Wayfair reported its first annual revenue increase since 2020, with sales reaching $12.5 billion in 2025. The online furniture retailer surpassed Wall Street expectations for both revenue and profit, driven by higher order volumes and improved customer acquisition. Profitability continued to strengthen, with adjusted EBITDA reaching $224 million, exceeding market forecasts.

On Thursday, Wayfair announced it achieved its first annual sales growth since 2020, as it continues to attract cost-conscious shoppers. Revenue for 2025 increased by 5.1% to $12.5 billion, reversing a decline of over 1% seen in 2024. The e-commerce giant outperformed analyst estimates for both revenue and profit in the fourth quarter, with stronger sales driving the results.

Co-founder and CEO Niraj Shah stated in the release, "The fourth quarter capped off an outstanding year for Wayfair. We achieved a third consecutive quarter of new customer growth and saw solid repeat order growth, even as the broader industry experienced low-single-digit contraction during the period. In 2025, we returned to growth and accelerated throughout the year through several organic business strategies that will continue to deliver for years to come."

Despite the sales growth and better-than-expected performance, Wayfair's stock fell more than 10% in Thursday's premarket trading.

Below is a comparison of Wayfair's fourth-quarter results versus Wall Street expectations (based on a Refinitiv analyst survey):

Earnings per share: Adjusted $0.85 vs. $0.66 expected Revenue: $3.34 billion vs. $3.30 billion expected

For the three months ended December 31, Wayfair reported a net loss of $116 million, or a loss of $0.89 per share, compared with a loss of $128 million, or $1.02 per share, in the year-ago period. Excluding stock-based compensation and other one-time items, earnings per share were $0.85.

Wayfair has now posted significant revenue growth for two consecutive quarters, with sales reaching $3.34 billion in the latest quarter, up approximately 7% from $3.12 billion a year earlier.

Although Wayfair has not reported an annual net profit since 2020, its adjusted EBITDA has shown consistent improvement. Adjusted EBITDA for the quarter was $224 million, above the $200 million expected by StreetAccount.

Chief Financial Officer Kate Gulliver remarked in an interview, "Ultimately, this is the result of the full year 2025. I think this year was critical for us in proving our share gain and profitability story. It delivered an exceptionally strong revenue quarter, and despite a challenging macro environment, we continued to gain market share while posting meaningful growth in adjusted EBITDA."

The company's return to revenue growth over the past two quarters has helped drive improved profitability. If sales trends continue, Wayfair expects further profit improvement.

Wayfair's growth comes during a challenging period for the furniture industry, where tariffs, high interest rates, and sluggish home sales have dampened demand for new sofas, dining tables, and other items. Consumers are still purchasing these goods but are increasingly focused on value and low prices—a need Wayfair is well-positioned to meet through its extensive network of manufacturers.

During the quarter, the average order value rose to $301 from $290 a year earlier, while delivered orders grew at a similar pace. Despite industry-wide price increases in home goods, Wayfair's order volume trends kept pace with order values.

Over the past year, Wayfair has focused on enhancing the customer experience through initiatives such as its member rewards program and Wayfair Certified Refurbished, along with website improvements.

Gulliver added, "I believe the combination of these consumer-facing initiatives has helped us gain market share in what remains a challenging industry environment."