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FIGS, Inc. (FIGS)·Q2 2025 Earnings Summary

Executive Summary

  • FIGS delivered its largest revenue quarter with Q2 2025 net revenues of $152.6M (+5.8% YoY), diluted EPS of $0.04, gross margin of 67.0%, and adjusted EBITDA margin of 12.9%, all ahead of internal expectations .
  • Significant beats vs S&P Global consensus: revenue $152.6M vs $144.2M*, EPS $0.04 vs $0.0188*, while adjusted EBITDA expanded 390 bps YoY to 12.9% driven by fulfillment and shipping cost efficiencies .
  • Management raised FY2025 outlook to low-single-digit revenue growth (from down low-single-digits in Q1) and adjusted EBITDA margin to 8.5–9.0% (from 7.5–8.5% in Q1), despite ~150 bps tariff headwind in 2025 .
  • Near-term watch items: planned promotional pullback intensifies in H2 and tariff phasing accelerates in Q4, implying softer Q4 margins; Q3 revenue guide is flat to +2% with adjusted EBITDA margin 9–9.5% .

Values retrieved from S&P Global*

What Went Well and What Went Wrong

What Went Well

  • Record revenue quarter with scrubwear strength: scrubwear net revenues $127.4M (+7.7% YoY), supported by integrated merchandising across new colors, fabric, and fit; international grew +19.8% YoY to $22.7M .
  • Cost efficiencies: selling expense rate fell to 22.6% from 25.6% YoY as fulfillment optimization and carrier mix/pricing actions took hold faster than expected, driving adjusted EBITDA margin to 12.9% (+390 bps YoY) .
  • AOV improved to $117 (+3.5% YoY), second-best quarter ever; management highlighted product mix and lower returns as primary drivers (“most favorable impact came from product mix shift”) .

What Went Wrong

  • Non-scrubwear declined 2.5% YoY to $25.2M due to fewer non-scrub launches and promotional pullback focus; Canada saw softness amid reduced promotions .
  • Gross margin contracted 40 bps YoY to 67.0% on higher inventory reserves and tariffs, partly offset by duty drawback and lower return rates .
  • Free cash flow for 1H25 was negative ($5.6M) on operating cash use (-$3.2M) and capex (-$2.4M); inventory up 14% YoY ($135.5M) with unit growth +8% and some tariff-related pull-forward .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Net Revenues ($USD Millions)$151.8 $124.9 $152.6
Diluted EPS ($USD)$0.01 $0.00 $0.04
Gross Margin (%)67.3% 67.6% 67.0%
Adjusted EBITDA ($USD Millions)$21.1 $9.0 $19.7
Adjusted EBITDA Margin (%)13.9% 7.2% 12.9%
Net Income Margin (%)1.2% -0.1% 4.7%

Actuals vs S&P Global Consensus

MetricQ4 2024 Estimate*Q4 2024 ActualQ1 2025 Estimate*Q1 2025 ActualQ2 2025 Estimate*Q2 2025 Actual
Revenue ($USD Millions)139.5*151.8 119.4*124.9 144.2*152.6
Diluted EPS ($USD)0.0148*0.01 0.0000*0.00 0.0188*0.04
EBITDA ($USD Millions)12.7*10.7 [GetEstimates actual value]*8.0*1.8 [GetEstimates actual value]*12.6*12.1 [GetEstimates actual value]*

Values retrieved from S&P Global*
Note: Company reports adjusted EBITDA; S&P Global “EBITDA” may reflect a different calculation basis than company “adjusted EBITDA” .

Segment and Geography Mix

Net Revenues ($USD Millions)Q4 2024Q1 2025Q2 2025
United States$127.5 $106.0 $129.9
Rest of World$24.3 $18.9 $22.7
Scrubwear$114.7 $99.6 $127.4
Non-scrubwear$37.2 $25.3 $25.2

KPIs

KPIQ2 2024Q1 2025Q2 2025
Active Customers (Millions)2.628 2.696 2.736
Net Revenues per Active Customer ($)210 208 208
Average Order Value ($)113 119 117

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenues Growth vs 2024FY 2025Down low-single-digits (Q1 update) Up low-single-digits (Q2) Raised
Adjusted EBITDA MarginFY 20257.5%–8.5% (Q1 update) 8.5%–9.0% (Q2) Raised
Net Revenues Growth vs 2024FY 2025Down low-single-digits (initial Q4 guide) Up low-single-digits (Q2) Raised vs initial
Adjusted EBITDA MarginFY 20259.0%–9.5% (initial Q4 guide) 8.5%–9.0% (Q2) Lower vs initial
Q3 2025 Net RevenuesQ3 2025N/AFlat to +2% YoY (Q2 call) New
Q3 2025 Adjusted EBITDA MarginQ3 2025N/A9%–9.5% (Q2 call) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Promotional strategyPlan to reduce promotions to support brand health Continued pullback; record AOV; US returns to growth More aggressive H2 pullback; baseline days strength offsets More deliberate, productivity up
Tariffs/tradeInitial FY25 guide before tariff escalation Updated FY25 outlook in response to U.S. tariffs Planning ~150 bps FY25 GM drag; mix: VN 20%, JO 15%, CN 30%; mitigation via sourcing, SG&A, pricing Headwind building into Q4/2026
Cost mitigation/logisticsFulfillment center cost overhang in 2024 Operational costs elevated at new FC Carrier mix/pricing optimization; fulfillment efficiencies; sustainable selling rate improvements Improving
Product/merchandisingNon-scrub growth in Q4; innovation focus Record AOV; strong full-price selling Scrubwear +8% YoY; fit updates during Nurses Week; strategic newness/color Strengthening core
International expansionIntl +45% in Q4 Intl +16% in Q1 Intl +20%; Japan live; S. Korea planned; LATAM regional tech rollouts Scaling
Retail/community hubsN/A40% new-to-brand; 30% become omnichannel Houston opening; NYC Upper East Side & Chicago planned Expanding footprint
Advocacy/brandN/ANurses Week activation “Awesome Humans on the Hill”; high engagement metrics; continued campaign chapters Elevated brand engagement

Management Commentary

  • “Strong execution drove our largest revenue quarter in our history and powered overall results ahead of expectations” (CEO) .
  • “Adjusted EBITDA margin improved 390 basis points year over year to 12.9%, which we believe demonstrates the power of our model when top line gains are matched with disciplined expense management” (CEO) .
  • “We are now pleased to be back within 50 basis points of our original 2025 outlook… full year net revenues are now expected to grow low single digits… adjusted EBITDA margin 8.5% to 9%” (CFO) .
  • “AOV increased 4% to $117… most favorable impact came from product mix shift, and favorability in returns” (CFO) .
  • “We are planning for added tariffs of 20% in Vietnam, 15% in Jordan and 30% in China… Q3 headwind largely offset by promo repositioning and cost actions; Q4 margin drag meaningfully higher” (CFO) .

Q&A Highlights

  • AOV drivers and outlook: Product mix and lower returns were key; AOV $117 (+4% YoY), second-best quarter, with innovation supporting higher average unit retail .
  • Tariffs quantification and phasing: FY25 ~150 bps gross margin pressure; current mix VN 20%, JO 15%, CN 30%; impact builds into Q3 and Q4; pricing is last resort and not in FY25 guidance .
  • Selling expense leverage: Sustainable savings from fulfillment optimization and carrier mix/pricing; path to return selling rates to 2023 levels by next year .
  • Non-scrubwear softness: Fewer launches and promo pullback; long-term stacked 3-year growth +35%; pipeline across underscrubs, footwear, outerwear, compression socks .
  • Inventory: +14% YoY dollars, +8% units; some pull-forward ahead of tariff dates; higher-cost goods mix .

Estimates Context

  • Q2 2025 beats: Revenue $152.6M vs $144.2M*, Diluted EPS $0.04 vs $0.0188*; both materially ahead, suggesting upward revisions to near-term models for core scrubwear and lower selling expense run-rate. Values retrieved from S&P Global*
  • Prior quarters also topped consensus: Q4 2024 revenue $151.8M vs $139.5M*; Q1 2025 revenue $124.9M vs $119.4M*; EPS was in line/slightly below in Q4 (0.01 vs 0.0148*) and in line in Q1 (0.00 vs 0.0000*) . Values retrieved from S&P Global*
  • Note on EBITDA: Company reports adjusted EBITDA ($19.7M in Q2), while S&P Global “EBITDA” consensus (~$12.6M*) reflects a different basis; use revenue and EPS for beat/miss signaling .

Key Takeaways for Investors

  • Quality beat: Strong scrubwear growth, baseline day productivity, and rapid cost mitigation produced outsized EPS and margin outperformance .
  • Guidance raised despite tariffs: FY25 revenue now up low-single digits and adjusted EBITDA margin 8.5–9.0% as mitigation levers (sourcing shifts, SG&A savings) offset phased tariff headwinds .
  • H2 setup: Expect Q3 margin leverage (9–9.5% adj. EBITDA) and a tougher Q4 given tariff ramp and lapping duty drawback; promotional pullback intensifies, moderating growth .
  • International scaling and retail footprint: Japan launched; South Korea next; 12 LATAM markets via regional tech; hubs coming to Houston, NYC, Chicago to drive omnichannel acquisition .
  • KPIs stable-to-improving: Active customers +4.1% YoY to 2.736M; AOV resilient at $117 with improving mix/returns; net revenues per active customer stable at $208 .
  • Watch inventory and tariffs: Inventory build (+14% YoY) reflects mix and pull-forward; tariff phasing suggests margin management is critical in Q4 and 2026 .
  • Catalysts: Continued cost savings realization, sustained scrubwear momentum, raised FY25 outlook, and execution on international/community hubs could support sentiment near term .

Additional Relevant Press Releases (Q2 2025)

  • Q2 2025 financial results press release (mirrors 8-K Exhibit 99.1; highlights and reconciliations) .
  • Earnings release date announcement (schedule and IR access details) .
  • Post-earnings participation notice (Goldman Sachs conference) .