Wayfair topped Wall Street third-quarter estimates as the company sets up operations to grow despite tariffs and a weak housing market with help from AI.
Net loss was $99 million, or 76 cents per diluted share, versus $74 million, or 60 cents per diluted share, in the year-prior quarter, the company reported. Adjusted for one-time events, net income was $110 million, or 70 cents per diluted share, versus $28 million, or 22 cents per diluted share, in the year-earlier period.
An analyst consensus estimate from Zacks Investment Research was for adjusted diluted earnings of 46 cents and revenue of $3.01 billion.
Net revenue $3.12 billion, up 8.1% in the quarter year over year, with total net revenue, excluding the impact of the company’s exit from the German market, up 9%. Net revenue from operations in the United States was $2.73 billion, up 8.6% year over year.
Income from operations was $38 million versus a loss from operations of $74 million in the year-before quarter.
In a conference call, Niraj Shah, Wayfair CEO, co-founder and co-chairman, said the groundwork the company laid over multiple years is driving share capture and profitability despite sluggishness in key segments in the furnishings category, as existing home sales continue with the same multi-decade lows seen since late 2022.
Shah added, “It is important to note that our plan to grow is driven by Wayfair-specific factors and is not reliant upon a recovery in the housing market. In spite of the depressed housing environment, we’ve been encouraged to see that the category has moved past its multi-year trend of double-digit declines. Based on the data we have, the category started down low single digits and has been inching closer and closer to flat over the course of 2025, though it remains structurally underspent against the pre-pandemic baseline. This directional improvement is all the more encouraging given the uncertainty our industry has faced around the evolving tariff landscape this year.”
So far, Shah said, Wayfair has not seen any real consumer behavior shifts based on tariffs, with minor temporary changes in large appliances and bathroom vanities he attributes to pull-forward purchasing to avoid duties.
Wayfair continues applying artificial intelligence to its operations across functions from pricing to marketing as it seeks to capitalize on its technological investment and expertise.
Fiona Tan, Wayfair chief technology officer, said the company is applying generative and agentic AI to improve the customer experience by moving beyond personalization to provide intuitive help and inspiration. Wayfair is also improving speed and efficiency in core processes by giving staffers AI tools they can readily apply. And Wayfair is building additional tools that improve coordination with suppliers and ensure the company catalog is seamlessly integrated into the next generation of AI-driven commerce.
Shah, in announcing the financial results, said, “The third quarter was a great success: share gain further accelerated, with revenue growing 9% year-over-year excluding Germany. We saw orders delivered grow by over 5% year-over-year in the quarter, including new orders now growing mid-single digits for two quarters in a row. This came in tandem with more than 70% year-over-year growth in adjusted EBITDA. Our 6.7% adjusted EBITDA margin marks the highest level achieved in Wayfair’s history outside of the pandemic period. As we’ve promised, substantial profitability flow through is powered by a strong contribution margin and fixed cost discipline as our business has returned to growth.”
