A month has gone by since the last earnings report for Wayfair (W Quick QuoteW - Free Report) . Shares have added about 5.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Wayfair due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Wayfair Inc. before we dive into how investors and analysts have reacted as of late.

Wayfair's Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Wayfair reported second-quarter 2025 non-GAAP earnings of 87 cents per share, beating the Zacks Consensus Estimate by 141.67%. The company had reported a profit of 47 cents per share in the year-ago quarter.

Net revenues of $3.3 billion beat the consensus mark by 4.25%. The top line increased by a mere $156 million year over year, driven by a steady performance in the U.S. segment.

Last Twelve Months (LTM) net revenues per active customer increased 5.9% year over year to $572, which beat the Zacks Consensus Estimate by 8.13%.

Further, the active customer base declined. The metric decreased 4.5% year over year to 21 million and missed the consensus mark by 4.7%.

Wayfair’s Q2 in Details

Net revenues in the United States (87.8% of total net revenues) increased 5.3% year over year to $2.9 billion. The figure beat the Zacks Consensus Estimate by 3.88%.

International net revenues (12.2% of total net revenues) increased 3.1% year over year to $399 million. The number missed the consensus mark by 12.11%.

Orders per customer for the quarter were 1.86, up from 1.85 reported in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 4.03%.

The average order value increased from $313 to $328 year over year, beating the consensus mark by 1.4%.

The total number of delivered orders in the reported quarter was 10 million, which remained the same year over year.

Repeat customers placed 8.1 million orders (80.7% of total orders delivered) in the second quarter, down 1.2% year over year.

Additionally, 62.9% of total delivered orders were placed through mobile devices in the reported quarter compared with 63.7% in the year-ago quarter.

Operating Results of Wayfair

Wayfair's second-quarter gross margin was 30.1% compared with 30.2% in the year-ago quarter. This was driven primarily by the company's marketplace model advantages and strategic reinvestments.

Adjusted EBITDA was $205 million, up from $163 million in the year-ago quarter, representing a 6.3% margin.

Customer service and merchant fees remained stable year over year at 121 million and represented 3.6% of net revenue.

Advertising expenses increased 1.9% year over year to $372 million.  Selling, operations, technology and general and administrative expenses decreased 4.9% year over year to $465 million.

Wayfair achieved a GAAP operating income of $17 million in the reported quarter compared with an operating loss of $35 million in the year-ago quarter.

Balance Sheet & Cash Flow of Wayfair

As of June 30, 2025, cash, cash equivalents, and short-term investments were $1.4 billion, unchanged from March 31, 2025.

Long-term debt was $2.9 billion as of June 30, 2025.

In the second quarter, net cash provided by operations amounted to $177 million compared with $96 million cash used in operations during the previous quarter.

Wayfair reported a free cash flow of $230 million in the second quarter.

Q3 2025 Guidance

Wayfair anticipates revenue growth in the low to mid-single digit range year-over-year for the third quarter, incorporating approximately 100 basis points of headwind from the German market exit. Gross margin is projected to be positioned at the lower end of the 30-31% target range. Adjusted EBITDA margin is expected to fall within the 5-6% range for the third quarter of 2025.
 
Customer service and merchant fees are forecast to remain just under 4% of net revenue. Advertising expenses are expected to represent 11-12% of net revenue. Selling, operations, technology, and general and administrative costs are projected to be between $360 and $370 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 52.73% due to these changes.

VGM Scores

At this time, Wayfair has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wayfair has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Wayfair is part of the Zacks Internet - Commerce industry. Over the past month, Booking Holdings (BKNG Quick QuoteBKNG - Free Report) , a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended June 2025 more than a month ago.

Booking Holdings reported revenues of $6.8 billion in the last reported quarter, representing a year-over-year change of +16%. EPS of $55.40 for the same period compares with $41.90 a year ago.

For the current quarter, Booking Holdings is expected to post earnings of $95.56 per share, indicating a change of +13.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Booking Holdings. Also, the stock has a VGM Score of B.