Revolve Group Announces Fourth Quarter and Full Year 2024 Financial Results

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Revolve Group, Inc. (NYSE: RVLV), the next-generation fashion retailer for Millennial and Generation Z consumers, today announced financial results for the fourth quarter and full year ended December 31, 2024.

“We finished the year with an outstanding fourth quarter, highlighted by double-digit top-line growth year-over-year and a more than doubling of net income and Adjusted EBITDA year-over-year,” said co-founder and co-CEO Mike Karanikolas. “Notably, our business was strong across the board, with net sales increasing at a double-digit rate year-over-year across Revolve, FWRD, domestic and international.”

“The team performed exceptionally this year, delivering marketing and logistics efficiency gains, a meaningfully reduced return rate in the second half of the year, significant advancements in our merchandising and product assortment, and enhanced site navigation features that further elevate product discovery,” said co-founder and co-CEO Michael Mente. “Importantly, we achieved strong financial results while continuing to invest in key initiatives that we believe set us up well for profitable growth and market share gains over the long term, including expansion of owned brands, deploying AI technology and exploration of physical retail expansion.”

Fourth Quarter 2024 Financial Summary

Three Months Ended December31, 2024 2023 YoY Change (in thousands, except percentages)Net sales $ 293,728 $ 257,778 14%Gross profit $ 154,298 $ 134,049 15%Gross margin 52.5 % 52.0 %Net income $ 11,770 $ 3,494 237%Adjusted EBITDA (non-GAAP financial measure) $ 18,272 $ 8,538 114%Net cash provided by (used in) operating activities $ 3,918 $ (3,876) NMFree cash flow (non-GAAP financial measure) $ 1,831 $ (4,960) NMNM – not meaningful

Fourth Quarter 2024 Operational Metrics

Three Months Ended December31, 2024 2023 YoY Change (in thousands, except average order value and percentages)Active customers 2,668 2,543 5%Total orders placed 2,172 2,022 7%Average order value $ 301 $ 303 (1%)

Additional Fourth Quarter 2024 Metrics and Results Commentary

— Trailing 12-month Active customers increased by 40,000 during the fourth quarter of 2024, growing to 2,668,000 as of December 31, 2024, an increase of 5% year-over-year.

— Total net sales were $293.7 million, an increase of 14% year-over-year, and a sequential improvement from the 10% increase year-over-year reported in the third quarter of 2024.

— Gross profit was $154.3 million, an increase of 15% year-over-year.

— Gross margin was 52.5%, a year-over-year increase of 53 basis points that was primarily driven by margin expansion in the FWRD segment.

— We achieved meaningful year-over-year efficiencies in our operating expenses, driven by strong efficiencies in our marketing, fulfillment, and selling and distribution expenses compared to the prior-year period, partially offset by growth in general and administrative expenses as a percentage of net sales year-over-year. General and administrative expenses for the fourth quarter of 2024 include $2.7 million in non-routine items excluded from Adjusted EBITDA, as explained further below in the non-GAAP reconciliation tables and accompanying disclosures in this press release. General and administrative expenses for the fourth quarter of 2023 include $3.4 million in non-routine items excluded from Adjusted EBITDA.

— Net income was $11.8 million, a year-over-year increase of 237%, primarily due to strong growth in net sales, gross margin expansion, leverage on operating expenses year-over-year, and a lower effective tax rate in the fourth quarter of 2024.

— Adjusted EBITDA was $18.3 million, a year-over-year increase of 114%.

— Diluted earnings per share (EPS) was $0.17, a year-over-year increase of 240%.

Additional Fourth Quarter 2024 Net Sales Commentary

Net sales increased by a double-digit rate year-over-year across segments and geographies.

— REVOLVE segment net sales were $252.0 million, a year-over-year increase of 15%.

— FWRD segment net sales were $41.8 million, a year-over-year increase of 11%.

— Domestic net sales were $236.6 million, a year-over-year increase of 11%.

— International net sales were $57.1 million, a year-over-year increase of 29%.

Additional trend information regarding Revolve Group's fourth quarter and full year 2024 financial results and operating metrics is available in the Q4 and FY 2024 Financial Highlights presentation available on the company's investor relations website athttps://investors.revolve.com.

Results Since the End of Fourth Quarter 2024

During the first seven weeks of 2025 (January 1, 2025 to February 18, 2025), net sales increased by a high single-digit percentage year-over-year compared to the same period in 2024.

2025 Business Outlook

Based on information available to us as of February 25, 2025, we are providing the following guidance for the full year ending December 31, 2025 and the first quarter ending March 31, 2025.

FY 2025 OutlookGross margin 52.4% to 52.9%Fulfillment expenses 3.0% to 3.2% of net salesSelling and distribution expenses 17.0% to 17.2% of net salesMarketing expenses 14.9% to 15.1% of net salesGeneral and administrative expenses $155 million to $158 millionEffective tax rate 24% to 26% First Quarter 2025 OutlookGross margin 52.2% to 52.7%Fulfillment expenses 3.2% of net salesSelling and distribution expenses 17.4% of net salesMarketing expenses 14.9% of net salesGeneral and administrative expenses $39.5 million

Full Year 2024 Financial Summary

Year Ended December31, 2024 2023 YoY Change (in thousands, except percentages)Net sales $ 1,129,911 $ 1,068,719 6%Gross profit $ 593,273 $ 554,199 7%Gross margin 52.5 % 51.9 %Net income $ 48,771 $ 28,147 73%Adjusted EBITDA (non-GAAP financial measure) $ 69,516 $ 43,409 60%Net cash provided by operating activities $ 26,692 $ 43,342 (38%)Free cash flow (non-GAAP financial measure) $ 18,005 $ 39,144 (54%)

Full Year 2024 Operational Metrics

Year Ended December31, 2024 2023 YoY Change (in thousands, except average order value and percentages)Active customers 2,668 2,543 5%Total orders placed 8,867 8,701 2%Average order value $ 302 $ 297 2%

Additional Full Year 2024 Metrics and Results Commentary

— Total net sales were $1.1 billion, a year-over-year increase of 6%.

— Gross profit was $593.3 million, a year-over-year increase of 7%.

— Gross margin was 52.5%, a year-over-year increase of 65 basis points.

— Net income was $48.8 million, a year-over-year increase of 73%, primarily reflecting the increase in net sales, gross margin expansion and leverage on operating expenses year-over-year.

— Adjusted EBITDA was $69.5 million, a year-over-year increase of 60%.

— Diluted EPS was $0.69, a year-over-year increase of 82%.

Additional Full Year 2024 Net Sales Commentary

— REVOLVE segment net sales were $970.5 million, a year-over-year increase of 7%.

— FWRD segment net sales were $159.4 million, a year-over-year decrease of 3%.

— Domestic net sales were $903.5 million, a year-over-year increase of 4%.

— International net sales were $226.4 million, a year-over-year increase of 14%.

Cash Flow and Balance Sheet Commentary

— Net cash provided by operating activities was $26.7 million and free cash flow was $18.0 million for the year ended December 31, 2024, a decrease of 38% and 54%, respectively. The decrease in both cash flow measures primarily reflects unfavorable movements in working capital, partially offset by higher net income.

— Stock repurchases were $11.8 million for the year ended December 31, 2024, exclusive of broker fees and excise taxes. The company repurchased 767,198 shares of its Class A common stock during the full year 2024, at an average cost of $15.35. $57.6 million remained available under the company's $100 million stock repurchase program as of December 31, 2024.

— Balance sheet: Cash and cash equivalents as of December 31, 2024 grew to $256.6 million, an increase of $11.2 million, or 5%, from $245.4 million as of December 31, 2023. Our balance sheet as of December 31, 2024 remains debt free.

— Inventory as of December 31, 2024 was $229.2 million, an increase of $25.7 million, or 13%, from the inventory balance of $203.6 million as of December 31, 2023. The increase in inventory balance year-over-year was slightly lower than our 14% year-over-year growth in net sales during the fourth quarter of 2024.

Conference Call Information Revolve Group management will host a call today at 4:30 pm ET / 1:30 pm PT to discuss today's results in more detail. To participate, please dial (888) 596-4144 within the United States or (646) 968-2525 outside the United States approximately 10 minutes before the scheduled start of the call. The conference ID for the call is 2756104. The conference call will also be accessible, live via audio broadcast, on the Investor Relations section of the Revolve Group website at http://investors.revolve.com. A replay of the conference call will be available online at http://investors.revolve.com. In addition, an audio replay of the call will be available for one week following the call and can be accessed by dialing 1-800-770-2030 within the United States or (609) 800-9909 outside the United States. The replay conference ID is 2756104.

Forward-Looking Statements

This press release contains ''forward-looking statements'' within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding ourgrowth prospects and market share gains, expansion of owned brands, deployment of AI technology, expansion of physical retail and outlook for the first quarter and full year of 2025. Forward-looking statements include statements containing words such as “expect,” “anticipate,” “believe,” “project,” “will” and similar expressions intended to identify forward-looking statements. These forward-looking statements are based on our current expectations. Forward-looking statements involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to changing economic conditions and their impact on consumer demand and our business, operating results and financial condition; demand for our products; supply chain challenges; the effect of tariffs; inflationary pressures; wars and conflicts in Ukraine/Russia, Israel/Gaza and the Middle East; other geopolitical tensions; our fluctuating operating results; seasonality in our business; our ability to acquire products on reasonable terms; our e-commerce business model; our ability to attract customers in a cost effective manner; the strength of our brand; competition; fraud; system interruptions; our ability to fulfill orders; the impact of public health crises on our business, operations and financial results; the effect of claims, lawsuits, government investigations, other legal or regulatory proceedings or commercial or contractual disputes; and other risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission, or SEC, including, without limitation, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and our Annual Report on Form 10-K for the year ended December 31, 2024, which we expect to file with the SEC on February 25, 2025. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.

Use of Non-GAAP Financial Measures and Other Operating Metrics

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we reference in this press release and the accompanying tables the following non-GAAP financial measures: Adjusted EBITDA and free cash flow.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

We use these non-GAAP financial measures to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and when planning, forecasting, and analyzing future periods.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, please see the tables captioned “Reconciliation of Non-GAAP Financial Measures” included at the end of this release. We encourage reviewing the reconciliation in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items and may include other expenses, costs and non-recurring items.

Definitions of our non-GAAP financial measures and other operating metrics are presented below.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income before other (income) expense, net; taxes; and depreciation and amortization; adjusted to exclude the effects of equity-based compensation expense, certain transaction costs and certain non-routine items. Adjusted EBITDA is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and, in the case of exclusion of the impact of equity-based compensation, excludes an item that we do not consider to be indicative of our core operating performance.

Free Cash Flow

Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used in purchases of property and equipment, and purchases of rental product. We view free cash flow as an important indicator of our liquidity because it measures the amount of cash we generate. Free cash flow also reflects changes in working capital.

Active Customers

We define an active customer as a unique customer account from which a purchase was made across our platform at least once in the preceding 12-month period. In any particular period, we determine our number of active customers by counting the total number of customers who have made at least one purchase in the preceding 12-month period, measured from the last date of such period. We view the number of active customers as a key indicator of our growth, the reach of our sites, the value proposition and consumer awareness of our brand, the continued use of our sites by our customers and their desire to purchase our products.

Total Orders Placed

We define total orders placed as the total number of orders placed by our customers, prior to product returns, across our platform in any given period. We view total orders placed as a key indicator of the velocity of our business and an indication of the desirability of our products and sites to our customers. Total orders placed, together with average order value, is an indicator of the net sales we expect to recognize in a given period.

Average Order Value

We define average order value as the sum of the total gross sales from our sites in a given period, prior to product returns, divided by the total orders placed in that period. We believe our high average order value demonstrates the premium nature of our product assortment. Average order value varies depending on the site through which we sell merchandise, the mix of product categories sold, the number of units in each order, the percentage of sales at full price, and for sales at less than full price, the level of markdowns.

About Revolve Group, Inc.

Revolve Group, Inc. (NYSE: RVLV) is the next-generation fashion retailer for Millennial and Generation Z consumers. As a trusted premium lifestyle brand and a go-to online source for discovery and inspiration, we deliver an engaging customer experience from a vast yet curated offering of apparel, footwear, accessories, beauty and home products. Our dynamic platform connects a deeply engaged community of millions of consumers, thousands of global fashion influencers and more than 1,000 emerging, established and owned brands.

We were founded in 2003 by ourco-CEOs, Michael Mente and Mike Karanikolas. We sell merchandise through two complementary segments, REVOLVE and FWRD, that leverage one platform. Through REVOLVE, we offer an assortment of premium apparel, footwear, accessories and beauty products from emerging, established and owned brands. Through FWRD, we offer an assortment of curated and elevated iconic and emerging luxury brands. For more information, visit www.revolve.com.

Contacts:

Investors:

Erik Randerson, CFA 562.677.9513 IR@revolve.com

Media:

Jennifer Walker revolve@walkerdrawas.com

REVOLVE GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(Unaudited)(In thousands, except per share data) Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023Net sales $ 293,728 $ 257,778 $ 1,129,911 $ 1,068,719Cost of sales 139,430 123,729 536,638 514,520Gross profit 154,298 134,049 593,273 554,199Operating expenses:Fulfillment 9,456 8,997 37,389 36,654Selling and distribution 48,359 45,776 195,169 197,052Marketing 43,326 42,353 167,176 171,774General and administrative 41,756 34,724 142,122 126,585Total operating expenses 142,897 131,850 541,856 532,065Income from operations 11,401 2,199 51,417 22,134Other income, net (3,246) (2,677) (13,030) (15,627)Income before income taxes 14,647 4,876 64,447 37,761Provision for income taxes 2,877 1,382 15,676 9,614Net income 11,770 3,494 48,771 28,147Less: Net loss attributable to non-controlling interest 566 – 786 -Net income attributable to Revolve Group, Inc. stockholders $ 12,336 $ 3,494 $ 49,557 $ 28,147Earnings per share of Class A and Class Bcommon stock:Basic $ 0.17 $ 0.05 $ 0.70 $ 0.39Diluted $ 0.17 $ 0.05 $ 0.69 $ 0.38Weighted average number of shares of Class A and Class B common stock outstanding:Basic 70,975 71,782 70,846 72,961Diluted 72,135 72,171 71,677 73,583REVOLVE GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)(In thousands, except share and per share data) December 31, 2024 2023AssetsCurrent assets:Cash and cash equivalents $ 256,600 $ 245,449Accounts receivable, net 10,338 12,405Inventory 229,244 203,587Income taxes receivable 1,195 1,625Prepaid expenses and other current assets 63,711 65,523Total current assets 561,088 528,589Property and equipment (net of accumulated depreciation of $22,230 and $17,994 8,937 7,763as of December 31, 2024 and December 31, 2023, respectively)Right-of-use lease assets 36,259 36,440Intangible assets, net 2,294 1,875Goodwill 2,042 2,042Other assets 18,067 2,172Deferred income taxes, net 36,860 30,005Total assets $ 665,547 $ 608,886Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable $ 45,098 $ 47,821Income taxes payable 4 -Accrued expenses 38,524 40,714Returns reserve 69,661 63,780Current lease liabilities 9,066 6,863Other current liabilities 33,744 30,442Total current liabilities 196,097 189,620Non-current lease liabilities 31,665 34,126Total liabilities 227,762 223,746Stockholders' equity:Class A common stock, $0.001 par value; 1,000,000,000 shares 40 39authorized as of December 31, 2024 and December 31, 2023;39,699,150 and 38,693,589 shares issued and outstanding as of December 31, 2024and December 31, 2023, respectively.Class B common stock, $0.001 par value; 125,000,000 shares authorized 32 33as of December 31, 2024 and December 31, 2023; 31,501,330 and32,597,119 shares issued and outstanding as of December 31, 2024 andDecember 31, 2023, respectively.Additional paid-in capital 133,046 116,713Retained earnings 305,070 268,355Non-controlling interest (403) -Total stockholders' equity 437,785 385,140Total liabilities and stockholders' equity $ 665,547 $ 608,886REVOLVE GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(In thousands) Year Ended December 31, 2024 2023Operating activities:Net income $ 48,771 $ 28,147Adjustments to reconcile net income to net cash provided by operatingactivities:Depreciation and amortization 4,429 5,094Rental product depreciation 736 -Equity-based compensation 10,028 5,839Deferred income taxes, net (6,855) (5,251)Changes in operating assets and liabilities:Accounts receivable 2,067 (6,984)Inventories (24,791) 11,637Income taxes receivable 430 1,349Prepaid expenses and other current assets 1,812 (5,649)Other assets (13,593) (1,365)Accounts payable (2,723) (2,968)Income taxes payable 4 (229)Accrued expenses (2,190) 2,448Returns reserve 5,881 399Right-of-use lease assets and current and non-current lease liabilities (77) 3,010Other current liabilities 2,763 7,865Net cash provided by operating activities 26,692 43,342Investing activities:Purchases of property and equipment (5,649) (4,198)Purchases of rental product (3,038) -Cash paid for acquisition (427) -Net cash used in investing activities (9,114) (4,198)Financing activities:Proceeds from the exercise of stock options, net 6,415 536Repurchases of Class A common stock (11,778) (30,913)Net cash (used in) provided by financing activities (5,363) (30,377)Effect of exchange rate changes on cash and cash equivalents (1,064) 1,958Net increase in cash and cash equivalents 11,151 10,725Cash and cash equivalents, beginning of period 245,449 234,724Cash and cash equivalents, end of period $ 256,600 $ 245,449Supplemental disclosure of cash flow information:Cash paid during the period for:Income taxes, net of refund $ 22,203 $ 12,995Operating leases $ 9,305 $ 7,012Supplemental disclosure of non-cash activities:Lease assets obtained in exchange for new operating lease liabilities $ 7,180 $ 20,452REVOLVE GROUP, INC. AND SUBSIDIARIESSEGMENT INFORMATION(Unaudited)The following table summarizes our net sales, cost of sales and gross profit for each of our reportable segments (in thousands): Three Months Ended December31, Year Ended December31,Net sales 2024 2023 2024 2023REVOLVE $ 251,972 $ 220,025 $ 970,517 $ 904,525FWRD 41,756 37,753 159,394 164,194Total $ 293,728 $ 257,778 $ 1,129,911 $ 1,068,719Cost of salesREVOLVE $ 114,416 $ 98,682 $ 435,918 $ 412,708FWRD 25,014 25,047 100,720 101,812Total $ 139,430 $ 123,729 $ 536,638 $ 514,520Gross profitREVOLVE $ 137,556 $ 121,343 $ 534,599 $ 491,817FWRD 16,742 12,706 58,674 62,382Total $ 154,298 $ 134,049 $ 593,273 $ 554,199The following table lists net sales by geographic area (in thousands): Three Months Ended December31, Year Ended December31, 2024 2023 2024 2023United States $ 236,644 $ 213,658 $ 903,484 $ 870,405Rest of the world 57,084 44,120 226,427 198,314Total $ 293,728 $ 257,778 $ 1,129,911 $ 1,068,719REVOLVE GROUP, INC. AND SUBSIDIARIESKEY OPERATING AND FINANCIAL METRICS(Unaudited) Three Months Ended December31, Year Ended December31, 2024 2023 2024 2023 (in thousands, except average order value and percentages)Gross margin 52.5 % 52.0 % 52.5 % 51.9 %Adjusted EBITDA $ 18,272 $ 8,538 $ 69,516 $ 43,409Free cash flow $ 1,831 $ (4,960) $ 18,005 $ 39,144Active customers 2,668 2,543 2,668 2,543Total orders placed 2,172 2,022 8,867 8,701Average order value $ 301 $ 303 $ 302 $ 297REVOLVE GROUP, INC. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(Unaudited)A reconciliation of non-GAAP Adjusted EBITDA to net income for the three months and year ended December 31, 2024 and 2023 is as follows: Three Months Ended December31, Year Ended December31, 2024 2023 2024 2023 (in thousands)Net income $ 11,770 $ 3,494 $ 48,771 $ 28,147Excluding:Other income, net (3,246) (2,677) $ (13,030) (15,627)Provision for income taxes 2,877 1,382 $ 15,676 9,614Depreciation and amortization 928 1,342 $ 4,429 5,094Equity-based compensation 3,277 1,610 $ 10,028 5,839Transaction costs (1) 700 – $ 1,194 -Non-routine items (2) 1,966 3,387 $ 2,448 10,342Adjusted EBITDA $ 18,272 $ 8,538 $ 69,516 $ 43,409(1) Includes legal and professional service fees related to potential and consummated strategic acquisitions and investments.(2) Non-routine items in the three months and year ended December 31, 2024 included a $2.0 million non-routine loss related to a shipment theft incident, which we expect to recover in full through our insurance in future periods. Non-routine items for the year ended December 31, 2024 also included a $0.5 million charge for a settled matter related to non-routine import and export fees. Non-routine items in the three months and year ended December 31, 2023 included $0.6 million and $7.5 million in legal fees and charges for two separate settled legal matters, respectively and $2.8 million related to non-routine import and export fees.A reconciliation of non-GAAP free cash flow to net cash provided by operating activities for the three months and year ended December 31, 2024 and 2023 is as follows: Three Months Ended December31, Year Ended December31, 2024 2023 2024 2023 (in thousands)Net cash provided by (used in) $ 3,918 $ (3,876) $ 26,692 $ 43,342operating activitiesPurchases of property and equipment (1,830) (1,084) (5,649) (4,198)Purchases of rental product (257) – (3,038) -Free cash flow $ 1,831 $ (4,960) $ 18,005 $ 39,144Net cash used in investing activities $ (2,087) $ (1,084) $ (9,114) $ (4,198)Net cash provided by (used in) financing activities $ 5,623 $ (18,279) $ (5,363) $ (30,377)

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