Warby Parker (NYSE:WRBY) executives used the company’s fourth-quarter 2025 earnings call to highlight a year of double-digit revenue growth, rising profitability, and strategic investments aimed at supporting both its core eyewear business and a planned entry into AI glasses later in 2026.
Fiscal 2025: Double-digit growth, first full year of net income profitability
Co-CEO Dave Gilboa said 2025 was “eventful” and emphasized that the company delivered “sustainable growth,” expanded adjusted EBITDA, and reported its first full year of positive net income even while navigating tariffs and what management described as a dynamic consumer backdrop.
Profitability improved as well. Full-year adjusted EBITDA was $95 million, up 30% year-over-year, which management said was driven by leverage in non-marketing SG&A. The company also generated $44 million in free cash flow and ended 2025 with $286 million in cash, up $32 million from the prior year. Mitchell noted Warby Parker also has a $120 million credit facility (expandable to $175 million) that remained undrawn other than $4 million in letters of credit.
Management discussed steps taken to mitigate tariffs while maintaining pricing on “the vast majority” of offerings, including its $95 prescription glasses. The company also cited operational changes, including sunsetting its Home Try-On program and completing lab and technology infrastructure upgrades in preparation for the planned AI glasses launch.
Q4 2025: Revenue rose 11%, but December slowdown pressured results
Mitchell said fourth-quarter revenue was $212 million, up 11.2% year-over-year. Retail revenue increased 15.2%, while e-commerce revenue was $56.8 million, up 1.6%.
While revenue growth remained positive, Gilboa said the company saw a slowdown in December relative to earlier one-year and two-year growth trends. He said softness was concentrated in the 25 to 34-year-old cohort, while older progressive customers were “more resilient.” Management also cited softer retail traffic and slowing contact lens growth, which pressured e-commerce performance. As a result, fourth-quarter adjusted EBITDA came in below management’s expectations, according to Gilboa.
Mitchell reported fourth-quarter adjusted gross margin (excluding stock-based compensation) of 52.5%, down 170 basis points from the prior year. He attributed the decline primarily to tariff headwinds in glasses and deleverage in the fixed portion of gross margin, including higher doctor headcount as the company staffed up in advance of its busiest period. He also cited higher penetration of lower-margin contact lenses and increased expedited shipping costs, partially offset by selective price increases and higher penetration of progressive lenses and other enhancements.
Fourth-quarter adjusted SG&A expenses were $110.3 million, or 52% of revenue, improving by 200 basis points year-over-year. Marketing was 12.9% of revenue, flat year-over-year. Adjusted EBITDA was $15.2 million, representing a 7.2% margin.
2026 priorities: Store expansion, eye exams, product mix, and insurance
Co-CEO Neil Blumenthal outlined three strategic priorities for 2026. The first is investing further in the company’s omni-channel model by expanding the retail footprint, driving more revenue within the existing store fleet, and enhancing the online experience.
Blumenthal said Warby Parker ended 2025 with 323 stores and continues to see long-term potential for at least 900. The company plans to open 50 new stores in 2026, with a large portion located in existing markets as part of an “infill” strategy. He said markets with more stores often show stronger e-commerce growth due to brand awareness and engagement across channels.
Management also highlighted growth opportunities tied to eye care and higher-value products. Blumenthal said eye exams grew 37% in 2025 to about 6% of the business, supported by features such as digital retinal imaging. He said exam capabilities exist in “almost 90%” of stores and that exam-enabled stores produce higher revenue, conversion, and gross profit.
On product mix, Blumenthal said Warby Parker launched 15 new collections in 2025 and expects to maintain a steady cadence. The company also plans to enter a new category in 2026 with its first sport collection featuring performance lenses. Progressives remained an emphasis: management said progressives represented about 22% of prescription units in 2025, versus an industry average of roughly 40% across progressives, bifocals, and multifocals.
Insurance was another focus. Blumenthal said in-network insurance penetration was about 8% in 2025, up from 7% the prior year, representing about 40% year-over-year dollar growth. Management described insured customers as among its most valuable, with higher initial spend, higher progressive lens attachment, and stronger repeat behavior. The company plans to expand covered lives, improve utilization through easier benefit verification and clearer communication, and scale a streamlined out-of-network reimbursement capability across all stores in the first quarter of 2026.
AI glasses: Launch planned later in 2026; no revenue included in guidance
Gilboa and Blumenthal said the company plans to introduce its first AI glasses in partnership with Google and Samsung later in 2026. Management said it expects the category to expand total addressable market and serve as a demand catalyst independent of broader eyewear trends. Blumenthal said Warby Parker is prioritizing production and supply chain readiness, store readiness (including fixtures and training), and ongoing R&D tied to a multiyear roadmap. He also said Google is offsetting “a large portion” of pre-launch investments.
In the Q&A, management said it does not plan to develop its own AI models and described its IP focus as centered on the eyewear itself, prescription integration, and leveraging Warby Parker’s vertically integrated structure and customer feedback loop. Executives said they were not yet sharing specific timing details beyond introducing the product to customers later in 2026.
Guidance: Measured approach amid industry headwinds and Q1 weather disruption
Mitchell said Warby Parker is taking a “measured approach” to 2026 given expected industry pressure, including management’s view that broader optical industry spending is projected to decline low single digits on both unit and dollar bases. Importantly, the company’s 2026 outlook excludes any revenue contribution from AI glasses, but includes operating expenses and capital investments to support the launch.
For full-year 2026, management guided to:
- Revenue of $959 million to $976 million (about 10% to 12% growth)
- Adjusted EBITDA of $117 million to $119 million, implying an adjusted EBITDA margin of about 12.2% and 130 basis points of year-over-year expansion
- Gross margin in line with 2025
- Marketing in the low teens as a percent of revenue
Mitchell said e-commerce is expected to grow low single digits for the year, with Home Try-On sunset impacts more concentrated in the first half and moderating in the second half.
For the first quarter of 2026, management guided to revenue of about $238 million to $240 million (growth of 6.5% to 7.5%) and adjusted EBITDA of $27 million to $28 million. Mitchell attributed the slower first-quarter growth outlook to historic winter storms and cold weather that led to store closures and reduced traffic, particularly given Warby Parker’s concentration of high-volume stores on the East Coast.
In addition, Mitchell said the company’s board authorized up to $100 million in share repurchases, which it intends to use opportunistically, primarily to offset dilution over time, while continuing to prioritize investment in growth initiatives.
About Warby Parker (NYSE:WRBY)
Warby Parker, Inc (NYSE: WRBY) is a U.S.-based eyewear company that designs, manufactures and sells prescription glasses, sunglasses and contact lenses through a direct-to-consumer model. Since its founding, the company has combined online and brick-and-mortar channels to streamline the customer experience, offering features such as virtual try-on technology and a home try-on program that allows consumers to sample frames before purchase.
Established in 2010 by Wharton graduates Neil Blumenthal, Dave Gilboa, Andrew Hunt and Jeffrey Raider, Warby Parker set out to disrupt the traditional optical market by controlling the entire supply chain—from frame design and lens production to warehousing and distribution.
