QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
June 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Right-of-use lease assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses | |||||||||||
Deferred revenue | |||||||||||
Current lease liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Non-current lease liabilities | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (see Note 9) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Interest and other income (loss), net | ( | ||||||||||||||||||||||
Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Provision for income taxes | ( | ||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted | |||||||||||||||||||||||
Other comprehensive loss | |||||||||||||||||||||||
Foreign currency translation adjustment | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Stock option exercises | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock unit releases | — | — | — | — | — | ||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance as of March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Stock option exercises | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock unit releases | — | — | — | — | — | ||||||||||||||||||||||||||||||
Shares issued in connection with employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Non-cash charitable contributions | — | — | — | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance as of June 30, 2023 | $ | $ | $ | ( | $ | ( | $ |
Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Stock option exercises | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock unit releases | — | — | — | — | — | ||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Stock option exercises | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock unit releases | — | — | — | — | — | ||||||||||||||||||||||||||||||
Shares issued in connection with employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Non-cash charitable contributions | — | — | — | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | $ | $ | ( | $ | ( | $ |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Non-cash charitable contribution | |||||||||||
Asset impairment charges | |||||||||||
Amortization of cloud-based software implementation costs | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts receivable, net | |||||||||||
Inventory | ( | ||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accounts payable | |||||||||||
Accrued expenses | ( | ( | |||||||||
Deferred revenue | ( | ( | |||||||||
Other current liabilities | ( | ||||||||||
Right-of-use lease assets and current and non-current lease liabilities | |||||||||||
Other liabilities | ( | ||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from stock option exercises | |||||||||||
Proceeds from shares issued in connection with employee stock purchase plan | |||||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rates on cash | ( | ( | |||||||||
Net change in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental disclosures | |||||||||||
Cash paid for income taxes | $ | $ | |||||||||
Cash paid for interest | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities | |||||||||||
Non-cash investing and financing activities: | |||||||||||
Purchases of property and equipment included in accounts payable and accrued expenses | $ | $ | |||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Eyewear products | $ | $ | $ | $ | |||||||||||||||||||
Services and other | |||||||||||||||||||||||
Total Revenue | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
E-commerce | $ | $ | $ | $ | |||||||||||||||||||
Retail | |||||||||||||||||||||||
Total Revenue | $ | $ | $ | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Leasehold improvements | $ | $ | |||||||||
Computers and equipment | |||||||||||
Furniture and fixtures | |||||||||||
Capitalized software | |||||||||||
Construction in process | |||||||||||
Less: accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Cost of goods sold | $ | $ | $ | $ | |||||||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||||||||||
Total depreciation and amortization expense | $ | $ | $ | $ | |||||||||||||||||||
Asset impairment charges | $ | $ | $ | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Payroll related | $ | $ | |||||||||
Marketing | |||||||||||
Unvested early exercised stock options | |||||||||||
Optical laboratory and product costs | |||||||||||
Charitable contributions | |||||||||||
Professional services | |||||||||||
Retail related | |||||||||||
Other accrued expenses | |||||||||||
Total accrued expenses | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Income tax expense | $ | ( | $ | $ | $ | ||||||||||||||||||
Effective tax rate | % | ( | % | ( | % | ( | % |
Class A | Class B | Class C | |||||||||||||||
Common stock outstanding | |||||||||||||||||
Employee stock options – outstanding | |||||||||||||||||
Restricted stock units – outstanding | |||||||||||||||||
Performance stock units – outstanding | |||||||||||||||||
Employee stock plans – available | |||||||||||||||||
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs | |||||||||||||||||
Total common stock – outstanding or issuable | |||||||||||||||||
Shares authorized | |||||||||||||||||
Common stock authorized and available for future issuance | |||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
ESPP purchase rights | |||||||||||||||||||||||
Risk-free interest rates | |||||||||||||||||||||||
Expected dividend yield | — | — | — | — | |||||||||||||||||||
Expected term | |||||||||||||||||||||||
Volatility | % | % | % | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Shares purchased under the ESPP | |||||||||||||||||||||||
Stock-based compensation expense related to ESPP | $ | $ | $ | $ | |||||||||||||||||||
Employee contributions | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Cost of goods sold | $ | $ | $ | $ | |||||||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Number of Stock Options | Weighted Average Exercise Price | Weighted average contractual term (years) | Aggregate intrinsic value | ||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | |||||||||||||||||||||
Options granted | |||||||||||||||||||||||
Options exercised | ( | ||||||||||||||||||||||
Options forfeited | |||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | |||||||||||||||||||||
Exercisable as of June 30, 2023 | $ | $ | |||||||||||||||||||||
Vested as of June 30, 2023 | |||||||||||||||||||||||
Unvested as of June 30, 2023 | $ |
Number of Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||
Unvested as of December 31, 2022 | $ | ||||||||||
Granted | |||||||||||
Forfeited | ( | ||||||||||
Released | ( | ||||||||||
Vested and not yet released | ( | ||||||||||
Unvested as of June 30, 2023 | $ |
Tranche | Number of PSUs | Stock Price Hurdle | ||||||||||||
1 | $ | |||||||||||||
2 | $ | |||||||||||||
3 | $ | |||||||||||||
4 | $ | |||||||||||||
5 | $ | |||||||||||||
6 | $ | |||||||||||||
7 | $ | |||||||||||||
8 | $ |
June 30, 2023 | December 31, 2022 | ||||||||||
Lease assets: | |||||||||||
Right-of-use assets | $ | $ | |||||||||
Total lease assets | |||||||||||
Lease liabilities: | |||||||||||
Current lease liabilities | |||||||||||
Non-current lease liabilities | |||||||||||
Total lease liabilities | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Operating lease expense | $ | $ | $ | $ | |||||||||||||||||||
Variable lease expense(1) | |||||||||||||||||||||||
Net lease expense | $ | $ | $ | $ |
Operating Leases(1) | |||||
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Future minimum lease payments | |||||
Impact of discounting | |||||
Present value of lease payments | $ |
June 30, 2023 | |||||
Weighted average remaining lease term (years) | |||||
Weighted average discount rate | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net loss attributable to common stockholders - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted average shares, basic and diluted | |||||||||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Stock options to purchase common stock | |||||||||||||||||||||||
Unvested restricted stock units | |||||||||||||||||||||||
Unvested performance stock units | |||||||||||||||||||||||
ESPP purchase rights |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Active Customers (in thousands) | 2,285 | 2,258 | 2,285 | 2,258 | |||||||||||||||||||
Store Count(1) | 217 | 178 | 217 | 178 | |||||||||||||||||||
Adjusted EBITDA(2) (in thousands) | $ | 14,175 | $ | 5,936 | $ | 31,912 | $ | 6,710 | |||||||||||||||
Adjusted EBITDA margin(2) | 8.5 | % | 4.0 | % | 9.4 | % | 2.2 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Net loss | $ | (15,925) | $ | (32,166) | $ | (26,737) | $ | (66,299) | |||||||||||||||
Adjusted to exclude the following: | |||||||||||||||||||||||
Interest and other loss, net | (2,281) | 38 | (4,160) | (108) | |||||||||||||||||||
Provision for income taxes | (24) | 47 | 237 | 586 | |||||||||||||||||||
Depreciation and amortization expense | 9,284 | 7,694 | 18,424 | 14,605 | |||||||||||||||||||
Asset impairment charges | 255 | 186 | 650 | 412 | |||||||||||||||||||
Stock-based compensation expense(1) | 18,164 | 26,867 | 38,030 | 54,244 | |||||||||||||||||||
Non-cash charitable donation(2) | 600 | 3,270 | 600 | 3,270 | |||||||||||||||||||
Amortization of cloud-based software implementation costs(3) | 463 | — | 826 | — | |||||||||||||||||||
ERP implementation costs(4) | 3,639 | — | 4,042 | — | |||||||||||||||||||
Adjusted EBITDA | 14,175 | 5,936 | 31,912 | 6,710 | |||||||||||||||||||
Adjusted EBITDA margin | 8.5 | % | 4.0 | % | 9.4 | % | 2.2 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Net revenue | $ | 166,093 | $ | 149,624 | $ | 338,061 | $ | 302,842 | |||||||||||||||
Cost of goods sold | 75,458 | 63,277 | 152,635 | 126,849 | |||||||||||||||||||
Gross profit | 90,635 | 86,347 | 185,426 | 175,993 | |||||||||||||||||||
Selling, general, and administrative expenses | 108,865 | 118,428 | 216,086 | 241,814 | |||||||||||||||||||
Loss from operations | (18,230) | (32,081) | (30,660) | (65,821) | |||||||||||||||||||
Interest and other income (loss), net | 2,281 | (38) | 4,160 | 108 | |||||||||||||||||||
Loss before income taxes | (15,949) | (32,119) | (26,500) | (65,713) | |||||||||||||||||||
Provision for income taxes | (24) | 47 | 237 | 586 | |||||||||||||||||||
Net loss | (15,925) | (32,166) | (26,737) | (66,299) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
% of Net Revenue | % of Net Revenue | ||||||||||||||||||||||
Net revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of goods sold | 45.4 | % | 42.3 | % | 45.2 | % | 41.9 | % | |||||||||||||||
Gross profit | 54.6 | % | 57.7 | % | 54.8 | % | 58.1 | % | |||||||||||||||
Selling, general, and administrative expenses | 65.5 | % | 79.2 | % | 63.9 | % | 79.8 | % | |||||||||||||||
Loss from operations | (10.9) | % | (21.5) | % | (9.1) | % | (21.7) | % | |||||||||||||||
Interest and other income (loss), net | 1.3 | % | — | % | 1.3 | % | — | % | |||||||||||||||
Loss before income taxes | (9.6) | % | (21.5) | % | (7.8) | % | (21.7) | % | |||||||||||||||
Provision for income taxes | — | % | — | % | 0.1 | % | 0.2 | % | |||||||||||||||
Net loss | (9.6) | % | (21.5) | % | (7.9) | % | (21.9) | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net revenue | $ | 166,093 | $ | 149,624 | $ | 16,469 | 11.0 | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cost of goods sold | $ | 75,458 | $ | 63,277 | $ | 12,181 | 19.3 | % | |||||||||||||||
Gross profit | 90,635 | 86,347 | 4,288 | 5.0 | % | ||||||||||||||||||
Gross margin | 54.6 | % | 57.7 | % | (3.1) | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Selling, general, and administrative expenses | $ | 108,865 | $ | 118,428 | $ | (9,563) | (8.1) | % | |||||||||||||||
As a percentage of net revenue | 65.5 | % | 79.2 | % | (13.7) | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Interest and other income (loss), net | $ | 2,281 | $ | (38) | $ | 2,319 | (6,102.6) | % | |||||||||||||||
As a percentage of net revenue | 1.3 | % | — | % | 1.3 | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Provision for income taxes | $ | (24) | $ | 47 | $ | (71) | (151.1) | % | |||||||||||||||
As a percentage of net revenue | — | % | — | % | — | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Net revenue | $ | 338,061 | $ | 302,842 | $ | 35,219 | 11.6 | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cost of goods sold | $ | 152,635 | $ | 126,849 | $ | 25,786 | 20.3 | % | |||||||||||||||
Gross profit | 185,426 | 175,993 | 9,433 | 5.4 | % | ||||||||||||||||||
Gross margin | 54.8 | % | 58.1 | % | (3.3) | % |
Six Months Ended June 30, |
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Selling, general, and administrative expenses | $ | 216,086 | $ | 241,814 | $ | (25,728) | (10.6) | % | |||||||||||||||
As a percentage of net revenue | 63.9 | % | 79.8 | % | (15.9) | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Interest and other income, net | $ | 4,160 | $ | 108 | $ | 4,052 | 3,751.9 | % | |||||||||||||||
As a percentage of net revenue | 1.3 | % | — | % | 1.3 | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Provision for income taxes | $ | 237 | $ | 586 | $ | (349) | (59.6) | % | |||||||||||||||
As a percentage of net revenue | 0.1 | % | 0.2 | % | (0.1) | % |
Six Months Ended June 30, | |||||||||||
2023 | 2022 | ||||||||||
(in thousands) | |||||||||||
Net cash provided by (used in) operating activities | $ | 27,395 | $ | (14,624) | |||||||
Net cash used in investing activities | (24,610) | (31,869) | |||||||||
Net cash provided by financing activities | 1,967 | 1,982 | |||||||||
Effect of exchange rates on cash | (681) | (302) | |||||||||
Net increase (decrease) in cash and cash equivalents | $ | 4,071 | $ | (44,813) |
Incorporated by Reference | Filed / Furnished Herewith | |||||||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | |||||||||||||||||||||||||||||||||
3.1 | S-8 | 333-259704 | 4.2 | 9/22/2021 | ||||||||||||||||||||||||||||||||||
3.2 | S-8 | 333-259704 | 4.3 | 9/22/2021 | ||||||||||||||||||||||||||||||||||
4.1 | S-1 | 333-259035 | 4.1 | 8/24/2021 | ||||||||||||||||||||||||||||||||||
4.2 | 10-Q | 001-40825 | 4.2 | 5/16/2022 | ||||||||||||||||||||||||||||||||||
10.1 | * | |||||||||||||||||||||||||||||||||||||
31.1 | * | |||||||||||||||||||||||||||||||||||||
31.2 | * | |||||||||||||||||||||||||||||||||||||
31.3 | * | |||||||||||||||||||||||||||||||||||||
32.1 | ** | |||||||||||||||||||||||||||||||||||||
32.2 | ** | |||||||||||||||||||||||||||||||||||||
32.3 | ** | |||||||||||||||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | * | ||||||||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | * | ||||||||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | * |
WARBY PARKER INC. | |||||||||||
By: | /s/ Neil Blumenthal | ||||||||||
Neil Blumenthal | |||||||||||
Co-Chief Executive Officer | |||||||||||
By: | /s/ Dave Gilboa | ||||||||||
Dave Gilboa | |||||||||||
Co-Chief Executive Officer | |||||||||||
By: | /s/ Steve Miller | ||||||||||
Steve Miller | |||||||||||
Chief Financial Officer |
Basis for Pricing | Level I | Level II | ||||||
Consolidated Senior Net Leverage Ratio* | < 2.00 : 1.00 | > 2.00 : 1.00 | ||||||
Revolving Credit BSBY Rate Margin | 150 | 180 | ||||||
Revolving Credit Base Rate Margin | 50 | 80 | ||||||
Revolving Credit Facility Fee | 50 | 50 | ||||||
Letter of Credit Fees (exclusive of facing fees) | 150 | 180 |
Date: August 9, 2023 | By: | /s/ Neil Blumenthal | |||||||||
Neil Blumenthal Co-Chief Executive Officer | |||||||||||
(Co-Principal Executive Officer) |
Date: August 9, 2023 | By: | /s/ Dave Gilboa | |||||||||
Dave Gilboa Co-Chief Executive Officer | |||||||||||
(Co-Principal Executive Officer) |
Date: August 9, 2023 | By: | /s/ Steve Miller | |||||||||
Steve Miller Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
Date: August 9, 2023 | By: | /s/ Neil Blumenthal | ||||||||||||
Neil Blumenthal | ||||||||||||||
Co-Chief Executive Officer (Co-Principal Executive Officer) |
Date: August 9, 2023 | By: | /s/ Dave Gilboa | ||||||||||||
Dave Gilboa | ||||||||||||||
Co-Chief Executive Officer (Co-Principal Executive Officer) |
Date: August 9, 2023 | By: | /s/ Steve Miller | ||||||||||||
Steve Miller | ||||||||||||||
Chief Financial Officer (Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2023 |
Dec. 31, 2022 |
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Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 1,050,000,000 | |
Common class A | ||
Common stock shares authorized | 750,000,000 | 750,000,000 |
Common stock shares issued | 97,142,756 | 96,115,202 |
Common stock shares outstanding | 97,142,756 | 96,115,202 |
Common class B | ||
Common stock shares authorized | 150,000,000 | 150,000,000 |
Common stock shares issued | 19,398,920 | 19,223,572 |
Common stock shares outstanding | 19,398,920 | 19,223,572 |
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Income Statement [Abstract] | ||||
Net revenue | $ 166,093 | $ 149,624 | $ 338,061 | $ 302,842 |
Cost of goods sold | 75,458 | 63,277 | 152,635 | 126,849 |
Gross profit | 90,635 | 86,347 | 185,426 | 175,993 |
Selling, general, and administrative expenses | 108,865 | 118,428 | 216,086 | 241,814 |
Loss from operations | (18,230) | (32,081) | (30,660) | (65,821) |
Interest and other income (loss), net | 2,281 | (38) | 4,160 | 108 |
Loss before income taxes | (15,949) | (32,119) | (26,500) | (65,713) |
Provision for income taxes | (24) | 47 | 237 | 586 |
Net loss | $ (15,925) | $ (32,166) | $ (26,737) | $ (66,299) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.14) | $ (0.28) | $ (0.23) | $ (0.58) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.14) | $ (0.28) | $ (0.23) | $ (0.58) |
Weighted average shares used in computing net loss per share attributable to common stockholders, basic | 116,792,223 | 114,679,892 | 116,477,573 | 114,393,420 |
Weighted average shares used in computing net loss per share attributable to common stockholders, diluted | 116,792,223 | 114,679,892 | 116,477,573 | 114,393,420 |
Other comprehensive loss | ||||
Foreign currency translation adjustment | $ (35) | $ (163) | $ (718) | $ (155) |
Total comprehensive loss | $ (15,960) | $ (32,329) | $ (27,455) | $ (66,454) |
Description of Business |
6 Months Ended |
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Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessWarby Parker Inc., a public benefit corporation founded in 2010 (together with its wholly owned subsidiaries, the “Company”), is a founder-led, mission-driven lifestyle brand that sits at the intersection of technology, design, healthcare, and social enterprise. The Company offers holistic vision care by selling eyewear products and providing optical services directly to consumers through its retail stores and e-commerce platform. For every pair of glasses or sunglasses sold, the Company helps distribute a pair of glasses to someone in need through its Buy a Pair, Give a Pair program. The Company is headquartered in New York, New York. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the related notes. The December 31, 2022 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. There have been no significant changes in accounting policies during the six months ended June 30, 2023 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and the related notes. Certain prior period amounts were reclassified to conform to the current period presentation. These changes had no impact on the condensed consolidated financial statements for any period. Principles of Consolidation The condensed consolidated financial statements include the financial statements of Warby Parker Inc., and its wholly owned subsidiaries. The Company has consolidated certain entities meeting the definition of a variable interest entity as the Company concluded that it is the primary beneficiary of the entities. The inclusion of these entities does not have a material impact on its condensed consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The Company prepares its condensed consolidated financial statements in conformity with U.S. GAAP. These principles require management to make certain estimates and assumptions during the preparation of its condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Significant estimates underlying the accompanying condensed consolidated financial statements include, but are not limited to (i) the valuation of inventory, including the determination of the net realizable value, (ii) the useful lives and recoverability of long-lived assets, (iii) the determination of deferred income taxes, including related valuation allowances, and (iv) assumptions related to the valuation of common stock and determination of stock-based compensation. Segment Information Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who makes decisions about allocating resources and assessing performance. The Company defines its CODM as its co-Chief Executive Officers. The Company has identified one operating segment. When evaluating the Company’s performance and allocating resources, the CODM relies on financial information prepared on a consolidated basis. Concentration of Credit Risk and Major Suppliers Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in various accounts, which, at times, may exceed the limits insured by the Federal Deposit Insurance Corporation of $250 thousand per institution and the Canada Deposit Insurance Corporation of $100 thousand Canadian dollars. At June 30, 2023 and December 31, 2022, uninsured cash balances were approximately $211.3 million and $207.0 million, respectively. The Company has not experienced any concentration losses related to its cash and cash equivalents to date. The Company seeks to minimize its credit risk by maintaining its cash and cash equivalents with high-quality financial institutions and monitoring the credit standing of such institutions. During the first quarter of 2023, the Company opened accounts with additional financial institutions to diversify its cash holdings. The Company’s top five inventory suppliers accounted for approximately 18% and 22% of cost of goods sold for the six months ended June 30, 2023 and 2022, respectively. Cash and Cash Equivalents The Company considers all highly liquid short-term investments with an original maturity of three months or less to be a cash equivalent. Cash and cash equivalents include deposits with banks and financial institutions, money market funds, and receivables from credit card issuers, which are typically converted into cash within two to four days of capture. As such, these receivables are recorded as a deposit in transit as a component of cash and cash equivalents on the condensed consolidated balance sheets. At June 30, 2023 and December 31, 2022, the balance of receivables from credit card issuers included within cash and cash equivalents was $3.5 million and $11.1 million, respectively. Inventory Inventory consists of approximately $12.9 million and $16.1 million of finished goods, including ready-to-wear sun frames, contact lenses, and eyeglass cases, as of June 30, 2023 and December 31, 2022, respectively, and approximately $46.9 million and $52.7 million of component parts, including optical frames and prescription optical lenses, as of June 30, 2023 and December 31, 2022, respectively. Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, include estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates. Cloud-Based Software Implementation Costs The Company has entered into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on the long or short-term nature of such costs, in line with the Company's policy on the accounting for prepaid software hosting arrangements. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement. As of June 30, 2023, the Company had $13.0 million of gross capitalized cloud-based software implementation costs and $1.1 million of related accumulated amortization, for a net balance of $11.9 million, made up of $4.5 million recorded within prepaid expenses and other current assets and $7.4 million recorded within other assets on the condensed consolidated balance sheet. As of December 31, 2022, the Company had $11.1 million of gross capitalized cloud-based software implementation costs and $0.3 million of related accumulated amortization, for a net balance of $10.8 million, made up of $2.6 million recorded within prepaid expenses and other current assets and $8.2 million recorded within other assets on the condensed consolidated balance sheet. During the three and six months ended June 30, 2023, the Company incurred $0.5 million and $0.8 million of amortization of capitalized cloud-based software implementation costs, respectively. No amortization of cloud-based software implementation costs was recognized during the three and six months ended June 30, 2022. Revenue Recognition The Company primarily derives revenue from the sales of eyewear products, optical services, and accessories. The Company sells products and services through its stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges, which are charged to the customer, associated with these purchases. Revenue generated from services consists of both in-person eye exams and prescriptions issued through the Virtual Vision Test app. All revenue is reported net of sales taxes collected from customers on behalf of taxing authorities and variable consideration, including returns and discounts. Revenue is recognized when performance obligations are satisfied through either the transfer of control of promised goods or the rendering of services to the Company's customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, which is generally determined to be the point of delivery or upon rendering of the service in the case of eye exams. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. In the normal course of business, payment may be collected from the customer prior to recognizing revenue and such cash receipts are included in deferred revenue until the order is delivered to the customer. Substantially all of the deferred revenue included on the balance sheet at December 31, 2022 was recognized as revenue in the first quarter of 2023 and the Company expects substantially all of the deferred revenue at June 30, 2023 to be recognized as revenue in the third quarter of 2023. The Company’s sales policy allows customers to return merchandise for any reason within 30 days of receipt, generally for an exchange or refund. An allowance is recorded within other current liabilities on the condensed consolidated balance sheets for expected future customer returns which the Company estimates using historical return patterns and its expectation of future returns. Any difference between the actual return and previous estimates is adjusted in the period in which such returns occur. Historical return estimates have not materially differed from actual returns in any of the periods presented. The allowance for returns was $2.2 million at both June 30, 2023 and December 31, 2022 and is included in other current liabilities on the condensed consolidated balance sheets. The Company offers non-expiring gift cards to its customers. Proceeds from the sale of gift cards are initially deferred and recognized within deferred revenue on the condensed consolidated balance sheets, and are recognized as revenue when the product is received by the customer after the gift card has been tendered for payment. Based on historical experience, and to the extent there is no requirement to remit unclaimed card balances to government agencies under unclaimed property laws, an estimate of the gift card balances that will never be redeemed is recognized as revenue in proportion to gift cards which have been redeemed. While the Company will continue to honor all gift cards presented for payment, management may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity. The following table disaggregates the Company’s revenue by product:
The following table disaggregates the Company’s revenue by channel:
Leases The Company records a lease liability and corresponding right-of-use (“ROU”) asset at lease commencement. The lease liability is measured at the present value of non-cancellable future lease payments over the lease term, minus expected tenant improvement allowances (“TIAs”) determined to be lease incentives. The ROU asset is measured at the lease liability amount, adjusted for prepaid lease payments, TIAs expected to be received, and any initial direct costs. When calculating the present value of future lease payments, the Company utilizes an incremental borrowing rate, which incorporates several factors including the lease term, U.S. Treasury bond rates, financial ratios related to earnings and cash flows, and other comparisons with similarly sized companies. Many of the Company’s leases contain TIA provisions, which represent contractual amounts receivable from a lessor for improvements to the leased property made by the Company which are determined to represent lease incentives. The Company considers the collection of TIAs to be reasonably certain, and includes them in the present value calculation when determining the lease liabilities for new leases. The benefit from a TIA is amortized through rent expense over the term of the related lease. The recognition of rent expense for an operating lease commences on the date at which control and possession of the property is obtained. Rent expense is calculated by recognizing total fixed minimum rental payments, net of any TIAs or other rental concessions, on a straight-line basis over the lease term. Some of the Company’s retail leases contain percent of sales rent or similar provisions, which is recognized as incurred as variable rent. Retail, optical laboratory, and distribution center rent expense is recognized as a component of cost of goods sold and all other rent expense is recognized as a component of selling, general, and administrative expenses. Recent Accounting Pronouncements The Company has not adopted nor are there any recently issued accounting pronouncements that had or are anticipated to have a material impact on the Company’s condensed consolidated financial statements.
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Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consists of the following:
Expenses associated with property and equipment consisted of the following:
Asset impairment charges for the three and six months ended June 30, 2023 and 2022 primarily related to the write-off of assets in connection with capitalized software and retail store closures.
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Accrued Expenses |
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Accrued Expenses | Accrued ExpensesAccrued expenses consists of the following:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company uses the estimated annual effective tax rate approach to determine the provision for income taxes. The estimated annual effective tax rate is based on forecasted annual results and may fluctuate due to differences between the forecasted and actual results, changes in valuation allowances, and any other transactions that result in differing tax treatment. The Company's income tax expense and effective tax rate were as follows:
The Company’s estimated annual effective income tax rate for the three and six months ended June 30, 2023 and 2022 differed from the statutory rate primarily due to the valuation allowance, non-deductible executive compensation, stock-based compensation, differences in tax rates in state and foreign jurisdictions, and other permanent items.
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Convertible Preferred Stock and Stockholders’ Equity | Stockholders’ Equity Common Stock As of June 30, 2023, the Company’s Twelfth Amended and Restated Certificate of Incorporation authorizes the issuance of up to 1,050,000,000 shares of common stock, par value of $0.0001 per share, of which 750,000,000 shares are designated Class A common stock, 150,000,000 shares are designated Class B common stock, and 150,000,000 shares are designated Class C common stock. Class A common stock receives one vote per share, Class B common stock receives ten votes per share, and Class C common stock has no voting rights except as required by Delaware law. Common stock is not redeemable at the option of the holder. As of June 30, 2023, outstanding shares of common stock as well as shares of common stock attributable to stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”) were as follows:
Preferred Stock As of June 30, 2023, 50,000,000 preferred shares were authorized and no shares were outstanding.
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Plans and Awards The Company’s eligible employees participate in various stock-based compensation plans, which are provided by the Company directly. In August 2021, the board of directors approved the 2021 Incentive Award Plan (the “2021 Plan”), which became effective on September 28, 2021, and the Company no longer grants equity awards under any prior equity plan. Upon the 2021 Plan becoming effective, there were 11,076,515 shares of Class A common stock authorized under the 2021 Plan, and the remaining shares available for issuance under the 2010 Equity Incentive Plan, 2011 Stock Plan, 2012 Milestone Stock Plan, and 2019 Founder Stock Plan (collectively, the “Prior Plans”) were also made available for issuance under the 2021 Plan. The shares authorized under the 2021 Plan will increase annually, beginning on January 1, 2022 and continuing through 2031, by the lesser of (i) 5% of the outstanding common stock (on an as converted basis) as of the last day of the immediately preceding fiscal year, or (ii) a smaller amount as agreed by the board of directors. Awards granted under the 2021 Plan generally vest over four years. In addition, the shares authorized under the 2021 Plan will increase, among other things, to the extent that an award (including an award under the Prior Plans) terminates, expires, or lapses for any reason or an award is settled in cash without the delivery of shares. In January 2022, the board of directors approved an annual increase of 5,735,463 shares to the shares authorized for issuance under the 2021 Plan, and at December 31, 2022, 16,323,025 shares of Class A common stock remained available for future issuance pursuant to new awards under the 2021 Plan. In January 2023, the board of directors approved an annual increase of 5,766,938 shares to the shares authorized for issuance under the 2021 Plan, and 20,712,346 shares remained available for future issuance pursuant to new awards as of June 30, 2023. Employee Stock Purchase Plan In August 2021, the board of directors adopted and the stockholders of the Company approved the 2021 Employee Stock Purchase Plan (the “ESPP” and, collectively with the Prior Plans and the 2021 Plan, the “Plans”). The ESPP initially reserved and authorized the issuance of up to 2,215,303 shares of Class A common stock, and such reserve will be increased annually on the first day of each fiscal year beginning in 2022 and ending in 2031, by an amount equal to the lesser of (i) 1% of the shares of the Company’s common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the board of directors; provided, however, no more than 16,614,772 shares of common stock may be issued under the ESPP. In January 2022 and 2023, the board of directors approved an annual increase of 1,147,092 and 1,153,387 shares, respectively, to the ESPP, and 4,210,184 shares remained available for future issuance pursuant to ESPP purchases as of June 30, 2023. The fair value for ESPP purchase rights granted under the Plans are estimated at the date of grant using the Black-Scholes option-pricing model. ESPP purchase rights for 475,916 shares and 528,238 shares were granted during both the three and six months ended June 30, 2023 and 2022, respectively. The following range of assumptions was used for ESPP purchase rights granted:
Offering periods begin on May 15 and November 15 of each year and consist of four six-month purchase periods. Eligible employees may contribute up to 20% of their base wages and the purchase price of shares of Class A common stock under an offering will be 85% of the lesser of the fair market value of Class A common stock on (i) the first day of the offering period, and (ii) the applicable purchase date. If such fair market value decreases from the first day of the offering period to the applicable purchase date, the offering period will terminate after the purchase of shares and all participants will be automatically enrolled in the next offering period (a “rollover event”). The following table presents other relevant ESPP information:
As of June 30, 2023, total unrecognized compensation costs associated with the ESPP was $2.7 million and is expected to be amortized over a weighted average period of 0.7 years. Stock-based Compensation Expense Stock-based compensation expense consisted of the following:
Stock-based compensation expense for the three and six months ended June 30, 2023 includes $11.2 million and $25.0 million related to the 2021 Founders Grant, as described below, respectively, and $5.1 million and $9.7 million in connection with RSUs, respectively. Stock-based compensation expense for the three and six months ended June 30, 2022 includes $19.3 million and $39.4 million related to the 2021 Founders Grant, respectively, and $5.4 million and $10.7 million in connection with RSUs, respectively. Stock Options The fair value for stock options granted under the Plans are estimated at the date of grant using the Black-Scholes option-pricing model. No stock options were granted in 2023 or 2022. Because the Company’s common stock was not yet publicly traded when the options currently outstanding were granted, the Company estimated the fair value of common stock. The board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards are approved. The factors considered included, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the Company’s preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as a qualified public offering or sale of the Company, given prevailing market conditions; and (vii) contemporaneous transactions involving the Company’s common shares. The board of directors utilized third-party valuations which were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation. A summary of stock option activity for the six months ended June 30, 2023 is as follows:
The total value of unrecognized stock compensation expense related to unvested options granted under the Plans was $4.0 million as of June 30, 2023, and is expected to be recognized over 0.7 years. Restricted Stock Units and Performance Stock Units A summary of RSU activity for the six months ended June 30, 2023 is as follows:
The total value of unrecognized stock compensation expense related to outstanding RSUs and PSUs granted under the Plans was $55.6 million and $29.8 million as of June 30, 2023, respectively, which is expected to be recognized over a weighted-average period of 1.3 years and 0.7 years, respectively. No PSUs were granted, forfeited, released or vested during the six months ended June 30, 2023. In June 2021, the Company granted 4,397,688 PSUs and 1,884,724 RSUs to the co-CEOs, in the aggregate, under the 2019 Founder Stock Plan (the “Founders Grant”). The PSUs vest upon two performance conditions, (i) a qualified public offering, which was satisfied upon the Company’s direct listing on September 20, 2021 (the “Direct Listing”), and (ii) the price of the Company’s Class A common stock reaching stock price hurdles over a period of ten years, as defined by the terms of the award. The PSUs are subject to the co-CEOs’ continued employment with the Company through the applicable vesting date. If the PSUs vest, the Company will deliver one share of Class B common stock on the settlement date. Unvested PSUs expire in ten years from the date of grant. The terms of the PSUs granted are described further below. The PSUs are divided into eight substantially equal tranches, each one vesting on the date the 90-day trailing volume-weighted average trading price of the Company’s Class A common stock exceeds the stock price hurdle, as set forth in the table below, provided that no PSUs may vest prior to the six month anniversary of the Direct Listing.
The Company used a Monte Carlo simulation to calculate the grant-date fair value of the PSUs of $128.8 million. Since the PSUs contain a performance and market condition, the stock-based compensation expense will be recognized when it becomes probable that the performance condition will be met using the accelerated attribution method. Stock-based compensation will be recognized over the period of time the market condition for each tranche is expected to be met (i.e., the derived service period). The performance condition was satisfied at September 29, 2021 by the Direct Listing, and the Company began recording expense at that time. The Founders Grant RSUs will vest in equal monthly installments over a period of five years, subject to the co-CEOs’ continued employment with the Company through the applicable vesting date and conditioned upon the completion of a qualified public offering. The grant-date fair value of the RSUs is $66.9 million. Since the RSUs contain a performance condition, stock-based compensation expense is recognized using the accelerated attribution method when it becomes probable that the performance condition will be met. The performance condition was satisfied on September 29, 2021 by the Direct Listing, and the Company began recording expense at that time. Shares underlying vested PSUs and RSUs will be issued to the CEOs on a specified quarterly date following the second anniversary of the vesting date, except for an amount necessary to cover any taxes due in connection with the vesting, which will be withheld or sold to cover, or issued to offset, such taxes. Any RSUs or PSUs subject to the award that have not vested by the tenth anniversary of the grant date will be forfeited. RSUs granted prior to the Company’s Direct Listing vest upon the satisfaction of both a service and a performance condition. Prior to its Direct Listing, the Company had concluded that it was not probable that the performance condition would be satisfied as the closing of a qualified public offering or change in control is not deemed probable until consummated. Upon its Direct Listing on September 29, 2021, the Company recorded stock-based compensation expense for the service condition satisfied through such date and began recording stock-based compensation expense using the accelerated attribution method as the service conditions are met. RSUs issued after its Direct Listing only contain a service condition and are recognized on a straight line basis over the vesting period.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company leases retail, office, optical laboratory, and distribution center space under operating leases from third parties. As of June 30, 2023, the total lease terms of the various leases range from 1 to 11 years. The leases generally contain renewal options and rent escalation clauses, and from time to time include contingent rent provisions. Renewal options are exercisable at the Company’s sole discretion and are included in the lease term if they are reasonably certain to be exercised. In general it is not reasonably certain that lease renewals will be exercised at lease commencement and as such, lease renewals are not included in the lease term. The following table presents the assets and liabilities related to the Company’s leases:
The following table details the Company’s net lease expense:
(1) Variable lease expense primarily consists of contingent rent. The following table presents the future maturity of lease liabilities:
(1) The year 2023 and 2024 each include $4.9 million of expected cash inflows from TIAs. Operating lease payments exclude $9.1 million of legally binding minimum lease payments related to executed leases for which the Company has not yet taken possession of the leased premises. The following table presents other relevant lease information:
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 2013 Credit Facility In August 2013, the Company entered into a Loan and Security Agreement with Comerica Bank (as amended, the “2013 Credit Facility”), which consisted of a revolving credit line of up to $50.0 million with a sub-limit of $15.0 million for the issuance of letters of credit. Borrowings under the revolving credit line bore interest on the principal amount outstanding at a variable interest rate based on either LIBOR or the bank’s prime rate, with no additional margin. The Company was charged fees on the uncommitted portion of the credit line of approximately 0.2% as long as total borrowings were less than $15.0 million. The 2013 Credit Facility was replaced by the 2022 Credit Facility (as defined below). 2022 Credit Facility In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., (together, the "Borrowers") entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the "2022 Credit Facility"), which replaced the 2013 Credit Facility. The 2022 Credit Facility consists of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes. The 2022 Credit Facility includes an option for the Company to increase the available amount by up to $75.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2022 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2022 Credit Facility at any time, in whole or in part, without penalty. Under the 2022 Credit Facility, borrowings bear interest on the principal amount outstanding at a variable interest rate either (a) based on the greater of (1) the prime rate (as defined in the credit agreement), (2) the federal funds rate plus 1%, and (3) the Bloomberg Short-Term Bank Yield Index rate (“BSBY Rate”) for a one month tenor plus 1%, in each case plus an applicable margin of 0.5% - 0.8% depending on the Company’s leverage ratio, or (b) the BSBY Rate plus an applicable margin of 1.5% - 1.8% depending on the Company’s leverage ratio. The Company is charged commitment fees of 0.5% whether or not amounts have been borrowed. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations. The 2022 Credit Facility contains a financial maintenance covenant which takes effect once total borrowings first exceed $60.0 million, and at all times thereafter, that requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2022 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as representations, warranties and event of default provisions. The obligations of the Borrowers under the Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company. Other than letters of credit outstanding of $4.3 million and $4.2 million as of June 30, 2023 and December 31, 2022, respectively, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2022 Credit Facility or 2013 Credit Facility. Litigation During the normal course of business, the Company may become subject to legal proceedings, claims and litigation. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. On March 13, 2023, a former employee, on behalf of herself and a proposed class of California hourly employees, filed a complaint against the Company, alleging violations of various California wage and hour laws. The matter is currently pending in the United States District Court for the Northern District of California. Pham v. Warby Parker Inc. (Case No. 5:23-cv-01884-NC; N.D. Cal.). On June 16, 2023, another former employee filed a related representative action in the Santa Clara County Superior Court of California pursuant to California’s Private Attorneys General Act, asserting largely overlapping claims, seeking civil penalties on behalf of the state. Chery v. Warby Parker Inc. (Case No. 23CV417693; Cal. Super. Ct.). We deny the allegations and intend to oppose the certification of any class or award of civil penalties, and to defend the each litigation vigorously. However, given the early stage of each litigation, the Company is unable to estimate the possible loss or range of loss, if any, that may result from these matters. In addition to the matters described above, as of June 30, 2023, the Company is currently involved in other legal proceedings which, in the opinion of the Company’s management, will not materially affect the Company’s financial position, results of operations, or cash flows should such litigation be resolved unfavorably.
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Net Loss Per Share Attributable to Common Stockholders |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders The computation of net loss per share attributable to common stockholders is as follows:
The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive:
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Related-Party Transactions |
6 Months Ended |
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Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions As a private company, the Company issued secured promissory notes collateralized by the stock purchased by certain Company executives in relation to the exercise of employee stock options. As the promissory notes are secured by the underlying shares they have been treated as non-recourse notes in the condensed consolidated financial statements. The promissory notes were issued with a term of 8.5 years and an interest rate equal to the minimum applicable federal mid-term rate in the month the loan was issued. The secured promissory notes were recorded as a reduction to equity offsetting the amount in additional paid-in-capital related to the exercised options funded by the notes. The loans are held by current and former employees and had a balance of $2.5 million at both June 30, 2023 and December 31, 2022. No loans are outstanding with any of our executive officers. During each of the three and six months ended June 30, 2023 and 2022, the outstanding loan balance increased by an immaterial amount due to interest. No new promissory notes were issued during the six months ended June 30, 2023 and 2022.
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Lease Obligations Subsequent to June 30, 2023, the Company entered into 4 operating lease agreements and extended the term of 2 existing operating lease agreements for retail space in the U.S., with terms ranging from 5 to 7 years. Total commitments under the new agreements are approximately $3.8 million, payable over the terms of the related agreements. Stock Donation In August 2023, the Company issued 178,572 shares of Class A common stock to the Warby Parker Impact Foundation, a 501(c)(3) nonprofit organization. The grant date fair value of the shares was $2.6 million.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
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Pay vs Performance Disclosure | ||||||
Net loss | $ (15,925) | $ (10,812) | $ (32,166) | $ (34,133) | $ (26,737) | $ (66,299) |
Insider Trading Arrangements |
3 Months Ended |
---|---|
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe Company’s unaudited condensed consolidated financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the related notes. The December 31, 2022 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. There have been no significant changes in accounting policies during the six months ended June 30, 2023 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and the related notes. Certain prior period amounts were reclassified to conform to the current period presentation. These changes had no impact on the condensed consolidated financial statements for any period. |
Principles of Consolidation | Principles of ConsolidationThe condensed consolidated financial statements include the financial statements of Warby Parker Inc., and its wholly owned subsidiaries. The Company has consolidated certain entities meeting the definition of a variable interest entity as the Company concluded that it is the primary beneficiary of the entities. The inclusion of these entities does not have a material impact on its condensed consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The Company prepares its condensed consolidated financial statements in conformity with U.S. GAAP. These principles require management to make certain estimates and assumptions during the preparation of its condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Significant estimates underlying the accompanying condensed consolidated financial statements include, but are not limited to (i) the valuation of inventory, including the determination of the net realizable value, (ii) the useful lives and recoverability of long-lived assets, (iii) the determination of deferred income taxes, including related valuation allowances, and (iv) assumptions related to the valuation of common stock and determination of stock-based compensation.
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Segment Information | Segment Information Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who makes decisions about allocating resources and assessing performance. The Company defines its CODM as its co-Chief Executive Officers. The Company has identified one operating segment. When evaluating the Company’s performance and allocating resources, the CODM relies on financial information prepared on a consolidated basis.
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Concentration of Credit Risk and Major Suppliers | Concentration of Credit Risk and Major SuppliersFinancial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in various accounts, which, at times, may exceed the limits insured by the Federal Deposit Insurance Corporation of $250 thousand per institution and the Canada Deposit Insurance Corporation of $100 thousand Canadian dollars. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid short-term investments with an original maturity of three months or less to be a cash equivalent. Cash and cash equivalents include deposits with banks and financial institutions, money market funds, and receivables from credit card issuers, which are typically converted into cash within two to four days of capture. As such, these receivables are recorded as a deposit in transit as a component of cash and cash equivalents on the condensed consolidated balance sheets. |
Inventory | Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, include estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates. |
Revenue Recognition | Revenue Recognition The Company primarily derives revenue from the sales of eyewear products, optical services, and accessories. The Company sells products and services through its stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges, which are charged to the customer, associated with these purchases. Revenue generated from services consists of both in-person eye exams and prescriptions issued through the Virtual Vision Test app. All revenue is reported net of sales taxes collected from customers on behalf of taxing authorities and variable consideration, including returns and discounts. Revenue is recognized when performance obligations are satisfied through either the transfer of control of promised goods or the rendering of services to the Company's customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, which is generally determined to be the point of delivery or upon rendering of the service in the case of eye exams. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. In the normal course of business, payment may be collected from the customer prior to recognizing revenue and such cash receipts are included in deferred revenue until the order is delivered to the customer. Substantially all of the deferred revenue included on the balance sheet at December 31, 2022 was recognized as revenue in the first quarter of 2023 and the Company expects substantially all of the deferred revenue at June 30, 2023 to be recognized as revenue in the third quarter of 2023. The Company’s sales policy allows customers to return merchandise for any reason within 30 days of receipt, generally for an exchange or refund. An allowance is recorded within other current liabilities on the condensed consolidated balance sheets for expected future customer returns which the Company estimates using historical return patterns and its expectation of future returns. Any difference between the actual return and previous estimates is adjusted in the period in which such returns occur. Historical return estimates have not materially differed from actual returns in any of the periods presented. The allowance for returns was $2.2 million at both June 30, 2023 and December 31, 2022 and is included in other current liabilities on the condensed consolidated balance sheets. The Company offers non-expiring gift cards to its customers. Proceeds from the sale of gift cards are initially deferred and recognized within deferred revenue on the condensed consolidated balance sheets, and are recognized as revenue when the product is received by the customer after the gift card has been tendered for payment. Based on historical experience, and to the extent there is no requirement to remit unclaimed card balances to government agencies under unclaimed property laws, an estimate of the gift card balances that will never be redeemed is recognized as revenue in proportion to gift cards which have been redeemed. While the Company will continue to honor all gift cards presented for payment, management may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity.
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Leases | Leases The Company records a lease liability and corresponding right-of-use (“ROU”) asset at lease commencement. The lease liability is measured at the present value of non-cancellable future lease payments over the lease term, minus expected tenant improvement allowances (“TIAs”) determined to be lease incentives. The ROU asset is measured at the lease liability amount, adjusted for prepaid lease payments, TIAs expected to be received, and any initial direct costs. When calculating the present value of future lease payments, the Company utilizes an incremental borrowing rate, which incorporates several factors including the lease term, U.S. Treasury bond rates, financial ratios related to earnings and cash flows, and other comparisons with similarly sized companies. Many of the Company’s leases contain TIA provisions, which represent contractual amounts receivable from a lessor for improvements to the leased property made by the Company which are determined to represent lease incentives. The Company considers the collection of TIAs to be reasonably certain, and includes them in the present value calculation when determining the lease liabilities for new leases. The benefit from a TIA is amortized through rent expense over the term of the related lease. The recognition of rent expense for an operating lease commences on the date at which control and possession of the property is obtained. Rent expense is calculated by recognizing total fixed minimum rental payments, net of any TIAs or other rental concessions, on a straight-line basis over the lease term. Some of the Company’s retail leases contain percent of sales rent or similar provisions, which is recognized as incurred as variable rent. Retail, optical laboratory, and distribution center rent expense is recognized as a component of cost of goods sold and all other rent expense is recognized as a component of selling, general, and administrative expenses.
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Recently Adopted and Issued Accounting Pronouncements | Recent Accounting Pronouncements The Company has not adopted nor are there any recently issued accounting pronouncements that had or are anticipated to have a material impact on the Company’s condensed consolidated financial statements.
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Research, Development, and Computer Software, Policy | Cloud-Based Software Implementation Costs The Company has entered into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on the long or short-term nature of such costs, in line with the Company's policy on the accounting for prepaid software hosting arrangements. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement.
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Summary of Significant Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table disaggregates the Company’s revenue by product:
The following table disaggregates the Company’s revenue by channel:
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Property and Equipment, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment, net consists of the following:
Expenses associated with property and equipment consisted of the following:
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Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued expenses consists of the following:
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Income Tax Expense (Benefit) | The Company's income tax expense and effective tax rate were as follows:
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Redeemable Convertible Preferred Stock and Stockholders’ Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock by Class | As of June 30, 2023, outstanding shares of common stock as well as shares of common stock attributable to stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”) were as follows:
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense consisted of the following:
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Share-based Payment Arrangement, Option, Activity | A summary of stock option activity for the six months ended June 30, 2023 is as follows:
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Share-based Payment Arrangement, Restricted Stock Unit, Activity | A summary of RSU activity for the six months ended June 30, 2023 is as follows:
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Schedule of Nonvested Performance-based Units Activity | The PSUs are divided into eight substantially equal tranches, each one vesting on the date the 90-day trailing volume-weighted average trading price of the Company’s Class A common stock exceeds the stock price hurdle, as set forth in the table below, provided that no PSUs may vest prior to the six month anniversary of the Direct Listing.
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following range of assumptions was used for ESPP purchase rights granted:
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Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award | The following table presents other relevant ESPP information:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease Assets and Liabilities | The following table presents the assets and liabilities related to the Company’s leases:
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Lease, Cost | The following table details the Company’s net lease expense:
(1) Variable lease expense primarily consists of contingent rent. The following table presents other relevant lease information:
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Lessee, Operating Lease, Liability, Maturity | The following table presents the future maturity of lease liabilities:
(1) The year 2023 and 2024 each include $4.9 million of expected cash inflows from TIAs. Operating lease payments exclude $9.1 million of legally binding minimum lease payments related to executed leases for which the Company has not yet taken possession of the leased premises.
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Net Loss Per Share Attributable to Common Stockholders (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The computation of net loss per share attributable to common stockholders is as follows:
|
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive:
|
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 166,093 | $ 149,624 | $ 338,061 | $ 302,842 |
E-commerce | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 55,329 | 58,448 | 117,081 | 125,452 |
Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 110,764 | 91,176 | 220,980 | 177,390 |
Eyewear products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 156,680 | 142,985 | 319,027 | 290,304 |
Services and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 9,413 | $ 6,639 | $ 19,034 | $ 12,538 |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Payables and Accruals [Abstract] | ||
Unvested early exercised stock options | $ 5,273 | $ 7,784 |
Payroll related | 9,074 | 11,149 |
Retail related | 2,159 | 4,121 |
Accrued Professional Fees, Current | 3,949 | 4,494 |
Charitable contributions | 4,897 | 6,001 |
Marketing | 5,611 | 8,353 |
Other accrued expenses | 6,656 | 11,773 |
Total accrued expenses | 42,759 | 58,222 |
Accrued Freight and Fulfillment Costs | $ 5,140 | $ 4,547 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ (24) | $ 47 | $ 237 | $ 586 |
Effective tax rate | 0.20% | (0.10%) | (0.90%) | (0.90%) |
Redeemable Convertible Preferred Stock and Stockholders’ Equity - Narrative (Details) |
Jun. 30, 2023
vote
$ / shares
shares
|
Dec. 31, 2022
$ / shares
shares
|
---|---|---|
Temporary Equity [Line Items] | ||
Common stock shares authorized | 1,050,000,000 | |
Common stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Preferred stock shares authorized | 50,000,000 | |
Preferred stock shares outstanding | 0 | |
Series A common stock | ||
Temporary Equity [Line Items] | ||
Common stock shares authorized | 750,000,000 | 750,000,000 |
Number of votes granted | vote | 1 | |
Series B common stock | ||
Temporary Equity [Line Items] | ||
Common stock shares authorized | 150,000,000 | 150,000,000 |
Number of votes granted | vote | 10 | |
Series C common stock | ||
Temporary Equity [Line Items] | ||
Common stock shares authorized | 150,000,000 | |
Number of votes granted | vote | 0 |
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 18,012 | $ 26,764 | $ 37,792 | $ 53,908 |
Cost of goods sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 290 | 231 | 484 | 457 |
Selling, general, and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 17,722 | $ 26,533 | $ 37,308 | $ 53,451 |
Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted stock units (RSUs) |
6 Months Ended |
---|---|
Jun. 30, 2023
$ / shares
shares
| |
Number of Restricted Stock Units | |
Unvested beginning balance (in shares) | shares | 3,314,420 |
Granted (in shares) | shares | 1,620,460 |
Forfeited (in shares) | shares | (243,030) |
Released (in shares) | shares | (438,179) |
Vested and not yet released (in shares) | shares | (404,348) |
Unvested ending balance (in shares) | shares | 3,849,323 |
Weighted Average Grant Date Fair Value | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 29.06 |
Granted (in dollars per share) | $ / shares | 13.29 |
Forfeited (in dollars per share) | $ / shares | 23.75 |
Released (in dollars per share) | $ / shares | 23.25 |
Vested and not yet released (in dollars per share) | $ / shares | 23.33 |
Unvested ending balance (in dollars per share) | $ / shares | $ 24.02 |
Leases - Narrative (Details) |
Jun. 30, 2023 |
---|---|
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term period | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term period | 11 years |
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
Right-of-use lease assets | $ 122,355 | $ 127,014 |
Current lease liabilities | 22,598 | 22,546 |
Non-current lease liabilities | 147,748 | 150,832 |
Total lease liabilities | $ 170,346 | $ 173,378 |
Leases - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Leases [Abstract] | ||||
Operating lease expense | $ 7,495 | $ 6,280 | $ 14,931 | $ 12,293 |
Variable lease expense(1) | 505 | 937 | 1,248 | 1,875 |
Net lease expense | $ 8,000 | $ 7,217 | $ 16,179 | $ 14,168 |
Leases - Future Minimum Operating Lease Payment (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
2023 | $ 15,348 | |
2024 | 36,846 | |
2025 | 34,740 | |
2026 | 33,197 | |
2027 | 29,878 | |
Thereafter | 56,772 | |
Future minimum lease payments | 206,781 | |
Impact of discounting | 36,435 | |
Present value of lease payments | 170,346 | $ 173,378 |
Expected cash inflows from TIAs | 4,900 | |
Minimum lease payments for leases not yet commenced | 9,100 | |
Expected Proceeds from Tenant Improvement Allowance, Following Year | $ 4,900 |
Leases - Other Lease Information (Details) |
Jun. 30, 2023 |
---|---|
Leases [Abstract] | |
Weighted average remaining lease term (years) | 5 years 9 months 18 days |
Weighted average discount rate | 4.60% |
Net Loss Per Share Attributable to Common Stockholders - Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Numerator | ||||
Net loss attributable to common stockholders, basic | $ (15,925) | $ (32,166) | $ (26,737) | $ (66,299) |
Net loss attributable to common stockholders, diluted | $ (15,925) | $ (32,166) | $ (26,737) | $ (66,299) |
Denominator | ||||
Weighted average shares, basic (in shares) | 116,792,223 | 114,679,892 | 116,477,573 | 114,393,420 |
Weighted average shares, diluted (in shares) | 116,792,223 | 114,679,892 | 116,477,573 | 114,393,420 |
Earnings Per Share | ||||
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.14) | $ (0.28) | $ (0.23) | $ (0.58) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.14) | $ (0.28) | $ (0.23) | $ (0.58) |
Related-Party Transactions (Details) - Management - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Related Party | ||
Related Party Transaction [Line Items] | ||
Other Receivables | $ 2.5 | $ 2.5 |
Secured promissory notes | ||
Related Party Transaction [Line Items] | ||
Notes payable, term | 8 years 6 months |
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