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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-38927

REVOLVE GROUP, INC.

(Exact name of registrant as specified in its charter)

     Delaware

     46-1640160

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification No.)

12889 Moore Street

Cerritos, California 90703

(Address of principal executive offices) (Zip code)

(562) 677-9480

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol(s):	Name of each exchange on which registered:
Class A Common Stock, par value $0.001 per share	RVLV	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 28, 2026, 41,412,365 shares of the registrant’s Class A common stock and 30,143,178 shares of the registrant’s Class B common stock were outstanding.

REVOLVE GROUP, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)		7

Condensed Consolidated Balance Sheets		7

Condensed Consolidated Statements of Income		8

Condensed Consolidated Statements of Comprehensive Income		9

Condensed Consolidated Statements of Cash Flows		10

Notes to the Condensed Consolidated Financial Statements		11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23

Item 3. Quantitative and Qualitative Disclosures About Market Risk		40

Item 4. Controls and Procedures		41


PART II - OTHER INFORMATION

Item 1. Legal Proceedings		42

Item 1A. Risk Factors		42

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		77

Item 3. Defaults Upon Senior Securities		77

Item 4. Mine Safety Disclosures		77

Item 5. Other Information		78

Item 6. Exhibits		79

Signatures		80

SUMMARY RISK FACTORS

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report titled “Risk Factors.” The following is a summary of the principal risks we face:

•

Economic downturns and other macroeconomic conditions or trends may adversely affect consumer discretionary spending and our business, operating results and financial condition.

•

Tariffs imposed by, threatened by or increased by the U.S. or foreign governments have increased and may continue to increase the cost of our products, ignite a global trade war or otherwise have a material adverse effect on our business, financial condition and results of operations.

•

If we fail to effectively manage our growth, our business, financial condition and operating results could be harmed.

•

We purchase inventory in anticipation of sales, and if we are unable to manage our inventory effectively, our operating results could be adversely affected.

•

Elevated merchandise returns may adversely affect our operating results and financial condition.

•

If we are unable to anticipate and respond to changing customer preferences and shifts in fashion and industry trends in a timely and cost-effective manner, our business, financial condition and operating results could be harmed.

•

Our business depends on our ability to maintain a strong community of brands, engaged customers and influencers. We may not be able to maintain and enhance our existing brand community if we receive customer or influencer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, operating results and growth prospects.

•

Use of social media and influencers may materially and adversely affect our reputation or subject us to regulatory and tax obligations, fines, lawsuits or other penalties.

•

If we fail to acquire new customers, or fail to do so in a cost-effective manner, our financial results may be materially adversely impacted.

•

If we fail to retain existing customers, or fail to maintain average order value levels, we may not be able to maintain our revenue base and margins, which would have a material adverse effect on our business and operating results.

•

Our business, including our costs and supply chain, is subject to risks associated with sourcing, manufacturing and warehousing.

•

We rely on third-party suppliers, manufacturers, distributors and other vendors and they may not continue to produce products or provide services that are consistent with our standards or applicable regulatory requirements, which could harm our brand, cause consumer dissatisfaction, and require us to find alternative suppliers of our products or services.

•

Shipping is a critical part of our business and any changes in or interruptions to our shipping arrangements, or any damage, theft or loss of inventory during shipping, could adversely affect our business and operating results.

•

Our industry is highly competitive and if we do not compete effectively, our operating results could be adversely affected.

•

Our quarterly operating results may fluctuate, which could cause our stock price to decline.

•

We may be unable to accurately forecast net sales and appropriately plan our expenses in the future.

•

Our past growth rates are not indicative of expected results in the near term.

•

If we do not successfully optimize, operate and manage the expansion of capacity of our fulfillment centers, our business, financial condition and operating results could be harmed.

•

Our failure to adequately and effectively staff our fulfillment centers, with our own employees or through third parties, could adversely affect our customer experience and operating results.

•

Increases in labor costs, including wages, could adversely affect our business, financial condition and results of operations.

•

Our operating results could be adversely affected by natural disasters, such as wildfires and earthquakes, public health crises, political crises, terrorist attacks, wars and geopolitical tensions, social unrest and other catastrophic events.

•

We may expand our business through acquisitions, joint ventures, strategic investments and commercial collaborations, which may divert management’s attention, be difficult to integrate, disrupt our business, dilute stockholder value, prove to be unsuccessful and adversely affect our business, operating results and financial condition.

•

Any failure by us or our vendors to comply with trade and other regulations including importation, exportation, product safety, labeling, labor or other laws, or to provide safe conditions for our or their workers, may lead to investigations or actions by government regulators, damage our reputation and brands and harm our business.

•

We have operations and do business in China, which exposes us to risks inherent in doing business there.

•

We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results.

•

Failure to comply with federal, state and international laws and regulations and our contractual obligations relating to privacy, data protection and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection and consumer protection, could harm our reputation or adversely affect our business and our financial condition.

•

Our use of AI and machine learning could adversely affect our business and operating results.

•

If we cannot successfully protect our intellectual property, our business would suffer.

•

The dual class structure of our common stock concentrates voting control with our executive officers, directors and their affiliates, which may depress the trading price of our Class A common stock.

Our risk factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

REVOLVE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)


	March 31,		December 31,
	2026		2025
Assets
Current assets:
Cash and cash equivalents	$	335,845	$	292,256
Restricted cash		—		10,943
Accounts receivable, net		26,454		16,561
Inventory		245,077		251,844
Income taxes receivable		1,950		1,717
Prepaid expenses and other current assets		78,912		73,706
Total current assets		688,238		647,027
Property and equipment (net of accumulated depreciation of $27,519 and $26,245 as of March 31, 2026 and December 31, 2025, respectively)		18,904		15,371
Right-of-use lease assets		30,072		28,832
Intangible assets, net		2,481		2,410
Goodwill		2,042		2,042
Other assets		39,905		29,560
Deferred income taxes		39,759		39,759
Total assets	$	821,401	$	765,001
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	71,021	$	56,409
Income taxes payable		4,643		1,357
Accrued expenses		51,664		44,297
Returns reserve		81,787		76,985
Current lease liabilities		10,851		10,534
Other current liabilities		50,620		40,963
Total current liabilities		270,586		230,545
Non-current lease liabilities		22,564		21,921
Total liabilities		293,150		252,466
Stockholders’ equity:
Class A common stock, $0.001 par value; 1,000,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 41,370,873 and 40,861,973 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		41		41
Class B common stock, $0.001 par value; 125,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 30,159,150 and 30,509,949 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		30		30
Additional paid-in capital		145,209		144,249
Retained earnings		381,816		368,215
Non-controlling interest		1,155		—
Total stockholders’ equity		528,251		512,535
Total liabilities and stockholders’ equity	$	821,401	$	765,001

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

REVOLVE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)


	Three Months Ended March 31,
	2026			2025
Net sales	$	342,880		$	296,709
Cost of sales		162,265			142,423
Gross profit		180,615			154,286
Operating expenses:
Fulfillment		10,772			9,358
Selling and distribution		57,699			49,956
Marketing		54,226			42,402
General and administrative		42,263			37,882
Total operating expenses		164,960			139,598
Income from operations		15,655			14,688
Equity earnings in unconsolidated subsidiaries		(136	)		—
Other income, net		(2,676	)		(893	)
Income before income taxes		18,467			15,581
Provision for income taxes		4,709			4,175
Net income		13,758			11,406
Less: Net loss attributable to non-controlling interest		594			413
Net income attributable to Revolve Group, Inc. stockholders	$	14,352		$	11,819
Earnings per share of Class A and Class B common stock:
Basic	$	0.20		$	0.17
Diluted	$	0.20		$	0.16
Weighted average number of shares of Class A and Class B common stock outstanding:
Basic		71,458			71,256
Diluted		72,351			72,271

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

REVOLVE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026			2025
Net income	$	13,758		$	11,406
Other comprehensive (loss) income:
Cumulative translation adjustment		(751	)		1,958
Total other comprehensive (loss) income		(751	)		1,958
Total comprehensive income		13,007			13,364
Less: Comprehensive income attributable to non-controlling interest		—			(35	)
Comprehensive income attributable to Revolve Group, Inc. stockholders	$	13,007		$	13,399

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

REVOLVE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026			2025
Operating activities:
Net income	$	13,758		$	11,406
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,349			1,018
Rental product depreciation		560			351
Gain on sale of rental product		(250	)		—
Equity-based compensation		3,249			2,753
Equity earnings in unconsolidated subsidiaries		(136	)		—
Changes in operating assets and liabilities:
Accounts receivable		(9,893	)		(6,482	)
Inventories		6,767			15,555
Income taxes receivable		(233	)		73
Prepaid expenses and other current assets		(5,206	)		(4,513	)
Other assets		11			(3,989	)
Accounts payable		14,612			12,256
Income taxes payable		3,286			2,639
Accrued expenses		7,367			(559	)
Returns reserve		4,802			8,866
Right-of-use lease assets and current and non-current lease liabilities		(280	)		37
Other current liabilities		9,657			5,734
Net cash provided by operating activities		49,420			45,145
Investing activities:
Purchases of property and equipment		(4,953	)		(1,779	)
Purchases of rental product		—			(562	)
Proceeds from sale of rental product		434			—
Investment in equity method investees		(10,964	)		—
Net cash used in investing activities		(15,483	)		(2,341	)
Financing activities:
Proceeds from the exercise of stock options, net of tax withholdings on share-based payment awards		(540	)		(531	)
Net cash used in financing activities		(540	)		(531	)
Effect of exchange rate changes on cash and cash equivalents		(751	)		1,958
Net increase in cash and cash equivalents		32,646			44,231
Cash, cash equivalents and restricted cash, beginning of period		303,199			256,600
Cash, cash equivalents and restricted cash, end of period	$	335,845		$	300,831
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes, net of refund	$	1,830		$	468
Operating leases	$	3,585		$	2,841
Supplemental disclosure of non-cash activities:
Lease assets obtained in exchange for new operating lease liabilities	$	3,500		$	6,096

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

REVOLVE GROUP, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Description of Business

Revolve Group, Inc., or REVOLVE, is a retailer and fashion brand. Through our websites, mobile applications and other channels, we deliver an aspirational customer experience with a vast, yet curated, merchandise offering. Our dynamic platform connects a deeply engaged community of consumers, global fashion influencers, and emerging, established and owned brands. We are headquartered in Los Angeles County, California.

Note 2. Significant Accounting Policies

Basis of Presentation

Our unaudited condensed consolidated interim financial information has been prepared in accordance with Article 10 of Regulation S-X. As permitted under those rules, certain footnotes or other financial information that are normally required by generally accepted accounting principles, or GAAP, in the United States can be condensed or omitted. These financial statements have been prepared on the same basis as our annual audited financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of our financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2026 or for any other interim period or for any other future year. All intercompany transactions and balances have been eliminated in consolidation. Our fiscal year ends on December 31 of each year.

The accompanying unaudited condensed consolidated financial statements and related notes thereto should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2025 contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on February 25, 2026.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include: the allowance for sales returns, the valuation of deferred tax assets, inventory, equity‑based compensation, valuation of goodwill, reserves for income tax uncertainties and other contingencies, and breakage of store credit and gift cards.

Net Sales

Revenue is primarily derived from the sale of apparel merchandise through our sites and, when applicable, shipping revenue. We recognize revenue through the following steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation. A contract is created with our customer at the time the order is placed by the customer, which creates a performance obligation to deliver the product to the customer. We recognize revenue for the performance obligation at the time control of the merchandise passes to the customer, which is at the time of shipment. In addition, we have elected to treat shipping and handling as fulfillment activities and not a separate performance obligation.

We have a Loyalty Club program within the REVOLVE and FWRD segments. Eligible customers who enroll in the program will generally earn points for every dollar spent and will automatically receive a $20 reward once they earn 2,000 points. We defer revenue based on an allocation of the price of the customer purchase and the estimated standalone selling price of the points earned. Revenue is recognized once the reward is redeemed or expires or once

unconverted points expire. Rewards generally expire 90 days after they are issued and unconverted points generally expire if a customer fails to engage in any activity that generates points for a period of one year or if their participation in the program is otherwise terminated.

In accordance with our policy on returns and exchanges, merchandise returns are generally accepted for full refund if returned within 30 days of the original purchase date and merchandise may be exchanged up to 60 days from the original purchase date. At the time of sale, we establish a reserve for merchandise returns, based on historical experience, merchandise mix and expected future returns, which is recorded as a reduction of sales. Accordingly, cost of sales is also reduced and an offsetting asset is recorded within prepaid expenses and other current assets for expected merchandise to be returned.

The following table presents a roll-forward of our sales return reserve for the three months ended March 31, 2026 (in thousands):


	Three Months Ended March 31,
	2026			2025
Beginning balance	$	76,985		$	69,661
Returns		(425,489	)		(376,814	)
Provisions		430,291			385,680
Ending balance	$	81,787		$	78,527

We may also issue store credit in lieu of cash refunds or exchanges and sell gift cards without expiration dates to our customers. Store credits issued and proceeds from the issuance of gift cards are recorded as deferred revenue and recognized as revenue when the store credit or gift cards are redeemed or upon inclusion in our store credit and gift card breakage estimates. Revenue recognized in net sales on breakage on store credit and gift cards was $1.3 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively.

Sales taxes and duties collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. We currently collect and remit sales taxes in all U.S. states that have enacted laws requiring out-of-state retailers to do so. However, certain jurisdictions may assert that we have tax collection obligations for prior periods in which we did not collect sales taxes. To the extent such obligations are determined to apply and the applicable statutes of limitations have not expired, we could be subject to assessments, interest, or penalties. No significant interest or penalties related to sales taxes are recognized in the accompanying condensed consolidated financial statements.

We have exposure to losses from fraudulent credit card charges. We record losses when incurred related to these fraudulent charges as amounts have historically been insignificant.

See Note 9, Segment Information, for disaggregation of net sales by reportable segment, geographic area and major product category.

Rental Product, Net

We rent a limited quantity of our product assortment, primarily handbags, to customers through a consignment agreement with a third party. We consider rental product to be a long-term productive asset and classify it as other assets within the Company’s condensed consolidated balance sheets.

Rental product is stated at cost, less accumulated depreciation. We depreciate rental product, less an estimated salvage value, over its estimated useful life, using the straight-line method. The estimated useful life of our rental product is typically two years. Rental product depreciation is included in cost of sales in the condensed consolidated statements of income. As of March 31, 2026, rental product, net amounted to $1.9 million and was included within other assets. Rental product depreciation was $0.6 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively.

Our consignment partner offers customers an opportunity to purchase items in rentable condition prior to the end of their useful life. In such instances, we consider the disposal of rental product to be a sale and record the proceeds

as net sales and record the net book value of the items at the time of sale as cost of sales in the condensed consolidated statements of income. Write-offs for losses on lost, damaged, and unreturned products are recorded as rental product depreciation within cost of sales.

Rental Product Revenues

Rental product revenues are recognized ratably over the subscription period, commencing on the date the subscriber enrolls in the rental program, net of discounts, customer credits and refunds and are recorded within net sales in the condensed consolidated statements of income. The subscription fees are collected from the customer upon enrollment. The subscription has a minimum period of three months after which it renews automatically on a monthly basis until cancelled by the customer.

Business Combinations

We account for business combinations using the acquisition method. All of the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree are recorded at their acquisition date fair values. The difference between the aggregate consideration paid for an acquisition and the fair value of the net assets acquired is recorded as either goodwill or a bargain purchase gain. Identifiable intangible assets with finite lives are amortized over their useful lives. Amortization of intangible assets is recorded within general and administrative expenses.

We use estimates and assumptions available to us as a part of the determination of fair value to accurately value assets acquired, liabilities assumed and any non-controlling interest on the business combination date. These estimates are subject to measurement period adjustments. As a result, during the preliminary determination of fair value, which may be up to one year from the business combination date, we may record adjustments to the assets acquired or liabilities assumed subsequent to the completion of the determination of fair value in the period in which the adjustments were determined. Non-controlling interest, if any, is measured using the fair value of the subsidiaries’ identifiable assets and liabilities at the date of acquisition, subject to possible adjustments for up to one year from the business combination date.

We also may incur acquisition-related and other expenses including legal, banking, accounting and other advisory fees of third parties which are recorded within general and administrative expenses in the period in which they were incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date.

Equity Method Investment

On January 1, 2026, we acquired a 48% equity interest in a privately held apparel company for approximately $11.0 million in cash. This transaction was accounted for as equity method investment, reflecting our ability to exercise significant influence over the investee without a controlling financial interest, and is recorded within other assets.

Under the equity method, the investment is initially recorded at cost and subsequently adjusted for our proportionate share of the investee’s net income or loss and distributions received.

Disposal of Subsidiary

During the second quarter of 2024, pursuant to a decision rendered by the Commercial Court of Paris, Revolve Group, Inc. acquired the business of Alexandre Vauthier, a French luxury fashion brand, for $0.4 million. The acquisition was made through L.A. Rive Droite, a newly incorporated French joint stock company. Under the terms of the agreement, until recently, Revolve Group owned an 80% interest and Mr. Alexandre Vauthier owned the remaining 20% interest in L.A. Rive Droite.

During the second quarter of 2025, we ceased funding the operations of our majority-owned foreign subsidiary, L.A. Rive Droite. Shortly thereafter, the subsidiary initiated formal insolvency proceedings under local law, which

was approved on May 28, 2025. As a result, we no longer exercise control over the subsidiary and deconsolidated its financial results effective May 28, 2025.

We recognized a $2.4 million loss on deconsolidation in the second quarter of 2025, reflecting the derecognition of net assets, the write-off of our investment and shareholder loans and the elimination of non-controlling interest. This amount is included in other income, net in our condensed consolidated statements of income.

Accounting Pronouncements Not Yet Effective

In November 2024, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2024-03, Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 320‑40), which requires additional disclosures around specific expense categories in the notes to the financial statements. This guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact that this new guidance may have on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued Accounting Standards Update, or ASU, 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350‑40): Targeted Improvements to the Accounting for Internal-Use Software, which replaces the previous project-stage model with a principles-based approach for capitalizing internal-use software costs. This guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact that this new guidance may have on our consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact that this new guidance may have on our disclosures.

Note 3. Line of Credit

On February 2, 2026, we amended our existing credit agreement to, among other things, extend the maturity date from March 23, 2026 to February 2, 2031, adjust the eligible inventory component of the borrowing base, amend certain of the reporting obligations and provide additional flexibility under certain of the negative covenants. The line of credit provides us with up to $75.0 million aggregate principal in revolver borrowings, based on eligible inventory and accounts receivable less reserves. Borrowings under the credit agreement accrue interest at a per annum rate equal to, at our option, (1) a base rate equal to the highest of (a) the federal funds rate, plus 0.50%, (b) the prime rate and (c) a term SOFR rate determined on the basis of a one-month interest period, plus 1.00%, or (2) a term SOFR rate, subject to a floor of 0.00%, in each case, plus a margin ranging from 0.25% to 0.75% per year in the case of base rate loans, and 1.25% to 1.75% per year in the case of term SOFR rate loans, depending upon availability under the credit agreement as of the most recently ended fiscal quarter. No borrowings were outstanding as of March 31, 2026 and December 31, 2025.

We are also obligated to pay other customary fees for a credit facility of this size and type, including an unused commitment fee. The credit agreement also permits us, in certain circumstances, to request an increase in the facility by an additional amount of up to $25.0 million (in an initial minimum amount of $10.0 million and in increments of $5.0 million thereafter) at the same maturity, pricing and other terms as the existing revolving commitments. Our obligations under the credit agreement are secured by substantially all of our assets and the assets of our subsidiaries that are borrowers or guarantors under the credit agreement. The credit agreement also contains customary covenants restricting certain of our activities, including limitations on our ability to sell assets, engage in mergers and acquisitions, enter into transactions involving related parties, obtain letters of credit, incur indebtedness, repurchase stock or grant liens or negative pledges on our assets, make loans or make other investments. Under these covenants, we are prohibited from paying cash dividends with respect to our capital stock, subject to certain exceptions. We are also required to maintain a minimum consolidated fixed charge coverage ratio of 1.00 to 1.00 for any twelve consecutive fiscal month period, determined as of the last date of each fiscal quarter.

Note 4. Equity-based Compensation

In 2013, Twist Holdings, LLC, or Twist, and Advance Holdings, LLC, or Advance, which subsequently became part of Revolve Group, Inc., adopted equity incentive plans that we refer to collectively as the 2013 Plan, pursuant to which the board of managers could grant options to purchase Class A units to officers and employees. Options could be granted with an exercise price equal to or greater than the unit’s fair value at the date of grant. All issued awards have 10 year terms and generally vest and become fully exercisable annually over five years of service from the date of grant. Awards will become fully vested upon the sale of the company. The then-outstanding options to purchase Class A units were converted into options to purchase shares of our Class B common stock in connection with our corporate conversion in June 2019.

In September 2018, the board of directors adopted the 2019 Equity Incentive Plan, or the 2019 Plan, which became effective in June 2019. Under the 2019 Plan, a total of 4,500,000 shares of our Class A common stock are reserved for issuance as options, stock appreciation rights, restricted stock, restricted stock units, or RSUs, performance units or performance shares. Upon the completion of our IPO, the 2019 Plan replaced the 2013 Plan, however, the 2013 Plan continues to govern the terms and conditions of the outstanding awards previously granted under that plan. The number of shares that will be available for issuance under our 2019 Plan also will increase annually on the first day of each year in an amount equal to the least of: (1) 6,900,000 shares, (2) 5% of the outstanding shares of all classes of our common stock as of the last day of the immediately preceding year and (3) such other amount as our board of directors may determine. Our board of directors determined not to increase the number of shares reserved for issuance under the 2019 Plan as of January 1, 2026. As of March 31, 2026, approximately 8.0 million shares of Class A common stock remain available for future issuance under the 2019 Plan.

Option activity for the three months ended March 31, 2026 under the 2013 Plan and 2019 Plan is as follows:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (thousands)
Balance at January 1, 2026		4,775,949		$	17.06		6.7	$	68,926
Granted		254,562			25.51		9.9
Exercised		(70,243	)		12.23		—
Forfeited		(10,790	)		24.03		—
Expired		(11,123	)		21.21		—
Balance at March 31, 2026		4,938,355			17.54		6.7		36,359
Exercisable at March 31, 2026		1,827,105			18.43		4.8		15,319
Vested and expected to vest		3,905,083			18.64		6.5		26,842

RSU award activity for the three months ended March 31, 2026 under the 2019 Plan is as follows:


	Class A Common Stock			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (thousands)
Unvested at January 1, 2026		134,606		$	22.43		1.8	$	4,064
Granted		145,387			25.13		—
Released		(143,201	)		25.16		—
Forfeited		—			—		—
Unvested at March 31, 2026		136,792			22.43		1.4		3,093

There were 254,562 options and 145,387 RSUs granted during the three months ended March 31, 2026. The weighted average grant-date fair value of options and RSUs granted during the three months ended March 31, 2026 was $13.73 per share and $25.13 per share, respectively.

As of March 31, 2026, there was $15.4 million of total unrecognized compensation cost related to unvested RSUs and time-based options granted under the 2013 Plan and 2019 Plan, which is expected to be recognized over a weighted average service period of 3.5 years.

2023 Performance Option Awards

On September 15, 2023, the Company granted an aggregate of 1,701,479 performance-based options to certain members of management with an exercise price of $13.05 and a grant-date fair value of $6.79. In addition, on November 3, 2023, the Company granted 49,971 performance-based options to a member of management with an exercise price of $13.35 and a grant-date fair value of $6.94. Collectively, we refer to these option awards as the 2023 Performance Option Awards. The 2023 Performance Option Awards are subject to multiple vesting tranches that vest upon achievement of certain predefined financial milestones. As of March 31, 2026, we had $1.8 million of total unrecognized stock-based compensation expense for the financial milestones that were considered probable of achievement, which will be recognized over a weighted-average period of 1.7 years. As of March 31, 2026, we had unrecognized stock-based compensation expense of $6.8 million for the operational milestones that were considered not probable of achievement. During the three months ended March 31, 2026 and 2025, we recorded stock-based compensation expense of $0.5 million and $0.1 million, respectively, related to the 2023 Performance Option Awards.

2026 Performance Option Awards

On March 1, 2026, the Company granted an aggregate of 119,246 performance-based options to certain employees and members of management with an exercise price of $25.16 and a grant-date fair value of $13.13. We refer to these option awards as the 2026 Performance Option Awards. The 2026 Performance Option Awards are subject to multiple vesting tranches that vest upon achievement of certain predefined financial milestones. As of March 31, 2026, we had $1.1 million of total unrecognized stock-based compensation expense for the financial milestones that were considered probable of achievement, which will be recognized over a weighted-average period of 1.6 years. As of March 31, 2026, we had unrecognized stock-based compensation expense of $0.4 million for the operational milestones that were considered not probable of achievement. During the three months ended March 31, 2026, we recorded stock-based compensation expense of $0.1 million, related to the 2026 Performance Option Awards.

Equity‑based compensation cost included in general and administrative expense in the accompanying condensed consolidated statements of income amounted to $3.2 million and $2.8 million for the three months ended March 31, 2026 and 2025, respectively. There was an excess income tax benefit of $0.2 million recognized in the condensed consolidated statements of income for equity‑based compensation arrangements for both the three months ended March 31, 2026 and 2025.

Note 5. Commitments and Contingencies

Contingencies

We record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We also disclose material contingencies when we believe a loss is not probable but reasonably possible. Accounting for contingencies requires us to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Although we cannot predict with assurance the outcome of any litigation or tax matters, we do not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on our operating results, financial position and cash flows.

Indemnifications

In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters. We have not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in our condensed consolidated financial statements.

Tax Contingencies

We are subject to income taxes in the United States, the United Kingdom, or UK, Philippines, Netherlands and Canada. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. Our provision for income taxes does not include any reserve provision because we believe that all of our tax positions are highly certain.

Legal Proceedings

During the second quarter of 2025, we accrued $1.0 million to general and administrative expenses for estimated losses and legal fees related to certain pending legal matters. An additional $1.0 million was accrued during the third quarter of 2025 for estimated losses and legal fees related to these matters. While the outcome of these matters cannot be predicted with certainty, we do not believe they will have a material adverse effect on our financial condition or results of operations.

In December 2025, we became subject to two lawsuits filed by the former founder and executive of a majority-owned subsidiary acquired in 2024 and subsequently liquidated in May 2025. The complaints allege fraudulent misrepresentation, breach of the shareholders’ agreement, breach of the bylaws and mismanagement of the majority-owned subsidiary by REVOLVE and seek related monetary damages. At this time, we are unable to reasonably estimate the possible loss or range of loss, if any, associated with this matter.

During the first quarter of 2026, we accrued $0.5 million to general and administrative expenses for estimated losses and legal fees related to a pending legal matter. While the outcome of this matter cannot be predicted with certainty, we do not believe it will have a material adverse effect on our financial condition or results of operations.

Note 6. Income Taxes

The following table summarizes our effective tax rate for the periods presented (in thousands):


	Three Months Ended March 31,
	2026			2025
Income before income taxes	$	18,467		$	15,581
Provision for income taxes		4,709			4,175
Effective tax rate		25.5	%		26.8	%

The decrease in the effective tax rate for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to the prior year increase in valuation allowance against deferred tax assets, which did not recur in the current period.

In October 2021, the Organization for Economic Co-operation and Development, or OECD, issued a statement updating and finalizing the key components of the two-pillar plan on global tax reform, intended to be effective on January 1, 2024. Pillar One focuses on nexus and profit allocation. Pillar Two provides for a global minimum effective corporate tax rate of 15%, applied on a jurisdiction-by-jurisdiction basis. While the U.S. has not adopted the Pillar Two rules, various other governments around the world are enacting legislation. Although these rules are not currently applicable to us, we operate in participating countries that have implemented or are expected to implement these rules. On January 5, 2026, the OECD announced a “side-by-side” elective safe harbor that would exempt electing U.S.-parented multinational entities from the fifteen percent global minimum tax for taxable years beginning on or after January 1, 2026. We continue to evaluate the impact of these tax developments and those under other OECD and non-U.S. rules as new guidance and regulations are published and become applicable. Further, legislation commonly known as the One Big Beautiful Bill Act enacted in July 2025 modified certain tax provisions that had an impact on our tax liability and financial condition.

Note 7. Stockholders’ Equity and Stock Repurchase Program

Changes in stockholders’ equity for the three months ended March 31, 2026 and 2025 were as follows:


	Three Months Ended March 31, 2026
	Common Stock				Additional Paid-in			Retained			Non-controlling			Total Stockholders’
	Number		Amount		Capital			Earnings			Interest			Equity
	(in thousands, except share data)
Beginning balance		71,371,922	$	71	$	144,249		$	368,215		$	—		$	512,535
Issuance of Class A common stock from exercise of stock options and vesting of restricted stock units		158,101		—		(540	)		—			—			(540	)
Equity-based compensation		—		—		3,249			—			—			3,249
Cumulative translation adjustment		—		—		—			(751	)		—			(751	)
Issuance of non-controlling interest at fair value		—		—		(1,749	)		—			1,749			—
Net income (loss)		—		—		—			14,352			(594	)		13,758
Ending balance		71,530,023	$	71	$	145,209		$	381,816		$	1,155		$	528,251


	Three Months Ended March 31, 2025
	Common Stock				Additional Paid-in			Retained		Non-controlling			Total Stockholders’
	Number		Amount		Capital			Earnings		Interest			Equity
	(in thousands, except share data)
Beginning balance		71,200,480	$	72	$	133,046		$	305,070	$	(403	)	$	437,785
Issuance of Class A common stock from exercise of stock options and vesting of restricted stock units		132,132		—		(531	)		—		—			(531	)
Equity-based compensation		—		—		2,753			—		—			2,753
Cumulative translation adjustment		—		—		—			1,958		—			1,958
Net income (loss)		—		—		—			11,819		(413	)		11,406
Ending balance		71,332,612	$	72	$	135,268		$	318,847	$	(816	)	$	453,371

Stock Repurchase Program

In August 2023, our board of directors authorized a stock repurchase program of up to $100 million of our outstanding Class A common stock. The timing and amount of any stock repurchases is determined based on market conditions, stock price and other factors, and the program does not require us to repurchase any specific number of shares of Class A common stock. The program has no expiration date but it may be modified, suspended or terminated at any time. The stock repurchase program is funded from available cash and cash equivalents. All repurchased shares under the stock repurchase program will be retired.

No shares were repurchased during the three months ended March 31, 2026 and 2025.

Note 8. Earnings per Share

Basic and diluted earnings per share is presented in conformity with the two-class method required for multiple classes of common stock. The rights of the holders of Class A and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible at any time into one share of Class A common stock.

Basic earnings per share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per share represents net income attributable to common stockholders divided by the weighted-average number of shares of common stock outstanding, inclusive of the effect of dilutive stock options and RSUs. The undistributed earnings are allocated based on the participation rights of shares of Class A and Class B common stock as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical for both classes, the undistributed earnings are allocated on a proportionate basis.

The calculation of diluted earnings per share for Class A common stock assumes the conversion of Class B common stock, while diluted earnings per share of Class B common stock does not assume the conversion of Class A common stock as Class A common stock is not convertible into Class B common stock. Similarly, outstanding options to purchase Class B common stock and RSUs that are dilutive are included in the calculation of diluted earnings for both Class A and Class B common stock.

In August 2023, our board of directors authorized a stock repurchase program of up to $100 million of our outstanding Class A common stock. Repurchases during any given fiscal period under the repurchase program reduce the weighted-average number of shares of common stock outstanding for the period.

The following table presents the calculation of basic and diluted earnings per share:


	Three Months Ended March 31,
	2026				2025
	Class A		Class B		Class A		Class B
	(in thousands, except per share data)
Numerator
Net income	$	7,939	$	5,819	$	6,429	$	4,977
Net loss attributable to non-controlling interest		343		251		233		180
Net income attributable to common stockholders — basic		8,282		6,070		6,662		5,157
Reallocation of undistributed earnings as a result of conversion of Class B to Class A common stock		6,070		—		5,157		—
Reallocation of undistributed earnings to Class B common stock		—		102		—		94
Net income attributable to common stockholders — diluted	$	14,352	$	6,172	$	11,819	$	5,251
Denominator
Weighted average shares used to compute earnings per share — basic		41,235		30,223		40,164		31,092
Conversion of Class B to Class A common stock outstanding		30,223		—		31,092		—
Effect of dilutive stock options and RSUs		893		893		1,015		1,015
Weighted average number of shares used to compute earnings per share — diluted		72,351		31,116		72,271		32,107
Earnings per share:
Basic	$	0.20	$	0.20	$	0.17	$	0.17
Diluted	$	0.20	$	0.20	$	0.16	$	0.16

The following have been excluded from the computation of basic and diluted earnings per share as their effect would have been anti-dilutive (in thousands):


	Three Months Ended March 31,
	2026		2025
Stock options to purchase Class A and Class B common stock, and RSUs		1,253		968

Note 9. Segment Information

We have two reportable segments, REVOLVE and FWRD, each offering apparel, shoes, accessories, and beauty products available for sale to customers through their respective websites and mobile applications. Our reportable segments have been identified based on how our chief operating decision makers manage our business, make operating decisions and evaluate operating performance. Our chief operating decision makers are our co-founders and co-chief executive officers. We evaluate the performance of our reportable segments based on net sales and gross profit. Management does not evaluate the performance of our reportable segments using asset measures. During the three months ended March 31, 2026 and 2025, no customer represented over 10% of net sales.

The following tables summarize our net sales, cost of sales and gross profit for each of our reportable segments (in thousands):


	Three Months Ended March 31,
Net sales	2026		2025
REVOLVE	$	293,243	$	254,395
FWRD		49,637		42,314
Total	$	342,880	$	296,709


Cost of sales
REVOLVE	$	133,716	$	115,610
FWRD		28,549		26,813
Total	$	162,265	$	142,423


Gross profit
REVOLVE	$	159,527	$	138,785
FWRD		21,088		15,501
Total	$	180,615	$	154,286

The following table presents net sales by geographic area (in thousands):


	Three Months Ended March 31,
	2026		2025
United States	$	273,989	$	239,243
Rest of the world (1)		68,891		57,466
Total	$	342,880	$	296,709

(1) No individual country exceeded 10% of total net sales for any period presented.

The following tables summarize net sales (in thousands) and percentage of net sales by product category for the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
	2026			2025
Net Sales
Fashion Apparel	$	162,255		$	138,313
Dresses		95,119			82,189
Handbags, Shoes and Accessories		65,487			59,989
Beauty		16,220			13,276
Other (1)		3,799			2,942
Total net sales	$	342,880		$	296,709

As a percentage of net sales
Fashion Apparel		47	%		47	%
Dresses		28	%		28	%
Handbags, Shoes and Accessories		19	%		20	%
Beauty		5	%		4	%
Other (1)		1	%		1	%
Total net sales		100	%		100	%

(1)

Includes deferred revenue, shipping revenue, rental product revenue and other revenue.

Note 10. Detail of Certain Balance Sheet Accounts

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	March 31,		December 31,
	2026		2025
Expected merchandise returns, net	$	32,972	$	30,515
Advanced payments on inventory to be delivered from vendors		19,451		18,236
Prepaid marketing		7,777		5,912
Other		18,712		19,043
Total prepaid expenses and other current assets	$	78,912	$	73,706

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	March 31,		December 31,
	2026		2025
Marketing	$	26,926	$	17,928
Consumption taxes		8,811		5,433
Salaries and related benefits		5,801		7,879
Selling and distribution		4,409		5,383
Other		5,717		7,674
Total accrued expenses	$	51,664	$	44,297

Other Current Liabilities

Other current liabilities consist of the following (in thousands):


	March 31,		December 31,
	2026		2025
Store credit	$	25,420	$	23,433
Loyalty Club liability		8,519		7,620
Gift cards		4,903		5,651
Other		11,778		4,259
Total other current liabilities	$	50,620	$	40,963

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Information

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, net sales or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “anticipate,” “predict” or any other similar words.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission, or the SEC. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following:

•

economic conditions and their impact on consumer demand and our business, operating results and financial condition;

•

the effect of tariffs imposed by the U.S. or foreign governments or a global trade war;

•

geopolitical tensions, wars, and their impact on global economic conditions, supply chains and consumer demand;

•

our ability to effectively manage or sustain our growth and to effectively expand our operations;

•

our ability to retain our existing customers and acquire new customers;

•

our ability to sustain and expand our gross margin and Adjusted EBITDA margin, a non-GAAP financial measure;

•

our ability to respond to changing consumer demand, spending habits and customer preferences, and our ability to accurately and effectively engage in predictive analytics;

•

our ability to retain existing vendors and brands and to attract new vendors and brands;

•

our ability to obtain and maintain differentiated high-quality products from appropriate brands in sufficient quantities from vendors;

•

our ability to obtain and maintain sufficient inventory at prices that will keep our business model profitable, and of a quality that will continue to retain existing customers and attract new customers;

•

our ability to expand our product offerings, including our owned brands;

•

our reliance on overseas suppliers and manufacturing partners, particularly in China;

•

our ability to expand our operations and physical store presence in an efficient and cost-effective manner;

•

our ability to maintain and enhance our brand;

•

our ability to optimize, operate, manage and expand our network infrastructure and our fulfillment center and delivery channels;

•

the growth of the market for premium lifestyle and luxury products, and the online market for premium lifestyle and luxury products in particular;

•

our ability to accurately forecast demand for our products and our results of operations;

•

the effect of claims, lawsuits, government investigations, other legal or regulatory proceedings or commercial or contractual disputes; and

•

the effect of natural disasters, such as wildfires and earthquakes, or other catastrophic events.

Additional factors that could cause actual results to differ materially from our forward-looking statements are set forth in this report, including under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our condensed consolidated financial statements and the related notes thereto.

Forward-looking statements in this report speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference speak only as of the date of those documents. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

In this report, “we,” “our,” “us,” “Company” and “Revolve” refer to Revolve Group, Inc., and where appropriate its subsidiaries.

Overview

REVOLVE 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 exceptional service and an engaging customer experience with a vast yet curated offering totaling over 140,000 apparel and footwear styles, as well as beauty and accessories. Our dynamic platform connects a deeply engaged community of millions of consumers, thousands of global fashion influencers and over 1,600 emerging, established and owned brands. Through more than 20 years of investment in technology, data analytics and innovative marketing and merchandising strategies, we have built a powerful platform and brand that we believe is connecting with the next generation of consumers and is redefining fashion retail.

We sell merchandise through two complementary segments, REVOLVE and FWRD, that leverage one platform. Through REVOLVE, we offer an assortment of premium apparel, footwear, beauty and accessories from emerging, established and owned brands. Through FWRD, we offer an assortment of curated and elevated iconic and emerging luxury brands. REVOLVE has historically been focused on the discovery of trend-driven, ready-to-wear styles, while FWRD has been more heavily weighted toward the statement pieces in our customers’ wardrobe, such as shoes and handbags. We believe that FWRD provides our customer with a unique destination for luxury products as our customers’ spending power increases and their desire for fashion and inspiration remains central to their self-expression.

We believe our product mix reflects the desires of the next-generation consumer and we optimize this mix through the selection of established brands that resonate with our consumer, the identification and incubation of emerging brands and the continued development of owned brands. The focus on emerging and owned brands minimizes our assortment overlap with other retailers, supporting marketing efficiency, conversion and sales at full price.

We have invested in our robust and scalable internally-developed technology platform to meet the specific needs of our business and to support our customers’ experience. We use proprietary algorithms and more than 20 years of data to efficiently manage our merchandising, marketing, product development, sourcing and pricing decisions. Our platform works seamlessly across devices and analyzes browsing and purchasing patterns and preferences to help us make purchasing decisions, which when combined with the small initial orders for new products, allows us to manage inventory and fashion risk. We have also invested in our creative capabilities to produce high-quality visual merchandising that caters to our customers by focusing on style with a distinct point of view rather than on individual products. The combination of our online sales platform and our in-house creative photography allows us to showcase brands in a distinctive and compelling manner.

We use social channels and cultural events designed to deliver authentic and aspirational, yet attainable, experiences to attract and retain next-generation consumers, and these efforts have historically led to higher earned media value than competitors. We complement our social media efforts through a variety of brand marketing campaigns and events, which generate a constant flow of authentic and inspiring content. Our social media and brand marketing strategy is combined with robust and sophisticated digital performance marketing activities and our proprietary brand ambassador program. Once we have attracted potential new customers to our sites, our goal is to convert them into active customers and then encourage repeat purchases. We acquire and retain customers through a variety of free and paid marketing channels, including paid search/product listing ads, affiliate marketing, our brand ambassador program, paid social, retargeting, organic search, personalized email and SMS marketing, and mobile “push” communications through our mobile applications.

We have developed an efficient logistics infrastructure, which allows us to provide free shipping and returns to our customers in the United States. We support our logistics network with proprietary algorithms to optimize inventory allocation, reduce shipping and fulfillment expenses and deliver merchandise quickly and efficiently to our customers. We continue to modify and expand our fulfillment network to support our growth and the demand for our products.

To date, we have successfully expanded internationally with limited investment and physical presence. Our ongoing initiative to elevate the international service levels and customer experience has been a key contributor to our growth. We also offer REVOLVE products on international marketplaces such as Tmall Global, RED and Douyin in China and Nykaa Fashion in India, to expand our distribution reach in these key geographies. We intend to continue to invest in and develop international markets while maintaining our focus on the core U.S. market.

Key Operating and Financial Metrics

We use the following metrics to assess the progress of our business, make decisions on where to allocate capital, time and technology investments, and assess the near-term and longer-term performance of our business.


	Three Months Ended March 31,
	2026			2025
	(in thousands, except average order value and percentages)
Gross margin		52.7	%		52.0	%
Adjusted EBITDA	$	21,062		$	19,299
Free cash flow	$	44,901		$	42,804
Active customers		2,926			2,703
Total orders placed		2,581			2,308
Average order value	$	298		$	295

Adjusted EBITDA and free cash flow are non-GAAP measures. See the sections captioned “—Adjusted EBITDA” and “—Free Cash Flow” below for information regarding our use of Adjusted EBITDA and free cash flow and their reconciliation to net income and net cash provided by operating activities, respectively.

Gross Margin

Gross profit is equal to our net sales less cost of sales. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of sales consists of our purchase price of merchandise sold to customers and includes import

duties and other taxes, inbound freight costs, receiving costs, defective merchandise returned from customers, inventory valuation adjustments, and other miscellaneous shrinkage.

Gross margin is impacted by the mix of brands and categories of styles that we sell on our sites. Gross margin on sales of owned brands is typically higher than that for third-party brands. Gross margin is also affected by the percentage of sales through the REVOLVE segment, which consists primarily of emerging third-party, established third-party and owned brands, compared to our FWRD segment, which consists primarily of established third-party brands. Merchandise mix will vary from period to period and if we do not accurately forecast demand, our growth, margins and inventory levels may be adversely affected.

We review our inventory levels on an ongoing basis to identify slow-moving merchandise and use product markdowns to efficiently sell these products. We have maintained a high percentage of sales that occur at full price, which we believe reflects our data-driven merchandising strategy, customer acceptance of our merchandise and the sense of urgency we create through frequent product introductions in limited quantities. Gross margin is impacted by the mix of sales at full price and markdowns, as well as the level of markdowns.

Gross margin is also impacted by inbound freight costs and the level of tariffs and duties placed on imported products. In the near-term, given the significant increase in tariff rates on imported products, particularly from China, our gross margin will be adversely impacted by the effects of tariffs, though any long-term impact remains unclear. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Certain of our competitors and other retailers report cost of sales differently than we do. As a result, the reporting of our gross profit and gross margin may not be comparable to other companies.

Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed in the table above and elsewhere in this report Adjusted EBITDA, a non-GAAP financial measure that we calculate as net income before other income, net; taxes; and depreciation and amortization; adjusted to exclude the effects of equity-based compensation expense, certain transaction costs and certain non-routine items. We have provided below a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure. 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.

We have included Adjusted EBITDA in this report because it is a key measure used by our management and board of directors 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. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

•

Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

•

Adjusted EBITDA does not reflect certain transaction costs that may represent a reduction in cash available to us;

•

Adjusted EBITDA does not reflect certain non-routine items that may represent a reduction in cash available to us; and

•

other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure to benchmark performance across various companies.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and our other GAAP results.

In the near-term, Adjusted EBITDA may be adversely impacted by the lowering of gross margin as a result of the increased level of tariff rates, though any long-term impact remains unclear. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

A reconciliation of Adjusted EBITDA to net income for the three months ended March 31, 2026 and 2025 is as follows:


	Three Months Ended March 31,
	2026			2025
	(in thousands)
Net income	$	13,758		$	11,406
Excluding:
Other income, net		(2,676	)		(893	)
Provision for income taxes		4,709			4,175
Depreciation and amortization		1,349			1,018
Equity-based compensation		3,249			2,753
Transaction costs(1)		223			840
Non-routine items(2)		450			—
Adjusted EBITDA	$	21,062		$	19,299



(1)	Includes legal and professional service fees related to potential and consummated strategic acquisitions and investments.
(2)	Non-routine items in the three months ended March 31, 2026 represent an accrual for a pending legal matter.

Free Cash Flow

To provide investors with additional information regarding our financial results, we have also disclosed in the table above and elsewhere in this report free cash flow, 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, net of proceeds from the sale of rental product. We have provided below a reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure.

We have included free cash flow in this report because it is a key measure used by our management and board of directors, which we believe is an important indicator of our liquidity because it measures the amount of cash we generate. Free cash flow also reflects changes in working capital. Our working capital fluctuates over time primarily as a result of the timing of our inventory purchases to support growth, our effective tax rate and the timing of tax payments, and changes in the level of merchandise that is returned by our customers, which in turn impacts our return reserve. Accordingly, we believe that free cash flow provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Free cash flow has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. There are limitations to using non-GAAP financial measures, including that other companies, including companies in our industry, may calculate free cash flow differently. Because of these limitations, you should consider free cash flow alongside other financial performance measures, including net cash provided by operating activities, purchases of property and equipment and our other GAAP results.

The following table presents a reconciliation of free cash flow to net cash provided by operating activities, as well as information regarding net cash used in investing activities and net cash used in financing activities, for each of the periods indicated:


	Three Months Ended March 31,
	2026			2025
	(in thousands)
Net cash provided by operating activities	$	49,420		$	45,145
Purchases of property and equipment		(4,953	)		(1,779	)
Purchases of rental product, net of proceeds from the sale of rental product		434			(562	)
Free cash flow	$	44,901		$	42,804
Net cash used in investing activities	$	(15,483	)	$	(2,341	)
Net cash used in financing activities	$	(540	)	$	(531	)

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. We calculate the number of active customers on a trailing 12-month basis given the volatility that can be observed when calculating it on the basis of shorter periods that may not be reflective of longer-term trends; however, such a methodology may not be indicative of other short-term trends, such as changes in new customers. 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 brands, the continued use of our sites by our customers and their desire to purchase our products. We believe the number of active customers is a measure that is useful to investors and management in understanding our growth, brand awareness and market opportunity. Our number of active customers drives both net sales and our appeal to brands and partners.

Active customers increased during the period ended March 31, 2026 compared to the same period in 2025 primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts.

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. We believe that total orders placed is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. Total orders placed and total orders shipped in any given period may differ slightly due to orders that are in process at the end of any particular period.

Total orders placed increased in the three months ended March 31, 2026 compared to the same period in 2025, primarily due to our increased engagement with our existing customers and acquisition of new customers through our sales and marketing efforts.

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 that average order value is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. Average order value varies depending on the site through which we sell merchandise, the percentage of sales at full price, and for sales at less than full price, the level of markdowns on these products, product mix, and the number of units per order. Average order value can be adversely impacted by negative consumer sentiment, including as a result of tariffs. A shift in product mix toward lower-priced products or categories may also reduce our average order value.

In the near-term, average order value may decrease year-over-year given the challenging macroeconomic environment, as customers seek to purchase products at more accessible price points. We expect this potential decrease to be at least partially offset by price increases as a result of the actual or anticipated effects of incremental tariffs that were in effect at various times and rates over the course of 2025 and early 2026, though any long-term impact remains unclear. The impact of tariffs may also impair comparability of average order value with prior periods. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Average order value increased in the three months ended March 31, 2026, relative to the same period in 2025, primarily due to an increase in average selling price, partially offset by a decrease in units per order.

Factors Affecting Our Performance

Overall Economic Trends

The overall economic environment and related changes in consumer behavior have a significant impact on our business. In general, positive conditions in the broader economy promote customer spending on our sites, while economic weakness, which generally results in a reduction of customer spending, may have a more pronounced negative effect on spending on our sites. Macro factors that can affect consumer confidence, shopping behavior and spending patterns, and thereby our near-term and long-term results of operations, include tariffs imposed by the U.S. or foreign governments or a global trade war, inflation levels, employment rates, business conditions, changes in the housing market, changes in the stock market, adverse developments affecting the financial services industry, the availability of credit, resumption of student loan payments, interest rates, foreign currency exchange rates, fuel, energy and raw material costs, supply chain challenges, and wars and geopolitical tensions. In addition, during periods of low unemployment, we generally experience higher labor costs.

For example, since February 2025, the U.S. government has imposed incremental tariffs on most goods imported from China, from which we source a significant portion of our products, subject to certain exceptions. At various points in 2025, the total tariff rate on our goods imported from China briefly reached 145.0%, before eventually decreasing to the current level of 10%. These tariffs are in addition to a pre-existing Section 301 tariff of 7.5% and baseline Harmonized Tariff Schedule, or HTS, tariffs, which vary by product. In addition, U.S. tariffs on goods imported from certain other countries from which we source products included an incremental reciprocal tariff of 10% imposed since April 2025 and higher reciprocal tariff rates at certain points in time for many U.S. trading partners including Japan, Turkey, Indonesia and India.

On February 20, 2026, the Supreme Court of the United States of America ruled against President Trump’s use of the International Emergency Economic Powers Act, or IEEPA, to impose tariffs on global trade partners, effective immediately. The impact of this decision on previous tariffs that we have paid is undetermined while the case is returned to the Court of International Trade for reconsideration in accordance with the Supreme Court ruling.

Heightened tariffs, particularly on Chinese goods, directly impact our owned brand products and, to a lesser extent, a limited number of third-party branded products for which we are the importer of record. In addition, we face various indirect exposures to the effects of heightened tariffs from other third-party brands. If U.S. tariffs on China or other countries from which we source products are reinstated or are increased further, it will increase our cost of sales and may also increase the price of our products. Raising prices of our products could adversely impact customer demand. In addition, heightened tariffs may adversely impact our ability to acquire products on acceptable terms and may also adversely impact global logistics, which may result in our inability to purchase sufficient inventory to meet customer demand and in turn materially and adversely impact our net sales. Furthermore, these and future changes in trade policy may adversely impact the macroeconomic environment, consumer sentiment and international demand if consumers outside of the United States boycott U.S. retailers. If we are not able to adjust our inventory levels and our inventory assortment in response to reduced customer demand, our gross margin may be adversely impacted

We have and continue to undertake a series of actions and initiatives to mitigate the impact of heightened tariffs, including cost-sharing discussions with our owned brand manufacturing partners, diversifying our owned brand manufacturing sources outside of China, partnering with our third-party brands to mitigate the impact of tariffs, optimizing our product import logistics, selectively increasing prices for our products and further optimizing our supply chain. However, our mitigation efforts may be costly and may not yield near-term results or be as effective as

we intend, or at all, and may have other negative impacts on our business, operations and financial condition. See the sections titled “Risk Factors—Risks Related to Our Business and Industry—Tariffs imposed by the U.S. or foreign governments or a global trade war has increased and may in the future continue to increase the cost of our products, which could have a material adverse effect on our business, financial condition and results of operations” and “—We purchase inventory in anticipation of sales, and if we are unable to manage our inventory effectively, our operating results could be adversely affected.”

Customer Acquisition and Retention and Growth in Brand Awareness

Our focus since inception has been on profitable growth, which has created our disciplined approach to acquiring new customers and retaining existing customers at a reasonable cost, relative to the contributions we expect from such customers. Failure to attract new visitors to our sites and convert them to customers would impact future net sales growth.

If our marketing efforts do not connect with our customer or fail to cost-effectively promote our brands or convert impressions into new customers, our net sales growth and profitability will be adversely affected. The social media and influencer-based marketing landscape continues to shift and competition remains intense, which may adversely impact our ability to differentiate ourselves and cost-effectively acquire and retain customers. Furthermore, changes in the user experience on search, social media and other platforms, including recent developments in artificial intelligence, or AI, and the introduction of large language models, or LLMs, a shift towards video and the level of recommended content as well as changes in privacy practices by third parties, may make it more difficult to gain customer awareness and cost-effectively acquire and retain customers. For example, in March 2025, Google introduced an experimental AI mode within its search platform and other platforms have or may in the future launch similar functionality, which may change consumer search behavior and affect our ability to cost-effectively acquire and retain customers. Additionally, Apple Inc. has imposed requirements for consumer disclosures regarding privacy practices, and has implemented an application tracking transparency framework that requires opt-in consent for certain types of tracking. This transparency framework was launched in April 2021 and has made it more difficult and costly to acquire and retain customers. Apple Inc. introduced new SDK privacy controls in 2023 that it integrated into iOS 17, including new protections designed to limit tracking or identification of user devices. Apple Inc. has also updated Apple Mail, including automated inbox categorization, sender-level grouping, and AI-generated email previews. These changes may reduce the visibility and effectiveness of our email communications, which could negatively impact customer engagement and, over time, affect customer retention. In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers’ ability to collect app and user data across Android devices, and in July 2024, announced its change from a previously-announced plan to stop supporting third-party cookies in its Google Chrome browser as a part of this initiative.

We seek to engage with our customers and build awareness of our brands through delivering unique events and experiences, as well as select retail experiences. We plan to continue to conduct events at varying levels of scale in the future and make opportunistic investments in marketing initiatives that could increase marketing as a percentage of net sales to levels in excess of historical levels for certain quarters or periods of time in the future. This incremental investment may not deliver a meaningful return in the short term and may adversely impact our operating income in the short term.

Our success is impacted not only by efficient and effective customer acquisition and growth in brand awareness, but also by our ability to retain customers, engage with our community and encourage repeat purchases. Existing customers, whom we define as customers in a year who have purchased from us in any prior year, account for a greater and greater share of active customers, orders placed and net sales over time.

Our ability to acquire and retain customers could be adversely impacted by the effects of tariffs and other macroeconomic factors. See the section titled “—Overall Economic Trends.”

Merchandise Mix

We offer merchandise across a variety of product types, brands and price points. The brands we sell on our platform consist of a mix of emerging third-party, established third-party (including iconic luxury brands) and owned brands. Our product mix consists primarily of apparel, footwear, beauty and accessories.

Our merchandise mix across our two reporting segments carry a range of margin profiles and may cause fluctuations in our gross margin. Shifts in our segment mix and our broader category merchandise mix may result in fluctuations in our gross margin from period to period.

Inventory Management

We leverage our platform and technology to buy and manage our inventory, including merchandise assortment and fulfillment center optimization. We utilize a data-driven “read and react” buying process to merchandise and curate the latest on-trend fashion. We generally make shallow initial inventory buys and then use our proprietary technology tools to identify and re-order best sellers, taking into account customer feedback across a variety of key metrics, which allows us to manage inventory and fashion risk. To ensure sufficient availability of merchandise, we generally purchase inventory in advance and frequently before apparel trends are confirmed. As a result, we are vulnerable to demand and pricing shifts and to suboptimal selection and timing of merchandise purchases. In the normal course of business, we incur inventory valuation adjustments, which impact our gross margin. Moreover, our inventory investments will fluctuate with the needs of our business. For example, entering new categories will require additional investments in inventory. Shifts in inventory levels may result in fluctuations in the percentage of full price sales, levels of markdowns, merchandise mix, as well as gross margin.

Investment in our Operations and Infrastructure

We have made investments over time to grow our customer base, enhance our offerings and deliver best-in-class service to our customers. Over the long term, we expect to continue to make capital investments in our inventory, fulfillment centers, and logistics infrastructure as we grow our customer base, launch new brands, expand internationally and drive operating efficiencies. We believe these investments will yield positive returns in the long term; however, we cannot be certain that these efforts will grow our customer base or be cost-effective in the short term.

Segment and Geographic Performance

Our financial results are affected by the performance across our two reporting segments, REVOLVE and FWRD, as well as across the various geographies in which we serve our customers.

The REVOLVE segment contributes to a majority of our net sales, representing 85.5% and 85.7% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, REVOLVE generated $293.2 million and $254.4 million in net sales, respectively, representing an increase of 15.3%. The net sales increase in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of orders shipped, a lower proportion of returned purchases and an increase in average order value.

The FWRD segment contributes to a smaller portion of our overall net sales, representing 14.5% and 14.3% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, FWRD generated $49.6 million and $42.3 million in net sales, respectively, representing an increase of 17.3%. The net sales increase in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of orders shipped, an increase in average order value and a lower proportion of returned purchases.

Net sales to customers in the United States contributed to 79.9% and 80.6% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, net sales to customers in the United States were $274.0 million and $239.2 million, respectively, representing an increase of 14.5%.

Net sales to customers outside of the United States contributed to 20.1% and 19.4% of our net sales for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026 and 2025, net

sales to customers outside of the United States were $68.9 million and $57.5 million, respectively, representing an increase of 19.9%.

Net sales to customers outside of the United States are impacted by various factors including import and export taxes, currency fluctuations and other macroeconomic conditions described in the section titled “—Overall Economic Trends.” In addition, any weakening of a local currency versus the U.S. dollar results in our products becoming more expensive in that local currency, which has in the past had, and may in the future have, a negative impact on demand for our products in the geographies that use such currency.

Seasonality

Seasonality in our business has not historically followed that of traditional retailers which typically experience concentration of net sales in the fourth quarter in connection with the holidays. Prior to 2020, we experienced increased sales in the spring and summer months that had resulted in peak sales during the second quarter of each fiscal year and lower activity in the first quarter of each fiscal year. However, in recent years, our operating results have remained relatively consistent across all quarters. As such, we do not consider our business to be materially impacted by seasonal trends at this time. Our operating results are also impacted by macroeconomic conditions described in the section titled “—Overall Economic Trends.”

Components of Our Results of Operations

Net Sales

Net sales consist primarily of sales of apparel, footwear, beauty and accessories. We recognize product sales at the time control is transferred to the customer, which is when the product is shipped. Net sales represent the sales of these items and shipping revenue when applicable, net of estimated returns and promotional discounts. Net sales are primarily driven by growth in the number of our customers, the frequency with which customers purchase, the proportion of returned merchandise and average order value. Net sales may be impacted by tariffs and other changes to trade policy, particularly in the near term. See the section titled “—Factors Affecting Our Performance—Overall Economic Trends.”

Cost of Sales

Cost of sales consists of our purchase price for merchandise sold to customers and includes import duties, net of drawback claims, and other taxes, inbound freight costs, receiving costs, defective merchandise returned from customers, inventory valuation adjustments, and other miscellaneous shrinkage. Cost of sales is primarily driven by the cost of the product, the number of total orders placed by customers, the mix of the product available for sale on our sites and transportation costs related to inventory receipts from our vendors. We expect our cost of sales to fluctuate as a percentage of net sales primarily due to how we manage our inventory and merchandise mix. We have recently experienced and may continue to experience an increase in the cost of goods due to an increase in the cost of materials.

Fulfillment Expenses

Fulfillment expenses represent those costs incurred in operating and staffing our fulfillment centers, including costs attributed to inspecting and warehousing inventories and picking, packaging and preparing customer orders for shipment. Fulfillment expenses also include the cost of warehousing facilities. We expect fulfillment expenses to fluctuate as a percentage of net sales due to pressure from increased costs such as wages and other input cost pressure, expansion of our fulfillment network footprint and capacity, and our customers’ propensity to return merchandise. Longer term, we expect operating efficiencies from increased scale as well as automation of the fulfillment center workflow.

Selling and Distribution Expenses

Selling and distribution expenses consist primarily of shipping and other transportation costs incurred delivering merchandise to customers and from customers returning merchandise, merchant processing fees, and customer service. We expect selling and distribution expenses to fluctuate as a percentage of net sales reflecting changes to input costs, particularly freight charges and fuel surcharges, from changes in our return rates, investments in international markets to offer hassle-free returns and efficiencies realized from optimized shipping methods.

Marketing Expenses

Marketing expenses consist primarily of targeted online performance marketing costs, such as paid search/product listing ads, affiliate marketing, paid social, retargeting, search engine optimization, personalized email and SMS marketing, and mobile “push” communications through our mobile applications. Marketing expenses also consist of investment in brand marketing channels, including events, payments to influencers and other forms of online and offline marketing. Marketing expenses are primarily related to growing and retaining our customer base and building the REVOLVE and FWRD brands. Over the long term, we expect marketing expenses to increase in absolute dollars as we continue to scale our business, and may fluctuate as a percentage of sales depending on net sales volume, the level of marketing investment in a particular period and the competitive environment. We may make opportunistic investments in marketing initiatives that may increase marketing as a percentage of net sales to levels in excess of historical levels for certain quarters or periods of time in the future.

General and Administrative Expenses

General and administrative expenses consist primarily of payroll and related benefit costs and equity-based compensation expense for our employees involved in general corporate functions, as well as costs associated with the use by these functions of facilities and equipment, such as depreciation, rent and other occupancy expenses. Over the long-term, we expect general and administrative expenses to continue to increase in absolute dollars to support business growth with general and administrative expenses as a percentage of net sales declining over the long-term as we leverage our investments and as our business scales. General and administrative expenses as a percentage of net sales may also increase if we are unable to adjust our cost structure for changes in customer demand and net sales.

Other Income, Net

Other income, net consists primarily of interest income on our money market funds, foreign currency exchange gains and losses, and fees associated with our line of credit.

Results of Operations

The tables below set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of net sales for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.


		Three Months Ended March 31,
		2026			2025
	(in thousands)
Net sales		$	342,880		$	296,709
Cost of sales			162,265			142,423
Gross profit			180,615			154,286
Operating expenses:
Fulfillment expenses			10,772			9,358
Selling and distribution expenses			57,699			49,956
Marketing expenses			54,226			42,402
General and administrative expenses			42,263			37,882
Total operating expenses			164,960			139,598
Income from operations			15,655			14,688
Other income, net			(2,676	)		(893	)
Income before income taxes			18,467			15,581
Provision for income taxes			4,709			4,175
Net income		$	13,758		$	11,406


	Three Months Ended March 31,
	2026			2025
Net sales		100.0	%		100.0	%
Cost of sales		47.3	%		48.0	%
Gross profit		52.7	%		52.0	%
Operating expenses:
Fulfillment expenses		3.1	%		3.2	%
Selling and distribution expenses		16.8	%		16.8	%
Marketing expenses		15.8	%		14.3	%
General and administrative expenses		12.4	%		12.8	%
Total operating expenses		48.1	%		47.1	%
Income from operations		4.6	%		4.9	%
Other income, net		(0.8	%)		(0.3	%)
Income before income taxes		5.4	%		5.2	%
Provision for income taxes		1.4	%		1.4	%
Net income		4.0	%		3.8	%

Comparison of the Three Months Ended March 31, 2026 and 2025

Net Sales


	Three Months Ended March 31,				Change
	2026		2025		$		%
	(dollars in thousands)
Net sales	$	342,880	$	296,709	$	46,171		15.6	%

The increase in net sales for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to a 11.8% increase in the number of orders shipped, a lower proportion of returned purchases and a 1.0% increase in the average order value.

Net sales in the REVOLVE segment increased 15.3% to $293.2 million in the three months ended March 31, 2026 as compared to net sales of $254.4 million in the same period in 2025. Net sales in the FWRD segment increased 17.3% to $49.6 million in the three months ended March 31, 2026 as compared to net sales of $42.3 million in the same period in 2025.

Cost of Sales


	Three Months Ended March 31,						Change
	2026			2025			$		%
	(dollars in thousands)
Cost of sales	$	162,265		$	142,423		$	19,842		13.9	%
Percentage of net sales		47.3	%		48.0	%

The increase in cost of sales for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in net sales. The decrease in cost of sales as a percentage of net sales was primarily due to shallower markdowns within markdown sales and a lower mix of third-party brand sales, partially offset by a lower percentage of full price sales.

Fulfillment Expenses


	Three Months Ended March 31,						Change
	2026			2025			$		%
	(dollars in thousands)
Fulfillment expenses	$	10,772		$	9,358		$	1,414		15.1	%
Percentage of net sales		3.1	%		3.2	%

The increase in fulfillment expenses for the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in the number of units processed. The decrease in fulfillment expenses as a percentage of net sales was primarily due to a lower proportion of returned purchases.

Selling and Distribution Expenses


	Three Months Ended March 31,						Change
	2026			2025			$		%
	(dollars in thousands)
Selling and distribution expenses	$	57,699		$	49,956		$	7,743		15.5	%
Percentage of net sales		16.8	%		16.8	%

The increase in selling and distribution expenses for the three months ended March 31, 2026, as compared to the same period in 2025, was due to increases in orders placed and net sales that resulted in a $5.3 million increase in shipping and handling costs, a $1.8 million increase in merchant processing fees and a $0.6 million increase in other selling expenses. Selling and distribution expenses as a percentage of net sales were flat as compared to the three months ended March 31, 2025, as higher shipping rates were offset by a lower proportion of returned purchases and an increase in average order value.

Marketing Expenses


	Three Months Ended March 31,						Change
	2026			2025			$		%
	(dollars in thousands)
Marketing expenses	$	54,226		$	42,402		$	11,824		27.9	%
Percentage of net sales		15.8	%		14.3	%

The increase in marketing expenses for the three months ended March 31, 2026, as compared to the same period in 2025, was due to a $6.3 million increase in performance marketing expense and a $5.5 million increase in brand marketing expense. The increase in marketing expenses as a percentage of net sales was primarily due to incremental marketing investments to support various growth initiatives, including the launch of our first-ever namesake label, REVOLVE Los Angeles, within our owned brand assortment.

General and Administrative Expenses


Three Months Ended March 31,		Change
2026	2025	$	%

Revolve Group, Inc. 10-Q