Warby Parker Inc.

Hello and welcome to today's Warby Parker Inc. Third Quarter 2025 Earnings Conference Call. My name is Bailey and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I'd now like to pass the conference over to Jacqueline Berkeley, Vice President of Investor Relations at Warby Parker. Jacqueline, please go ahead.

Thank you, and good morning, everyone. Here with me today are Neil Blumenthal and Dave Gilboa, our co-founders and co-CEOs, alongside Josh Truppo, Vice President of Financial Planning and Analysis. Before we begin, we have a couple of reminders. Our earnings release and slide presentation are available on our website at investors.warbyparker.com. During this call and in our presentation, we will be making comments of a forward-looking nature. Actual results may differ materially from those expressed or implied as a result of various risks and uncertainties. For more information about some of these risks, please review the company's SEC filings, including the section titled Risk Factors in the company's latest annual report on Form 10-K. These forward-looking statements are based on information as of November 6, 2025, and except as required by law, we assume no obligation to publicly update or revise our forward-looking statements. Additionally, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of our non-GAAP measures to the most directly comparable U.S. GAAP measures can be found in this morning's press release and our slide deck available on our IR website. And with that, I'll pass it over to Neil to kick us off.

Thank you, Jacqueline, and good morning, everyone. Q3 was a strong quarter on many fronts, reflecting both top-line acceleration and significant progress towards our long-term profitability goals. Net revenue grew 15.2% year over year, driven by 20% growth in retail revenue. Adjusted gross margin was 54.2%, and adjusted EBITDA grew approximately 50% to $25.7 million, representing an 11.6% adjusted EBITDA margin and 260 basis points of year-over-year expansion, our highest quarterly expansion in the last two years. It was also a quarter that reflected shifting consumer trends. particularly within our single vision and contacts customer base, which tends to skew younger, while we've seen more resiliency from our progressives customers. We entered the quarter with strong momentum. July and August represented the strongest two-month period of the year before trends moderated in September and have remained consistent. We saw a mixed shift within glasses that weighed on average selling price. while contacts growth decelerated as broader consumer sentiment softened. Performance remained consistent on a two-year stack basis, even as we lapped in acceleration and growth last year. Volume growth remained healthy, and we delivered a justity without profitability ahead of our guidance on lower than planned revenue, underscoring the adaptability of our business and our team's strong execution. Based on the trends we've seen since September, we are reaffirming our 2025 adjusted EBITDA outlook and raising our adjusted EBITDA margin expectations, reflecting continued operational discipline and AI-driven productivity gains, even as we take a more measured view on revenue given the current macro environment. And as we look beyond 2025, we're incredibly excited about what's next. we believe we are entering Warby Parker's third act. Our first act was to establish one of the first made-on-the-internet lifestyle brands. We launched with features in GQ and Vogue and pioneered how to sell glasses online. Our second act was characterized by our expansion into bricks and mortar, becoming the industry's first true omnichannel retailer, while entering holistic vision care by providing eye exams and contacts. And now we're entering our third act, defined by innovation through AI. We plan to leverage AI to develop new products like AI glasses, to enhance our customer and patient experience like our homegrown first true-to-scale virtual try-on that now encompasses features like glasses eraser and advisor, and to drive productivity and accelerate EBITDA expansion. We previously announced that we'll be working with Google to bring intelligent eyewear to market and are excited to share that we're partnering with Samsung as well. We believe that Samsung's innovation in hardware and their mobile device ecosystem, combined with Google's leadership in AI and Warby Parker's strength in design, eye care, and customer experience, unlock enormous potential to create beautifully designed, intelligent eyewear that seamlessly integrates into everyday life. We look forward to sharing more details in the coming months. Dave and I just got back from Colorado, where we hosted our annual One Vision Summit. For several days, we brought together over 500 retail leaders and optometrists across our team for strategizing, training, and team building. We shared our vision to leverage AI to develop new products, enhance the customer experience, and drive productivity. We walked away feeling energized and inspired by their ideas, their camaraderie, and their passion for delivering best in class customer experiences, which is paramount as we head into our busiest time of the year. Our retail leaders and doctors typically join Warby Parker because of our track record of innovation and best in class technology. and they've grown accustomed to our rapid growth and are the most tech-forward leaders in the category. It's events like our One Vision Summit that makes us more confident than ever in the foundation we're building for the next chapter of Warby Parker. We operate in a large and resilient market with an unmatched value proposition and believe we are well positioned to continue taking market share for many years and decades to come. Our long-term priorities remain unchanged, but our ambitions have only grown. We continue to make meaningful progress in our core business, including achieving significant leverage in our expense space while also investing in AI glasses, an opportunity that will expand our TAM beyond traditional glasses and define the next era of our brand. I'd like to call out a few Q3 highlights that demonstrate our ability to continue on our path of sustainable growth. We delivered our highest glasses volume growth of the year alongside our ninth consecutive quarter of accelerated active customer growth. Retail and especially our eye care business were bright spots. with record retail productivity and our largest ever quarter for new store openings, including our first five target shop and shops. We also completed a major system upgrade in our optical labs to support future growth, faster delivery times, and enable us to eventually fulfill AI glasses. We expanded the use of AI across our operations to improve efficiency and empower our teams to spend more time with customers. We're confident in our ability to navigate the near-term environment while we embark on our next act, one defined by even more personalized experiences, intelligent eyewear, and a relentless focus on profitable and sustainable growth. As we head into our busiest season, our teams are focused on what we can control. delivering the exceptional customer experience and remarkable value that have come to define Warby Parker. Before Josh walks through our financials and guidance, Dave will recap the drivers of our Q3 performance.