Warby Parker Inc. 2026 Q2 Earnings Call

Here with me today are Neil Blumenthal and Dave Gilboa, our co-founders and co-CEOs, alongside Adrian Mitchell, our Chief Financial Officer. 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 August 6, 2026, 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 an 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. With that, I'll pass it over to Neil to kick us off.

Thank you, Jacqueline, good morning. In Q2, we generated $236 million in revenue, representing approximately 10% year-over-year growth, while continuing to make progress against our core business initiatives, particularly in eye exams, insurance, and e-commerce. We also accelerated investment and the pace of activity across the business as we prepare to launch our Intelligent Eyewear collection this fall. Adjusted EBITDA was approximately $33 million, or a 14% margin, including an $11.8 million benefit from tariff refunds, which was partially used to offset strategic investments in the business as we prepare to launch Intelligent Eyewear. Today, we'll walk through the drivers of our second quarter results, highlight the progress we're making against our strategic priorities, and share more about our upcoming Intelligent Eyewear launch. It's pretty incredible to think that after years of work, we're finally entering the home stretch.

In just a few weeks, we'll unveil all of the designs within our first Intelligent Eyewear collection, with customer deliveries on track for the holiday season. 16 years ago, Dave, Andy, Jeff, and I set out to build a brand people love, to reimagine the glasses shopping experience, and to design eyewear that enables people to feel like the best versions of themselves. That mission has taken us from one store to more than 350, helped us serve millions of customers, and enabled us to distribute more than 25 million pairs of glasses to people in need. We've scaled by building differentiated capabilities across the business, from our own state-of-the-art optical labs and proprietary point-of-sale system to the first true-to-scale virtual try-on. Now, we're bringing that same combination of design, technological innovation, and customer-centric execution to Intelligent Eyewear.

Our Intelligent Eyewear will unlock new possibilities within the glasses millions of people wear every day, opening up new ways to explore, discover, remember, navigate, and connect, all while keeping your eyes on the world around you. Launching a new category like this is the result of years of ideation and hard work by our incredible team. One thing we've learned throughout this journey is that when you bring together brilliant, committed people around a shared mission, they're capable of doing great things over and over again. Since our last call, we've been wearing these glasses every day, and I've been amazed by how they help me stay present in experiences instead of pulling me out of them. A few months ago, I was at a Knicks game with my son and one of my best friends from high school.

As it became clear the Knicks were about to seal the victory on their path to their first championship in over 50 years, everyone jumped to their feet. Instead of reaching for my phone, I was able to stay present and use my glasses to capture those precious moments of us celebrating. It's become one of my favorite videos, and every time I watch it brings me back to the immense joy we felt that night. Whether it's capturing an unforgettable moment like a Knicks win, learning a new recipe in the kitchen, navigating a new city more confidently, troubleshooting a complicated project at home, or documenting your child's first steps, which one of our team members was able to do, we found ourselves feeling more present, more curious, and more connected to the world around us.

We believe we're only beginning to expand what's possible with glasses and the role they can play in our lives and remain excited about the opportunity to shape the future of eyewear for years to come. Turning to the balance of the year, we remain focused on executing against our strategic priorities for the core business while preparing for the launch of Intelligent Eyewear. With the introduction now just weeks away, we're increasing investment in several areas that are critical to delivering a great customer experience from day one and scaling over time. Over the past several months, we've identified and chosen to lean into incremental strategic growth opportunities.

Supported by approximately $14 million of tariff refunds this year, we have greater flexibility to invest across the business as we prepare for launch, strengthening operational capabilities while driving brand and media investments that we believe will build awareness and excitement this year and position us to scale the business in 2027 and beyond. The second quarter tariff benefit offset those additional investments with the remaining benefit expected to offset similar investments throughout the balance of the year. We continue to take a disciplined and prudent approach to our outlook, which excludes any expected revenue benefit from AI glasses or any benefit from the increased awareness and marketing surrounding the launch. We are reaffirming our full-year revenue and adjusted EBITDA guidance, which now includes the tariff refund benefit and the additional investments we're making ahead of launch.

We remain confident in the strategic initiatives underway and our outlook for the second half, which Adrian will discuss in more detail. With that, Dave and I will walk through the drivers of our Q2 performance. Starting first with our plan to further invest in scaling our industry-leading omnichannel model and delivering exceptional customer experiences. We focused on this in three primary ways this quarter. In Q2, we opened 15 net new stores, including our 350th store at Doral Marketplace outside Miami, as well as suburban markets like Tigard, Oregon, and key tri-state suburbs of Westport, Connecticut, Scarsdale, and Port Chester, New York. With 29 net new stores open through the first half of the year versus 22 at this point last year, we're already more than halfway toward our goal of opening 50 stores in 2026, putting us in a strong position as we prepare to launch Intelligent Eyewear.

Our growing retail presence has always been a competitive advantage, and it's one that becomes even more important for demonstrating the power and utility of AI glasses. We now have 352 stores across 43 states and two Canadian provinces, including locations in 48 of the 50 largest metropolitan areas in the U.S. Today, nearly two-thirds of the U.S. population lives within 30 minutes of a Warby Parker store. Our stores will play a critical role in helping customers discover Intelligent Eyewear, experience it firsthand, get an updated prescription, and personalize eye care from our network of over 500 doctors, and receive ongoing support from our advisors and opticians. Next, we drove growth within our existing fleet, particularly through eye care and higher value products. One of our biggest priorities this year has been growing our eye exam business. Today, exams represent 7% of our business.

Based on industry penetration, we believe they have the potential to become as high as 15%-20% over time. We now offer eye exams in approximately 90% of our stores, positioning us to drive growth through greater awareness and utilization. Our recent surveys show that awareness remains quite low even among our existing customers. Today, roughly 50% of customers who have shopped with Warby Parker still don't know we offer eye exams. Given that industry-wide, approximately 75% of customers purchase glasses where they get their eye exam, we believe increasing awareness represents one of the clearest long-term growth opportunities. In Q2, we launched a dedicated eye exam marketing campaign generating nearly 200 million impressions across linear TV, YouTube, Reddit, social media, and other channels.

We're encouraged by the early response and intend to continue leaning in here for the balance of the year to drive more intentional, high-converting traffic into our stores. Eye exams grew over 30% year-over-year and reached approximately 7% of revenue, up from 6% a year ago. progressive lens penetration reached 23.4%, up 30 basis points from last year, reflecting the benefit of opening more stores with doctors. Behind the scenes, we also built and implemented our own homegrown Electronic Health Record system. Our technology team leveraged AI to build it far faster than would've been possible just a few years ago. The result is a system that's purpose-built for our doctors, improves our patients' experiences, and gives us a stronger foundation as we grow our exam business.

We also expanded our product assortment with five new collections during the quarter, including the launch of Warby Parker Sport, our first foray into performance eyewear. Sport represents a new technical capability for us. The collection is handcrafted in Italy from lightweight flexible nylon and features six and eight base wrapped frames, along with performance polarized lenses designed to reduce glare and enhance visual clarity. These are technologies and construction techniques we haven't offered before, allowing us to serve customers in entirely new ways. From the beginning, we designed the collection with prescription wearers in mind. Given our strong prescription sum business, we saw an opportunity to bring high-quality performance eyewear to prescription customers at a more accessible price point. It's still early, but we're encouraged by what we're seeing and have already started working on our second collection.