Purple Innovation Reports Second Quarter 2025 Results; Reaffirms 2025 Guidance

Net Loss Exceeded Expectations; Adjusted EBITDA Margin Improved 120 Basis Points versus Last Year

Strong Rejuvenate 2.0 Demand More than Double the Rejuvenate 1.0 Launch inDTC

Mattress Firm Rollout Progressing on Schedule

Purple Innovation, Inc. (NASDAQ: PRPL) (“Purple”), a comfort innovation company whose mattresses promise to give you “less pain, better sleep,” today announced results for the second quarter ended June 30, 2025.

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“We are pleased with our second quarter performance, which reflects our disciplined execution and continued progress as we build a premium, sustainable, and profitable brand,” said Rob DeMartini, CEO of Purple Innovation. “Revenue and profit exceeded our expectations, delivering sequential improvement, where strong demand from consumers and partners has temporarily outpaced our ability to fulfill orders.”

DeMartini continued, “We are seeing strong validation of our brand and innovation strategy, led by the breakthrough success of our Rejuvenate 2.0 collection — the first product to incorporate our new DreamLayer grid technology layered on top of our core GelFlex grid platform. We're also building significant momentum through our ongoing expansion with Mattress Firm, which remains on track, and through deepening relationships with partners such as Walmart and Costco, alongside strong and growing interest from both traditional and non-traditional partners. These initiatives are fueling momentum across our business and advancing our long-term Path to Premium Sleep strategy. With third quarter revenue-to-date up in the mid-single digits range versus the same period last year, we remain confident in our ability to drive profitable growth and create shareholder value.”

Second Quarter 2025 Financial Results Second quarter 2025 net revenue declined by 12.6% to $105.1 million, compared to $120.3 million in the second quarter of 2024, reflecting delays in the timing of Rejuvenate 2.0 shipments, lapping reductions in wholesale door count from 2024, and softness in ecommerce.

Gross profit for the second quarter decreased to $37.7 million, compared to $48.9 million in the prior-year period. Gross margin was 35.9%, a decrease of 480 basis points year-over-year, and was adversely impacted by costs related to tariffs and the ramp-up of both the Mattress Firm roll-out and Rejuvenate 2.0 launch, which were partially offset by direct material and sourcing savings.

Second quarter operating expenses were $51.9 million, down 18.2% from $63.5 million in the prior year quarter. The decrease was largely driven by reduced advertising spend and benefits from restructuring and cost savings initiatives completed previously.

Net loss attributable to Purple Innovation, Inc. for the second quarter was $(17.3) million, a decline from $0.0 in the prior year.

Adjusted EBITDA for the second quarter was $(2.4) million, an improvement from $(4.1) million last year, driven primarily by our disciplined cost management.

Balance Sheet As of June 30, 2025, the Company had cash and cash equivalents of $34.2 million compared to $29.0 million as of December 31, 2024.

Net inventories as of June 30, 2025, totaled $60.9 million, down 12.6% compared to June 30, 2024, and an increase of 7.1% compared to December 31, 2024.

2025 Outlook The Company is reiterating its 2025 outlook for full year revenue to be in the range of $465 to $485 million and adjusted EBITDA in the range of flat to positive $10 million. The Company anticipates sequential growth in the second half of the year, driven by the successful launch of Rejuvenate 2.0 and the rollout of our expanded partnership with Mattress Firm.

Conference Call and Webcast Information Purple Innovation, Inc. will host a live conference call to discuss financial results today, July 29, 2025, at 4:30 p.m. Eastern Time. To access the call dial 800-715-9871 (domestic) or 646-307-1963 (international). The call is also being webcast and can be accessed on the investor relations section of the Company's website, investors.purple.com. After the conference call, a webcast replay will remain available on the investor relations section of the Company's website for 30 days.

About Purple Purple is a premium mattress company and the leader in sleep technology. Their patented GelFlex Grid® is the only material that instantly relieves pressure for less pain and better sleep.

With over 30 years of innovation, Purple's product engineers are paving the way for everyone to experience a proven, deeper sleep by reducing their aches and pains. The GelFlex Grid® does it all-it instantly adapts as you move, balances temperature, relieves pressure, and offers support in all the right places. Purple products, including mattresses, pillows, cushions, frames, sheets, and more, can be found online at Purple.com, in 55 Purple stores, and over 3,000 retailers nationwide.

Purple Less pain. Better sleep.

Forward Looking Statements Certain statements made in this release that are not historical facts are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company's expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These statements include, but are not limited to, statements regarding our innovation pipeline, the timing of new product collection launches, our ability to improve profitability and optimize our business, the expansion of and benefits to us from our commercial relationship with Mattress Firm, the impact of other commercial relationships, including those with Walmart, Costco, and other traditional and non-traditional partners, revenue-to-date for the third quarter, our ability to drive profitable growth and create shareholder value, and our outlook for revenue and adjusted EBITDA for the full year 2025. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Factors that could influence the realization of forward-looking statements include, among others: changes in economic, financial and end-market conditions in the markets in which we operate; fluctuations in raw material prices and cost of labor; the financial condition of our customers and suppliers; competitive pressures, including the need for technology improvement, successful new product development and introduction; changes in consumer demand, including pullbacks in consumer spending; disruptions to our manufacturing processes; and the risk factors outlined in the “Risk Factors” section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2025, and in our other filings made with the SEC. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures EBITDA, adjusted operating expenses, adjusted EBITDA, adjusted net income, and adjusted net income per diluted share are non-GAAP financial measures that remove the impact of certain non-cash and non-recurring costs. Management believes that the use of such non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments, which we view as a better measure of our operating performance. Refer to the attached table for the reconciliation of such non-GAAP financial measures to the most comparable GAAP financial measure.

With respect to the Company's Adjusted EBITDA outlook for the full year 2025, a quantitative reconciliation to the corresponding GAAP information cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted, including but not limited to warrant liabilities and stock based compensation. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results.

Investor Contact: Stacy Turnof, Edelman Smithfield stacy.turnof@edelmansmithfield.com 917-362-2581

PURPLE INNOVATION, INC.Condensed Consolidated Balance Sheets(unaudited – in thousands, except for par value) June 30, December31, 2025 2024AssetsCurrent assets:Cash and cash equivalents $ 34,248 $ 29,011Accounts receivable, net 21,083 33,057Inventories 60,903 56,863Prepaid expenses 4,017 6,023Other current assets 5,680 1,414Total current assets 125,931 126,368Property and equipment, net 87,374 93,874Operating lease right-of-use assets 73,313 75,516Intangible assets, net 7,577 8,890Other long-term assets 9,593 3,197Total assets $ 303,788 $ 307,845Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable $ 25,963 $ 40,639Accrued compensation 6,632 9,415Customer prepayments 8,490 6,411Accrued rebates and allowances 10,941 10,013Accrued warranty liabilities – current portion 7,774 6,114Operating lease obligations – current portion 16,274 15,661Other current liabilities 8,362 12,750Total current liabilities 84,436 101,003Related party debt 94,539 55,394Accrued warranty liabilities, net of current portion 24,945 26,091Operating lease obligations, net of current portion 84,651 87,072Warrant liabilities 28,925 16,067Other long-term liabilities 1,871 2,009Total liabilities 319,367 287,636Commitments and contingencies (Note 13)Stockholders' equity (deficit):Class A common stock; $0.0001 par value, 210,000 shares authorized; 108,244 11 11issued and outstanding at June 30, 2025, and 107,545 issued and outstanding atDecember 31, 2024Class B common stock; $0.0001 par value, 90,000 shares authorized; 165 issued and – -outstanding at June 30, 2025, and at December 31, 2024Additional paid-in capital 594,698 594,053Accumulated deficit (610,348) (573,866)Total stockholders' equity (deficit) attributable to Purple Innovation, Inc. (15,639) 20,198Noncontrolling interest 60 11Total stockholders' equity (deficit) (15,579) 20,209Total liabilities and stockholders' equity (deficit) $ 303,788 $ 307,845

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PURPLE INNOVATION, INC.Condensed Consolidated Statements of Operations(unaudited – in thousands, except per share amounts) Three Months Ended Six Months Ended June30, June30, 2025 2024 2025 2024Revenues, net $ 105,100 $ 120,271 $ 209,271 $ 240,304Cost of revenues:Cost of revenues 67,340 71,331 129,547 149,644Cost of revenues – restructuring related charges 77 – 995 -Total cost of revenues 67,417 71,331 130,542 149,644Gross profit 37,683 48,940 78,729 90,660Operating expenses:Marketing and sales 30,616 41,377 67,242 82,839General and administrative 14,991 18,117 29,478 37,845Research and development 2,178 3,986 4,630 7,652Restructuring, impairment and other related charges 4,137 – 6,097 -Total operating expenses 51,922 63,480 107,447 128,336Operating loss (14,239) (14,540) (28,718) (37,676)Other income (expense):Interest expense (7,457) (4,161) (12,221) (8,635)Other income, net 1 53 70 4,447Loss on extinguishment of debt – – – (3,394)Change in fair value – warrant liabilities 4,378 18,693 4,427 (4,906)Total other income (expense), net (3,078) 14,585 (7,724) (12,488)Net income (loss) before income taxes (17,317) 45 (36,442) (50,164)Income tax expense (54) (54) (95) (113)Net loss (17,371) (9) (36,537) (50,277)Net loss attributable to noncontrolling interest (26) (36) (55) (87)Net income (loss) attributable to Purple Innovation, Inc. $ (17,345) $ 27 $ (36,482) $ (50,190)Net income (loss) per share:Basic $ (0.16) $ 0.00 $ (0.34) $ (0.47)Diluted $ (0.16) $ (0.00) $ (0.34) $ (0.47)Weighted average common shares outstanding:Basic 108,230 107,489 107,915 106,755Diluted 108,230 107,779 107,915 106,755

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PURPLE INNOVATION, INC.Condensed Consolidated Statements of Cash Flows(unaudited – in thousands) Six Months Ended June 30, 2025 2024Cash flows from operating activities:Net loss $ (36,537) $ (50,277)Adjustments to reconcile net lossto net cash used in operating activities:Depreciation and amortization 9,881 12,821Non-cash interest 5,656 3,372Paid-in-kind interest 6,797 4,375Non-cash restructuring, impairment and other related charges 3,816 -Loss on extinguishment of debt – 3,394Loss on disposal of property and equipment 224 112Change in fair value – warrant liabilities (4,427) 4,906Stock-based compensation 845 1,317Changes in operating assets and liabilities:Accounts receivable 11,974 5,719Inventories (4,040) (2,779)Prepaid expenses and other assets 2,671 4,665Operating leases, net (1,018) (1,340)Accounts payable (17,111) (9,522)Accrued compensation (2,783) 4,122Customer prepayments 2,079 (986)Accrued rebates and allowances (2,572) (4,608)Accrued warranty liabilities 514 (159)Other accrued liabilities (3,031) (862)Net cash used in operating activities (27,062) (25,730)Cash flows from investing activities:Sale of property and equipment 363 -Purchase of property and equipment (5,222) (5,142)Investment in intangible assets (285) (111)Net cash used in investing activities (5,144) (5,253)Cash flows from financing activities:Proceeds from related party loan 39,000 61,000Payments on term loan – (25,000)Payments on revolving line of credit – (5,000)Payments for debt issuance costs (1,557) (3,466)Net cash provided by financing activities 37,443 27,534Net increase (decrease) in cash and cash equivalents 5,237 (3,449)Cash and cash equivalents, beginning of the year 29,011 26,857Cash and cash equivalents, end of the period $ 34,248 $ 23,408Supplemental disclosures of cash flow information:Cash paid during the period for interest, net of amounts capitalized $ 81 $ 203Cash paid during the period for income taxes $ 165 $ 293Supplemental schedule of non-cash investing and financing activities:Property and equipment included in accounts payable $ 435 $ 375Warrants issued $ 17,284 $ 19,571Amendment fee added to principal of loan $ 1,215 $ –

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PURPLE INNOVATION, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (In thousands)

Management believes that the use of the following non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments, which we view as a better measure of our operating performance. These non-GAAP financial measures are EBITDA, adjusted EBITDA, adjusted operating expenses, adjusted net loss and adjusted net loss per diluted share. Other companies may calculate these non-GAAP measures differently than we do. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for our financial results prepared in accordance with GAAP.

Reconciliation of GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA

A reconciliation of GAAP net income (loss) to the non-GAAP measures of EBITDA and adjusted EBITDA is provided below. EBITDA represents net income (loss) before interest expense, income tax expense, other income, net, and depreciation and amortization. Adjusted EBITDA represents EBITDA excluding costs incurred due to changes in the fair value of the warrant liability, debt extinguishment, stock-based compensation expense, restructuring related expenses, loss on project write-off, nonrecurring and debt issuance legal fees, Board special committee costs, executive interim and search costs, severance cost and showroom opening and closing costs. We believe EBITDA and Adjusted EBITDA provide additional useful information with respect to the impact of various adjustments and provide meaningful measures of our operating performance.

Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024GAAP net loss $ (17,371) (9) (36,537) (50,277)Interest expense 7,457 4,161 12,221 8,635Income tax expense 54 54 95 113Other income, net (1) (53) (70) (4,447)Depreciation and amortization 4,831 6,439 9,881 12,821EBITDA (5,030) 10,592 (14,410) (33,155)Adjustments:Change in fair value – warrant liability (4,378) (18,693) (4,427) 4,906Loss on extinguishment of debt – – – 3,394Stock-based compensation expense 439 829 845 1,321Restructuring related charges 4,137 – 6,785Loss on project write-off – 1,355 – 1,355Non-recurring and debt issuance legal fees 907 87 1,140 924Strategic alternative costs 1,086 – 1,260 -Executive interim and search costs – 1,526 – 2,974Severance costs 361 104 1,570 884Showroom opening and closing costs 114 57 147 58Adjusted EBITDA $ (2,364) $ (4,143) $ (7,090) $ (17,339)

Reconciliation of GAAP Operating Expenses to non-GAAP Adjusted Operating Expenses

Our presentation of adjusted operating expenses assumes adjustments for certain nonrecurring items that we do not believe directly reflects our current core operations. Adjusted operating expenses is a supplemental measure of operating performance that does not represent, and should not be considered, alternatives to net loss and earnings per share, as calculated in accordance with GAAP. We believe adjusted operating expenses supplements GAAP measures and enables us to more effectively evaluate our performance period-over-period. A reconciliation of operating expenses, the most directly comparable GAAP measure, to adjusted operating expenses is set forth below:

(in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024Total operating expenses $ 51,922 $ 63,480 $ 107,477 $ 128,336Restructuring, impairment and other related charges (4,137) – (6,097) -Adjusted operating expenses $ 47,785 $ 63,480 $ 101,380 $ 128,336

Reconciliation of GAAP Net Loss to non-GAAP Adjusted Net Loss and Adjusted Net Loss per Diluted Share

Our presentation of adjusted net loss assumes that all net loss is attributable to Purple Innovation, Inc. (i.e. there is no allocation of net loss to noncontrolling interests), which assumes the full exchange at the beginning of the period of all outstanding Paired Securities for shares of Class A common stock of Purple Innovation, Inc., adjusted for certain nonrecurring items that we do not believe directly reflect our core operations. Adjusted net loss per share, diluted, is calculated by dividing adjusted net loss by the total shares of Class A common stock outstanding plus any dilutive warrants, options and restricted stock as calculated in accordance with GAAP and assuming the full exchange of all outstanding Paired Securities as of the beginning of each period presented. Adjusted net loss and adjusted net loss per diluted share, are supplemental measures of operating performance that do not represent, and should not be considered, alternatives to net loss and earnings per share, as calculated in accordance with GAAP. We believe adjusted net loss and adjusted net loss per diluted share, supplement GAAP measures and enable us to more effectively evaluate our performance period-over-period. A reconciliation of net loss, the most directly comparable GAAP measure, to adjusted net loss and the computation of adjusted net loss per diluted share, are set forth below:

(in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024Net loss $ (17,371) $ (9) $ (36,537) $ (50,277)Income tax (benefit) expense, as reported 54 54 95 113Revenue reduction due to SGI Contract 627 – 627 -Change in fair value – warrant liabilities (4,378) (18,693) (4,427) 4,906Loss on extinguishment of debt – – – 3,394Restructuring related charges 4,213 – 7,092 -Gain on insurance proceeds – – – (4,300)Strategic alternative costs 1,086 – 1,260 -Adjusted net loss before income taxes (15,769) (18,648) (31,890) (46,164)Adjusted income tax benefit(1) 4,084 4,830 8,260 11,956Adjusted net loss $ (11,685) $ (13,818) $ (23,630) $ (34,208)Adjusted net loss per share, diluted $ (0.11) $ (0.13) $ (0.22) $ (0.32)Adjusted weighted-average shares outstanding, diluted(2) 108,395 107,779 108,080 106,960

(1) Represents the estimated effective tax rate of 25.9% for the three and six months ended June 30, 2025 and 2024, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company's blended state tax rates.

(2) Assumes options and restricted stock units calculated in accordance with GAAP and the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period.

A reconciliation of net income (loss) per share, diluted, to adjusted net loss per diluted share is set forth below for the three and six months ended June 30, 2025 and 2024:

For the Three Months Ended June 30, 2025 June 30, 2024 Net Weighted Net Net Weighted Net Income Average Income Income Average Income Shares, per Shares, per Diluted Share, Diluted Share, Diluted DilutedNet income (loss) attributable to Purple $ (17,345) 108,230 (0.16) $ 27 107,779 $ (0.00)Innovation Inc.(1)Assumed exchange of shares(2) (26) 165 (36) -Net loss (17,371) (9)Adjustments to arrive at adjusted loss 1,602 (18,639)before taxes(3)Adjusted loss before taxes (15,769) (18,648)Adjusted income tax benefit(4) 4,084 4,830Adjusted net loss $ (11,685) 108,395 (0.11) $ (13,818) 107,779 $ (0.13)

(1) Represents net income (loss) attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding. For the three months ended June 30, 2024, the Paired Securities are included in the beginning weighted average shares, diluted.

(2) Assumes the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period if not already included in weighted average diluted shares in footnote (1) above. Also assumes the addition of net income attributable to noncontrolling interests corresponding with the assumed exchange of the Paired Securities for shares of Class A common stock.

(3) Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes. Also assumes the dilutive warrants, options and restricted stock as calculated in accordance with GAAP.

(4) Represents the estimated effective tax rate of 25.9% for the three months ended June 30, 2024 and 2023, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company's blended state tax rates assuming no valuation allowance.

For the Six Months Ended June 30, 2025 June 30, 2024 Net Weighted Net Net Weighted Net Income Average Income Income Average Income Shares, per Shares, per Diluted Share, Diluted Share, Diluted DilutedNet loss attributable to Purple $ (36,482) 107,915 (0.34) $ (50,190) 106,755 $ (0.47)Innovation Inc.(1)Assumed exchange of shares(2) (55) 165 (87) 205Net loss (36,537) (50,277)Adjustments to arrive at adjusted loss 4,647 4,113before taxes(3)Adjusted loss before taxes (31,890) (46,164)Adjusted income tax benefit(4) 8,260 11,956Adjusted net loss $ (23,630) 108,080 (0.22) $ (34,208) 106,960 $ (0.32)

(1) Represents net loss attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding.

(4) Represents the estimated effective tax rate of 25.9% for the six months ended June 30, 2025 and 2024, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company's blended state tax rates assuming no valuation allowance.

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SOURCE Purple Innovation, LLC

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