Wayfair Inc. · NYSE:W
Wayfair — Q4 2024 Earnings Presentation
51 slides from Wayfair's earnings presentation, Feb 20, 2025
Slide 1: Investor Presentation 2025
Investor Presentation 2025 1
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements within the meaning of federal and state securities laws. All statements other than statements of historical fact contained in this presentation—including statements regarding our future results of operations and financial position, in
Slide 3: Contents
1. The Home Category 2. Competitive Advantages 3. Growth Initiatives 4. Financials 5. Appendix Contents 3
Slide 4: The Home Category
The Home Category 4
Slide 5: Shopping for the Home Is Different
Shopping for the Home Is Different Home shopping is browse-based, Customers value individuality and have not search-based an emotional connection to their homes The Home category is largely Bulky and damage-prone products unbranded and very fragmented require tailored delivery and customer service 5
Slide 6: Our Market Opportunity Remains Vast across the US, Canada and the UK
Our Market Opportunity Remains Vast across the US, Canada and the UK >50% The home category exceeds $500B in North America and the UK today, and is Higher expected to show a ~25% Penetrated US Home Retail considerable step up in Category Categories B2C Online online penetration over Penetration Toda
Slide 7: Who We Are
Who We Are We are an e-commerce platform exclusively focused on the home Supplier Customer Services Service Suppliers: Customers: >20K Technology >21M active and and Wayfair partners with our Infrastructure growing suppliers to drive growth Wayfair offers its customers via our platform Shopping a 1P
Slide 8: Competitive Advantages
Competitive Advantages 8
Slide 9: We have enormous reach across our >100M customer file
We have enormous reach across our >100M customer file We have a household brand across the US, Canada and the UK, with broad customer awareness We drove ~3B visits across site/app in 2024 9
Slide 10: To Be the Trusted Destination for All Things Home
our brand purpose To Be the Trusted Destination for All Things Home 10
Slide 11: Portfolio of brands across price tiers
This positioning is enabled by the broad reach of our portfolio of brands Est. 2006 All of modern, made simple. Est. 2017 Luxury An undiscovered world ($175K+ household income) of luxury design. Est. 2014 A fresh take on the classics. Mass ($60K – $175K household income) Est. 2011 Every Style. Every
Slide 12: We can tell a brand story everywhere, meeting the customer where they are
We can tell a brand story everywhere, meeting the customer where they are Physical Retail Influencers & Social Media Homepage Placement Throughout the Funnel Catalogs, Circulars & Mailers Prominent Features on Category Pages 12
Slide 13: Best-in-class eCommerce operations along the entire value chain
Best-in-class eCommerce operations score high along the entire value chain Returns & Inbound Fulfillment Delivery Incidents Supplier Service Customer Service 13
Slide 14: Wayfair services along the value chain
Wayfair offers multiple services along the value chain to support customer experience All our services enable... Returns & Inbound 1 Fulfillment Faster speedDelivery Incidents 2 Supplier Lower Service cost Customer Service 3 Better experience 14
Slide 15: Wayfair Services enable better performance across the board
Wayfair Services enable better performance across the board US only, small parcel, FY’2024 Dropship CastleGate Order-to-delivery 5.4 2.9 time, in calendar days Speed Badging share, in % 47% 88% Return rate, in % 4.8% 3.8% Cost Incident rate, in % 3.8% 3.4% 15
Slide 16: Customers love speed: Faster speed = higher conversion
Customers love speed: Faster speed = higher conversion Speed gets rewarded on our website Sales significantly increase ● Different speed badges for ● Faster badge = higher 1, 2, 3, 5 days conversion ● More exposure on site ● ‘No’ to ‘1 day’ badge with a >75% 1 conversion lift No badge >20% 5-day bad
Slide 17: Forward positioning is key
1 Faster speed to customers Forward positioned product and quick order-to-ship capabilities enables speed, which increases exposure on site and drives customer conversion Forward positioning is 2 key Lower retail prices More Leveraging CastleGate’s Forward positioned exposure competitive ocean conta
Slide 18: Items in CastleGate achieve faster ship speed, driving up conversion
Items in CastleGate achieve faster ship speed, driving up conversion Faster ship times… …drive higher customer conversion and NPS1 Small Parcel Large Parcel Order CastleGate Conversion uplift Fast lead times Pick & Pack Dropship CastleGate Dropship CastleGate Ship Order to delivery days ~5 ~3 ~15 ~7
Slide 19: Wayfair operates a cost markup model
Differentiated products: Wayfair operates a cost markup model Costs included in pricing Product Outbound Shipping Wayfair’s Wayfair Retail Incidence Variable Margin Price Cost Merchant Fees Customer Service 19 19
Slide 20: Extensive offering across everything Home: core categories
At Wayfair, we have an extensive offering across everything Home Consumers broadly know us CORE CATEGORIES ● for our core categories - Sofas, Casegoods, Bedroom furniture and more Sofas & Rugs Bedroom Outdoor Decor ● These are areas of the Sectionals Furniture business where we have high awareness a
Slide 21: Strong and growing businesses in emerging categories
We also have strong and growing businesses in several emerging categories EMERGING CATEGORIES Large Appliances Outdoor structures & Spa Cabinetry Plumbing Small Electrics Storage & Org Kitchen and Tabletop Recreation Pet Bedding Decor Wall Accents We are focused on driving share gains in frequency p
Slide 22: Emerging categories have seen exciting growth over the last 6 years
Emerging categories have seen exciting growth over the last 6 years, outpacing Wayfair US Emerging Category Growth (CAGR 2018 - 2024) Outdoor structures & Spa Hardware Recreation Appliances Pet Flooring Vanities Storage & Org Core Plumbing U.S. Net Revenue CAGR % 22 Emerging category growth rates ar
Slide 23: Curation is our differentiator
Curation is our differentiator, helping consumers cut through the noise Provide Celebrate Reinforce Instill Confidence inspiration the season trust Collaborations A shortcut Cohesive looks Trend-forward, with influencers to the best items and ideas to seasonally relevant our customers enhance the ro
Slide 24: Wayfair Verified signals audited premium items
“Wayfair Verified” is how we signal premium items that have been audited by our merchant team
Slide 25: Wayfair Verified items dramatically outperform all other products
Wayfair Verified items dramatically outperform all other products More visits and higher conversion… …leading to much higher revenue >15x >20x visits revenue1 per SKU per SKU Q4 2024 Data 1 Gross revenue, prior to returns and cancellations
Slide 26: Membership program with exclusive access to elevated experiences
provides exclusive access to elevated experiences. $29 annual membership fee 5% back in Member- Free shipping1 Special offers Member rewards1 exclusive sales From plates to sofas, it’s & perks support line on every item every day. Steals that’ll get the on us. We’ll treat you on your Call for fast,
Slide 27: Program will fuel sales and deeper relationships
Benefits will incentivize basket building, trial purchases, and brand preference. Program will fuel sales and deeper relationships by creating new ways for customers to engage with our platform. Using rewards to treat Saving up rewards Scoring an exclusive yourself to all the for that new bed set th
Slide 28: Award-winning customer service
Our award-winning customer service ensures every customer has an exceptional experience >90% of customers give us a 5 star rating after talking to us “Every customer service interaction I’ve had with Wayfair has been top-notch. 10/10! Highly recommended Wayfair to everyone I know!” High availability
Slide 29: Technology Drives Every Part of the Wayfair Experience
Technology Drives Every Part of the Wayfair Experience Applying .machine learning (ML) and AI. to every step of our customer journey for the last decade. Marketing Search, Recs & Merchandising Pricing Supply Chain Sales & Service Personalization Over a decade of ML and AI 29
Slide 30: Reshaping capabilities with Generative AI
We are reshaping many of our current capabilities with .Generative AI.. Marketing Search, Recs & Merchandising Pricing Supply Chain Sales & Service Personalization Over a decade of ML and AI Gen AI 30
Slide 31: Enabling new Gen AI powered capabilities
We are also enabling .new Gen AI. powered capabilities. Search, Recs & Marketing Merchandising Pricing Supply Chain Sales & Service Personalization Muse Developer Tech Finance & Product Assist Transformation Accounting Safety Over a decade of ML and AI Gen AI 31
Slide 32: Growth Initiatives
Growth Initiatives 32
Slide 33: Wayfair Professional courts an accretive and distinct customer base
Wayfair Professional courts an accretive and distinct customer base We are a multi-billion dollar business with over 1M active customers. ● 2x Avg Visits per Customer vs B2C Shoppers ● 2x Conversion to Purchase vs B2C Shoppers Interior Designers Office 33 Contractor Accommodations Food Service Educa
Slide 34: Taking share in the luxury market
We leverage the Wayfair platform to drive scale and growth as we take share in the luxury market 2-3x >50M >200K >40% LTM New Wayfair AOV Visits in 2024 5Y Order CAGR Customers 34 34
Slide 35: Approach tailored to the luxury customer
Our approach is driven by and tailored to our customer, building a connection to our brand and the brands we sell Customer-Inspired Focus Tailored to the ● Clarity and consistency in Luxury Customer our marketing experience ● A unique voice with ● Awareness and brand preference distinct messaging an
Slide 36: Specialty Brands serve a discerning customer
Specialty Brands serve a discerning customer, seeking a tailored experience Modern made simple. Classic Style for Joyful Living Customer Customer Customer Age: 25-45 years old (avg 35) Age: 30-50 (primary), 50-70 (secondary) Age: 30-55 (avg 45) Gender: 65% female / 35% male Gender: Primarily female
Slide 37: International efforts across Canada, the UK and Ireland
We’ve focused our international efforts across Canada, the UK and Ireland Optimized supply chain for the best sellers, to ship fast with reduced incidences: Logistics CastleGate warehouses located across regions CA + UK & IE Marketing Dedicated teams to Dedicated serve Canadian and and Extended reac
Slide 38: Where are we in our physical retail journey?
Where are we in our physical retail journey? 10 stores open and more on the way ★ MarketStreet, Lynnfield, Q2 2022 ★ Legacy Place, Dedham, Q4 2022 ★ Burlington Mall, Burlington, Q3 2022 ★ Oakbrook Center, Oakbrook, Q2 2023 ★ Edens Plaza, Wilmette, Q2 2024 ★ Arboretum Market, Austin, Q3 2023 ★ Mizner
Slide 39: The first of many Wayfair large-format stores
Wayfair 1 by the numbers 150,000 30,000+ 12,000+ Square feet Cubic ft capacity in our Products in the assortment back-of-house pick module >50% 300+ >15% customers new to Wayfair in 20241 Suppliers featured Illinois vs National growth in 20241 The first of many Wayfair large-format stores 39 1 Inter
Slide 40: Advertising solutions designed to boost products on Wayfair
Event Sponsorships and Brand Spotlights Our advertising solutions are designed to give products a boost on Wayfair. Display Advertising and Offsite Retargeting Transparent ROI and full control on how/what/when to spend Sponsored Events in Email Wayfair Sponsored Wayfair Sponsored Products Shops With
Slide 41: Financials
Financials 41
Slide 42: Scale of Revenue & Orders
Scale of Revenue & Orders Cultivating a customer base that makes Wayfair a part of their shopping habits, with 80% of orders coming from repeat customers in 2024 and a 25% revenue CAGR since IPO Orders (M) Net Revenue ($B) 42
Slide 43: Improving Unit Economics
Improving Unit Economics Expanding profitability as we structurally increase gross margin through logistics, supplier services, wholesale economics and merchandising mix Gross Margin Gross Profit ($B) 43
Slide 44: Fixed Cost Discipline
Fixed Cost Discipline Demonstrating consistent cost discipline to achieve SOTG&A leverage despite challenging macro environment, with significant flow through as home goods demand normalizes Last 12 Month SOTG&A, excluding stock-based comp 44 Note: USD Millions
Slide 45: Healthy Capital Structure
Healthy Capital Structure Launched our inaugural high yield offering in the fall of 2024, using the proceeds to pay down our upcoming convertible maturities USD Billions Conversion Price High Yield Bond $417 $148 $63 $46 With >$1.3 billion of cash on the balance sheet as of Q4 2024, we have consider
Slide 46: Building momentum towards our profitability goals
Building momentum towards our profitability goals Step 1 Step 2 Step 3 Breakeven Mid-Single Digit >10% Adjusted Adjusted Adjusted EBITDA Margin EBITDA Margin & Sustained EBITDA & Positive FCF Strong FCF FY’23 Adjusted EBITDA Q2’24 Adjusted EBITDA margin Ongoing Expansion Via Margin of 2.5%1 of 5.2%1
Slide 47: Path to 10%+ Adjusted EBITDA Margins
Path to 10%+ Adjusted EBITDA1 Margins How do we get to 10%+ Adjusted EBITDA1 margins? What does the OpEx path look like? 2-4% Marketing Across our range Other 1-2% of growth Logistics 1-2% scenarios, Advertising 1-2% we anticipate 2-3% Adjusted EBITDA1 margin expansion annually on the path to 10%+ M
Slide 48: Appendix
Appendix 48
Slide 49: Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), this presentation contains certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin Free Cash Flow and Free Cash Flow Margin. We use these
Slide 50: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 50
Slide 51: Wayfair
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