Dive Brief:
- Wayfair recorded its first annual revenue gain since 2020, with total revenue increasing 5.1% year over year to $12.5 billion in 2025. U.S. revenue grew nearly 6% to $11 billion, while international revenue inched up 0.4% to $1.5 billion.
- “We are in a dramatically different position than we were two years ago, and the numbers clearly reflect that,” co-founder, co-Chairman and CEO Niraj Shah and co-founder and co-Chairman Steve Conine wrote in a shareholder letter. “And while we are proud of the progress, we believe there is significantly more ahead of us.”
- In the fourth quarter, total net revenue grew nearly 7% year over year to $3.3 billion. Gross margin was 30.3% compared to 30.2% last year.
Dive Insight:
Shah called 2025 a “tremendous year” for Wayfair even as the broader home sector remains challenged.
“Wayfair pushed through a tough environment defined by a sluggish housing market, elevated interest rates, and historically steep tariffs on furniture imports,” Emarketer senior analyst Zak Stambor said in a Thursday note.
In the U.S., the company outpaced the overall home sector with revenues in the region increasing 7.4% year over year to $2.9 billion in the fourth quarter. “Some of this is down to an increased focus on value among shoppers, which was particularly important in the final quarter,” GlobalData Managing Director Neil Saunders said in emailed comments, adding that tariff fears also contributed to “a slight urgency in purchasing” from consumers.
In addition to top-line growth, the company narrowed its net loss during Q4, from $128 million in the year-ago quarter to $116 million, and swung to an operating profit of $84 million from a loss of $117 million last year.
Executives said Q4 marked the third-consecutive quarter of new customer growth for Wayfair, although its active customer declined slightly from the year-ago period to 21.3 million. While it could partially be due to the company’s exit from Germany, it could also “underline that something of a ceiling has been reached in terms of customer penetration,” Saunders said. “If this trend carries forward it makes Wayfair more reliant on expanding share of wallet among existing customers.” Repeat customers placed 8.8 million orders in Q4, up 3.5% year over year.
To help drive repeat orders, Wayfair launched its paid rewards program in late 2024. The program has over a million members, and the cohort is driving over 15% of the company’s U.S. revenue, Shah said on a call with analysts Thursday. Rewards members are also more engaged across a wider mix of categories, with those shoppers having a conversion rate of furniture and decor that’s nearly three times that of non-members.
The company’s physical stores are also helping it attract new customers, Shah said. The company has steadily been increasing its footprint across its portfolio of brands, which in addition to its namesake, include Joss & Main, Perigold and AllModern.
Looking ahead, executives are focused on three main initiatives: improving selection, price, availability and delivery speed; scaling new business initiatives; and using technology to improve operations.
For the first quarter, Wayfair expects revenue growth in the mid-single digits, with gross margin in the 30% to 31% range. Advertising is expected to represent between 11% and 12% of net revenue.
