Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 16, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40448 | ||
Entity Registrant Name | FIGS, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-2005653 | ||
Entity Address, Address Line One | 2834 Colorado Avenue | ||
Entity Address, Address Line Two | Suite 100 | ||
Entity Address, City or Town | Santa Monica | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 90404 | ||
City Area Code | 424 | ||
Local Phone Number | 300-8330 | ||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | ||
Trading Symbol | FIGS | ||
Security Exchange Name | NYSE | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,051,699,837 | ||
Documents Incorporated by Reference | Portions of the Registrant’s definitive Proxy Statement relating to its 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated herein by reference in Part III of this Annual Report on Form 10-K where indicated. | ||
Entity Central Index Key | 0001846576 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Document Financial Statement Error Correction [Flag] | false | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 161,627,840 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 8,283,641 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Los Angeles, California |
Auditor Firm ID | 42 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 144,173 | $ 159,775 |
Short-term investments | 102,522 | 0 |
Accounts receivable | 7,469 | 6,866 |
Inventory, net | 119,040 | 177,976 |
Prepaid expenses and other current assets | 12,455 | 11,883 |
Total current assets | 385,659 | 356,500 |
Non-current assets | ||
Property and equipment, net | 24,864 | 11,024 |
Operating lease right-of-use assets | 43,059 | 15,312 |
Deferred tax assets | 18,291 | 10,971 |
Other assets | 1,336 | 1,257 |
Total non-current assets | 87,550 | 38,564 |
Total assets | 473,209 | 395,064 |
Current liabilities | ||
Accounts payable | 14,749 | 20,906 |
Operating lease liabilities | 8,230 | 3,408 |
Accrued expenses | 7,906 | 26,164 |
Accrued compensation and benefits | 7,312 | 3,415 |
Sales tax payable | 3,149 | 3,374 |
Gift card liability | 8,240 | 7,882 |
Deferred revenue | 2,160 | 2,786 |
Returns reserve | 2,989 | 3,458 |
Income tax payable | 2,557 | 0 |
Total current liabilities | 57,292 | 71,393 |
Non-current liabilities | ||
Operating lease liabilities, non-current | 38,884 | 15,756 |
Other non-current liabilities | 183 | 176 |
Total liabilities | 96,359 | 87,325 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity | ||
Preferred stock — par value $0.0001 per share, 100,000,000 shares authorized as of December 31, 2023 and December 31, 2022; zero shares issued and outstanding as of December 31, 2023 and December 31, 2022 | 0 | 0 |
Additional paid-in capital | 315,075 | 268,606 |
Accumulated other comprehensive income | 5 | 0 |
Retained earnings | 61,754 | 39,117 |
Total stockholders’ equity | 376,850 | 307,739 |
Total liabilities and stockholders’ equity | 473,209 | 395,064 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common stock | 16 | 16 |
Class B Common Stock | ||
Stockholders’ equity | ||
Common stock | $ 0 | $ 0 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | |
Common stock, shares, issued (in shares) | 161,457,403 | 159,351,307 |
Common stock, shares, outstanding (in shares) | 161,457,403 | 159,351,307 |
Class B Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | |
Common stock, shares, issued (in shares) | 8,283,641 | 7,210,795 |
Common stock, shares, outstanding (in shares) | 8,283,641 | 7,210,795 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net revenues | $ 545,646 | $ 505,835 | $ 419,591 |
Cost of goods sold | 168,683 | 151,375 | 118,370 |
Gross profit | 376,963 | 354,460 | 301,221 |
Operating expenses | |||
Selling | 125,149 | 118,449 | 81,923 |
Marketing | 77,094 | 77,692 | 58,713 |
General and administrative | 140,675 | 120,653 | 149,602 |
Total operating expenses | 342,918 | 316,794 | 290,238 |
Net income from operations | 34,045 | 37,666 | 10,983 |
Other income (loss), net | |||
Interest income (expense) | 6,775 | 1,708 | (239) |
Other expense | (13) | (647) | (885) |
Total other income (loss), net | 6,762 | 1,061 | (1,124) |
Net income before provision for income taxes | 40,807 | 38,727 | 9,859 |
Provision for income taxes | 18,170 | 17,541 | 19,415 |
Net income (loss) | $ 22,637 | $ 21,186 | $ (9,556) |
Earnings (loss) per share: | |||
Basic earnings (loss) per share (in USD per share) | $ 0.13 | $ 0.13 | $ (0.06) |
Diluted earnings (loss) per share (in USD per share) | $ 0.12 | $ 0.11 | $ (0.06) |
Weighted Average Number of Shares Outstanding | |||
Weighted-average shares outstanding—basic (in shares) | 168,065,721 | 165,268,185 | 159,177,713 |
Weighted-average shares outstanding—diluted (in shares) | 182,412,965 | 187,547,474 | 159,177,713 |
STATEMENTS OF COMPREHENSIVE INC
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 22,637 | $ 21,186 | $ (9,556) |
Other comprehensive income, net of tax | |||
Unrealized gain on short-term investments, net of tax | 5 | 0 | 0 |
Total other comprehensive income, net of tax | 5 | 0 | 0 |
Total comprehensive income (loss) | $ 22,642 | $ 21,186 | $ (9,556) |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Issuance of Class A Common Stock upon exchange of Common Stock | Issuance of Class B Common Stock upon exchange of Common Stock | Common Stock | Common Stock Issuance of Class A Common Stock upon exchange of Common Stock | Common Stock Issuance of Class B Common Stock upon exchange of Common Stock | Common Stock Class A Common Stock | Common Stock Class A Common Stock Issuance of Class A Common Stock upon exchange of Common Stock | Common Stock Class A Common Stock Issuance of Class A Common Stock upon exchange of Class B Common Stock | Common Stock Class A Common Stock Issuance of Class B Common Stock upon exchange of Class A Common Stock | Common Stock Class B Common Stock | Common Stock Class B Common Stock Issuance of Class B Common Stock upon exchange of Common Stock | Common Stock Class B Common Stock Issuance of Class A Common Stock upon exchange of Class B Common Stock | Common Stock Class B Common Stock Issuance of Class B Common Stock upon exchange of Class A Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Beginning Balance (in shares) at Dec. 31, 2020 | 154,444,851 | 0 | 0 | ||||||||||||||
Beginning Balance at Dec. 31, 2020 | $ 97,677 | $ 15 | $ 0 | $ 0 | $ 70,175 | $ 27,487 | $ 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Issuance of stock upon exchange of stock (in shares) | (142,851,852) | (12,148,029) | 142,851,852 | 1,468,324 | (1,478,482) | 12,148,029 | (1,468,324) | 1,478,482 | |||||||||
Issuance of stock upon exchange of stock | $ 0 | $ 0 | $ (14) | $ (1) | $ 14 | $ 1 | |||||||||||
Issuance of Class A Common Stock upon initial public offering, net of offering costs and related tax impacts (in shares) | 4,636,364 | ||||||||||||||||
Issuance of Class A Common Stock upon initial public offering, net of offering costs and related tax impacts | 95,101 | $ 1 | 95,100 | ||||||||||||||
Issuance of Class A Common Stock upon vesting of Restricted Stock, net of tax withholdings (in shares) | 1,880,548 | ||||||||||||||||
Restricted Stock surrendered for employees’ tax liability | (21,556) | (21,556) | |||||||||||||||
Capital contribution | 1,301 | 1,301 | |||||||||||||||
Stock-based compensation | 81,139 | 81,139 | |||||||||||||||
Stock option exercises (in shares) | 555,030 | 2,739,651 | |||||||||||||||
Stock option exercises | 907 | 907 | |||||||||||||||
Tax benefit of deductible IPO transaction costs | 560 | 560 | |||||||||||||||
Net income (loss) | (9,556) | (9,556) | |||||||||||||||
Other comprehensive income, net of tax | 0 | ||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | 152,098,257 | 12,158,187 | ||||||||||||||
Ending Balance at Dec. 31, 2021 | 245,573 | $ 0 | $ 15 | $ 1 | 227,626 | 17,931 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Issuance of stock upon exchange of stock (in shares) | 6,300,000 | (1,352,608) | (6,300,000) | 1,352,608 | |||||||||||||
Issuance of stock upon exchange of stock | 0 | $ 1 | $ (1) | ||||||||||||||
Issuance of Class A Common Stock upon initial public offering, net of offering costs and related tax impacts (in shares) | 1,777,374 | ||||||||||||||||
Capital contribution | 479 | 479 | |||||||||||||||
Stock-based compensation | 37,458 | 37,458 | |||||||||||||||
Stock option exercises and employee stock purchases (in shares) | 0 | 528,284 | |||||||||||||||
Stock option exercises and employee stock purchases | 3,043 | 3,043 | |||||||||||||||
Net income (loss) | 21,186 | 21,186 | |||||||||||||||
Other comprehensive income, net of tax | 0 | ||||||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | 159,351,307 | 7,210,795 | ||||||||||||||
Ending Balance at Dec. 31, 2022 | 307,739 | $ 0 | $ 16 | $ 0 | 268,606 | 39,117 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Issuance of stock upon exchange of stock (in shares) | (1,072,846) | 1,072,846 | |||||||||||||||
Issuance of Class A Common Stock upon initial public offering, net of offering costs and related tax impacts (in shares) | 2,371,621 | ||||||||||||||||
Restricted Stock surrendered for employees’ tax liability | (246) | (246) | |||||||||||||||
Stock-based compensation | $ 45,799 | 45,799 | |||||||||||||||
Stock option exercises (in shares) | 773,056 | ||||||||||||||||
Stock option exercises and employee stock purchases (in shares) | 0 | 807,321 | |||||||||||||||
Stock option exercises and employee stock purchases | $ 916 | 916 | |||||||||||||||
Net income (loss) | 22,637 | 22,637 | |||||||||||||||
Other comprehensive income, net of tax | 5 | 5 | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2023 | 0 | 161,457,403 | 8,283,641 | ||||||||||||||
Ending Balance at Dec. 31, 2023 | $ 376,850 | $ 0 | $ 16 | $ 0 | $ 315,075 | $ 61,754 | $ 5 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 22,637 | $ 21,186 | $ (9,556) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Depreciation and amortization expense | 2,942 | 1,924 | 1,424 |
Deferred income taxes | (7,320) | (732) | (3,732) |
Non-cash operating lease cost | 2,863 | 2,381 | 0 |
Stock-based compensation | 45,799 | 37,458 | 81,139 |
Accretion of discount on available-for-sale securities | (1,678) | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (603) | (4,425) | 3,339 |
Inventory | 58,936 | (91,908) | (36,333) |
Prepaid expenses and other current assets | (572) | (4,483) | (735) |
Other assets | (79) | (197) | 127 |
Accounts payable | (6,192) | 6,315 | 2,855 |
Accrued expenses | (18,657) | 1,487 | 17,983 |
Accrued compensation and benefits | 3,897 | (3,049) | 2,250 |
Sales tax payable | (225) | (354) | 652 |
Gift card liability | 358 | 2,292 | 2,571 |
Deferred revenue | (626) | 2,190 | (1,185) |
Returns reserve | (469) | 697 | 1,084 |
Income tax payable | 2,557 | (3,973) | 4,428 |
Deferred rent and lease incentive | 0 | 0 | (117) |
Operating lease liabilities | (2,660) | (2,071) | 0 |
Other non-current liabilities | 7 | (67) | 243 |
Net cash (used in) provided by operating activities | 100,915 | (35,329) | 66,437 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (16,348) | (5,348) | (2,712) |
Purchases of available-for-sale securities | (150,139) | 0 | 0 |
Maturities of available-for-sale securities | 49,300 | 0 | 0 |
Purchases of held-to-maturity securities | 0 | (500) | 0 |
Net cash used in investing activities | (117,187) | (5,848) | (2,712) |
Cash flows from financing activities: | |||
Proceeds from issuance of Class A common stock in initial public offering, net of underwriting discounts | 0 | 0 | 95,881 |
Payments of initial public offering issuance costs, net of reimbursements | 0 | 0 | (780) |
Payment of debt issuance and financing costs | 0 | 0 | (181) |
Proceeds from capital contributions | 0 | 479 | 1,301 |
Proceeds from stock option exercises and employee stock purchases | 916 | 3,043 | 907 |
Tax payments related to net share settlements on restricted stock units | (246) | 0 | (21,556) |
Net cash provided by financing activities | 670 | 3,522 | 75,572 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (15,602) | (37,655) | 139,297 |
Cash, cash equivalents, and restricted cash, beginning of period | 159,775 | 197,430 | 58,133 |
Cash, cash equivalents, and restricted cash, end of period | 144,173 | 159,775 | 197,430 |
Supplemental disclosures: | |||
Cash paid for income taxes, net of refunds received | 21,100 | 11,903 | 15,004 |
Property and equipment included in accounts payable and accrued expenses | 453 | 19 | 32 |
Deferred offering costs recorded in stockholders’ equity upon initial public offering, net of related tax impacts | $ 0 | $ 0 | $ 220 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS FIGS, Inc. (the “Company”), a Delaware corporation, was founded in 2013 and is a founder-led, direct-to-consumer healthcare apparel and lifestyle brand company. The Company designs and sells scrubwear and non-scrubwear, such as outerwear, underscrubs, footwear, compression socks, lab coats, loungewear and other apparel. The Company markets and sells its products primarily in the United States. Sales are primarily generated through the Company’s digital platforms. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company has prepared the accompanying financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Stock Split On May 19, 2021, the Company effected a nine-for-one forward stock split of its issued and outstanding common stock, stock options and RSUs. Accordingly, all share and per share information has been retroactively adjusted to reflect the stock split for all periods presented. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. Significant estimates include, but are not limited to, the valuation of the net realizable value of inventory, reserves for sales returns, allowances for doubtful accounts, stock-based compensation, contingent sales tax liability, and the useful lives and recoverability of long-lived assets. Actual results could differ from those estimates. Loss Contingencies The Company may be involved in legal proceedings, claims and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business resulting in loss contingencies. Loss contingencies are accrued for when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable; however, the range of such reasonably possible losses would be disclosed. Loss contingencies considered remote are generally not disclosed. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Short-term Investments The Company holds short-term investments in U.S. government debt securities and corporate debt securities. The Company’s short-term investments mature within 12-months or less and are classified as current assets on the Company’s balance sheets and have been classified and accounted for as available-for-sale securities. The Company determines the appropriate classification of its investments at the time of purchase and reevaluates their classification at each balance sheet date. The Company’s available-for-sale investments in debt securities are carried at fair value with unrealized gains and losses, net of taxes, reported within accumulated other comprehensive income in stockholders’ equity. Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses, with any allowance for credit losses recognized as a charge in other expense on the Company’s statements of operations. The Company did not record any credit losses on its available-for-sale debt securities in any of the periods presented. The Company determines gains or losses on the sale or maturities of short-term investments using the specific identification method and gains or losses are recorded in other expense on the Company’s statements of operations. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and short-term investments. The Company’s cash and cash equivalents and short-term investments are held with creditworthy financial institutions. Although the Company’s deposits held with banks may exceed the amount of federal insurance provided on such deposits, the Company has not experienced any losses in such accounts. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents and short-term investments for the amounts reflected on the balance sheets. Cash and Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. Accounts Receivable Accounts receivable consists of trade accounts receivables relating primarily to the credit card receivables arising from the sale of products to customers through the Company’s digital platforms. Trade accounts receivable is reported net of an allowance for doubtful accounts, which was zero as of December 31, 2023 and 2022. Other receivables generally relate to amounts due to the Company that result from activities that are not related to the direct sale of the Company’s products. Inventory, Net Inventory consists of finished goods and is accounted for using an average cost method. Inventory is valued at the lower of cost or net realizable value. The Company records a provision for excess and obsolete inventory to adjust the carrying value of inventory based on assumptions regarding future demand for the Company’s products. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration, and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence, or impaired inventory. Excess and obsolete inventory is charged to cost of goods sold. The Company’s allowance to write down inventory to the lower of cost or net realizable value was not material as of December 31, 2023 and 2022. Property and Equipment, Net Property and equipment are recorded at cost, net of accumulated depreciation and amortization. The Company depreciates property and equipment using the straight-line method over the estimated useful lives of the assets, which range from three years to ten years. Estimated useful life (years) Furniture and fixtures 7 Office equipment 5 Machinery and equipment 10 Computer equipment 3 Software and website development 5 Leasehold improvements Shorter of the lease term or the estimated life of the asset Upon the sale or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in general and administrative expense in the statements of income and comprehensive income. Maintenance and repairs are charged to the general and administrative expenses in the statements of income and comprehensive income as incurred, while expenditures for major renewals and betterments that extend the useful life of an asset or provide additional utility are capitalized. The Company has incurred costs related to the development of the Company’s websites. The Company capitalizes these website development costs, as applicable, in accordance with ASC Subtopic 350-50, Intangibles—Goodwill and Other—Website Development Costs (“ASC 350-50”). ASC 350-50 requires that costs incurred during the website development stage be capitalized. Capitalized website costs include salary and benefit costs for Company employees and contractors that develop the website. When the development phase is substantially complete and the website is ready for its intended purpose, capitalized costs are amortized using the straight-line method over the five-year useful life. Cloud Computing Costs The Company also capitalizes software license fees and implementation costs associated with cloud hosting arrangements that are service contracts. These amounts are included in prepaid expenses and other current assets and other assets in the accompanying balance sheets. Amortization of the software license fees is calculated using the straight-line method over the term of the service contract. Amortization of the implementation costs is calculated using the straight-line method based on the term of the service contract or based on the expected utilization of the asset and commences once the module or component is ready for its intended use. Impairment of Long-Lived Assets The Company tests its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset or group of assets to the future undiscounted cash flows expected to be generated by the asset or asset group. If the evaluation of the forecasted cash flows indicates that the carrying value of the assets is not recoverable, the assets are written down to their fair value. No such impairments were recognized for the years ended December 31, 2023, 2022, and 2021. Leases The Company determines whether an arrangement is a lease at inception of the agreement and reassesses that conclusion if the agreement is modified. At lease commencement, which is generally when the Company takes possession of the asset, the Company records a lease liability and corresponding right-of-use asset. Lease liabilities represent the present value of minimum lease payments over the expected lease term, which includes options to extend or terminate the lease when it is reasonably certain those options will be exercised. The present value of the lease liability is determined using the Company’s incremental borrowing rate at the lease commencement date. Right-of-use assets and lease liabilities are established on the balance sheets for leases with an expected term greater than one year. Leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company does not allocate consideration between lease and non-lease components. Right-of-use assets represent the right to control the use of the leased asset during the lease and are initially recognized in an amount equal to the lease liability. Beginning on the lease commencement date, expense is recognized on a straight-line basis over the term. Right-of-use assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Sales Tax Based on the 2018 Supreme Court decision in South Dakota v. Wayfair Inc. , an increasing number of states have considered or adopted laws or administrative practices, with or without notice, that impose new taxes on remote sellers to collect transaction taxes such as sales, consumption, or similar taxes. The Company follows the guidelines of ASC 450, Contingencies, and its financial statements reflect the current impact of such legislation. Revenue Recognition The Company recognizes revenues in accordance with Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). Revenue is recognized in an amount that reflects the consideration expected to be received in exchange for products. To determine revenue recognition for contracts with customers within the scope of ASC 606, the Company recognizes revenue from the commercial sales of products and contracts by applying the following five steps (i) identify the contract(s) with a customer; (ii) identify the performance obligations of the contract(s); (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract(s); and (v) recognize revenue when (or as) the Company satisfies the performance obligations. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the good or services it transfers to the customer. The Company recognizes revenue at a point in time when it satisfies a performance obligation and transfers control of the products to the respective customers, which occurs when the goods are transferred to a common carrier. Shipping and handling costs associated with outbound freight incurred to transfer a product to a customer are treated as a fulfillment activity, and as a result, any fees received from customers are included in the transaction price for the performance obligation of providing goods to the customer. The Company generally provides refunds for goods returned within 30 days from the original purchase date. A returns reserve is recorded by the Company based on the historical refund pattern. The returns reserve in the balance sheets was $3.0 million and $3.5 million as of December 31, 2023 and 2022, respectively. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The Company records deferred revenue when it receives payments in advance of the transfer of the goods to a common carrier. The amounts recorded are expected to be recognized as revenue within the 12 months following the balance sheet and, therefore, are classified as current liabilities in the balance sheets. The Company does not have significant contract balances other than deferred revenue, the allowance for sales returns and liabilities related to its gift cards. The Company recognized revenues of $2.7 million during the year ended December 31, 2023 related to the deferred revenue balance that existed at December 31, 2022. The Company recognized revenues of $2.9 million during the year ended December 31, 2023 related to redemptions from the gift card liability balance that existed at December 31, 2022. The Company recognizes estimated gift card breakage revenues under the redemption recognition method in proportion to actual gift card redemptions, over the period that remaining gift card values are redeemed. The Company recognized revenues of $2.4 million related to gift card breakage during the year ended December 31, 2023. The Company does not have significant contract acquisition costs. The following table presents the disaggregation of the Company’s net revenues for the years ended December 31, 2023, 2022, and 2021 (in thousands): Year ended 2023 2022 2021 By geography: United States $ 483,454 $ 462,126 $ 390,514 Rest of the world 62,192 43,709 29,077 $ 545,646 $ 505,835 $ 419,591 By product: Scrubwear $ 439,987 $ 415,937 $ 363,050 Non-Scrubwear 105,659 89,898 56,541 $ 545,646 $ 505,835 $ 419,591 Cost of Goods Sold Cost of goods sold consists primarily of the cost of purchased merchandise and includes import duties and other taxes, freight-in, defective merchandise returned by customers, inventory write-downs and other miscellaneous shrinkage as well as compensation and benefits related to embroidery personnel. Selling Expenses Selling expenses primarily include the cost of shipping and handling, fulfillment and credit card sales processing. Shipping and handling costs are associated with outbound freight after control over a product has transferred to a customer and, as such, are included in selling expenses. Marketing Expenses Marketing expenses primarily consist of digital and brand advertising. The Company’s marketing costs are primarily comprised of digital advertising through search engines and social media and are expensed as incurred. General and Administrative Expenses General and administrative expenses consist primarily of employee-related costs, including salaries, bonuses, benefits and stock-based compensation, charitable contributions, including the cost of product donations, other related costs, including certain third-party consulting and contractor expenses, certain facilities costs, software expenses, legal expenses and recruiting fees, and overhead. Stock-Based Compensation The Company measures and recognizes stock-based compensation expense for all stock option awards granted to employees and non-employees based on their estimated fair values as of the grant date using the Black-Scholes option-pricing model. The Company’s use of the Black-Scholes option-pricing model to estimate the fair value of stock options granted requires the input of various assumptions which are as follows: Risk-free interest rate—determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected volatility— the Company derives its volatility from the average historical stock volatilities of several peer public companies over a period equivalent to the expected term of the awards. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. Expected dividend yield—the Company has not paid, and does not currently anticipate paying, cash dividends on its common stock; therefore, the expected dividend yield is assumed to be zero. Expected term—the expected term of the Company’s stock options granted to employees has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options, which calculates the expected term as the average of the time-to-vesting and the contractual life of options, as the Company does not have enough historical data to estimate the expected term. Fair value of common stock—the fair value of the Company’s common stock is the closing stock price of the Company’s Class A common stock as reported on the New York Stock Exchange. The Company measures the fair value of restricted stock units (“RSUs”) granted to employees and non-employees based on the fair value of its Class A common stock on the grant date. The Company’s RSU grants vest upon the satisfaction of either a service condition or both a service condition and a performance condition. The service condition is generally satisfied ratably over four years. The performance condition related to the Company’s outstanding performance-based awards was satisfied in connection with the Company's initial public offering (“IPO”). For employee and non-employee awards that vest upon the satisfaction of a service condition, the Company recognizes compensation expense based on the grant date fair value of the award over the requisite service period on a straight-line basis, which is generally the vesting period of the respective award based on the grant date fair value of the award. The Company accounts for forfeitures as they occur. The Company classifies stock-based compensation expense in its statements of income and comprehensive income in the same manner in which the award recipient’s cash compensation costs are classified. For the years ended December 31, 2023, 2022, and 2021 the Company recorded stock-based compensation expense of $45.8 million, $37.5 million, and $81.1 million, respectively, which are all recorded in general and administrative expense on the statements of operations. Income Taxes The Company accounts for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributed to temporary differences between the financial reporting basis and the respective tax basis of these assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for carryforwards and other deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. Based on its facts, the Company considered all available evidence, both positive and negative, including historical levels of taxable income, expectations, and risks associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals and litigation processes, if any. The second step is to measure the largest amount of tax benefit as the largest amount that is more likely than not to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss), other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders, as well as unrealized gains and losses, net of taxes, related to the Company's available-for-sale investments in debt securities. Earnings (loss) per Share The Company computes earnings (loss) per share using the two-class method required for multiple classes of common stock and participating securities. Basic earnings (loss) per share (“Basic EPS”) is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the year. Diluted earnings (loss) per share (“Diluted EPS”) is calculated by dividing net income (loss) by the weighted-average number of common and common equivalent shares outstanding during the year. Common equivalent shares are calculated using the treasury stock method and are excluded from the computation of diluted earnings per share in periods for which they have an anti-dilutive effect. Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker (“CODM”), in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company manages its operations as a single segment for the purposes of assessing performance and making operating and resource allocation decisions. Therefore, the Company has concluded that it has one reportable segment. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This ASU is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within annual period beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which requires disclosure of disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for public companies with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements. |
Sales Tax | Sales Tax Based on the 2018 Supreme Court decision in South Dakota v. Wayfair Inc. , an increasing number of states have considered or adopted laws or administrative practices, with or without notice, that impose new taxes on remote sellers to collect transaction taxes such as sales, consumption, or similar taxes. The Company follows the guidelines of ASC 450, Contingencies, and its financial statements reflect the current impact of such legislation. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES The Company’s cash equivalents consist of money market funds and highly liquid investments with original maturities of 90 days or less from the date of purchase. The Company classifies cash equivalents and short-term investments within Level 1 or Level 2 of the fair value hierarchy. The following tables present the Company’s cash equivalents and short-term investments by significant investment category and fair value level as of December 31, 2023 and 2022 (in thousands): December 31, 2023 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1: Money market funds $ 117,328 $ — $ — $ 117,328 U.S. government securities 64,630 12 — 64,642 Level 2: Corporate paper 37,888 — (7) 37,881 Total $ 219,846 $ 12 $ (7) $ 219,851 December 31, 2022 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1: Money market funds $ 102,908 $ — $ — $ 102,908 Total $ 102,908 $ — $ — $ 102,908 There have been no transfers of assets between fair value levels during the periods presented. The carrying values of other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following (in thousands): December 31, 2023 2022 Trade $ 6,549 $ 6,288 Other 920 578 $ 7,469 $ 6,866 |
Prepaid Expense and Other Curre
Prepaid Expense and Other Current Assets | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2023 2022 Inventory deposits $ 3,012 $ 2,086 Prepaid expenses 8,173 6,588 Prepaid taxes — 2,186 Other 1,270 1,023 $ 12,455 $ 11,883 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following (in thousands): December 31, 2023 2022 Furniture and fixtures $ 1,441 $ 1,189 Office equipment 1,031 937 Machinery and equipment 2,753 2,853 Computer equipment 2,056 1,486 Software and website design 8,061 6,209 Leasehold improvements 3,696 3,126 Capital projects in progress 13,555 11 Total property and equipment 32,593 15,811 Less: accumulated depreciation and amortization (7,729) (4,787) Property and equipment, net $ 24,864 $ 11,024 Depreciation and amortization expense for the years ended December 31, 2023, 2022, and 2021 on property and equipment was $2.9 million, $1.9 million, and $1.4 million, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consisted of the following (in thousands): December 31, 2023 2022 Accrued inventory $ 2,126 $ 8,906 Accrued shipping 565 2,149 Accrued selling expenses 2,601 10,648 Accrued legal expenses 24 395 Accrued marketing expenses 466 1,747 Other accrued expenses 2,124 2,319 $ 7,906 $ 26,164 |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS On September 7, 2021, the Company, as borrower, entered into a credit agreement with Bank of America, N.A. for a $100.0 million revolving credit facility, including capacity to issue letters of credit (the “2021 Facility”). The 2021 Facility is secured by substantially all assets of the Company and its material subsidiaries, subject to customary exceptions. The 2021 Facility has a maturity date of September 7, 2026 (“2021 Facility Maturity Date”). As of December 31, 2023, the Company had letters of credit aggregating to $4.9 million outstanding under the 2021 Facility and available borrowings of $95.1 million. As of December 31, 2023, the Company had no outstanding borrowings under the 2021 Facility. Borrowings under the 2021 Facility are payable on the 2021 Facility Maturity Date. Borrowings bear interest at either (a) the Eurodollar Rate (as defined in the 2021 Facility) plus 1.125% or (b) the Base Rate (as defined in the 2021 Facility) plus 0.125%. The interest rate for undrawn amounts is 0.175%. Costs associated with entering into the 2021 Facility were not material. On February 27, 2023, the Company entered into a first amendment (the “First Amendment”) to the 2021 Facility. The First Amendment amends the Credit Agreement to replace the London interbank offered rate (“LIBOR”) with a term rate based on the Secured Overnight Financing Rate (“SOFR”), together with certain administrative changes to facilitate such replacement. Except as amended by the First Amendment, the remaining terms of the Credit Agreement remain in full force and effect. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS In 2021, Tulco, LLC reimbursed the Company for certain of the Company’s professional fees in connection with the IPO. These reimbursements totaled $4.9 million and the Company received payment of the reimbursements during the year ended December 31, 2021. In addition, Tulco, LLC reimbursed the Company for certain of the Company’s professional fees in connection with their participation as a selling stockholder in the Company’s follow-on offering, completed on September 20, 2021 (the “Follow-on Offering”). These reimbursements totaled $0.5 million. The Company received payment of the amounts due from Tulco, LLC during the year ended December 31, 2021. In 2022, the Company’s Executive Chair and Chief Executive Officer paid the Company, at their election, an aggregate amount of $0.4 million for certain of the Company’s professional fees in connection with the Follow-on Offering in which they participated as selling stockholders. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Taxes on Remote Sellers The Company is subject to state laws or administrative practices with respect to the taxes on remote sellers. In accordance with ASC 450, Contingencies, the Company recorded $1.6 million within sales tax payable on the Company’s balance sheets as of December 31, 2023 and 2022 as an estimate of contingent sales tax payable. Inventory Purchase Obligations Inventory purchase obligations as of December 31, 2023 were approximately $67.2 million. These inventory purchase obligations can be impacted by various factors, including the timing of issuing orders and the timing of the shipment of orders. Legal Contingencies Legal claims may arise from time to time in the normal course of business, the results of which may have a material effect on the Company’s accompanying financial statements. A putative securities class action and related derivative suits against the Company and certain of its executive officers and directors are currently pending. The Company intends to vigorously defend against such claims. The Company has determined that any potential loss is neither probable nor reasonably estimable and an accrual has not been recorded. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating lease agreements for its office space, retail stores, and fulfillment center. The Company’s lease agreements have initial terms that expire between 2028 and 2030. Certain of the Company’s lease agreements include rent abatement periods, escalating rent payment provisions, and provide for an option to extend or terminate the lease. The Company has a sublease agreement classified as an operating lease for additional office space with an initial term expiring in 2026. The sublease includes an option to extend the agreement, at the Company’s discretion, if the sublandlord declines to terminate its master lease. The sublease includes a rent abatement period and escalating rent payment provisions. The operating lease and sublease agreements included in the measurement of lease liabilities do not reflect options to extend or terminate, as the Company does not consider the exercise of these options to be reasonably certain. The Company’s lease and sublease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company recognizes operating lease expense on a straight-line basis over the lease term. Operating lease expense for the years ended December 31, 2023, 2022, and 2021 were $4.2 million, $2.8 million, and $1.8 million, respectively. Short-term lease expense for the years ended December 31, 2023 and 2022 was $9.2 million and $3.7 million, respectively. Cash payments included in the measurement of operating lease liabilities were $4.0 million for the year ended December 31, 2023. Right of use assets obtained in exchange for operating lease liabilities were $31.0 million for the year ended December 31, 2023. As the rates implicit in the Company’s outstanding leases are not determinable, the Company uses its incremental borrowing rate based on information available on the lease commencement date to determine the present value of lease payments. The weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases at December 31, 2023 were as follows: Weighted-average remaining lease term 6.4 years Weighted-average discount rate 6.2 % Future undiscounted lease payments, and a reconciliation of these payments to the Company’s operating lease liabilities at December 31, 2023, were as follows (in thousands): Year ended December 31, 2024 $ 8,494 2025 9,206 2026 8,047 2027 8,220 2028 8,473 Thereafter 15,182 Total lease payments $ 57,622 Less: Imputed interest 10,508 Total lease liabilities $ 47,114 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of the Company’s provision for income taxes were as follows (in thousands): December 31, 2023 2022 2021 Current Federal $ 20,008 $ 16,731 $ 17,790 State 5,482 1,542 5,357 Total current provision 25,490 18,272 23,147 Deferred Federal (5,954) (2,039) (3,014) State (1,366) 1,307 (718) Total deferred benefit (7,320) (732) (3,732) Provision for income taxes $ 18,170 $ 17,541 $ 19,415 On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (“IRA”), which, among other things, implements a 15% alternative minimum tax on corporations with book income in excess of $1 billion, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. The effective date of these provisions was January 1, 2023. The Company has reviewed the provisions of the law and determined that they did not have a material impact on its financial statements. The Company will continue to evaluate the impact of the IRA as further information becomes available. On June 29, 2020, Assembly Bill 85 (“A.B. 85”) was signed into California law. A.B. 85 provides for a three-year suspension of the use of net operating losses for medium and large businesses and a three-year cap on the use of business incentive tax credits to offset no more than $5.0 million of tax per year. A.B. 85 suspends the use of net operating losses for taxable years 2020, 2021 and 2022 for certain taxpayers with taxable income of $1.0 million or more. The carryover period for any net operating losses that are suspended under this provision will be extended. A.B. 85 also states that business incentive tax credits including carryovers may not reduce the applicable tax by more than $5.0 million for taxable years 2020, 2021 and 2022. On February 9, 2022, Senate Bill 113 (“S.B.113”) was signed into law. S.B.113 shortened the previously enacted suspension of net operating loss deductions and eliminated the restrictions on the use of certain business tax credits for taxable years beginning on or after January 1, 2022. The Company was able to partially offset its California taxable income with its net operating losses for the years ended December 31, 2023 and 2022. A reconciliation of income tax expense using the U.S. statutory federal income tax rate to the provision for income taxes is as follows (in thousands): December 31, 2023 2022 2021 Tax expense at U.S. statutory rate $ 8,569 $ 8,133 $ 2,083 State tax expense, net of federal benefit 1,828 1,498 606 Non-deductible expenses (831) (380) 344 Stock-based compensation 3,956 4,921 (28,727) Excess compensation limitations 4,365 4,776 45,359 Foreign-derived intangible income deduction — (3) (455) R&D tax credit benefit — — (230) Uncertain tax positions 7 (39) 280 Change in valuation allowance — — — Provision to return true up 203 (1,823) (121) Other 73 458 276 Provision for income taxes $ 18,170 $ 17,541 $ 19,415 The Company’s effective tax rate for years ending December 31, 2023, 2022, and 2021 was 44.5%, 45.3%, and 196.90%, respectively. The Company’s effective tax rate in each of 2023 and 2022 is higher than the federal statutory tax rate mainly due to state tax expense and permanent disallowance of certain stock-based compensation for tax purposes. In 2021, the Company’s effective tax rate was further driven up by lower pre-tax book income resulting from one-time IPO charges. As of December 31, 2023 and 2022, the Company recorded no valuation allowance due to its cumulative pretax income position. Significant components of deferred tax balances were as follows (in thousands): December 31, 2023 2022 Deferred tax assets Net operating losses $ 334 $ 371 Uniform capitalization adjustment to inventory 9,930 5,741 Stock-based compensation 3,959 2,236 Accrued compensation and benefits 1,444 579 Lease liability 11,812 4,837 Inventory reserve 1,407 837 Returns reserve 749 873 Sales tax accrual 406 421 Other 856 969 Total deferred tax assets 30,897 16,864 Less: valuation allowance — — Total net deferred tax assets 30,897 16,864 Deferred tax liabilities Property and equipment (1,811) (2,028) Right-of-use asset (10,795) (3,865) Total deferred tax liabilities (12,606) (5,894) Net deferred tax assets $ 18,291 $ 10,971 As of December 31, 2023, the Company had available federal net operating loss (“NOL”) carryforwards of approximately $1.2 million, which begin to expire in 2037. The Company also had available California NOL carryforwards of approximately $1.1 million as of December 31, 2023, which begin to expire in 2038. The usage of the Company’s federal and California NOL carryforwards is subject to the limitations imposed by Section 382 of the Internal Revenue Code. Further, the Company’s California NOL was suspended in 2021. The tax years ending December 31, 2020, through December 31, 2022 remain open and subject to audit by the Internal Revenue Service. The tax years ending December 31, 2019, through December 31, 2022, remain open and subject to audit by state tax authorities. As of December 31, 2023 and 2022, the Company had $0.2 million of uncertain tax positions, excluding interest and penalties. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions as income tax expense. During the years ended December 31, 2023, 2022, and 2021 interest and penalties were immaterial. There were no activities during the year ended December 31, 2023 related to the uncertain tax positions. The following table summarizes the activity related to our uncertain tax positions during the years ended December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Beginning balance of uncertain tax positions $ 167 $ 167 Increases related to current year tax positions — — Decreases related to current year tax positions — — Increases related to prior year tax positions — — Changes due to lapse of statute of limitations — — Settlement with taxing authorities — — Ending balance of uncertain tax positions $ 167 $ 167 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Amended 2016 Equity Incentive Plan In 2016, the Company adopted the 2016 Equity Incentive Plan (as amended, the “2016 Plan”). The 2016 Plan provided for the issuance of restricted stock awards (“RSAs”), RSUs, stock appreciation rights (“SARs”), incentive stock options, non-qualified stock options and other stock-based awards to employees and consultants of the Company and its affiliates and members of the Board of Directors of the Company (the “Board”). Prior to its termination, the number of shares of Class A common stock authorized for issuance under the 2016 Plan was 51,716,934. Only incentive stock options, non-qualified stock options and RSUs were granted under the 2016 Plan. On May 18, 2021, the Board approved the termination of the 2016 Plan. Any remaining shares of common stock available for issuance under the 2016 Plan as of such date were added to the shares of our Class A common stock reserved for issuance under the Company’s 2021 Equity Incentive Award Plan (the “2021 Plan”). Additionally, any shares of common stock subject to awards granted under the 2016 Plan that expire, lapse or are terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited following the effective date of the 2021 Plan will become available for issuance under the 2021 Plan. 2021 Equity Incentive Award Plan and 2021 Employee Stock Purchase Plan On May 18, 2021, the Board adopted and the stockholders of the Company approved the 2021 Plan and the 2021 Employee Stock Purchase Plan (the “ESPP”). The number of shares reserved for issuance under the 2021 Plan increases automatically on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) a number of shares of Class A common stock such that the aggregate number of Shares available for grant under the 2021 Plan immediately following such increase shall equal 5% of the aggregate number of shares of Class A common stock and Class B common stock outstanding on the final day of the immediately preceding calendar year, and (B) such lesser number of shares of Class A common stock as determined by our Board. The 2021 Plan authorizes the granting of RSAs, RSUs, SARs, incentive stock options, non-qualified stock options, dividend equivalents, and other stock or cash awards to employees and consultants of the Company and its subsidiaries and members of the Board. The number of shares of the Company’s Class A common stock that will be available for issuance and sale to eligible employees under the ESPP increases automatically on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) 1% of the shares of Class A common stock and Class B common stock outstanding as of the last day of the immediately preceding fiscal year and (B) such lesser number of shares of Class A common stock as determined by our Board. The ESPP permits eligible employees to purchase shares of the Company’s Class A common stock at a purchase price per share equal to 85% of the lesser of (i) the fair market value of the Company’s Class A common stock on the first trading day of an applicable offering period or (ii) the last trading day of a purchase period in an applicable offering period. All options and SARs granted under the 2021 Plan will generally expire ten years from the date of grant if not exercised. In the event of a termination of employment, any unvested portion of an option will generally be forfeited immediately. Any vested options may generally be exercised within three months, except for (i) instances of termination due to death or disability whereby any vested options may be exercised within one year and (ii) instances of termination “with cause” whereby any vested options are forfeited immediately. Shares that expire, lapse or are terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited will become available for future awards under the 2021 Plan. In addition, shares of Class A common stock that are tendered to the Company by a participant to satisfy the applicable exercise or purchase price of an award and/or to satisfy any applicable tax withholding obligation with respect to an award will be added to the number of shares of Class A common stock available for future awards. Additionally, any shares of Class A common stock subject to awards granted under the 2016 Plan that expire, lapse or are terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited following the effective date of the 2021 Plan will become available for issuance under the 2021 Plan. The 2021 Plan is administered by the Board with respect to awards to non-employee directors and by the Compensation Committee of the Board with respect to other participants. As of December 31, 2023, the number of shares available for issuance under the 2021 Plan and ESPP were 3,863,941 and 3,172,104, respectively. Stock Option Valuation The assumptions that the Company used to determine the grant date fair value of stock options granted were as follows, presented on a weighted-average basis: December 31, 2023 2022 2021 Risk free interest rate 3.63 % 2.94 % 1.15 % Expected volatility 40 % 38 % 48 % Expected dividend yield 0 % 0 % 0 % Expected term (in years) 6.25 5.91 6.25 A summary of stock option activity under the 2016 Plan and 2021 Plan, is as follows: Stock Options Outstanding Number of Shares Weighted Average Weighted Average Aggregate Outstanding at December 31, 2022 42,397,911 $ 6.11 7.38 $ 105 Granted 4,059,936 7.35 Exercised (773,056) 0.90 Forfeited (1,683,631) 11.06 Outstanding at December 31, 2023 44,001,160 $ 6.13 6.56 $ 108 Exercisable at December 31, 2023 33,366,714 $ 5.17 6.11 $ 99 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Class A common stock for those stock options that had exercise prices lower than the fair value of the Class A common stock as of the end of the period. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2023, 2022, and 2021 was $5.6 million, $3.2 million, and $115.1 million, respectively. The weighted-average grant date fair values per share of the Company’s stock options granted during the years ended December 31, 2023, 2022, and 2021 was $3.35, $5.02, and $10.02, respectively. The grant date fair value of stock options vested during the years ended December 31, 2023, 2022 and 2021 was $27.3 million, $22.8 million, and $49.8 million, respectively. As of December 31, 2023, total unrecognized compensation cost related to unvested stock option awards was $47.2 million, to be recognized over a weighted-average period of 2.1 years. Stock Option Modifications During the year ended December 31, 2021, the Board determined to accelerate the vesting of certain employee stock option awards, subject to and effective as of the closing of the Company’s IPO, and further subject to the employee’s continued service with the Company through the closing of the IPO, as described in the registration statement on Form S-1 (File No. 333-255797) we filed in connection with the IPO, declared effective by the SEC on May 26, 2021. Upon the modification of the stock options, the Company determined no incremental fair value was required to be recorded as the awards would continue to vest both prior to and post modification and the modification of the stock options did not change award valuation inputs or assumptions. The Company recorded $32.8 million of expense during the second quarter of 2021 as a result of the accelerated vesting of stock options. During the year ended December 31, 2021, in connection with the retirement of the Company’s previous Chief Financial Officer, the Board determined to accelerate the vesting of certain stock option awards held by the retiring executive and provide that such stock option awards may be exercised for one year following the retirement date. Upon the modification of the stock options, the Company determined that $5.7 million of incremental fair value was required to be recorded related to the 275,000 stock options which were not probable of vesting prior to the modification but concluded to be probable of vesting based on the modified terms of the award. The modification of stock options changed the award valuation inputs, including the remaining term of the award. The Company recorded $5.7 million of expense related to the stock option modification during the fourth quarter of 2021 as a result of the accelerated vesting of stock options. Restricted Stock Awards and Restricted Stock Units During the year ended December 31, 2020, the Company granted 5,410,440 RSUs which vest upon the satisfaction of both a service and a performance condition. The service condition for these awards is satisfied over four years. The performance condition is satisfied upon the occurrence of a qualifying event, generally defined as a change of control transaction or an IPO. The performance condition for these awards was satisfied in connection with our IPO. Upon the satisfaction of the performance condition, the Company recorded $16.0 million of stock-based compensation expense related to these awards and withheld 762,359 shares of common stock, based on the IPO price of $22.00 per share, to satisfy the tax remittances of approximately $16.8 million. The fair value of RSUs and RSAs that vested during the years ended December 31, 2023, 2022, and 2021 was $17.4 million, $18.4 million, and $72.6 million respectively. As of December 31, 2023, total unrecognized compensation cost related to unvested RSUs was $31.4 million, to be recognized over a weighted-average period of 2.7 years. A summary of RSU activity under the 2016 Plan and 2021 Plan is as follows: Number of Shares Weighted average Unvested restricted stock units at December 31, 2022 3,548,431 $ 11.96 Granted 2,497,561 7.30 Vested (2,397,527) 8.75 Forfeited (383,792) 12.23 Unvested restricted stock units at December 31, 2023 3,264,673 $ 10.71 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | ARNINGS (LOSS) PER SHARE Basic EPS and Diluted EPS attributable to common stockholders is calculated in conformity with the two-class method required for participating securities: Class A and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to twenty votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock. As the economic rights of Class A and Class B common stock are identical, undistributed earnings are allocated on a proportionate basis and presented on a combined basis. The following table sets forth the computation of Basic EPS and Diluted EPS and a reconciliation of the weighted average number of common and common equivalent shares outstanding for the years ended December 31, 2023, 2022, and 2021 (in thousands, except share and per share amounts). Year ended December 31, 2023 2022 2021 Numerator: Net income (loss) $ 22,637 $ 21,186 $ (9,556) Denominator: Weighted-average shares—basic 168,065,721 165,268,185 159,177,713 Effect of dilutive stock options 13,502,538 20,362,453 — Effect of dilutive restricted stock units 844,705 1,916,835 — Weighted-average shares—diluted 182,412,965 187,547,474 159,177,713 Earnings (loss) per share: Basic earnings (loss) per share $ 0.13 $ 0.13 $ (0.06) Effect of dilutive stock options and restricted stock units (0.01) (0.02) — Diluted earnings (loss) per share $ 0.12 $ 0.11 $ (0.06) The Company excluded the following weighted average common equivalent shares from the computation of Diluted EPS for the years ended December 31, 2023, 2022, and 2021 because including them would have had an anti-dilutive effect: Year ended December 31, 2023 2022 2021 Stock options to purchase common stock 11,219,739 5,845,057 40,164,214 Restricted stock units 2,278,137 1,078,486 4,316,091 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 22,637 | $ 21,186 | $ (9,556) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. Significant estimates include, but are not limited to, the valuation of the net realizable value of inventory, reserves for sales returns, allowances for doubtful accounts, stock-based compensation, contingent sales tax liability, and the useful lives and recoverability of long-lived assets. Actual results could differ from those estimates. |
Loss Contingencies | Loss Contingencies The Company may be involved in legal proceedings, claims and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business resulting in loss contingencies. Loss contingencies are accrued for when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable; however, the range of such reasonably possible losses would be disclosed. Loss contingencies considered remote are generally not disclosed. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use. Assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. |
Short-term Investments | Short-term Investments The Company holds short-term investments in U.S. government debt securities and corporate debt securities. The Company’s short-term investments mature within 12-months or less and are classified as current assets on the Company’s balance sheets and have been classified and accounted for as available-for-sale securities. The Company determines the appropriate classification of its investments at the time of purchase and reevaluates their classification at each balance sheet date. The Company’s available-for-sale investments in debt securities are carried at fair value with unrealized gains and losses, net of taxes, reported within accumulated other comprehensive income in stockholders’ equity. Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses, with any allowance for credit losses recognized as a charge in other expense on the Company’s statements of operations. The Company did not record any credit losses on its available-for-sale debt securities in any of the periods presented. The Company determines gains or losses on the sale or maturities of short-term investments using the specific identification method and gains or losses are recorded in other expense on the Company’s statements of operations. |
Concentration of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and short-term investments. The Company’s cash and cash equivalents and short-term investments are held with creditworthy financial institutions. Although the Company’s deposits held with banks may exceed the amount of federal insurance provided on such deposits, the Company has not experienced any losses in such accounts. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash and cash equivalents and short-term investments for the amounts reflected on the balance sheets. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable consists of trade accounts receivables relating primarily to the credit card receivables arising from the sale of products to customers through the Company’s digital platforms. Trade accounts receivable is reported net of an allowance for doubtful accounts, which was zero as of December 31, 2023 and 2022. Other receivables generally relate to amounts due to the Company that result from activities that are not related to the direct sale of the Company’s products. |
Inventory, Net | Inventory, Net Inventory consists of finished goods and is accounted for using an average cost method. Inventory is valued at the lower of cost or net realizable value. The Company records a provision for excess and obsolete inventory to adjust the carrying value of inventory based on assumptions regarding future demand for the Company’s products. Lower of cost or net realizable value is evaluated by considering obsolescence, excessive levels of inventory, deterioration, and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence, or impaired inventory. Excess and obsolete inventory is charged to cost of goods sold. |
Property and Equipment Net | Property and Equipment, Net Property and equipment are recorded at cost, net of accumulated depreciation and amortization. The Company depreciates property and equipment using the straight-line method over the estimated useful lives of the assets, which range from three years to ten years. Estimated useful life (years) Furniture and fixtures 7 Office equipment 5 Machinery and equipment 10 Computer equipment 3 Software and website development 5 Leasehold improvements Shorter of the lease term or the estimated life of the asset Upon the sale or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in general and administrative expense in the statements of income and comprehensive income. Maintenance and repairs are charged to the general and administrative expenses in the statements of income and comprehensive income as incurred, while expenditures for major renewals and betterments that extend the useful life of an asset or provide additional utility are capitalized. The Company has incurred costs related to the development of the Company’s websites. The Company capitalizes these website development costs, as applicable, in accordance with ASC Subtopic 350-50, Intangibles—Goodwill and Other—Website Development Costs (“ASC 350-50”). ASC 350-50 requires that costs incurred during the website development stage be capitalized. Capitalized website costs include salary and benefit costs for Company employees and contractors that develop the website. When the development phase is substantially complete and the website is ready for its intended purpose, capitalized costs are amortized using the straight-line method over the five-year useful life. |
Cloud Computing Costs | Cloud Computing Costs The Company also capitalizes software license fees and implementation costs associated with cloud hosting arrangements that are service contracts. These amounts are included in prepaid expenses and other current assets and other assets in the accompanying balance sheets. Amortization of the software license fees is calculated using the straight-line method over the term of the service contract. Amortization of the implementation costs is calculated using the straight-line method based on the term of the service contract or based on the expected utilization of the asset and commences once the module or component is ready for its intended use. |
Impairment of Long Lived Assets | Impairment of Long-Lived Assets |
Leases | Leases The Company determines whether an arrangement is a lease at inception of the agreement and reassesses that conclusion if the agreement is modified. At lease commencement, which is generally when the Company takes possession of the asset, the Company records a lease liability and corresponding right-of-use asset. Lease liabilities represent the present value of minimum lease payments over the expected lease term, which includes options to extend or terminate the lease when it is reasonably certain those options will be exercised. The present value of the lease liability is determined using the Company’s incremental borrowing rate at the lease commencement date. Right-of-use assets and lease liabilities are established on the balance sheets for leases with an expected term greater than one year. Leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company does not allocate consideration between lease and non-lease components. Right-of-use assets represent the right to control the use of the leased asset during the lease and are initially recognized in an amount equal to the lease liability. Beginning on the lease commencement date, expense is recognized on a straight-line basis over the term. Right-of-use assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. |
Sales Tax | Sales Tax Based on the 2018 Supreme Court decision in South Dakota v. Wayfair Inc. , an increasing number of states have considered or adopted laws or administrative practices, with or without notice, that impose new taxes on remote sellers to collect transaction taxes such as sales, consumption, or similar taxes. The Company follows the guidelines of ASC 450, Contingencies, and its financial statements reflect the current impact of such legislation. |
Revenue Recognition and Selling Expenses | Revenue Recognition The Company recognizes revenues in accordance with Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). Revenue is recognized in an amount that reflects the consideration expected to be received in exchange for products. To determine revenue recognition for contracts with customers within the scope of ASC 606, the Company recognizes revenue from the commercial sales of products and contracts by applying the following five steps (i) identify the contract(s) with a customer; (ii) identify the performance obligations of the contract(s); (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract(s); and (v) recognize revenue when (or as) the Company satisfies the performance obligations. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the good or services it transfers to the customer. The Company recognizes revenue at a point in time when it satisfies a performance obligation and transfers control of the products to the respective customers, which occurs when the goods are transferred to a common carrier. Shipping and handling costs associated with outbound freight incurred to transfer a product to a customer are treated as a fulfillment activity, and as a result, any fees received from customers are included in the transaction price for the performance obligation of providing goods to the customer. The Company generally provides refunds for goods returned within 30 days from the original purchase date. A returns reserve is recorded by the Company based on the historical refund pattern. The returns reserve in the balance sheets was $3.0 million and $3.5 million as of December 31, 2023 and 2022, respectively. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The Company records deferred revenue when it receives payments in advance of the transfer of the goods to a common carrier. The amounts recorded are expected to be recognized as revenue within the 12 months following the balance sheet and, therefore, are classified as current liabilities in the balance sheets. Selling Expenses Selling expenses primarily include the cost of shipping and handling, fulfillment and credit card sales processing. Shipping and handling costs are associated with outbound freight after control over a product has transferred to a customer and, as such, are included in selling expenses. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold consists primarily of the cost of purchased merchandise and includes import duties and other taxes, freight-in, defective merchandise returned by customers, inventory write-downs and other miscellaneous shrinkage as well as compensation and benefits related to embroidery personnel. |
Marketing Expenses | Marketing Expenses Marketing expenses primarily consist of digital and brand advertising. The Company’s marketing costs are primarily comprised of digital advertising through search engines and social media and are expensed as incurred. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses consist primarily of employee-related costs, including salaries, bonuses, benefits and stock-based compensation, charitable contributions, including the cost of product donations, other related costs, including certain third-party consulting and contractor expenses, certain facilities costs, software expenses, legal expenses and recruiting fees, and overhead. |
Share Based Compensation | Stock-Based Compensation The Company measures and recognizes stock-based compensation expense for all stock option awards granted to employees and non-employees based on their estimated fair values as of the grant date using the Black-Scholes option-pricing model. The Company’s use of the Black-Scholes option-pricing model to estimate the fair value of stock options granted requires the input of various assumptions which are as follows: Risk-free interest rate—determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected volatility— the Company derives its volatility from the average historical stock volatilities of several peer public companies over a period equivalent to the expected term of the awards. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. Expected dividend yield—the Company has not paid, and does not currently anticipate paying, cash dividends on its common stock; therefore, the expected dividend yield is assumed to be zero. Expected term—the expected term of the Company’s stock options granted to employees has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options, which calculates the expected term as the average of the time-to-vesting and the contractual life of options, as the Company does not have enough historical data to estimate the expected term. Fair value of common stock—the fair value of the Company’s common stock is the closing stock price of the Company’s Class A common stock as reported on the New York Stock Exchange. The Company measures the fair value of restricted stock units (“RSUs”) granted to employees and non-employees based on the fair value of its Class A common stock on the grant date. The Company’s RSU grants vest upon the satisfaction of either a service condition or both a service condition and a performance condition. The service condition is generally satisfied ratably over four years. The performance condition related to the Company’s outstanding performance-based awards was satisfied in connection with the Company's initial public offering (“IPO”). For employee and non-employee awards that vest upon the satisfaction of a service condition, the Company recognizes compensation expense based on the grant date fair value of the award over the requisite service period on a straight-line basis, which is generally the vesting period of the respective award based on the grant date fair value of the award. The Company accounts for forfeitures as they occur. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributed to temporary differences between the financial reporting basis and the respective tax basis of these assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for carryforwards and other deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. Based on its facts, the Company considered all available evidence, both positive and negative, including historical levels of taxable income, expectations, and risks associated with estimates of future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals and litigation processes, if any. The second step is to measure the largest amount of tax benefit as the largest amount that is more likely than not to be realized upon settlement. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss), other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders, as well as unrealized gains and losses, net of taxes, related to the Company's available-for-sale investments in debt securities. |
Earnings (loss) per Share | Earnings (loss) per Share The Company computes earnings (loss) per share using the two-class method required for multiple classes of common stock and participating securities. Basic earnings (loss) per share (“Basic EPS”) is calculated by dividing net |
Segment Information | Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the chief operating decision maker (“CODM”), in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company manages its operations as a single segment for the purposes of assessing performance and making operating and resource allocation decisions. Therefore, the Company has concluded that it has one reportable segment. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This ASU is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within annual period beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which requires disclosure of disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for public companies with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment | Estimated useful life (years) Furniture and fixtures 7 Office equipment 5 Machinery and equipment 10 Computer equipment 3 Software and website development 5 Leasehold improvements Shorter of the lease term or the estimated life of the asset Property and equipment, net consisted of the following (in thousands): December 31, 2023 2022 Furniture and fixtures $ 1,441 $ 1,189 Office equipment 1,031 937 Machinery and equipment 2,753 2,853 Computer equipment 2,056 1,486 Software and website design 8,061 6,209 Leasehold improvements 3,696 3,126 Capital projects in progress 13,555 11 Total property and equipment 32,593 15,811 Less: accumulated depreciation and amortization (7,729) (4,787) Property and equipment, net $ 24,864 $ 11,024 |
Schedule of Disaggregation of Revenue | The following table presents the disaggregation of the Company’s net revenues for the years ended December 31, 2023, 2022, and 2021 (in thousands): Year ended 2023 2022 2021 By geography: United States $ 483,454 $ 462,126 $ 390,514 Rest of the world 62,192 43,709 29,077 $ 545,646 $ 505,835 $ 419,591 By product: Scrubwear $ 439,987 $ 415,937 $ 363,050 Non-Scrubwear 105,659 89,898 56,541 $ 545,646 $ 505,835 $ 419,591 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value | The following tables present the Company’s cash equivalents and short-term investments by significant investment category and fair value level as of December 31, 2023 and 2022 (in thousands): December 31, 2023 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1: Money market funds $ 117,328 $ — $ — $ 117,328 U.S. government securities 64,630 12 — 64,642 Level 2: Corporate paper 37,888 — (7) 37,881 Total $ 219,846 $ 12 $ (7) $ 219,851 December 31, 2022 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Level 1: Money market funds $ 102,908 $ — $ — $ 102,908 Total $ 102,908 $ — $ — $ 102,908 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable consisted of the following (in thousands): December 31, 2023 2022 Trade $ 6,549 $ 6,288 Other 920 578 $ 7,469 $ 6,866 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of Prepaid Expense and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2023 2022 Inventory deposits $ 3,012 $ 2,086 Prepaid expenses 8,173 6,588 Prepaid taxes — 2,186 Other 1,270 1,023 $ 12,455 $ 11,883 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Estimated useful life (years) Furniture and fixtures 7 Office equipment 5 Machinery and equipment 10 Computer equipment 3 Software and website development 5 Leasehold improvements Shorter of the lease term or the estimated life of the asset Property and equipment, net consisted of the following (in thousands): December 31, 2023 2022 Furniture and fixtures $ 1,441 $ 1,189 Office equipment 1,031 937 Machinery and equipment 2,753 2,853 Computer equipment 2,056 1,486 Software and website design 8,061 6,209 Leasehold improvements 3,696 3,126 Capital projects in progress 13,555 11 Total property and equipment 32,593 15,811 Less: accumulated depreciation and amortization (7,729) (4,787) Property and equipment, net $ 24,864 $ 11,024 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, 2023 2022 Accrued inventory $ 2,126 $ 8,906 Accrued shipping 565 2,149 Accrued selling expenses 2,601 10,648 Accrued legal expenses 24 395 Accrued marketing expenses 466 1,747 Other accrued expenses 2,124 2,319 $ 7,906 $ 26,164 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Lease, Cost | The weighted-average remaining lease term and weighted-average discount rate related to the Company’s operating leases at December 31, 2023 were as follows: Weighted-average remaining lease term 6.4 years Weighted-average discount rate 6.2 % |
Summary of Future Undiscounted Lease Payments | Future undiscounted lease payments, and a reconciliation of these payments to the Company’s operating lease liabilities at December 31, 2023, were as follows (in thousands): Year ended December 31, 2024 $ 8,494 2025 9,206 2026 8,047 2027 8,220 2028 8,473 Thereafter 15,182 Total lease payments $ 57,622 Less: Imputed interest 10,508 Total lease liabilities $ 47,114 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Components Of Income Tax Expense Or Benefit | The components of the Company’s provision for income taxes were as follows (in thousands): December 31, 2023 2022 2021 Current Federal $ 20,008 $ 16,731 $ 17,790 State 5,482 1,542 5,357 Total current provision 25,490 18,272 23,147 Deferred Federal (5,954) (2,039) (3,014) State (1,366) 1,307 (718) Total deferred benefit (7,320) (732) (3,732) Provision for income taxes $ 18,170 $ 17,541 $ 19,415 |
Schedule Of Effective Income Tax Reconciliation | A reconciliation of income tax expense using the U.S. statutory federal income tax rate to the provision for income taxes is as follows (in thousands): December 31, 2023 2022 2021 Tax expense at U.S. statutory rate $ 8,569 $ 8,133 $ 2,083 State tax expense, net of federal benefit 1,828 1,498 606 Non-deductible expenses (831) (380) 344 Stock-based compensation 3,956 4,921 (28,727) Excess compensation limitations 4,365 4,776 45,359 Foreign-derived intangible income deduction — (3) (455) R&D tax credit benefit — — (230) Uncertain tax positions 7 (39) 280 Change in valuation allowance — — — Provision to return true up 203 (1,823) (121) Other 73 458 276 Provision for income taxes $ 18,170 $ 17,541 $ 19,415 |
Schedule Of Components Of Deferred Income Taxes | Significant components of deferred tax balances were as follows (in thousands): December 31, 2023 2022 Deferred tax assets Net operating losses $ 334 $ 371 Uniform capitalization adjustment to inventory 9,930 5,741 Stock-based compensation 3,959 2,236 Accrued compensation and benefits 1,444 579 Lease liability 11,812 4,837 Inventory reserve 1,407 837 Returns reserve 749 873 Sales tax accrual 406 421 Other 856 969 Total deferred tax assets 30,897 16,864 Less: valuation allowance — — Total net deferred tax assets 30,897 16,864 Deferred tax liabilities Property and equipment (1,811) (2,028) Right-of-use asset (10,795) (3,865) Total deferred tax liabilities (12,606) (5,894) Net deferred tax assets $ 18,291 $ 10,971 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to our uncertain tax positions during the years ended December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Beginning balance of uncertain tax positions $ 167 $ 167 Increases related to current year tax positions — — Decreases related to current year tax positions — — Increases related to prior year tax positions — — Changes due to lapse of statute of limitations — — Settlement with taxing authorities — — Ending balance of uncertain tax positions $ 167 $ 167 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share Based Payment Award Stock Options Granted Valuation Assumptions | The assumptions that the Company used to determine the grant date fair value of stock options granted were as follows, presented on a weighted-average basis: December 31, 2023 2022 2021 Risk free interest rate 3.63 % 2.94 % 1.15 % Expected volatility 40 % 38 % 48 % Expected dividend yield 0 % 0 % 0 % Expected term (in years) 6.25 5.91 6.25 |
Summary of Stock Option Activity for Company's Stock Option Plans | A summary of stock option activity under the 2016 Plan and 2021 Plan, is as follows: Stock Options Outstanding Number of Shares Weighted Average Weighted Average Aggregate Outstanding at December 31, 2022 42,397,911 $ 6.11 7.38 $ 105 Granted 4,059,936 7.35 Exercised (773,056) 0.90 Forfeited (1,683,631) 11.06 Outstanding at December 31, 2023 44,001,160 $ 6.13 6.56 $ 108 Exercisable at December 31, 2023 33,366,714 $ 5.17 6.11 $ 99 |
Summary of Restricted Stock Activity | A summary of RSU activity under the 2016 Plan and 2021 Plan is as follows: Number of Shares Weighted average Unvested restricted stock units at December 31, 2022 3,548,431 $ 11.96 Granted 2,497,561 7.30 Vested (2,397,527) 8.75 Forfeited (383,792) 12.23 Unvested restricted stock units at December 31, 2023 3,264,673 $ 10.71 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of Basic EPS and Diluted EPS and a reconciliation of the weighted average number of common and common equivalent shares outstanding for the years ended December 31, 2023, 2022, and 2021 (in thousands, except share and per share amounts). Year ended December 31, 2023 2022 2021 Numerator: Net income (loss) $ 22,637 $ 21,186 $ (9,556) Denominator: Weighted-average shares—basic 168,065,721 165,268,185 159,177,713 Effect of dilutive stock options 13,502,538 20,362,453 — Effect of dilutive restricted stock units 844,705 1,916,835 — Weighted-average shares—diluted 182,412,965 187,547,474 159,177,713 Earnings (loss) per share: Basic earnings (loss) per share $ 0.13 $ 0.13 $ (0.06) Effect of dilutive stock options and restricted stock units (0.01) (0.02) — Diluted earnings (loss) per share $ 0.12 $ 0.11 $ (0.06) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company excluded the following weighted average common equivalent shares from the computation of Diluted EPS for the years ended December 31, 2023, 2022, and 2021 because including them would have had an anti-dilutive effect: Year ended December 31, 2023 2022 2021 Stock options to purchase common stock 11,219,739 5,845,057 40,164,214 Restricted stock units 2,278,137 1,078,486 4,316,091 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
May 19, 2021 | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Accounting Policies [Abstract] | ||||
Stock, conversion ratio | 9 | |||
Allowance for doubtful debts | $ 0 | $ 0 | ||
Impairment of long-lived assets | 0 | 0 | $ 0 | |
Returns reserve | 3,000,000 | 3,500,000 | ||
Revenue recognized | 2,900,000 | 2,700,000 | ||
Redemptions from gift cards | 2,400,000 | |||
Expected dividend yield | 0 | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation | 45,799,000 | 37,458,000 | $ 81,139,000 | |
Deferred tax assets, valuation allowance | $ 0 | 0 | ||
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Operating lease right-of-use assets | $ 43,059,000 | $ 15,312,000 | ||
Operating Lease, Liability | $ 47,114,000 | |||
Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Estimated useful life (years) | 3 years | |||
Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Estimated useful life (years) | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Property and Equipment, Net (Details) | Dec. 31, 2023 |
Minimum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (years) | 10 years |
Furniture and fixtures | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (years) | 7 years |
Office equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Machinery and equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (years) | 10 years |
Computer equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Software and website development | |
Property Plant And Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Disaggregation of the Company's Net Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | |||
Net revenues | $ 545,646 | $ 505,835 | $ 419,591 |
Scrubwear | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenues | 439,987 | 415,937 | 363,050 |
Non-Scrubwear | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenues | 105,659 | 89,898 | 56,541 |
United States | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenues | 483,454 | 462,126 | 390,514 |
Rest of the world | |||
Disaggregation Of Revenue [Line Items] | |||
Net revenues | $ 62,192 | $ 43,709 | $ 29,077 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Schedule of Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents | ||
Cost | $ 144,173 | $ 159,775 |
Short-Term Investments | ||
Cost | 219,846 | 102,908 |
Gross Unrealized Gains | 12 | 0 |
Gross Unrealized Losses | (7) | 0 |
Fair Value | 219,851 | 102,908 |
Corporate paper | ||
Cash and Cash Equivalents | ||
Fair Value | 117,328 | 102,908 |
Corporate paper | Level 1 | ||
Cash and Cash Equivalents | ||
Cost | 117,328 | $ 102,908 |
U.S. government securities | ||
Short-Term Investments | ||
Fair Value | 64,642 | |
U.S. government securities | Level 1 | ||
Short-Term Investments | ||
Cost | 64,630 | |
Gross Unrealized Gains | 12 | |
Gross Unrealized Losses | 0 | |
Corporate paper | ||
Short-Term Investments | ||
Fair Value | 37,881 | |
Corporate paper | Level 2 | ||
Short-Term Investments | ||
Cost | 37,888 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | $ (7) |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Trade | $ 6,549 | $ 6,288 |
Other | 920 | 578 |
Accounts receivable | $ 7,469 | $ 6,866 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Inventory deposits | $ 3,012 | $ 2,086 |
Prepaid expenses | 8,173 | 6,588 |
Prepaid taxes | 0 | 2,186 |
Other | 1,270 | 1,023 |
Prepaid expenses and other current assets | $ 12,455 | $ 11,883 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 32,593 | $ 15,811 |
Less: accumulated depreciation and amortization | (7,729) | (4,787) |
Property and equipment, net | 24,864 | 11,024 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 1,441 | 1,189 |
Office equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 1,031 | 937 |
Machinery and equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 2,753 | 2,853 |
Computer equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 2,056 | 1,486 |
Software and website design | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 8,061 | 6,209 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 3,696 | 3,126 |
Capital projects in progress | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 13,555 | $ 11 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 2.9 | $ 1.9 | $ 1.4 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued inventory | $ 2,126 | $ 8,906 |
Accrued shipping | 565 | 2,149 |
Accrued selling expenses | 2,601 | 10,648 |
Accrued legal expenses | 24 | 395 |
Accrued marketing expenses | 466 | 1,747 |
Other accrued expenses | 2,124 | 2,319 |
Total accrued expenses | $ 7,906 | $ 26,164 |
Financing Arrangements (Details
Financing Arrangements (Details) - Revolving Credit Facility - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Sep. 07, 2021 | |
Bank of America, N.A. | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 100 | |
Letter of credit aggregate amount | $ 4.9 | |
Debt instrument, basis spread on variable rate (as a percent) | 1.125% | |
Outstanding borrowings | $ 95.1 | |
Eurodollar | Bank of America, N.A. | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility, commitment fee percentage | 0.175% | |
Base Rate | ||
Line Of Credit Facility [Line Items] | ||
Debt instrument, basis spread on variable rate (as a percent) | 0.125% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Net revenues | $ 545,646 | $ 505,835 | $ 419,591 |
Professional Fee Reimbursements, IPO | |||
Related Party Transaction [Line Items] | |||
Transaction amount | 4,900 | ||
Professional Fee Reimbursements, Follow-On Offering | |||
Related Party Transaction [Line Items] | |||
Transaction amount | $ 400 | $ 500 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Estimate of contingent sales tax payable | $ 1.6 | $ 1.6 |
Inventory purchase obligations | $ 67.2 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 4.2 | $ 2.8 | $ 1.8 |
Short-term lease expense | 9.2 | $ 3.7 | |
Cash payments included in the measurement of the operating lease liabilities | 4 | ||
Right of use assets obtained in exchange for operating lease liabilities | $ 31 | ||
Term of lease not yet commenced | 5 years | ||
Lease not yet commenced | $ 10.9 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Details) | Dec. 31, 2023 |
Leases [Abstract] | |
Weighted-average remaining lease term | 6 years 4 months 24 days |
Weighted-average discount rate | 6.20% |
Leases - Summary of Future Undi
Leases - Summary of Future Undiscounted Lease Payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |
2024 | $ 8,494 |
2025 | 9,206 |
2026 | 8,047 |
2027 | 8,220 |
2028 | 8,473 |
Thereafter | 15,182 |
Total lease payments | 57,622 |
Less: Imputed interest | 10,508 |
Total lease liabilities | $ 47,114 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense or Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current | |||
Federal | $ 20,008 | $ 16,731 | $ 17,790 |
State | 5,482 | 1,542 | 5,357 |
Total current provision | 25,490 | 18,272 | 23,147 |
Deferred | |||
Federal | (5,954) | (2,039) | (3,014) |
State | (1,366) | 1,307 | (718) |
Total deferred benefit | (7,320) | (732) | (3,732) |
Provision for income taxes | $ 18,170 | $ 17,541 | $ 19,415 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax expense benefit ,current | $ 25,490,000 | $ 18,272,000 | $ 23,147,000 |
Deferred income taxes | $ (7,320,000) | $ (732,000) | $ (3,732,000) |
Effective income tax rate (as a percent) | 44.50% | 45.30% | 196.90% |
Deferred tax assets, change in valuation allowance | $ 0 | ||
Unrecognized tax benefits | 167,000 | $ 167,000 | $ 167,000 |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 1,200,000 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 1,100,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Tax expense at U.S. statutory rate | $ 8,569 | $ 8,133 | $ 2,083 |
State tax expense, net of federal benefit | 1,828 | 1,498 | 606 |
Non-deductible expenses | 831 | 380 | (344) |
Stock-based compensation | 3,956 | 4,921 | (28,727) |
Excess compensation limitations | 4,365 | 4,776 | 45,359 |
Foreign-derived intangible income deduction | 0 | (3) | (455) |
R&D tax credit benefit | 0 | 0 | (230) |
Uncertain tax positions | 7 | (39) | 280 |
Change in valuation allowance | 0 | 0 | 0 |
Provision to return true up | 203 | (1,823) | (121) |
Other | 73 | 458 | 276 |
Provision for income taxes | $ 18,170 | $ 17,541 | $ 19,415 |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets | ||
Net operating losses | $ 334 | $ 371 |
Uniform capitalization adjustment to inventory | 9,930 | 5,741 |
Stock-based compensation | 3,959 | 2,236 |
Accrued compensation and benefits | 1,444 | 579 |
Lease liability | 11,812 | 4,837 |
Inventory reserve | 1,407 | 837 |
Returns reserve | 749 | 873 |
Sales tax accrual | 406 | 421 |
Other | 856 | 969 |
Total deferred tax assets | 30,897 | 16,864 |
Less: valuation allowance | 0 | 0 |
Total net deferred tax assets | 30,897 | 16,864 |
Deferred tax liabilities | ||
Property and equipment | (1,811) | (2,028) |
Deferred Tax Liabilities, Leasing Arrangements | (10,795) | (3,865) |
Total deferred tax liabilities | (12,606) | (5,894) |
Net deferred tax assets | $ 18,291 | $ 10,971 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 167 | $ 167 |
Increases related to current year tax positions | 0 | 0 |
Decreases related to current year tax positions | 0 | 0 |
Increases related to prior year tax positions | 0 | 0 |
Changes due to lapse of statute of limitations | 0 | 0 |
Settlement with taxing authorities | 0 | 0 |
Ending balance | $ 167 | $ 167 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
May 18, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Value of options outstanding | $ 115,100 | $ 5,600 | $ 3,200 | $ 115,100 | |||
Weighted average grant date of fair value stock options granted (in USD per share) | $ 3.35 | $ 5.02 | $ 10.02 | ||||
Fair value of stock options vested | $ 32,800 | $ 27,300 | $ 22,800 | $ 49,800 | |||
Total unrecognized compensation cost | $ 47,200 | ||||||
Weighted average period (in years) | 2 years 1 month 6 days | ||||||
Employee Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Fair value of stock options vested | $ 5,700 | ||||||
Compensation expense | $ 5,700 | ||||||
Shares based compensation arrangement, stock options granted (in shares) | 275,000 | ||||||
RSU | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Fair value of stock options vested | $ 17,400 | $ 18,400 | $ 72,600 | ||||
Total unrecognized compensation cost | $ 31,400 | ||||||
Weighted average period (in years) | 2 years 8 months 12 days | ||||||
Restricted stock units granted (in shares) | 5,410,440 | ||||||
Stock awards, vesting period (in years) | 4 years | 4 years | |||||
RSU | IPO | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Compensation expense | $ 16,000 | ||||||
Shares withheld for tax withholding obligation (in shares) | 762,359 | ||||||
Share price (in USD per share) | $ 22 | $ 22 | |||||
Share compensation expense, tax benefit | $ 16,800 | ||||||
RSA | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Fair value of stock options vested | $ 17,400 | $ 72,600 | |||||
Total unrecognized compensation cost | $ 31,400 | ||||||
Weighted average period (in years) | 2 years 8 months 12 days | ||||||
2021 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Expiration period (in years) | 10 years | ||||||
Shares outstanding (as a percent) | 5% | ||||||
ESPP | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares outstanding (as a percent) | 1% | ||||||
Percentage of shares to market value (as a percent) | 85% | ||||||
Maximum | 2016 Stock Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of shares reserved for future issuance (in shares) | 51,716,934 | ||||||
Maximum | 2021 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of shares reserved for future issuance (in shares) | 3,863,941 | ||||||
Maximum | ESPP | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of shares reserved for future issuance (in shares) | 3,172,104 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share Based Payment Award Stock Options Granted Valuation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk free interest rate | 3.63% | 2.94% | 1.15% |
Expected volatility | 40% | 38% | 48% |
Expected dividend yield | 0% | 0% | 0% |
Expected term (in years) | 6 years 3 months | 5 years 10 months 28 days | 6 years 3 months |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity for Company's Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Beginning balance (in shares) | 42,397,911 | |
Granted (in shares) | 4,059,936 | |
Exercised (in shares) | (773,056) | |
Forfeited (in shares) | (1,683,631) | |
Ending balance (in shares) | 44,001,160 | 42,397,911 |
Weighted Average Exercise Price (per share) | ||
Beginning balance (in USD per share) | $ 6.11 | |
Granted (in USD per share) | 7.35 | |
Exercised (in USD per share) | 0.90 | |
Forfeited (in USD per share) | 11.06 | |
Ending balance (in USD per share) | $ 6.13 | $ 6.11 |
Stock Options Outstanding | ||
Weighted Average Remaining Contractual Term (in years) | 6 years 6 months 21 days | 7 years 4 months 17 days |
Aggregate Intrinsic Value (in millions) | $ 108 | $ 105 |
Exercisable (in shares) | 33,366,714 | |
Exercisable (in USD per share) | $ 5.17 | |
Stock Options outstanding, Weighted average remaining contractual term (years) | 6 years 1 month 9 days | |
Exercisable, intrinsic value | $ 99 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Restricted Stock options (Details) - RSAs and RSUs - 2016 and 2021 Plan | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 3,548,431 |
Granted (in shares) | shares | 2,497,561 |
Vested (in shares) | shares | (2,397,527) |
Forfeited (in shares) | shares | (383,792) |
Ending balance (in shares) | shares | 3,264,673 |
Weighted average grant date fair value per share | |
Beginning balance (in USD per share) | $ / shares | $ 11.96 |
Granted (in USD per share) | $ / shares | 7.30 |
Vested (in USD per share) | $ / shares | 8.75 |
Forfeited (in USD per share) | $ / shares | 12.23 |
Ending balance (in USD per share) | $ / shares | $ 10.71 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) | Dec. 31, 2023 vote |
Class A Common Stock | |
Earnings Per Share Basic [Line Items] | |
Number of votes | 1 |
Class B Common Stock | |
Earnings Per Share Basic [Line Items] | |
Number of votes | 20 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net income (loss) | $ 22,637 | $ 21,186 | $ (9,556) |
Denominator: | |||
Weighted-average shares outstanding—basic (in shares) | 168,065,721 | 165,268,185 | 159,177,713 |
Weighted-average shares outstanding - diluted (in shares) | 182,412,965 | 187,547,474 | 159,177,713 |
Earnings (loss) per share: | |||
Basic earnings (loss) per share (in USD per share) | $ 0.13 | $ 0.13 | $ (0.06) |
Effect of dilutive stock options (in USD per share) | (0.01) | (0.02) | 0 |
Diluted earnings (loss) per share (in USD per share) | $ 0.12 | $ 0.11 | $ (0.06) |
Employee Stock Option | |||
Denominator: | |||
Effect of dilutive stock options (in shares) | 13,502,538 | 20,362,453 | 0 |
Restricted Stock | |||
Denominator: | |||
Effect of dilutive stock options (in shares) | 844,705 | 1,916,835 | 0 |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Antidilutive Securities Excluded From Computation of Earning Per Share (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Stock Option | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Stock options to purchase common stock (in shares) | 11,219,739 | 5,845,057 | 40,164,214 |
RSU | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Stock options to purchase common stock (in shares) | 2,278,137 | 1,078,486 | 4,316,091 |