Wayfair Q4 Adjusted EBITDA Soars 60% as Revenue Ex-Germany Rises 7.8%
Wayfair’s Q4 2025 net revenue grew 6.9% year-over-year (7.8% excluding Germany), with US sales up over 7% and adjusted gross margin at 30.3%. Adjusted EBITDA was $224 million (6.7% margin), full-year EBITDA rose 60% to $743 million, free cash flow improved 40% to $145 million, and net leverage fell below 2.5x on $1.5 billion cash.
1. Revenue Growth and Margins
Wayfair’s Q4 2025 net revenue rose 6.9% year-over-year (7.8% excluding Germany), driven by over 7% US growth and nearly 4% international growth. Adjusted gross margin reached 30.3% of net revenue and contribution margin improved to 15.3%, up 250 basis points from Q4 2024.
2. EBITDA and Cash Flow
Adjusted EBITDA was $224 million (6.7% margin) in Q4, while full-year adjusted EBITDA surged 60% to $743 million. Free cash flow for the quarter improved 40% to $145 million, contributing to operating cash flow of $534 million for 2025.
3. Liquidity and Leverage
The company ended Q4 with $1.5 billion in cash and $1.9 billion in total liquidity, reducing net leverage to under 2.5x from approximately 4x at the end of 2024. This strengthened balance sheet supports strategic investments and debt reduction efforts.
4. Strategic Initiatives and Outlook
Wayfair expanded its physical retail footprint with new stores in Atlanta, Columbus and Denver and grew its Rewards program to over 1 million members, now generating more than 15% of US revenue. The company expects mid-single-digit revenue growth in Q1 2026 and anticipates margins dipping below 30% due to market share investments.