Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40825 | |
Entity Registrant Name | Warby Parker Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0423634 | |
Entity Address, Address Line One | 233 Spring Street | |
Entity Address, Address Line Two | 6th Floor East | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10013 | |
City Area Code | 646 | |
Local Phone Number | 847-7215 | |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | WRBY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001504776 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Common class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 96,434,651 | |
Common class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 19,699,028 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 204,261 | $ 208,585 |
Accounts receivable, net | 962 | 1,435 |
Inventory | 64,411 | 68,848 |
Prepaid expenses and other current assets | 14,927 | 15,700 |
Total current assets | 284,561 | 294,568 |
Property and equipment, net | 140,476 | 138,628 |
Right-of-use lease assets | 123,278 | 127,014 |
Other assets | 9,566 | 8,497 |
Total assets | 557,881 | 568,707 |
Current liabilities: | ||
Accounts payable | 19,958 | 20,791 |
Accrued expenses | 47,996 | 58,222 |
Deferred revenue | 18,886 | 25,628 |
Current lease liabilities | 21,710 | 22,546 |
Other current liabilities | 2,489 | 2,370 |
Total current liabilities | 111,039 | 129,557 |
Non-current lease liabilities | 148,922 | 150,832 |
Other liabilities | 1,574 | 1,672 |
Total liabilities | 261,535 | 282,061 |
Commitments and contingencies (see Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.0001 par value; Class A: 750,000,000 shares authorized at March 31, 2023 and December 31, 2022, 96,282,522 and 96,115,202 issued and outstanding at March 31, 2023 and December 31, 2022, respectively; Class B: 150,000,000 shares authorized at March 31, 2023 and December 31, 2022, 19,318,298 and 19,223,572 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively, convertible to Class A on a one-to-one basis | 12 | 12 |
Additional paid-in capital | 912,110 | 890,915 |
Accumulated deficit | (614,446) | (603,634) |
Accumulated other comprehensive loss | (1,330) | (647) |
Total stockholders’ equity | 296,346 | 286,646 |
Total liabilities and stockholders’ equity | $ 557,881 | $ 568,707 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 1,050,000,000 | |
Common class A | ||
Common stock shares authorized | 750,000,000 | 750,000,000 |
Common stock shares issued | 96,282,522 | 96,115,202 |
Common stock shares outstanding | 96,282,522 | 96,115,202 |
Common class B | ||
Common stock shares authorized | 150,000,000 | 150,000,000 |
Common stock shares issued | 19,318,298 | 19,223,572 |
Common stock shares outstanding | 19,318,298 | 19,223,572 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net revenue | $ 171,968 | $ 153,218 |
Cost of goods sold | 77,177 | 63,572 |
Gross profit | 94,791 | 89,646 |
Selling, general, and administrative expenses | 107,221 | 123,386 |
Loss from operations | (12,430) | (33,740) |
Interest and other loss, net | 1,879 | 146 |
Loss before income taxes | (10,551) | (33,594) |
Provision for income taxes | 261 | 539 |
Net loss | $ (10,812) | $ (34,133) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.09) | $ (0.30) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.09) | $ (0.30) |
Weighted average shares used in computing net loss per share attributable to common stockholders, basic | 116,159,428 | 114,103,766 |
Weighted average shares used in computing net loss per share attributable to common stockholders, diluted | 116,159,428 | 114,103,766 |
Other comprehensive loss | ||
Foreign currency translation adjustment | $ (683) | $ 8 |
Total comprehensive loss | $ (11,495) | $ (34,125) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity - USD ($) $ in Thousands | Total | Common Stock Class A and Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 113,621,000 | ||||
Beginning balance at Dec. 31, 2021 | $ 285,998 | $ 11 | $ 779,212 | $ 16 | $ (493,241) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises (in shares) | 201,000 | ||||
Stock option exercises | 1,866 | 1,866 | |||
Restricted stock unit releases (in shares) | 147,000 | ||||
Stock-based compensation | 27,144 | 27,144 | |||
Other comprehensive income | 8 | 8 | |||
Net income (loss) | (34,133) | (34,133) | |||
Ending balance (in shares) at Mar. 31, 2022 | 113,969,000 | ||||
Ending balance at Mar. 31, 2022 | 280,883 | $ 11 | 808,222 | 24 | (527,374) |
Beginning balance (in shares) at Dec. 31, 2022 | 115,339,000 | ||||
Beginning balance at Dec. 31, 2022 | $ 286,646 | $ 12 | 890,915 | (647) | (603,634) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock option exercises (in shares) | 108,572 | 109,000 | |||
Stock option exercises | $ 1,415 | 1,415 | |||
Restricted stock unit releases (in shares) | 153,000 | ||||
Stock-based compensation | 19,780 | 19,780 | |||
Other comprehensive income | (683) | (683) | |||
Net income (loss) | (10,812) | (10,812) | |||
Ending balance (in shares) at Mar. 31, 2023 | 115,601,000 | ||||
Ending balance at Mar. 31, 2023 | $ 296,346 | $ 12 | $ 912,110 | $ (1,330) | $ (614,446) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (10,812) | $ (34,133) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 9,140 | 6,910 |
Stock-based compensation | 19,780 | 27,144 |
Asset Impairment Charges | 395 | 227 |
Amortization of cloud-based software implementation costs | 363 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | 473 | 163 |
Inventory | 4,442 | (7,147) |
Prepaid expenses and other assets | (657) | (4,316) |
Accounts payable | (921) | 751 |
Accrued expenses | (7,826) | (2,158) |
Deferred revenue | (6,744) | (2,654) |
Other current liabilities | 119 | 129 |
Right-of-use lease assets and current and non-current lease liabilities | 988 | 2,571 |
Other liabilities | (97) | 2,217 |
Net cash provided by (used in) operating activities | 8,643 | (10,296) |
Cash flows from investing activities | ||
Purchases of property and equipment | (12,385) | (16,060) |
Net cash used in investing activities | (12,385) | (16,060) |
Cash flows from financing activities | ||
Proceeds from stock option exercises | 81 | 180 |
Net cash provided by financing activities | 81 | 180 |
Effect of exchange rates on cash | (662) | 84 |
Net decrease in cash and cash equivalents | (4,323) | (26,092) |
Cash and cash equivalents, beginning of period | 208,585 | 256,416 |
Cash and cash equivalents, end of period | 204,262 | 230,324 |
Supplemental disclosures | ||
Cash paid for income taxes | 97 | 34 |
Cash paid for interest | 50 | 35 |
Payments for Leasing Costs | 10,849 | 6,941 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment included in accounts payable and accrued expenses | $ 2,957 | $ 4,241 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessWarby Parker Inc., a public benefit corporation founded in 2010 (together with its wholly owned subsidiaries, the “Company”), is a founder-led, mission-driven lifestyle brand that sits at the intersection of technology, design, healthcare, and social enterprise. The Company offers holistic vision care by selling eyewear products and providing optical services directly to consumers through its retail stores and e-commerce platform. For every pair of glasses or sunglasses sold, the Company helps distribute a pair of glasses to someone in need through its Buy a Pair, Give a Pair program. The Company is headquartered in New York, New York. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the related notes. The December 31, 2022 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. There have been no significant changes in accounting policies during the three months ended March 31, 2023 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and the related notes, except for the adoption of new accounting pronouncements as noted under the heading Recently Adopted Accounting Pronouncements below. Certain prior period amounts were reclassified to conform to the current period presentation. These changes had no impact on the condensed consolidated financial statements for any period. Principles of Consolidation The condensed consolidated financial statements include the financial statements of Warby Parker Inc., and its wholly owned subsidiaries. The Company has consolidated certain entities meeting the definition of a variable interest entity as the Company concluded that it is the primary beneficiary of the entities. The inclusion of these entities does not have a material impact on its condensed consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The Company prepares its condensed consolidated financial statements in conformity with U.S. GAAP. These principles require management to make certain estimates and assumptions during the preparation of its condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Significant estimates underlying the accompanying condensed consolidated financial statements include, but are not limited to (i) the valuation of inventory, including the determination of the net realizable value, (ii) the useful lives and recoverability of long-lived assets, (iii) the determination of deferred income taxes, including related valuation allowances, and (iv) assumptions related to the valuation of common stock and determination of stock-based compensation. Segment Information Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who makes decisions about allocating resources and assessing performance. The Company defines its CODM as its co-Chief Executive Officers. The Company has identified one operating segment. When evaluating the Company’s performance and allocating resources, the CODM relies on financial information prepared on a consolidated basis. Concentration of Credit Risk and Major Suppliers Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in various accounts, which, at times, may exceed the limits insured by the Federal Deposit Insurance Corporation of $250 thousand per institution and the Canada Deposit Insurance Corporation of $100 thousand Canadian dollars. At March 31, 2023 and December 31, 2022, uninsured cash balances were approximately $202.8 million and $207.0 million, respectively. The Company has not experienced any concentration losses related to its cash and cash equivalents to date. The Company seeks to minimize its credit risk by maintaining its cash and cash equivalents with high-quality financial institutions and monitoring the credit standing of such institutions. During the first quarter of 2023, the Company opened accounts with additional financial institutions to diversify its cash holdings. The Company’s top five inventory suppliers accounted for approximately 19% and 23% of cost of goods sold for the three months ended March 31, 2023 and 2022, respectively. Cash and Cash Equivalents The Company considers all highly liquid short-term investments with an original maturity of three months or less to be a cash equivalent. Cash and cash equivalents include deposits with banks and financial institutions, money market funds, and receivables from credit card issuers, which are typically converted into cash within two to four days of capture. As such, these receivables are recorded as a deposit in transit as a component of cash and cash equivalents on the condensed consolidated balance sheets. At March 31, 2023 and December 31, 2022, the balance of receivables from credit card issuers included within cash and cash equivalents was $3.7 million and $11.1 million, respectively. Inventory Inventory consists of approximately $15.4 million and $16.1 million of finished goods, including ready-to-wear sun frames, contact lenses, and eyeglass cases, as of March 31, 2023 and December 31, 2022, respectively, and approximately $49.0 million and $52.7 million of component parts, including optical frames and prescription optical lenses, as of March 31, 2023 and December 31, 2022, respectively. Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, include estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates. Cloud-Based Software Implementation Costs The Company has entered into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on the long or short-term nature of such costs, in line with the Company's policy on the accounting for prepaid software hosting arrangements. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement. As of March 31, 2023, the Company had $13.8 million of gross capitalized cloud-based software implementation costs and $0.6 million of related accumulated amortization, for a net balance of $13.2 million, made up of $3.9 million recorded within prepaid expenses and other current assets and $9.3 million recorded within other assets on the condensed consolidated balance sheet. During the three months ended March 31, 2023, the Company incurred $0.4 million of amortization of capitalized cloud-based software implementation costs. Revenue Recognition The Company primarily derives revenue from the sales of eyewear products, optical services, and accessories. The Company sells products and services through its stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges, which are charged to the customer, associated with these purchases. Revenue generated from services consists of both in-person eye exams and prescriptions issued through the Virtual Vision Test app. All revenue is reported net of sales taxes collected from customers on behalf of taxing authorities and variable consideration, including returns and discounts. Revenue is recognized when performance obligations are satisfied through either the transfer of control of promised goods or the rendering of services to the Company's customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, which is generally determined to be the point of delivery or upon rendering of the service in the case of eye exams. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. In the normal course of business, payment may be collected from the customer prior to recognizing revenue and such cash receipts are included in deferred revenue until the order is delivered to the customer. Substantially all of the deferred revenue included on the balance sheet at December 31, 2022 was recognized as revenue in the first quarter of 2023 and the Company expects substantially all of the deferred revenue at March 31, 2023 to be recognized as revenue in the second quarter of 2023. The Company’s sales policy allows customers to return merchandise for any reason within 30 days of receipt, generally for an exchange or refund. An allowance is recorded within other current liabilities on the condensed consolidated balance sheets for expected future customer returns which the Company estimates using historical return patterns and its expectation of future returns. Any difference between the actual return and previous estimates is adjusted in the period in which such returns occur. Historical return estimates have not materially differed from actual returns in any of the periods presented. The allowance for returns was $2.3 million and $2.2 million at March 31, 2023 and December 31, 2022, respectively, and is included in other current liabilities on the condensed consolidated balance sheets. The Company offers non-expiring gift cards to its customers. Proceeds from the sale of gift cards are initially deferred and recognized within deferred revenue on the condensed consolidated balance sheets, and are recognized as revenue when the product is received by the customer after the gift card has been tendered for payment. Based on historical experience, and to the extent there is no requirement to remit unclaimed card balances to government agencies under unclaimed property laws, an estimate of the gift card balances that will never be redeemed is recognized as revenue in proportion to gift cards which have been redeemed. While the Company will continue to honor all gift cards presented for payment, management may determine the likelihood of redemption to be remote for certain card balances due to, among other things, long periods of inactivity. The following table disaggregates the Company’s revenue by product: Three Months Ended March 31, 2023 2022 Eyewear products $ 162,347 $ 147,318 Services and other 9,621 5,900 Total Revenue $ 171,968 $ 153,218 The following table disaggregates the Company’s revenue by channel: Three Months Ended March 31, 2023 2022 E-commerce $ 61,751 $ 67,005 Retail 110,217 86,213 Total Revenue $ 171,968 $ 153,218 Leases The Company records a lease liability and corresponding right-of-use (“ROU”) asset at lease commencement. The lease liability is measured at the present value of non-cancellable future lease payments over the lease term, minus expected tenant improvement allowances (“TIAs”) determined to be lease incentives. The ROU asset is measured at the lease liability amount, adjusted for prepaid lease payments, TIAs expected to be received, and any initial direct costs. When calculating the present value of future lease payments, the Company utilizes an incremental borrowing rate, which incorporates several factors including the lease term, U.S. Treasury bond rates, financial ratios related to earnings and cash flows, and other comparisons with similarly sized companies. Many of the Company’s leases contain TIA provisions, which represent contractual amounts receivable from a lessor for improvements to the leased property made by the Company which are determined to represent lease incentives. The Company considers the collection of TIAs to be reasonably certain, and includes them in the present value calculation when determining the lease liabilities for new leases. The benefit from a TIA is amortized through rent expense over the term of the related lease. The recognition of rent expense for an operating lease commences on the date at which control and possession of the property is obtained. Rent expense is calculated by recognizing total fixed minimum rental payments, net of any TIAs or other rental concessions, on a straight-line basis over the lease term. Some of the Company’s retail leases contain percent of sales rent or similar provisions, which is recognized as incurred as variable rent. Retail, optical laboratory, and distribution center rent expense is recognized as a component of cost of goods sold and all other rent expense is recognized as a component of selling, general, and administrative expenses. Recent Accounting Pronouncements The Company has not adopted nor are there any recently issued accounting pronouncements that had or are anticipated to have a material impact on the Company’s condensed consolidated financial statements. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consists of the following: March 31, December 31, 2022 Leasehold improvements $ 142,658 $ 139,421 Computers and equipment 33,116 31,928 Furniture and fixtures 24,958 23,849 Capitalized software 19,611 18,876 Construction in process 15,072 12,924 235,415 226,998 Less: accumulated depreciation and amortization (94,939) (88,370) Property and equipment, net $ 140,476 $ 138,628 Expenses associated with property and equipment consisted of the following: Three Months Ended March 31, 2023 2022 Cost of goods sold $ 6,029 $ 4,647 Selling, general, and administrative expenses 3,111 2,263 Total depreciation and amortization expense $ 9,140 $ 6,910 Asset impairment charges $ 395 $ 227 Asset impairment charges for the three months ended March 31, 2023 and 2022 primarily related to the write-off of assets in connection with retail store closures. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consists of the following: March 31, December 31, 2022 Optical laboratory and product costs $ 8,786 $ 4,547 Marketing 7,187 8,353 Unvested early exercised stock options 6,452 7,784 Payroll related 6,437 11,149 Charitable contributions 5,294 6,001 Professional services 3,813 4,494 Retail related 3,248 4,121 Other accrued expenses 6,779 11,773 Total accrued expenses $ 47,996 $ 58,222 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company uses the estimated annual effective tax rate approach to determine the provision for income taxes. The estimated annual effective tax rate is based on forecasted annual results and may fluctuate due to differences between the forecasted and actual results, changes in valuation allowances, and any other transactions that result in differing tax treatment. The Company's income tax expense and effective tax rate were as follows: Three Months Ended March 31, 2023 2022 Income tax expense $ 261 $ 539 Effective tax rate (2.5) % (1.6) % The Company’s estimated annual effective income tax rate for the three months ended March 31, 2023 and 2022 differed from the statutory rate primarily due to the valuation allowance, non-deductible executive compensation, stock-based compensation, differences in tax rates in state and foreign jurisdictions, and other permanent items. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock and Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Redeemable Convertible Preferred Stock and Stockholders’ Equity | Stockholders’ Equity Common Stock As of March 31, 2023, the Company’s Twelfth Amended and Restated Certificate of Incorporation authorizes the issuance of up to 1,050,000,000 shares of common stock, par value of $0.0001 per share, of which 750,000,000 shares are designated Class A common stock, 150,000,000 shares are designated Class B common stock, and 150,000,000 shares are designated Class C common stock. Class A common stock receives one vote per share, Class B common stock receives ten votes per share, and Class C common stock has no voting rights except as required by Delaware law. Common stock is not redeemable at the option of the holder. As of March 31, 2023, outstanding shares of common stock as well as shares of common stock attributable to stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”) were as follows: Class A Class B Class C Common stock outstanding 96,282,522 19,318,298 — Employee stock options – outstanding 1,054,324 1,802,248 — Restricted stock units – outstanding 2,901,351 1,956,310 — Performance stock units – outstanding — 4,397,688 — Employee stock plans – available 25,309,009 — — Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs 27,474,544 — — Total common stock – outstanding or issuable 153,021,750 27,474,544 — Shares authorized 750,000,000 150,000,000 150,000,000 Common stock authorized and available for future issuance 596,978,250 122,525,456 150,000,000 Preferred Stock As of March 31, 2023, 50,000,000 preferred shares were authorized and no shares were outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Plans and Awards The Company’s eligible employees participate in various stock-based compensation plans, which are provided by the Company directly. In August 2021, the board of directors approved the 2021 Incentive Award Plan (the “2021 Plan”), which became effective on September 28, 2021, and the Company no longer grants equity awards under any prior equity plan. Upon the 2021 Plan becoming effective, there were 11,076,515 shares of Class A common stock authorized under the 2021 Plan, and the remaining shares available for issuance under the 2010 Equity Incentive Plan, 2011 Stock Plan, 2012 Milestone Stock Plan, and 2019 Founder Stock Plan (collectively, the “Prior Plans” and, collectively with the 2021 Plan, the “Plans”) were also made available for issuance under the 2021 Plan. The shares authorized under the 2021 Plan will increase annually, beginning on January 1, 2022 and continuing through 2031, by the lesser of (i) 5% of the outstanding common stock (on an as converted basis) as of the last day of the immediately preceding fiscal year, or (ii) a smaller amount as agreed by the board of directors. Awards granted under the 2021 Plan generally vest over four years. In addition, the shares authorized under the 2021 Plan will increase, among other things, to the extent that an award (including an award under the Prior Plans) terminates, expires, or lapses for any reason or an award is settled in cash without the delivery of shares. In January 2022, the board of directors approved an annual increase of 5,735,463 shares to the shares authorized for issuance under the 2021 Plan, and at December 31, 2022, 16,323,025 shares of Class A common stock remained available for future issuance pursuant to new awards under the 2021 Plan. In January 2023, the board of directors approved an annual increase of 5,766,938 shares to the shares authorized for issuance under the 2021 Plan, and 20,981,889 shares remained available for future issuance pursuant to new awards as of March 31, 2023. Employee Stock Purchase Plan In August 2021, the board of directors adopted and the stockholders of the Company approved the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP initially reserved and authorized the issuance of up to 2,215,303 shares of Class A common stock, and such reserve will be increased annually on the first day of each fiscal year beginning in 2022 and ending in 2031, by an amount equal to the lesser of (i) 1% of the shares of the Company’s common stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the board of directors; provided, however, no more than 16,614,772 shares of common stock may be issued under the ESPP. In January 2022 and 2023, the board of directors approved an annual increase of 1,147,092 and 1,153,387 shares, respectively, to the ESPP, and 4,327,120 shares remained available for future issuance pursuant to ESPP purchases as of March 31, 2023. Offering periods begin on May 15 and November 15 of each year and consist of four six-month purchase periods. Eligible employees may contribute up to 20% of their base wages and the purchase price of shares of Class A common stock under an offering will be 85% of the lesser of the fair market value of Class A common stock on (i) the first day of the offering period, and (ii) the applicable purchase date. If such fair market value decreases from the first day of the offering period to the applicable purchase date, the offering period will terminate after the purchase of shares and all participants will be automatically enrolled in the next offering period (a “rollover event”). During both the three months ended March 31, 2023 and 2022, zero shares were purchased under the ESPP. During the three months ended March 31, 2023 and 2022, the Company recognized $0.6 million and $0.5 million of stock-based compensation expense in connection with the ESPP, respectively, and withheld $0.6 million and $1.0 million of contributions from employees, respectively. As of March 31, 2023, total unrecognized compensation costs associated with the ESPP was $2.4 million and is expected to be amortized over a weighted average period of 0.6 years. Stock-based Compensation Expense Stock-based compensation expense consisted of the following: Three Months Ended March 31, 2023 2022 Cost of goods sold $ 194 $ 226 Selling, general, and administrative expenses 19,586 26,918 Total stock-based compensation expense $ 19,780 $ 27,144 Stock-based compensation expense for the three months ended March 31, 2023 includes $13.8 million related to the 2021 Founders Grant, as described below, and $4.6 million in connection with RSUs. Stock-based compensation expense for the three months ended March 31, 2022 includes $20.1 million related to the 2021 Founders Grant, and $5.3 million in connection with RSUs. Stock Options The fair value for stock options and ESPP purchase rights granted under the Plans are estimated at the date of grant using the Black-Scholes option-pricing model. No options or ESPP purchase rights were granted during the three months ended March 31, 2023 and 2022. Because the Company’s common stock was not yet publicly traded when the options currently outstanding were granted, the Company estimated the fair value of common stock. The board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards are approved. The factors considered included, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the Company’s preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as a qualified public offering or sale of the Company, given prevailing market conditions; and (vii) contemporaneous transactions involving the Company’s common shares. The board of directors utilized third-party valuations which were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation . A summary of stock option activity for the three months ended March 31, 2023 is as follows: Number of Weighted Weighted Aggregate Balance at December 31, 2022 2,965,144 $ 7.23 4.5 $ 21,243 Options granted — — Options exercised (108,572) 13.03 191 Options forfeited — — Balance at March 31, 2023 2,856,572 $ 7.01 4.2 $ 14,886 Exercisable as of March 31, 2023 2,856,572 $ 7.01 4.2 $ 14,886 Vested as of March 31, 2023 2,336,998 4.73 3.5 Unvested as of March 31, 2023 519,574 $ 17.25 7.8 The total value of unrecognized stock compensation expense related to unvested options granted under the Plans was $4.8 million as of March 31, 2023, and is expected to be recognized over 0.8 years. Restricted Stock Units and Performance Stock Units A summary of RSU activity for the three months ended March 31, 2023 is as follows: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested as of December 31, 2022 3,314,420 $ 29.06 Granted 1,208,689 13.91 Forfeited (100,615) 24.25 Released (153,474) 25.23 Vested and not yet released (133,256) 32.50 Unvested as of March 31, 2023 4,135,764 $ 24.78 The total value of unrecognized stock compensation expense related to outstanding RSUs and PSUs granted under the Plans was $62.6 million and $37.8 million as of March 31, 2023, respectively, which is expected to be recognized over a weighted-average period of 1.4 years and 0.8 years, respectively. No PSUs were granted, forfeited, released or vested during the three months ended March 31, 2023. In June 2021, the Company granted 4,397,688 PSUs and 1,884,724 RSUs to the co-CEOs, in the aggregate, under the 2019 Founder Stock Plan (the “Founders Grant”). The PSUs vest upon two performance conditions, (i) a qualified public offering, which was satisfied upon the Company’s Direct Listing on September 20, 2021, and (ii) the price of the Company’s Class A common stock reaching stock price hurdles over a period of ten years, as defined by the terms of the award. The PSUs are subject to the co-CEOs’ continued employment with the Company through the applicable vesting date. If the PSUs vest, the Company will deliver one share of Class B common stock on the settlement date. Unvested PSUs expire in ten years from the date of grant. The terms of the PSUs granted are described further below. The PSUs are divided into eight substantially equal tranches, each one vesting on the date the 90-day trailing volume-weighted average trading price of the Company’s Class A common stock exceeds the stock price hurdle, as set forth in the table below, provided that no PSUs may vest prior to the six month anniversary of the Direct Listing. Tranche Number of PSUs Stock Price Hurdle 1 549,712 $ 47.75 2 549,710 $ 55.71 3 549,712 $ 63.67 4 549,710 $ 71.63 5 549,712 $ 79.59 6 549,710 $ 87.55 7 549,712 $ 95.50 8 549,710 $ 103.46 The Company used a Monte Carlo simulation to calculate the grant-date fair value of the PSUs of $128.8 million. Since the PSUs contain a performance and market condition, the stock-based compensation expense will be recognized when it becomes probable that the performance condition will be met using the accelerated attribution method. Stock-based compensation will be recognized over the period of time the market condition for each tranche is expected to be met (i.e., the derived service period). The performance condition was satisfied at September 29, 2021 by the Direct Listing, and the Company began recording expense at that time. The Founders Grant RSUs will vest in equal monthly installments over a period of five years, subject to the co-CEOs continued employment with the Company through the applicable vesting date and conditioned upon the completion of a qualified public offering. The grant-date fair value of the RSUs is $66.9 million. Since the RSUs contain a performance condition, stock-based compensation expense is recognized using the accelerated attribution method when it becomes probable that the performance condition will be met. The performance condition was satisfied on September 29, 2021 by the Direct Listing, and the Company began recording expense at that time. Shares underlying vested PSUs and RSUs will be issued to the CEOs on a specified quarterly date following the second anniversary of the vesting date, except for an amount necessary to cover any taxes due in connection with the vesting, which will be withheld or sold to cover, or issued to offset, such taxes. Any RSUs or PSUs subject to the award that have not vested by the tenth anniversary of the grant date will be forfeited. RSUs granted prior to the Company’s direct listing vest upon the satisfaction of both a service and a performance condition. Prior to its direct listing, the Company had concluded that it was not probable that the performance condition would be satisfied as the closing of a qualified public offering or change in control is not deemed probable until consummated. Upon its direct listing on September 29, 2021, the Company recorded stock-based compensation expense for the service condition satisfied through such date and began recording stock-based compensation expense using the accelerated attribution method as the service conditions are met. RSUs issued after its direct listing only contain a service condition and are recognized on a straight line basis over the vesting period. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | LeasesThe Company leases retail, office, optical laboratory, and distribution center space under operating leases from third parties. As of March 31, 2023, the total lease terms of the various leases range from 3 to 18 years. The leases generally contain renewal options and rent escalation clauses, and from time to time include contingent rent provisions. Renewal options are exercisable at the Company’s sole discretion and are included in the lease term if they are reasonably certain to be exercised. In general it is not reasonably certain that lease renewals will be exercised at lease commencement and as such, lease renewals are not included in the lease term. The Company’s finance leases are immaterial. The following table presents the assets and liabilities related to the Company’s leases: March 31, December 31, 2022 Lease assets: Right-of-use assets $ 123,278 $ 127,014 Total lease assets 123,278 127,014 Lease liabilities: Current lease liabilities 21,710 22,546 Non-current lease liabilities 148,922 150,832 Total lease liabilities $ 170,632 $ 173,378 The following table details the Company’s net lease expense: Three Months Ended March 31, 2023 2022 Operating lease expense $ 7,436 $ 6,013 Variable lease expense (1) 743 938 Net lease expense $ 8,179 $ 6,951 (1) Variable lease expense primarily consists of contingent rent. The following table presents the future maturity of lease liabilities: Operating Leases (1) 2023 $ 20,998 2024 37,099 2025 32,337 2026 30,724 2027 27,431 Thereafter 50,154 Future minimum lease payments 198,743 Impact of discounting 28,111 Present value of lease payments $ 170,632 (1) The year 2023 and 2024 includes $7.2 million and $2.4 million, respectively, of expected cash inflows from TIAs. Operating lease payments exclude $7.5 million of legally binding minimum lease payments related to executed leases for which the Company has not yet taken possession of the leased premises. The following table presents other relevant lease information: March 31, Weighted average remaining lease term (years) 5.9 Weighted average discount rate 4.5 % |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 2013 Credit Facility In August 2013, the Company entered into a Loan and Security Agreement with Comerica Bank (as amended, the “2013 Credit Facility”), which consisted of a revolving credit line of up to $50.0 million with a sub-limit of $15.0 million for the issuance of letters of credit. Borrowings under the revolving credit line bore interest on the principal amount outstanding at a variable interest rate based on either LIBOR or the bank’s prime rate, with no additional margin. The Company was charged fees on the uncommitted portion of the credit line of approximately 0.2% as long as total borrowings were less than $15.0 million. The 2013 Credit Facility was replaced by the 2022 Credit Facility (as defined below). 2022 Credit Facility In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., (together, the "Borrowers") entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the "2022 Credit Facility"), which replaced the 2013 Credit Facility. The 2022 Credit Facility consists of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes. The 2022 Credit Facility includes an option for the Company to increase the available amount by up to $75.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2022 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2022 Credit Facility at any time, in whole or in part, without penalty. Under the 2022 Credit Facility, borrowings bear interest on the principal amount outstanding at a variable interest rate either (a) based on the greater of (1) the prime rate (as defined in the credit agreement), (2) the federal funds rate plus 1%, and (3) the Bloomberg Short-Term Bank Yield Index rate (“BSBY Rate”) for a one month tenor plus 1%, in each case plus an applicable margin of 0.5% - 0.8% depending on the Company’s leverage ratio, or (b) the BSBY Rate plus an applicable margin of 1.5% - 1.8% depending on the Company’s leverage ratio. The Company is charged commitment fees of 0.15% whether or not amounts have been borrowed. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations. The 2022 Credit Facility contains a financial maintenance covenant which takes effect once total borrowings first exceed $60.0 million, and at all times thereafter, that requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2022 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as representations, warranties and event of default provisions. The obligations of the Borrowers under the Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company. Other than letters of credit outstanding of $4.2 million as of both March 31, 2023 and December 31, 2022, respectively, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2022 Credit Facility or 2013 Credit Facility. Litigation During the normal course of business, the Company may become subject to legal proceedings, claims and litigation. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. As of March 31, 2023, the Company is not subject to any pending legal matters or claims that could have a material adverse effect on its financial position, results of operations, or cash flows should such litigation be resolved unfavorably. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders The computation of net loss per share attributable to common stockholders is as follows: Three Months Ended March 31, 2023 2022 Numerator Net loss attributable to common stockholders - basic and diluted $ (10,812) $ (34,133) Denominator Weighted average shares, basic and diluted 116,159,428 114,103,766 Earnings Per Share Net loss per share attributable to common stockholders, basic and diluted $ (0.09) $ (0.30) The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive: Three Months Ended March 31, 2023 2022 Stock options to purchase common stock 2,856,572 3,423,813 Unvested restricted stock units 4,135,764 3,265,465 Unvested performance stock units 4,397,688 4,397,688 ESPP purchase rights 376,493 177,113 |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions As a private company, the Company issued secured promissory notes collateralized by the stock purchased by certain Company executives in relation to the exercise of employee stock options. As the promissory notes are secured by the underlying shares they have been treated as non-recourse notes in the condensed consolidated financial statements. The promissory notes were issued with a term of 8.5 years and an interest rate equal to the minimum applicable federal mid-term rate in the month the loan was issued. The secured promissory notes were recorded as a reduction to equity offsetting the amount in additional paid-in-capital related to the exercised options funded by the notes. The loans are held by current and former employees and had a balance of $2.5 million at both March 31, 2023 and December 31, 2022. No loans are outstanding with any of our executive officers. During both the three months ended March 31, 2023 and 2022, the outstanding loan balance increased by an immaterial amount due to interest. No new promissory notes were issued during the three months ended March 31, 2023 and 2022. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Lease Obligations Subsequent to March 31, 2023, the Company entered into 3 operating lease agreements for retail space in the U.S., with terms ranging from 5 to 7 years. Total commitments under the new agreements are approximately $1.6 million, payable over the terms of the related agreements. Equity Awards In April 2023, the board of directors approved grants of 178,299 RSUs for Class A common stock to employees under the 2021 Plan. The total grant date fair value of these awards was $2.0 million and will be recognized as stock-based compensation, net of forfeitures as incurred, over approximately four years. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and the related notes. The December 31, 2022 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. There have been no significant changes in accounting policies during the three months ended March 31, 2023 from those disclosed in the audited consolidated financial statements for the year ended December 31, 2022 and the related notes, except for the adoption of new accounting pronouncements as noted under the heading Recently Adopted Accounting Pronouncements below. Certain prior period amounts were reclassified to conform to the current period presentation. These changes had no impact on the condensed consolidated financial statements for any period. |
Principles of Consolidation | Principles of ConsolidationThe condensed consolidated financial statements include the financial statements of Warby Parker Inc., and its wholly owned subsidiaries. The Company has consolidated certain entities meeting the definition of a variable interest entity as the Company concluded that it is the primary beneficiary of the entities. The inclusion of these entities does not have a material impact on its condensed consolidated financial statements. Intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The Company prepares its condensed consolidated financial statements in conformity with U.S. GAAP. These principles require management to make certain estimates and assumptions during the preparation of its condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Significant estimates underlying the accompanying condensed consolidated financial statements include, but are not limited to (i) the valuation of inventory, including the determination of the net realizable value, (ii) the useful lives and recoverability of long-lived assets, (iii) the determination of deferred income taxes, including related valuation allowances, and (iv) assumptions related to the valuation of common stock and determination of stock-based compensation. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who makes decisions about allocating resources and assessing performance. The Company defines its CODM as its co-Chief Executive Officers. The Company has identified one operating segment. When evaluating the Company’s performance and allocating resources, the CODM relies on financial information prepared on a consolidated basis. |
Concentration of Credit Risk and Major Suppliers | Concentration of Credit Risk and Major Suppliers Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and cash equivalents in various accounts, which, at times, may exceed the limits insured by the Federal Deposit Insurance Corporation of $250 thousand per institution |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid short-term investments with an original maturity of three months or less to be a cash equivalent. Cash and cash equivalents include deposits with banks and financial institutions, money market funds, and receivables from credit card issuers, which are typically converted into cash within two to four days of capture. As such, these receivables are recorded as a deposit in transit as a component of cash and cash equivalents on the condensed consolidated balance sheets. |
Inventory | Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, include estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates. |
Revenue Recognition | Revenue Recognition The Company primarily derives revenue from the sales of eyewear products, optical services, and accessories. The Company sells products and services through its stores, website, and mobile apps. Revenue generated from eyewear products includes the sales of prescription and non-prescription optical glasses and sunglasses, contact lenses, eyewear accessories, and expedited shipping charges, which are charged to the customer, associated with these purchases. Revenue generated from services consists of both in-person eye exams and prescriptions issued through the Virtual Vision Test app. All revenue is reported net of sales taxes collected from customers on behalf of taxing authorities and variable consideration, including returns and discounts. Revenue is recognized when performance obligations are satisfied through either the transfer of control of promised goods or the rendering of services to the Company's customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product, which is generally determined to be the point of delivery or upon rendering of the service in the case of eye exams. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. In the normal course of business, payment may be collected from the customer prior to recognizing revenue and such cash receipts are included in deferred revenue until the order is delivered to the customer. Substantially all of the deferred revenue included on the balance sheet at December 31, 2022 was recognized as revenue in the first quarter of 2023 and the Company expects substantially all of the deferred revenue at March 31, 2023 to be recognized as revenue in the second quarter of 2023. The Company’s sales policy allows customers to return merchandise for any reason within 30 days of receipt, generally for an exchange or refund. An allowance is recorded within other current liabilities on the condensed consolidated balance sheets for expected future customer returns which the Company estimates using historical return patterns and its expectation of future returns. Any difference between the actual return and previous estimates is adjusted in the period in which such returns occur. Historical return estimates have not materially differed from actual returns in any of the periods presented. The allowance for returns was $2.3 million and $2.2 million at March 31, 2023 and December 31, 2022, respectively, and is included in other current liabilities on the condensed consolidated balance sheets. |
Leases | Leases The Company records a lease liability and corresponding right-of-use (“ROU”) asset at lease commencement. The lease liability is measured at the present value of non-cancellable future lease payments over the lease term, minus expected tenant improvement allowances (“TIAs”) determined to be lease incentives. The ROU asset is measured at the lease liability amount, adjusted for prepaid lease payments, TIAs expected to be received, and any initial direct costs. When calculating the present value of future lease payments, the Company utilizes an incremental borrowing rate, which incorporates several factors including the lease term, U.S. Treasury bond rates, financial ratios related to earnings and cash flows, and other comparisons with similarly sized companies. Many of the Company’s leases contain TIA provisions, which represent contractual amounts receivable from a lessor for improvements to the leased property made by the Company which are determined to represent lease incentives. The Company considers the collection of TIAs to be reasonably certain, and includes them in the present value calculation when determining the lease liabilities for new leases. The benefit from a TIA is amortized through rent expense over the term of the related lease. The recognition of rent expense for an operating lease commences on the date at which control and possession of the property is obtained. Rent expense is calculated by recognizing total fixed minimum rental payments, net of any TIAs or other rental concessions, on a straight-line basis over the lease term. Some of the Company’s retail leases contain percent of sales rent or similar provisions, which is recognized as incurred as variable rent. Retail, optical laboratory, and distribution center rent expense is recognized as a component of cost of goods sold and all other rent expense is recognized as a component of selling, general, and administrative expenses. |
Recently Adopted and Issued Accounting Pronouncements | Recent Accounting Pronouncements The Company has not adopted nor are there any recently issued accounting pronouncements that had or are anticipated to have a material impact on the Company’s condensed consolidated financial statements. |
Research, Development, and Computer Software, Policy | Cloud-Based Software Implementation Costs The Company has entered into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on the long or short-term nature of such costs, in line with the Company's policy on the accounting for prepaid software hosting arrangements. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized cloud-based software implementation costs are amortized, beginning on the date the related software or module is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table disaggregates the Company’s revenue by product: Three Months Ended March 31, 2023 2022 Eyewear products $ 162,347 $ 147,318 Services and other 9,621 5,900 Total Revenue $ 171,968 $ 153,218 The following table disaggregates the Company’s revenue by channel: Three Months Ended March 31, 2023 2022 E-commerce $ 61,751 $ 67,005 Retail 110,217 86,213 Total Revenue $ 171,968 $ 153,218 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consists of the following: March 31, December 31, 2022 Leasehold improvements $ 142,658 $ 139,421 Computers and equipment 33,116 31,928 Furniture and fixtures 24,958 23,849 Capitalized software 19,611 18,876 Construction in process 15,072 12,924 235,415 226,998 Less: accumulated depreciation and amortization (94,939) (88,370) Property and equipment, net $ 140,476 $ 138,628 Expenses associated with property and equipment consisted of the following: Three Months Ended March 31, 2023 2022 Cost of goods sold $ 6,029 $ 4,647 Selling, general, and administrative expenses 3,111 2,263 Total depreciation and amortization expense $ 9,140 $ 6,910 Asset impairment charges $ 395 $ 227 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consists of the following: March 31, December 31, 2022 Optical laboratory and product costs $ 8,786 $ 4,547 Marketing 7,187 8,353 Unvested early exercised stock options 6,452 7,784 Payroll related 6,437 11,149 Charitable contributions 5,294 6,001 Professional services 3,813 4,494 Retail related 3,248 4,121 Other accrued expenses 6,779 11,773 Total accrued expenses $ 47,996 $ 58,222 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense (Benefit) | The Company's income tax expense and effective tax rate were as follows: Three Months Ended March 31, 2023 2022 Income tax expense $ 261 $ 539 Effective tax rate (2.5) % (1.6) % |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock and Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Stock by Class | As of March 31, 2023, outstanding shares of common stock as well as shares of common stock attributable to stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”) were as follows: Class A Class B Class C Common stock outstanding 96,282,522 19,318,298 — Employee stock options – outstanding 1,054,324 1,802,248 — Restricted stock units – outstanding 2,901,351 1,956,310 — Performance stock units – outstanding — 4,397,688 — Employee stock plans – available 25,309,009 — — Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs 27,474,544 — — Total common stock – outstanding or issuable 153,021,750 27,474,544 — Shares authorized 750,000,000 150,000,000 150,000,000 Common stock authorized and available for future issuance 596,978,250 122,525,456 150,000,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Stock-based compensation expense consisted of the following: Three Months Ended March 31, 2023 2022 Cost of goods sold $ 194 $ 226 Selling, general, and administrative expenses 19,586 26,918 Total stock-based compensation expense $ 19,780 $ 27,144 |
Share-based Payment Arrangement, Option, Activity | A summary of stock option activity for the three months ended March 31, 2023 is as follows: Number of Weighted Weighted Aggregate Balance at December 31, 2022 2,965,144 $ 7.23 4.5 $ 21,243 Options granted — — Options exercised (108,572) 13.03 191 Options forfeited — — Balance at March 31, 2023 2,856,572 $ 7.01 4.2 $ 14,886 Exercisable as of March 31, 2023 2,856,572 $ 7.01 4.2 $ 14,886 Vested as of March 31, 2023 2,336,998 4.73 3.5 Unvested as of March 31, 2023 519,574 $ 17.25 7.8 |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | A summary of RSU activity for the three months ended March 31, 2023 is as follows: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested as of December 31, 2022 3,314,420 $ 29.06 Granted 1,208,689 13.91 Forfeited (100,615) 24.25 Released (153,474) 25.23 Vested and not yet released (133,256) 32.50 Unvested as of March 31, 2023 4,135,764 $ 24.78 |
Schedule of Nonvested Performance-based Units Activity | The PSUs are divided into eight substantially equal tranches, each one vesting on the date the 90-day trailing volume-weighted average trading price of the Company’s Class A common stock exceeds the stock price hurdle, as set forth in the table below, provided that no PSUs may vest prior to the six month anniversary of the Direct Listing. Tranche Number of PSUs Stock Price Hurdle 1 549,712 $ 47.75 2 549,710 $ 55.71 3 549,712 $ 63.67 4 549,710 $ 71.63 5 549,712 $ 79.59 6 549,710 $ 87.55 7 549,712 $ 95.50 8 549,710 $ 103.46 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Assets and Liabilities | The following table presents the assets and liabilities related to the Company’s leases: March 31, December 31, 2022 Lease assets: Right-of-use assets $ 123,278 $ 127,014 Total lease assets 123,278 127,014 Lease liabilities: Current lease liabilities 21,710 22,546 Non-current lease liabilities 148,922 150,832 Total lease liabilities $ 170,632 $ 173,378 |
Lease, Cost | The following table details the Company’s net lease expense: Three Months Ended March 31, 2023 2022 Operating lease expense $ 7,436 $ 6,013 Variable lease expense (1) 743 938 Net lease expense $ 8,179 $ 6,951 The following table presents other relevant lease information: March 31, Weighted average remaining lease term (years) 5.9 Weighted average discount rate 4.5 % |
Lessee, Operating Lease, Liability, Maturity | The following table presents the future maturity of lease liabilities: Operating Leases (1) 2023 $ 20,998 2024 37,099 2025 32,337 2026 30,724 2027 27,431 Thereafter 50,154 Future minimum lease payments 198,743 Impact of discounting 28,111 Present value of lease payments $ 170,632 (1) The year 2023 and 2024 includes $7.2 million and $2.4 million, respectively, of expected cash inflows from TIAs. Operating lease payments exclude $7.5 million of legally binding minimum lease payments related to executed leases for which the Company has not yet taken possession of the leased premises. |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computation of net loss per share attributable to common stockholders is as follows: Three Months Ended March 31, 2023 2022 Numerator Net loss attributable to common stockholders - basic and diluted $ (10,812) $ (34,133) Denominator Weighted average shares, basic and diluted 116,159,428 114,103,766 Earnings Per Share Net loss per share attributable to common stockholders, basic and diluted $ (0.09) $ (0.30) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive: Three Months Ended March 31, 2023 2022 Stock options to purchase common stock 2,856,572 3,423,813 Unvested restricted stock units 4,135,764 3,265,465 Unvested performance stock units 4,397,688 4,397,688 ESPP purchase rights 376,493 177,113 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Concentration Risk [Line Items] | |||
Number of operating segments | segment | 1 | ||
Uninsured cash balances | $ 202,800 | $ 207,000 | |
Cash and cash equivalents | 204,261 | 208,585 | |
Finished goods | 15,400 | 16,100 | |
Component parts | 49,000 | 52,700 | |
Allowance for returns | 2,300 | 2,200 | |
Capitalized Computer Software, Gross | 13,800 | ||
Capitalized Computer Software, Net | 13,200 | ||
Capitalized Computer Software, Accumulated Amortization | 600 | ||
Amortization of cloud-based software implementation costs | 363 | $ 0 | |
Prepaid Expenses and Other Current Assets | |||
Concentration Risk [Line Items] | |||
Capitalized Computer Software, Net | 3,900 | ||
Other Noncurrent Assets | |||
Concentration Risk [Line Items] | |||
Capitalized Computer Software, Net | 9,300 | ||
Credit Card Receivable | |||
Concentration Risk [Line Items] | |||
Cash and cash equivalents | $ 3,700 | $ 11,100 | |
Cost of Goods and Service Benchmark | Supplier Concentration Risk | Top Five Inventory Suppliers | |||
Concentration Risk [Line Items] | |||
Concentration risk percent | 19% | 23% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 171,968 | $ 153,218 |
E-commerce | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 61,751 | 67,005 |
Retail | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 110,217 | 86,213 |
Eyewear products | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 162,347 | 147,318 |
Services and other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 9,621 | $ 5,900 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 235,415 | $ 226,998 | |
Less: accumulated depreciation and amortization | (94,939) | (88,370) | |
Property and equipment, net | 140,476 | 138,628 | |
Total depreciation and amortization expense | 9,140 | $ 6,910 | |
Asset Impairment Charges | 395 | 227 | |
Cost of goods sold | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 6,029 | 4,647 | |
Selling, general, and administrative expenses | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 3,111 | 2,263 | |
Total depreciation and amortization expense | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 9,140 | $ 6,910 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 142,658 | 139,421 | |
Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 33,116 | 31,928 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 24,958 | 23,849 | |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 19,611 | 18,876 | |
Construction in process | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 15,072 | $ 12,924 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Unvested early exercised stock options | $ 6,452 | $ 7,784 |
Payroll related | 6,437 | 11,149 |
Retail related | 3,248 | 4,121 |
Accrued Professional Fees, Current | 3,813 | 4,494 |
Charitable contributions | 5,294 | 6,001 |
Marketing | 7,187 | 8,353 |
Other accrued expenses | 6,779 | 11,773 |
Total accrued expenses | 47,996 | 58,222 |
Accrued Freight and Fulfillment Costs | $ 8,786 | $ 4,547 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 261 | $ 539 |
Effective tax rate | (2.50%) | (1.60%) |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Stock and Stockholders’ Equity - Narrative (Details) | Mar. 31, 2023 vote $ / shares shares | Dec. 31, 2022 $ / shares shares |
Temporary Equity [Line Items] | ||
Common stock shares authorized | 1,050,000,000 | |
Common stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Preferred stock shares authorized | 50,000,000 | |
Preferred stock shares outstanding | 0 | |
Series A common stock | ||
Temporary Equity [Line Items] | ||
Common stock shares authorized | 750,000,000 | 750,000,000 |
Number of votes granted | vote | 1 | |
Series B common stock | ||
Temporary Equity [Line Items] | ||
Common stock shares authorized | 150,000,000 | 150,000,000 |
Number of votes granted | vote | 10 | |
Series C common stock | ||
Temporary Equity [Line Items] | ||
Common stock shares authorized | 150,000,000 | |
Number of votes granted | vote | 0 |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Stock and Stockholders’ Equity - Common Stock Outstanding (Details) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Employee stock options - outstanding (in shares) | 2,856,572 | 2,965,144 |
Authorized (in shares) | 1,050,000,000 | |
Employee Stock Purchase Plan | ||
Class of Stock [Line Items] | ||
Total common stock – outstanding or issuable on exercise of options (in shares) | 4,327,120 | |
Series A common stock | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 96,282,522 | 96,115,202 |
Employee stock options - outstanding (in shares) | 1,054,324 | |
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs (in shares) | 27,474,544 | |
Total common stock – outstanding or issuable on exercise of options (in shares) | 153,021,750 | |
Authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock available for future issuance (in shares) | 596,978,250 | |
Series A common stock | Restricted stock units (RSUs) | ||
Class of Stock [Line Items] | ||
Stock units - outstanding (in shares) | 2,901,351 | |
Series A common stock | Performance Stock Units | ||
Class of Stock [Line Items] | ||
Stock units - outstanding (in shares) | 0 | |
Series A common stock | Employee Stock Purchase Plan | ||
Class of Stock [Line Items] | ||
Employee stock options - available (in shares) | 25,309,009 | |
Series B common stock | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 19,318,298 | 19,223,572 |
Employee stock options - outstanding (in shares) | 1,802,248 | |
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs (in shares) | 0 | |
Total common stock – outstanding or issuable on exercise of options (in shares) | 27,474,544 | |
Authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock available for future issuance (in shares) | 122,525,456 | |
Series B common stock | Restricted stock units (RSUs) | ||
Class of Stock [Line Items] | ||
Stock units - outstanding (in shares) | 1,956,310 | |
Series B common stock | Performance Stock Units | ||
Class of Stock [Line Items] | ||
Stock units - outstanding (in shares) | 4,397,688 | |
Series B common stock | Employee Stock Purchase Plan | ||
Class of Stock [Line Items] | ||
Employee stock options - available (in shares) | 0 | |
Series C common stock | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 0 | |
Employee stock options - outstanding (in shares) | 0 | |
Shares of Class A common stock issuable upon conversion of all outstanding Class B common stock, options, RSUs, and PSUs (in shares) | 0 | |
Total common stock – outstanding or issuable on exercise of options (in shares) | 0 | |
Authorized (in shares) | 150,000,000 | |
Common stock available for future issuance (in shares) | 150,000,000 | |
Series C common stock | Restricted stock units (RSUs) | ||
Class of Stock [Line Items] | ||
Stock units - outstanding (in shares) | 0 | |
Series C common stock | Performance Stock Units | ||
Class of Stock [Line Items] | ||
Stock units - outstanding (in shares) | 0 | |
Series C common stock | Employee Stock Purchase Plan | ||
Class of Stock [Line Items] | ||
Employee stock options - available (in shares) | 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||||
Jan. 31, 2023 shares | Jan. 31, 2022 shares | Aug. 31, 2021 shares | Jun. 30, 2021 performanceCondition shares | Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total stock-based compensation expense | $ | $ 19,780,000 | $ 27,144,000 | |||||
Direct Listing | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total stock-based compensation expense | $ | 5,300,000 | ||||||
Series A common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future issuance | 153,021,750 | ||||||
Series B common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future issuance | 27,474,544 | ||||||
2021 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase in shares authorized, percent | 5% | ||||||
Number of additional shares authorized | 5,766,938 | 5,735,463 | |||||
2021 Plan | Series A common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized | 11,076,515 | ||||||
The Plans | Series A common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options approved for grant (in shares) | 20,981,889 | 16,323,025 | |||||
The Founders Grant | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total stock-based compensation expense | $ | $ 13,800,000 | 20,100,000 | |||||
Stock options or restricted stock units (RSUs) | 2021 Incentive Award Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized | 2,215,303 | ||||||
Number of additional shares authorized | 1,153,387 | 1,147,092 | 16,614,772 | ||||
Shares available for future issuance | 4,327,120 | ||||||
Shares purchased under ESPP (in shares) | 0 | ||||||
Total stock-based compensation expense | $ | $ 600,000 | 500,000 | |||||
Contributions withheld from employees | $ | 600,000 | $ 1,000,000 | |||||
Cost not yet recognized, outstanding awards | $ | $ 2,400,000 | ||||||
Non-vested award, cost not yet recognized, period for recognition | 7 months 6 days | ||||||
Stock options | The Plans | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Cost not yet recognized, outstanding awards | $ | $ 4,800,000 | ||||||
Non-vested award, cost not yet recognized, period for recognition | 9 months 18 days | ||||||
Restricted stock units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Units vested (in shares) | 153,474 | ||||||
Granted (in shares) | 1,208,689 | ||||||
Restricted stock units (RSUs) | 2021 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total stock-based compensation expense | $ | $ 4,600,000 | ||||||
Restricted stock units (RSUs) | The Plans | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-vested award, cost not yet recognized, period for recognition | 1 year 4 months 24 days | ||||||
Cost not yet recognized, outstanding awards | $ | $ 62,600,000 | ||||||
Restricted stock units (RSUs) | The Founders Grant | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 5 years | ||||||
Granted (in shares) | 1,884,724 | ||||||
Grant date fair value | $ | 66,900,000 | ||||||
Performance stock units (PSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award expiration period | 10 years | ||||||
Number of performance conditions | performanceCondition | 2 | ||||||
Terms of award, stock price hurdle period | 10 years | ||||||
Performance stock units (PSUs) | Monte Carlo simulation | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grant date fair value | $ | $ 128,800,000 | ||||||
Performance stock units (PSUs) | Series B common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares receivable per share based payments award (in shares) | 1 | ||||||
Performance stock units (PSUs) | The Plans | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-vested award, cost not yet recognized, period for recognition | 9 months 18 days | ||||||
Cost not yet recognized, outstanding awards | $ | $ 37,800,000 | ||||||
Performance stock units (PSUs) | The Founders Grant | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 4,397,688 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 19,780 | $ 27,144 |
Cost of goods sold | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 194 | 226 |
Selling, general, and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 19,586 | $ 26,918 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2023 | Sep. 30, 2022 | |
Number of Stock Options | ||
Beginning balance (in shares) | 2,965,144 | |
Options granted (in shares) | 0 | |
Options exercised (in shares) | (108,572) | |
Options forfeited (in shares) | 0 | |
Ending balance (in shares) | 2,856,572 | |
Exercisable at end of period (in shares) | 2,856,572 | |
Vested at end of period (in shares) | 2,336,998 | |
Exercisable at end of period (in shares) | 519,574 | |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 7.23 | |
Options granted (in dollars per share) | 0 | |
Options exercised (in dollars per share) | 13.03 | |
Options forfeited (in dollars per share) | 0 | |
Ending balance (in dollars per share) | 7.01 | |
Exercisable at end of period (in dollars per share) | 7.01 | |
Vested at end of period (in dollars per share) | 4.73 | |
Unvested at end of period (in dollars per share) | $ 17.25 | |
Weighted average contractual term (years) | ||
Weighted average contractual term | 4 years 2 months 12 days | 4 years 6 months |
Exercisable at end of period | 4 years 2 months 12 days | |
Vested at end of period | 3 years 6 months | |
Unvested at end of period | 7 years 9 months 18 days | |
Aggregate intrinsic value | ||
Beginning balance | $ 21,243 | |
Options exercised | 191 | |
Ending balance | 14,886 | |
Exercisable at end of period | $ 14,886 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted stock units (RSUs) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Restricted Stock Units | |
Unvested beginning balance (in shares) | shares | 3,314,420 |
Granted (in shares) | shares | 1,208,689 |
Forfeited (in shares) | shares | (100,615) |
Released (in shares) | shares | (153,474) |
Vested and not yet released (in shares) | shares | (133,256) |
Unvested ending balance (in shares) | shares | 4,135,764 |
Weighted Average Grant Date Fair Value | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 29.06 |
Granted (in dollars per share) | $ / shares | 13.91 |
Forfeited (in dollars per share) | $ / shares | 24.25 |
Released (in dollars per share) | $ / shares | 25.23 |
Vested and not yet released (in dollars per share) | $ / shares | 32.50 |
Unvested ending balance (in dollars per share) | $ / shares | $ 24.78 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of PSUs (Details) - Unvested performance stock units | Mar. 31, 2023 $ / shares shares |
1 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,712 |
Stock price hurdle (in dollars per share) | $ / shares | $ 47.75 |
2 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,710 |
Stock price hurdle (in dollars per share) | $ / shares | $ 55.71 |
3 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,712 |
Stock price hurdle (in dollars per share) | $ / shares | $ 63.67 |
4 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,710 |
Stock price hurdle (in dollars per share) | $ / shares | $ 71.63 |
5 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,712 |
Stock price hurdle (in dollars per share) | $ / shares | $ 79.59 |
6 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,710 |
Stock price hurdle (in dollars per share) | $ / shares | $ 87.55 |
7 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,712 |
Stock price hurdle (in dollars per share) | $ / shares | $ 95.50 |
8 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of PSUs (in shares) | shares | 549,710 |
Stock price hurdle (in dollars per share) | $ / shares | $ 103.46 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term period | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term period | 18 years |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Right-of-use lease assets | $ 123,278 | $ 127,014 |
Current lease liabilities | 21,710 | 22,546 |
Non-current lease liabilities | 148,922 | 150,832 |
Total lease liabilities | $ 170,632 | $ 173,378 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 7,436 | $ 6,013 |
Variable lease expense(1) | 743 | 938 |
Net lease expense | $ 8,179 | $ 6,951 |
Leases - Future Minimum Operati
Leases - Future Minimum Operating Lease Payment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2023 | $ 20,998 | |
2024 | 37,099 | |
2025 | 32,337 | |
2026 | 30,724 | |
2027 | 27,431 | |
Thereafter | 50,154 | |
Future minimum lease payments | 198,743 | |
Impact of discounting | 28,111 | |
Present value of lease payments | 170,632 | $ 173,378 |
Expected cash inflows from TIAs | 7,200 | |
Minimum lease payments for leases not yet commenced | 7,500 | |
Expected Proceeds from Tenant Improvement Allowance, Following Year | $ 2,400 |
Leases - Other Lease Informatio
Leases - Other Lease Information (Details) | Mar. 31, 2023 |
Leases [Abstract] | |
Weighted average remaining lease term (years) | 5 years 10 months 24 days |
Weighted average discount rate | 4.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Comerica Bank - Line of credit $ in Millions | 1 Months Ended | |||
Sep. 30, 2022 USD ($) | Aug. 31, 2013 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 100 | $ 50 | ||
Unused capacity, commitment fee percentage | 0.15% | |||
Total borrowings minimum threshold for covenant | $ 60 | |||
Senior net leverage ratio | 3 | |||
Revolving credit facility | Federal Funds Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 1% | |||
Revolving credit facility | Federal Funds Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 0.50% | |||
Revolving credit facility | Federal Funds Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 0.80% | |||
Revolving credit facility | BSBY Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 1% | |||
Revolving credit facility | BSBY Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 1.50% | |||
Revolving credit facility | BSBY Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 1.80% | |||
Revolving credit facility | Option to Increase | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 175 | |||
Increase available | 75 | |||
Revolving credit facility | Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Unused capacity, commitment fee percentage | 0.20% | |||
Unused capacity, maximum outstanding amount | $ 15 | |||
Letter of credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 15 | |||
Letter of credit | Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 15 | |||
Letters of credit, outstanding amount | $ 4.2 | $ 4.2 | ||
Swing Line Notes | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 5 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator | ||
Net loss attributable to common stockholders, basic | $ (10,812) | $ (34,133) |
Net loss attributable to common stockholders, diluted | $ (10,812) | $ (34,133) |
Denominator | ||
Weighted average shares, basic (in shares) | 116,159,428 | 114,103,766 |
Weighted average shares, diluted (in shares) | 116,159,428 | 114,103,766 |
Earnings Per Share | ||
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.09) | $ (0.30) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.09) | $ (0.30) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders -Schedule of Antidilutive Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 2,856,572 | 3,423,813 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 4,135,764 | 3,265,465 |
Unvested performance stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 4,397,688 | 4,397,688 |
Employee Stock Purchase Plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 376,493 | 177,113 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - Management - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party | ||
Related Party Transaction [Line Items] | ||
Other Receivables | $ 2.5 | $ 2.5 |
Secured promissory notes | ||
Related Party Transaction [Line Items] | ||
Notes payable, term | 8 years 6 months |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2023 USD ($) shares | Mar. 31, 2023 USD ($) shares | May 09, 2023 USD ($) leaseAgreement | |
Subsequent Event [Line Items] | |||
Future minimum lease payments | $ 198,743 | ||
Unvested restricted stock units | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | shares | 1,208,689 | ||
Minimum | |||
Subsequent Event [Line Items] | |||
Operating lease term period | 3 years | ||
Maximum | |||
Subsequent Event [Line Items] | |||
Operating lease term period | 18 years | ||
Subsequent Event | Unvested restricted stock units | 2021 Plan | Series A common stock | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | shares | 178,299 | ||
Grant date fair value | $ 2,000 | ||
Subsequent Event | New and Extended Lease Terms, Retail Space United States | |||
Subsequent Event [Line Items] | |||
Operating lease agreements | leaseAgreement | 3 | ||
Future minimum lease payments | $ 1,600 | ||
Subsequent Event | New and Extended Lease Terms, Retail Space United States | Minimum | |||
Subsequent Event [Line Items] | |||
Operating lease term period | 5 years | ||
Subsequent Event | New and Extended Lease Terms, Retail Space United States | Maximum | |||
Subsequent Event [Line Items] | |||
Operating lease term period | 7 years |