Warby Parker NYSE: WRBY reported third-quarter revenue growth of 10.4% and adjusted earnings above its guidance as it prepared to launch Intelligent Eyewear, a product line executives expect to become a major growth driver in 2027.
Revenue rose to $244.7 million in the quarter, while adjusted EBITDA totaled $28.6 million, or 11.7% of revenue. The eyewear retailer narrowed its full-year outlook and included a modest contribution from Intelligent Eyewear for the first time, with initial customer deliveries expected to begin in mid-December.
Management said the launch comes against a challenging backdrop for the optical industry. Co-Founder and Co-CEO Neil Blumenthal said store traffic remained softer than the company would like, although customers continued to convert at healthy rates and spend more per order.
Intelligent Eyewear launch approaches
Warby Parker plans to unveil its full Intelligent Eyewear collection and pricing on Nov. 12, when pre-orders will begin. Customers will be able to try the products at 65 stores that week, with demonstrations expanding across the company’s store fleet the following week, Co-Founder and Co-CEO Dave Gilboa said.
The company is developing the products in partnership with Google and Samsung. Gilboa said the collection will be designed for prescription use from the outset, with customers also able to choose options including sun and photochromic lenses.
Gilboa said the devices will cost more than Warby Parker’s traditional eyewear, although the company did not disclose prices on the call. He said the company is focused on generating gross profit dollars per order and expects a significant share of orders to include lenses with margins comparable to existing products.
Management expects production and customer deliveries to build throughout 2027. Asked about supply constraints and the pace of deliveries relative to pre-orders, Blumenthal did not provide specific projections, saying the company would share more about the combined business in February.
Blumenthal said Warby Parker controls distribution of the products and has invested in capacity at its optical labs in New York and Nevada to fit prescription lenses. He also said the company expects to launch its largest marketing campaign around the product.
Revenue gains and softer industry demand
Retail revenue increased 12.4% year over year in the third quarter. E-commerce revenue rose 4.8% to $61.7 million, improving from a 2% decline in the first half of 2026 as the effect of ending the Home Try-On program diminished. Blumenthal said that headwind is expected to fully roll off at the end of the year.
The company opened 12 net new stores in the quarter, bringing its total to 364. It has opened 41 net new stores year to date and remains on track for 50 openings for the full year.
Eye exams grew 30% year over year, while insurance business grew 22%, Gilboa said. In-network insurance penetration reached 8.4%, up from 7.4% a year earlier. Blumenthal said cash-pay customers were more affected by softness in the category than insured customers.
Active customers grew 3% over the trailing 12 months, while average revenue per customer increased 6.7% year over year. Blumenthal attributed the latter increase in part to eye exams and greater use of progressive lenses and other lens enhancements.
Third-quarter adjusted gross profit was $133.6 million, or 54.6% of revenue, an improvement of 40 basis points from a year earlier. Chief Financial Officer Adrian Mitchell attributed the increase partly to reduced tariffs, shipping improvements and optical lab efficiencies. Adjusted selling, general and administrative expenses rose to 49.4% of revenue from 48.7% a year earlier.
Guidance includes limited launch contribution
For 2026, Warby Parker expects revenue of $966 million to $976 million, representing growth of about 11% to 12%, and adjusted EBITDA of $117 million to $119 million. The company forecast fourth-quarter revenue of $243 million to $253 million and adjusted EBITDA of $26 million to $28 million.
Mitchell said the outlook includes up to one percentage point of full-year revenue growth and several percentage points of fourth-quarter growth from Intelligent Eyewear. Revenue is recognized when products are delivered, rather than when orders are placed.
The guidance does not assume any boost to the core business from additional Intelligent Eyewear traffic, Mitchell said. It does include launch-related expenses, including staffing, brand and media investments. He said the company maintained flexibility in its outlook to respond to additional needs during the launch.
Warby Parker ended the quarter with $288 million in cash. Mitchell said free cash flow was affected by launch-related investments, including spending on stores and optical labs, as well as the timing of partner reimbursements.
About Warby Parker (NYSE:WRBY)
Warby Parker Inc is an optical retailer that designs, manufactures and sells prescription eyeglasses, sunglasses, contact lenses and related accessories. The company offers its products through its website, mobile applications and a growing network of retail stores, combining online shopping with in-person services such as frame fitting and eye examinations.
Founded in 2010 by Neil Blumenthal, Dave Gilboa, Andrew Hunt and Jeffrey Raider, Warby Parker was established as a direct-to-consumer eyewear company.
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