Wayfair (1WF) Q2 2026 Earnings Report

The call conveyed clear, broadbased operational and financial progress: accelerating top-line growth (7.5% YoY), improving order momentum, expanding adjusted EBITDA (6.9%) and strong free cash flow ($301M, +30% YoY). U.S. share gains, outsized luxury/specialty growth (Perigold +35%+), improving unit economics and balance-sheet repairs (convert retirements and a Fitch upgrade) are major positives. Challenges are concentrated in international markets, a still-promotional mass environment, and near-term gross margin reinvestments tied to loyalty and CX that intentionally trade some margin for durable growth. Overall, the highlights meaningfully outweigh the lowlights.

Wayfair guided Q3 to high single‑digit revenue growth (following Q2’s 7.5% y/y), with gross margin pegged at 29.5%–30.5% of net revenue (they expect to land at the lower end), customer service and merchant fees just below 4%, and advertising in a 10.5%–11.5% range (also expected toward the low end); the net result should be a contribution margin roughly in line with or slightly above Q2’s 15.3%. They expect SOTG&A to hold in the $360–$370 million range, implying an adjusted EBITDA margin of about 6%–7% of net revenue. Other Q3 assumptions include equity‑based comp and related taxes of $65–$75 million, depreciation & amortization of $64–$70 million (roughly 1%–2% of revenue), net interest of ~$42 million, weighted average shares of ~137 million, and capital expenditures of $60–$70 million, with management reiterating that free cash flow and adjusted EBITDA should continue to expand.