percentage of net revenue, total selling, operations, technology, general and administrative expenses decreased to 20.4% for the year ended December 31, 2023 compared to 21.5% in the same period in 2022, primarily due to decreased compensation costs.
As a percentage of net revenue, total selling, operations, technology, general and administrative expens es decreased to 16.7% f or the year ended December 31, 2024, compared to 20.4% in the same period in 2023, primarily due to decreased compensation costs.
These estimates are based on historical rates of customer returns and allowances as well as the specific identification of outstanding returns that have not yet been received by us. The actual amount of customer returns and allowances are inherently uncertain and may differ from our estimates.
Allowances for sales returns are estimated and recorded based on prior returns history, recent trends and projections for returns on sales in the current period. These estimates are based on historical rates of customer returns and allowances as well as the specific identification of outstanding returns that have not yet been received by us.
We also continued to manage our advertising spend according to a return on investment-oriented approach that carefully tracks and monitors the results of advertising campaigns as we seek to maintain appropriate return targets. 39 T a ble of Contents Global Considerations We are continuing to closely monitor macroeconomic impacts, including, but not limited to, geopolitical events and rising and fluctuating interest rates and inflation on our business, results of operations and financial results.
We also continued to manage our advertising spend according to a return on investment-oriented approach that carefully tracks and monitors the results of advertising campaigns as we seek to maintain appropriate return targets. 39 Table of Contents Global Considerations We closely monitor macroeconomic conditions, including, but not limited to, economic instability, changes in tax laws, regulations and new or increased tariffs, including based on the recent United States (“U.S.”) presidential election, sustained higher interest rates and inflationary pressures, on our business, results of operations and financial results.
These are partially offset by increased payments to extinguish convertible debt of $10 million and increased premiums paid for capped call confirmations of $7 million. Off-Balance Sheet Arrangements We do not engage in any off-balance sheet activities.
These are partially offset by increases in proceeds from the issuance of debt of $108 million, decreases in premiums paid for capital call confirmations of $87 million and other financing inflows of $3 million. Off-Balance Sheet Arrangements We do not engage in any off-balance sheet activities.
Accordingly, we believe that Free Cash Flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management. Free Cash Flow has limitations as an analytical tool because it omits certain components of the cash flow statement and does not represent the residual cash flow available for discretionary expenditures.
We disclose Free Cash Flow because it is an important indicator of our business performance as it measures the amount of cash we generate. Accordingly, we believe that Free Cash Flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
During the year ended December 31, 2023, net revenue decreased by 1.8% compared to the same period in 2022. As of December 31, 2023, we had 22 million active customers and during the year ended December 31, 2023, 79.6% of orders came from repeat buyers.
As of December 31, 2024, we had 21 million active customers and during the year ended December 31, 2024, 80.1% of orders came from repeat buyers.
During the year ended December 31, 2021, we recorded $12 million of customer service center impairment and other related charges related to our plan to consolidate customer service centers in identified U.S. locations.
During the year ended December 31, 2023, we recorded net charges of $14 million, inclusive of $5 million related to consolidation of certain customer service centers and $9 million related to construction in progress assets at identified U.S. locations.
Year Ended December 31, 2023 2022 % Change (in millions) Interest expense, net $ (17) $ (27) (37.0) % 44 T a ble of Contents Other income (expense), net During the year ended December 31, 2023, we recorded other income, net of $1 million, compared to other expense, net of $4 million in the same period in 2022, primarily driven by increases in foreign currency transaction gains.
Year Ended December 31, 2024 2023 % Change (in millions) Interest expense, net $ (29) $ (17) 70.6 % 44 Table of Contents Other (expense) income, net During the year ended December 31, 2024, other (expense) income, net increased by $22 million, or 2,200.0%, compared to the same period in 2023 , primarily driven by foreign currency rate fluctuations between the U.S.
During the year ended December 31, 2023, cost of goods sold decreased by $466 million, or 5.3%, compared to the same period in 2022. The decrease in cost of goods sold is primarily driven by operational cost savings initiatives.
During the year ended December 31, 2024, cost of goods so ld decreased by $59 million, or 0.7%, compared to the same period in 2023.
In connection with the issuance of our 2027 Notes, we recorded a $96 million gain on debt extinguishment, representing the difference between the cash paid for principal of $504 million and the combined net carrying value of the 2024 Notes and 2025 Notes of $600 million.
During the year ended December 31, 2024, we recorded a $29 million gain on debt extinguishment, representing the difference between the cash paid for principal, plus accrued and unpaid interest and transaction fees of $741 million and the combined net carrying value of the 2025 Notes, 2026 Notes and 2025 Accreting Notes (as defined below) of $770 million.
See Note 6, Debt and Other Financing , in the notes to the consolidated financial statements, included in Part II, Item 8, Financial Statements and Supplementary Data , in this Annual Report on Form 10-K. 46 T a ble of Contents The conditional conversion features of the 2024 Notes, 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes (collectively, the “Non-Accreting Notes” and together with the 2025 Accreting Notes, the “Notes”) were not triggered during the calendar quarter ended December 31, 2023, therefore, the 2024 Notes, 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes are not convertible during the calendar quarter ended March 31, 2024 pursuant to the applicable last reported sales price conditions.
The conditional conversion features of the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes were not triggered during the calendar quarter ended December 31, 2024, therefore, the 2025 Notes, 2026 Notes, 2027 Notes and 2028 Notes are not convertible during the calendar quarter ended March 31, 2025 pursuant to the applicable last reported sales price conditions.
Through increasing brand awareness as well as paid and unpaid advertising, we attract new and repeat customers to our family of sites. We turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey — offering best-in-class product discovery, purchasing, fulfillment and customer service.
We aim to turn these customers into recurring shoppers by creating a seamless shopping experience across their entire journey — offering best-in-class product discovery, purchasing, fulfillment and customer service. During the year ended December 31, 2024, net revenue decreased by 1.3% compared to the same period in 2023.
Financing Activities Cash flows provided by financing activities increased by $61 million during the year ended December 31, 2023 compared to the same period in 2022, primarily due to $75 million of repurchases of our Class A common stock and $3 million of principal payments upon maturity of convertible debt, both of which occurred during the year ended December 31, 2022.
Financing Activities Cash flows used in financing activities increased by $146 million during the year ended December 31, 2024, compared to the same period in 2023. The increase in cash used is primarily due to increases in payments for extinguishments of debt of $227 million and debt maturities of $117 million.
We believe an increasing portion of the dollars spent on home goods will be spent online and that there is an opportunity for acquiring more market share. Our business model is designed to grow our net revenue by acquiring new customers as well as stimulating repeat purchases from our existing customers.
Our business model is designed to grow our net revenue by acquiring new customers as well as stimulating repeat purchases from our existing customers. Through increasing brand awareness as well as paid and unpaid advertising, we attract new and repeat customers to our family of sites.
During the year ended December 31, 2022, we recorded net charges of $31 million of lease impairment and other charges related to changes in market conditions around future sublease income for one office location in the U.S. and charges of $8 million related to construction in progress assets at an International warehouse.
During the year ended December 31, 2024, we recorded net charges of $37 million, inclusive of $34 million associated with weakened macroeconomic conditions in connection with our German operations , $2 million related to changes in sublease market conditions and $1 million related to construction in progress assets at identified U.S. locations.
The decrease reflects our response to changing market conditions as we sought to maintain our return targets across various channels. As a percentage of net revenue, advertising expenses decreased to 11.6% for the year ended December 31, 2023 compared to 12.1% in the same period in 2022 due in part to maintaining efficiencies in our advertising channel mix.
As a percentage of net revenue, advertising expense s increased to 12.4% for the year ended December 31, 2024 compared to 11.6% in the same period in 2023 due to changes in our advertising channel mix as we seek to maximize returns on advertising spend within our efficiency parameters.
Interest expense, net During the year ended December 31, 2023, our interest expense, net decreased by $10 million, or 37.0%, compared to the same period in 2022, primarily driven by higher interest income.
Interest expense, net During the year ended December 31, 2024, interest expense, net increased to $29 million, co mpared to $17 million in the same period in 2023, primarily driven by the issuances of the 2029 Secured Notes and 2028 Notes (as defined below) in October 2024 and May 2023, respectively.
During the year ended December 31, 2023, we used $514 million of the net transaction amount from the issuance of the 2028 Notes to repurchase for cash $83 million aggregate principal amount of the 2024 Notes and $535 million aggregate principal amount of the 2025 Notes in privately negotiated repurchase transactions.
(3) During the year ended December 31, 2024, we recorded a $29 million gain on debt extinguishment upon repurchase of $518 million in aggregate principal amount of the 2025 Notes, $215 million in aggregate principal amount of the 2026 Notes and the remaining $39 million in aggregate principal amount of the 2025 Accreting Notes.
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The lower sales were a function of normalization in average order value following a period of intense inflation in 2022, which were offset by a recovery in order volume, which showed positive growth year-over-year.
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The lower sales were due to lower order volume, which was driven by challenges in the category such as macroeconomic pressures, including consumer spending patterns and housing market conditions, compared to the same period in 2023.
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Our Free Cash Flow and Adjusted Diluted Earnings or Loss per Share are measured on a consolidated basis, while our Adjusted EBITDA is measured on a consolidated and reportable segment basis. All other key financial statement and operating metrics are derived and reported from our consolidated net revenue.
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Germany Restructuring On January 10, 2025, we announced our decision to exit the German market (the “Germany Restructuring”), including a workforce reduction impacting approximately 730 employees, although we expect approximately half of these positions to relocate to other corporate offices.
Removed
The decrease in net revenue was due to lower average order value due, in part, to normalization of inflationary pressures in the supply chain compared to the same period in 2022.
Added
As a result of the Germany Restructuring, we expect to incur aggregate charges of approximately $102 million to $111 million, consisting of (i) approximately $40 million to $44 million in employee-related costs, including severance, benefits, relocation and transition costs and (ii) approximately $62 million to $67 million of other primarily non-cash charges, including gross impairment charges related to facility closures and other wind-down activities and excluding any recoveries that may be recognized related to our leases.
Removed
During the year ended December 31, 2023, our United States (“U.S.”) net revenue increased by 0.2% and International net revenue decreased by 13.3% compared to the same period in 2022.
Added
During the year ended December 31, 2024, Wayfair recorded impairment charges of $34 million associated with weakened macroeconomic conditions in connection with our German operations. This is inclusive of $21 million related to ROU assets and $13 million related to property, plant and equipment. Wayfair expects to incur the remainder of the aggregate charges during the first quarter of 2025.
Removed
Further, on January 19, 2024, we announced a workforce realignment plan, including a workforce reduction involving approximately 1,650 employees. As a result, we expect to incur between approximately $70 million and $80 million of costs, consisting primarily of employee severance and benefit costs, most of which are expected to be incurred in the first quarter of 2024.
Added
Key Financial Statement and Operating Metrics We measure our business using the key financial statement and operating metrics that are reflected in the below table.
Removed
The 2025 Accreting Notes are convertible at any time prior to the close of business on the second business day immediately preceding the maturity date. During the year ended December 31, 2023, there were no conversions of the Notes.

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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 changeWe continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. If our costs were to be subject to more significant inflationary pressures, we may not be able to fully offset such higher costs through price increases or other cost efficiency measures.
Biggest changeIf our costs were to be subject to more significant inflationary pressures, we may not be able to fully offset such higher costs through price increases or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition and results of operations. 54 Table of Contents
Our 2024 Notes, which were issued in November 2018, carry a fixed interest rate of 1.125% per year, our 2025 Notes, which were issued in August 2020, carry a fixed interest rate of 0.625% per year, our 2026 Notes, which were issued in August 2019, carry a fixed interest rate of 1.00% per year, our 2027 Notes, which were issued in September 2022, carry a fixed interest rate of 3.250%, our 2028 Notes, which were issued in May 2023, carry a fixed interest rate of 3.500% and our 2025 Accreting Notes, which were issued in April 2020, carry a fixed interest rate of 2.50% per year.
Our 2025 Notes, which were issued in August 2020, carry a fixed interest rate of 0.625% per year, our 2026 Notes, which were issued in August 2019, carry a fixed interest rate of 1.00% per year, our 2027 Notes, which were issued in September 2022, carry a fixed interest rate of 3.250%, our 2028 Notes, which were issued in May 2023, carry a fixed interest rate of 3.500% and our 2029 Secured Notes, which were issued in November 2024, carry a fixed interest rate of 7.250% per year.
In addition, global economic conditions may result in changes in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our net revenue as expressed in U.S. dollars. Inflation In fiscal 2023, we began to see normalization of inflationary pressures in the supply chain.
The effect of foreign currency exchange on our business historically has varied from quarter to quarter and may continue to do so, potentially materially. In addition, global economic conditions may result in changes in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our net revenue as expressed in U.S. dollars.
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The effect of foreign currency exchange on our business historically has varied from quarter to quarter and may continue to do so, potentially 53 T a ble of Contents materially.
Added
Inflation In fiscal 2024, we continued to see normalization of inflationary pressures in the supply chain. We continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions.
Removed
Our inability or failure to do so could harm our business, financial condition and results of operations. 54 T a ble of Contents

Other W 10-K year-over-year comparisons