Executive Summary

Q4 delivered modest top-line growth and solid profitability: revenue $3.12B (+0.2% YoY) with gross margin 30.2% and Adjusted EBITDA $96M (3.1% margin) as U.S. grew 1.1% while International fell 5.7% .
Mix and merchandising supported AOV (+5% YoY to $290) despite lower orders; repeat remained 79.4% of orders, active customers declined 4.5% YoY to 21.4M .
Q1 2025 outlook guides revenue flat to down YoY (≈100 bps drag from Germany exit), gross margin 30–31% (midpoint), advertising 12–13% of revenue (Q4 was a “high watermark” at 13.7%), SOT G&A $380–390M, and Adjusted EBITDA margin 2–4% .
Strategic catalysts: heavier brand/creator marketing (with payback timing), loyalty ramp (Wayfair Rewards), AI discovery (Muse), and logistics leverage (CastleGate) to drive share gains and long-term margin scalability .

What Went Well and What Went Wrong

What Went Well
- Share gains and disciplined profitability: Q4 revenue inched up to $3.1B with Adjusted EBITDA ~$96M; CEO emphasized “strong conclusion to the year” and “nearly $100 million of adjusted EBITDA in the quarter” .
- Brand and acquisition momentum: CFO cited Q4 as advertising “high watermark” with double-digit app install growth, more creators, and new customer order growth outpacing repeat in the U.S., supporting future payback .
- Balance sheet strengthening: tapped high-yield markets and repurchased portions of 2025/2026 convertibles; total liquidity >$1.9B, positioning for 2025 initiatives .
What Went Wrong
- International softness and active customer decline: International revenue down 5.7% YoY; active customers -4.5% YoY to 21.4M; orders delivered -5.3% YoY .
- Macro and category demand: management described a weak, unpredictable category (big/bulky furniture), with January/February trends soft; no immediate macro catalyst noted .
- One-time charges and GAAP loss: Q4 net loss ($128M) included $35M impairment tied largely to Germany; diluted GAAP EPS ($1.02) despite non-GAAP profitability .

Financial Results

Core P&L and Cash Flow

Metric	Q4 2023	Q3 2024	Q4 2024
Net Revenue ($B)	$3.114	$2.884	$3.121
Gross Profit ($M)	$944	$873	$941
Gross Margin %	—	30.3%	30.2%
Loss from Operations ($M)	($172)	($74)	($117)
Net Loss ($M)	($174)	($74)	($128)
GAAP Diluted EPS ($)	($1.49)	($0.60)	($1.02)
Adjusted Diluted EPS ($)	($0.11)	$0.22	($0.25)
Adjusted EBITDA ($M)	$92	$119	$96
Adjusted EBITDA Margin %	3.0%	4.1%	3.1%
Operating Cash Flow ($M)	$158	$49	$162
Free Cash Flow ($M)	$62	($9)	$102

Segments

Metric	Q4 2023	Q3 2024	Q4 2024
U.S. Net Revenue ($B)	$2.710	$2.512	$2.740
International Net Revenue ($M)	$404	$372	$381

KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Active Customers (M)	22.4 approx (table shows 22)	21.7	21.4
LTM Revenue per Active Customer ($)	$537	$545	$555
Orders Delivered (M)	11.3 approx (table shows 11)	9.3	10.7
Repeat Orders Share (%)	79.4%	79.9%	79.4%
Repeat Orders (M)	9.0 approx (not in Q3) —	7.4	8.5
Average Order Value ($)	$276	$310	$290
Mobile Order Share (%)	62.8%	63.0%	64.5%

Notes: CFO highlighted Q4 SOT G&A (excludes equity-based comp and certain items, includes D&A) at $392M as part of managing spend while leaning into marketing . Q4 impairment of $35M largely tied to Germany .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue (YoY)	Q1 2025	n/a	Flat to down YoY; ≈100 bps drag from Germany exit	New
Gross Margin %	Q1 2025	30–31% range	Maintain 30–31%; closer to midpoint	Maintained
Customer Service & Merchant Fees % Rev	Q1 2025	~<4% recent	Just below 4%	Maintained
Advertising % Rev	Q1 2025	n/a	12–13% (Q4 is “high watermark”)	New (lower vs Q4 run-rate)
SOT G&A ($)	Q1 2025	n/a	$380–$390M	New
Adjusted EBITDA Margin %	Q1 2025	n/a	2–4%	New
SBC + taxes ($)	Q1 2025	n/a	~$80–$100M	New
D&A ($)	Q1 2025	n/a	~$82–$87M	New
Net Interest Expense ($)	Q1 2025	n/a	~$18M	New
Wtd Avg Shares (M)	Q1 2025	n/a	~127M	New
CapEx ($)	Q1 2025	n/a	$60–$70M	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
AI/Technology initiatives	Focus on efficiency and profitability; no major AI product in Q2 PR . Q3 emphasized cost discipline and share capture .	Launched “Muse” (genAI inspiration-to-shopping), building on Decorify; tech replatforming “far along,” unlocking product-led growth in 2025 .	Accelerating product innovation and personalization.
Supply chain/CastleGate	Continued operations strength; best FCF in 3 years in Q2; no specific CastleGate detail .	CastleGate drives speed badges, lower returns, higher NPS; utilization a lever for gross margin/profit as volumes scale .	Logistics advantages deepening; utilization upside.
Tariffs/Macro	Q2: macro headwinds, category correction akin to GFC in magnitude . Q3: sustained challenges, share capture .	Category remains weak; pricing investments targeted by elasticity, suppliers diversifying sourcing; tariff exposure managed via marketplace model .	Macro still a headwind; pricing levered to GP dollar growth.
Marketing/Brand	Q2–Q3: cost discipline, profitable growth .	“Wayborhood” brand refresh and creator program; Q4 ad spend a high watermark; paybacks 60–90+ days; channel expansion (YouTube, AppLovin) .	Lean-in to top/mid funnel to seed 2025 growth.
Loyalty	Not in Q2 PR; n/a in Q3 PR.	Wayfair Rewards (launched Oct. 2024) early results ahead of expectations; ramping prominence on site .	Loyalty ramp expected to lower paid mix over time.
Regional trends	Q2: International flat to modestly up cc . Q3: U.S. -2.3% YoY, Intl flat cc .	U.S. +1.1% YoY; International -5.7% YoY (cc -5.0%) .	U.S. stabilizing; Int’l still soft.

Management Commentary

“We ended 2024 on a high note... These results enabled us to drive nearly $100 million of adjusted EBITDA in the quarter” — CEO Niraj Shah .
“Our strong financial performance enabled us to tap into the high yield markets... strongest balance sheet position in many years” — CEO .
“Gross margin for the quarter was 30.2%... we continue to see attractive opportunities to lean in on competitive take rates” — CFO Kate Gulliver .
“Advertising was 13.7%, which we expect will represent the high watermark... paybacks can be 60 to 90 days or longer” — CFO .
“We intend 2025 to be a year where our investments... return the business back to a state of expanding growth” — CEO .
“Muse is our evolution in how customers discover, personalize and shop” — CEO (prepared) .
“Utilization of our fulfillment network... is a big driver of gain for us” — CEO (Q&A on CastleGate) .

Q&A Highlights

Top-line drivers and share gains: Holiday execution, event cadence, and market share focus amid a still-weak category; base case assumes macro remains challenged in 2025 .
Pricing and tariffs: Suppliers have diversified sourcing beyond China; Wayfair manages retail pricing via elasticity to grow gross profit dollars rather than pass-through cost inputs .
Marketing ROI and mix: Q4 spend was peak; multi-quarter paybacks; expanding into creators/YouTube/AppLovin while holding strict payback thresholds .
Demand cadence: January weak, February slightly weaker; Presidents’ Day softer industry-wide; weather neutral .
Q1 guidance context: QTD just below flat; FY Q1 flat to down YoY including ~100 bps drag from Germany exit; ad % normalizing to 12–13%; SOT G&A $380–$390M; Adjusted EBITDA margin 2–4% .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 was unavailable due to data access limitations at this time; as a result, we cannot provide “vs. consensus” comparisons for revenue/EPS/EBITDA. Values would be retrieved from S&P Global if accessible (S&P Global data unavailable at time of analysis).
Given Q1 2025 guide (ad 12–13%, Adjusted EBITDA margin 2–4%, revenue flat to down YoY), near-term models may reflect lower Q1 margins with improving leverage as prior-period ad spend paybacks materialize; gross margin guide maintained at 30–31% .

Key Takeaways for Investors

Execution over macro: Q4 shows Wayfair can deliver profit growth and modest top-line stabilization even as category demand is weak; management is underwriting another tough year in 2025 while aiming to grow Adjusted EBITDA dollars .
Near-term margin cadence: Expect Q1 margin dip within 2–4% Adjusted EBITDA margin as Q4’s elevated ads begin to pay back; ad % should improve from Q4 peak toward guided 12–13% .
Structural growth levers: Loyalty (Wayfair Rewards), app adoption, creator/influencer programs, and AI (Muse) should increase direct traffic and conversion, lowering acquisition cost over time .
Logistics leverage: CastleGate utilization and retail media can support gross margin within the 30–31% range while improving customer experience and supplier economics .
International risk: U.S. stabilizing (+1.1% YoY) vs. continued International softness (-5.7% YoY), with FX/macro pressure and Germany exit impacting near-term growth composition .
Capital position: Liquidity >$1.9B and recent refinancing/activity provide flexibility to invest through the cycle and repurchase/term out debt as opportunities arise .
Watchlist for catalysts: Q1 revenue/margin trajectory vs. guide, loyalty membership ramp, creator-channel efficiency, Muse engagement KPIs, and visible uplift from logistics utilization.

Appendix: Additional Context from Prior Quarters

Q2 2024: Net revenue $3.117B (-1.7% YoY); Adjusted EBITDA $163M; best profitability/FCF in three years amid macro headwinds .
Q3 2024: Net revenue $2.884B (-2.0% YoY); Adjusted EBITDA $119M; mid-single-digit Adjusted EBITDA margin for second straight quarter; continued share capture .

Sources: Q4 2024 8-K/press release and exhibits -; Q4 2024 earnings call transcript -; Q3 2024 8-K -; Q2 2024 8-K -; Wayfair Rewards press release (Oct 22, 2024) ; Muse press release (Feb 11, 2025) .

Wayfair Inc. (W)·Q4 2024 Earnings Summary