FIGS Releases Fourth Quarter and Full Year 2024 Financial Results

2024 Results Exceed Expectations with Net Revenues Growth of 1.8% YoY, Net Income Margin of 0.5%, and Adjusted EBITDA Margin of 9.3%

Increases Share Repurchase Authorization by $50 Million

FIGS, Inc. (NYSE:FIGS) (the "Company"), the global leading healthcare apparel brand dedicated to improving the lives of healthcare professionals, today released its fourth quarter and full year 2024 financial results and published a financial highlights presentation on its investor relations website at ir.wearfigs.com/financials/quarterly-results/.

Fourth Quarter 2024 Financial Highlights

• Net revenues were $151.8 million, an increase of 4.8% year over year, primarily due to an increase in orders from existing customers.
  • Scrubwear net revenues were $114.7 million, an increase of 2.4% year over year.
  • Non-scrubwear net revenues were $37.2 million, an increase of 12.8% year over year.
  • U.S. net revenues were $127.5 million, a decrease of 0.5% year over year.
  • International net revenues were $24.3 million, an increase of 45.2% year over year.
• Gross margin was 67.3%, a decrease of 20 basis points year over year, primarily due to product mix shifts, partially offset by a benefit from duty drawback claims.
• Operating expenses were $93.3 million, an increase of 11.6% year over year. As a percentage of net revenues, operating expenses increased to 61.4% from 57.7% in the same period last year, primarily due to higher operational costs at our new fulfillment center, higher shipping costs, and lapping the outsized favorable impact in Q4 2023 as a result of the inception of our duty reclassification method last year.
• Net income and net income, as adjusted⁽¹⁾ were $1.9 million (or $0.01 in diluted earnings per share), a decrease of $8.1 million year over year as compared to net income and net income, as adjusted⁽¹⁾ in the same period last year.
• Net income margin⁽²⁾ was 1.2%, as compared to 6.9% in the same period last year.
• Adjusted EBITDA⁽¹⁾ was $21.1 million, a decrease of $5.5 million year over year.
• Adjusted EBITDA margin⁽¹⁾⁽²⁾ was 13.9%, as compared to 18.4% in the same period last year.

"We finished the year with solid momentum, as our fourth quarter results exceeded our expectations and were powered by an impactful flow of product newness driving repeat frequency," said Trina Spear, Chief Executive Officer and Co-Founder. "While overall 2024 financial results were mixed, we look forward to seeing our industry and Company normalize coming out of the COVID overhang that impacted us over the past couple years. We intend to accelerate our strategic pillars to drive long-term sustainable and profitable growth through product innovation, deep connection with our community, and meeting our healthcare professionals where they are, both online and offline. We remain confident in our brand positioning, our strategic focus, and the long-term structural strength of the healthcare industry."

Full Year 2024 Financial Highlights

• Net revenues were $555.6 million, an increase of 1.8% year over year, primarily driven by an increase in orders from existing customers, partially offset by a decrease in average order value ("AOV").⁽³⁾
  • Scrubwear net revenues were $445.1 million, an increase of 1.2% year over year.
  • Non-scrubwear net revenues were $110.4 million, an increase of 4.5% year over year.
  • U.S. net revenues were $474.3 million, a decrease of 1.9% year over year.
  • International net revenues were $81.3 million, an increase of 30.6% year over year.
• Gross margin was 67.6%, a decrease of 150 basis points year over year, primarily due to product mix shifts.
• Operating expenses were $373.4 million, an increase of 8.9% year over year. As a percentage of net revenues, operating expenses increased to 67.2% from 62.8% in the same period last year, primarily due to higher digital and brand marketing expenses related to our 2024 Olympics campaign and higher transitory expenses associated with the transition to our new fulfillment center.
• Net income was $2.7 million and diluted earnings per share was $0.02.
• Net income margin⁽²⁾ was 0.5%, as compared to 4.1% in the same period last year.
• Net income, as adjusted⁽¹⁾ was $2.7 million and diluted earnings per share, as adjusted⁽¹⁾ was $0.02.
• Adjusted EBITDA⁽¹⁾ was $51.8 million, a decrease of $34.2 million year over year.
• Adjusted EBITDA margin⁽¹⁾⁽²⁾ was 9.3%, as compared to 15.8% in the same period last year.
• Free Cash Flow⁽¹⁾ was $64.1 million.

Full Year 2024 Key Operating Metrics

• Active customers⁽³⁾ as of December 31, 2024 increased 3.0% year over year to 2.7 million.
• Net revenues per active customer⁽³⁾ was $208, a decrease of 1.0% year over year.
• AOV⁽³⁾ was $113, a decrease of 1.7% year over year primarily driven by lower units per transaction.

Increase to Share Repurchase Authorization

As of December 31, 2024, the Company had approximately $4.6 million available for future repurchases under the Company's ongoing share repurchase program for its outstanding Class A common stock. On February 27, 2025, the Company's Board of Directors authorized a $50.0 million increase in the share repurchase program.

Under the program, the Company may repurchase shares in the open market, through privately negotiated transactions, by entering into structured repurchase agreements with third parties, by making block purchases, entering into derivatives contracts and/or pursuant to Rule 10b5-1 trading plans, subject to market conditions, applicable securities laws and other legal requirements and relevant factors. The Company is not obligated to repurchase any specific number of shares and the program may be modified, suspended or terminated at any time, without prior notice. The timing, manner, price and amount of any repurchases will be determined at the Company's discretion, subject to business, economic and market conditions and other factors. The share repurchase program has no expiration date.

Full Year 2025 Financial Outlook

Sarah Oughtred, Chief Financial Officer, commented, "We ended 2024 in a strong financial position that will support our efforts to take decisive actions across a number of measures in 2025. This includes investing with conviction and speed into our emerging channels to accelerate growth over the long term, as well as opportunities across brand and marketing to reinvigorate our customer funnel. At the same time, we are planning a reduction in our reliance on promotions, which we expect will negatively impact our near-term top-line performance but support the longer-term health of the brand. In tandem with these actions, our strong balance sheet and cash flow also support our efforts to return value to shareholders, and we are announcing a $50 million increase in our share repurchase program. We see an incredible opportunity ahead for the brand and believe these actions and discipline are paramount to driving our growth ambitions."

Conference Call Details

FIGS management will host a conference call and webcast today at 2:00 p.m. PT / 5:00 p.m. ET to discuss the Company's financial and business results and outlook. To participate, please dial 1-833-470-1428 (US) or 1-404-975-4839 (International) and the conference ID 686323. The call is also accessible via webcast at ir.wearfigs.com. A recording will be available shortly after the conclusion of the call until 11:59 p.m. ET on March 6, 2025. To access the replay, please dial 1-866-813-9403 (US) or 1-929-458-6194 (International) and the conference ID 185176. An archive of the webcast will be available on FIGS' investor relations website at ir.wearfigs.com.

Non-GAAP Financial Measures and Key Operating Metrics

In addition to the GAAP financial measures set forth in this press release, the Company has included non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. The Company uses "net income, as adjusted," "diluted earnings per share, as adjusted," "adjusted EBITDA" and "adjusted EBITDA margin" to provide useful supplemental measures that assist in evaluating its ability to generate earnings, provide consistency and comparability with its past financial performance and facilitate period-to-period comparisons of its core operating results as well as the results of its peer companies. The Company uses "free cash flow" as a useful supplemental measure of liquidity and as an additional basis for assessing its ability to generate cash. The Company calculates "net income, as adjusted," as net income adjusted to exclude transaction costs, expenses related to non-ordinary course disputes, other than temporary impairment of held-to-maturity investments, stock-based compensation, including expense related to award modifications, accelerated performance awards and associated payroll taxes and costs, ambassador grants in connection with its initial public offering, and expense resulting from the retirement of a former CFO of the Company, and the income tax impact of these adjustments. The Company calculates "diluted earnings per share, as adjusted" as net income, as adjusted divided by diluted shares outstanding. The Company calculates "adjusted EBITDA" as net income adjusted to exclude: other income (loss), net; gain/loss on disposal of assets; provision for income taxes; depreciation and amortization expense; stock-based compensation and related expense; transaction costs; and expenses related to non-ordinary course disputes. The Company calculates "adjusted EBITDA margin" by dividing adjusted EBITDA by net revenues. The Company calculates "free cash flow" as net cash (used in) provided by operating activities reduced by capital expenditures, including purchases of property and equipment and capitalized software development costs.

Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included below under the heading "Reconciliations of GAAP to Non-GAAP Measures."

The Company has also included herein "active customers," "net revenues per active customer" and "average order value," which are key operational and business metrics that are important to understanding Company performance. The Company believes the number of active customers is an important indicator of growth as it reflects the reach of the Company's digital platform, brand awareness and overall value proposition. The Company defines an active customer as a unique customer account that has made at least one purchase in the preceding 12-month period. In any particular period, the Company determines the 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. The Company believes measuring net revenues per active customer is important to understanding engagement and retention of customers, and as such, the value proposition for its customer base. The Company defines net revenues per active customer as the sum of total net revenues in the preceding 12-month period divided by the current period active customers. The Company defines average order value as the sum of the total net revenues in a given period divided by the total orders placed in that period. Total orders are the summation of all completed individual purchase transactions in a given period. The Company believes its relatively high average order value demonstrates the premium nature of its products. As the Company expands into and increases its presence in additional product categories, price points and international markets, average order value may fluctuate.

Active customers as of December 31, 2024 and 2023, respectively, net revenues per active customer as of December 31, 2024 and 2023, respectively, and average order value for the years ended December 31, 2024 and 2023, respectively, are presented below under the heading "Key Operating Metrics."

About FIGS

FIGS is a founder-led, direct-to-consumer healthcare apparel and lifestyle brand that seeks to celebrate, empower, and serve current and future generations of healthcare professionals. We create technically advanced apparel and products that feature an unmatched combination of comfort, durability, function, and style. We share stories about healthcare professionals' experiences in ways that inspire them. We build meaningful connections within the healthcare community that we created. Above all, we seek to make an impact for our community, including by advocating for them and always having their backs.

We serve healthcare professionals in numerous countries in North America, Europe, the Asia Pacific region and the Middle East. We also serve healthcare institutions through our TEAMS platform.

Forward Looking Statements

This press release contains various forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are based on current management expectations, and which involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, such forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking. These forward-looking statements generally are identified by the words "anticipate", "believe", "contemplate", "continue", "could", "estimate", "expect", "forecast", "future", "intend", "may", "might", "opportunity", "outlook", "plan", "possible", "potential", "predict", "project," "should", "strategy", "strive", "target", "will" or "would", the negative of these words or other similar terms or expressions. The absence of these words does not mean that a statement is not forward-looking. These forward-looking statements address various matters, including the Company's expectation that the industry and Company will normalize; the Company's plans to accelerate its strategic pillars to drive long-term sustainable and profitable growth; the Company's confidence in its brand positioning, strategic focus and the long-term structural strength of the healthcare industry; the Company's share repurchase program; the Company's belief that its financial position will support its efforts in 2025; the Company's plans to invest in its emerging channels and opportunities across brand and marketing; the Company's planned reduction in promotions and the expected resulting impact on the business; the Company's efforts to return value to shareholders; the Company's growth ambitions; and the information under the section titled "Full Year 2025 Financial Outlook," such as the Company's outlook as to net revenues growth and adjusted EBITDA margin for the full year ending December 31, 2025; all of which reflect the Company's expectations based upon currently available information and data. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, the Company's actual results, performance or achievements may differ materially from those expressed or implied by the forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements. The following important factors and uncertainties, among others, could cause actual results, performance or achievements to differ materially from those described in these forward-looking statements: the Company's ability to maintain its historical growth; the Company's ability to maintain profitability; the Company's ability to maintain the value and reputation of its brand; the Company's ability to attract new customers, retain existing customers, and to maintain or increase sales to those customers; the success of the Company's marketing efforts; the Company's ability to maintain a strong community of engaged customers and Ambassadors; negative publicity related to the Company's marketing efforts or use of social media; the Company's ability to successfully develop and introduce new, innovative and updated products; the competitiveness of the market for healthcare apparel; the Company's ability to maintain its key employees; the Company's ability to attract and retain highly skilled team members; risks associated with expansion into, and conducting business in, international markets; changes in, or disruptions to, the Company's shipping arrangements; the successful operation of the Company's distribution and warehouse management systems; the Company's ability to accurately forecast customer demand, manage its inventory, and plan for future expenses; the impact of changes in consumer confidence, shopping behavior and consumer spending on demand for the Company's products; the impact of macroeconomic trends on the Company's operations; the Company's reliance on a limited number of third-party suppliers; the fluctuating costs of raw materials; the Company's failure to protect proprietary, confidential or sensitive information or personal customer data or risks of cyberattacks; the Company's failure to protect its intellectual property rights; the fact that the operations of many of the Company's suppliers and vendors are subject to additional risks that are beyond its control; and other risks, uncertainties and factors discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 to be filed with the Securities and Exchange Commission ("SEC"), and the Company's other periodic filings with the SEC. The forward-looking statements in this press release speak only as of the time made and the Company does not undertake to update or revise them to reflect future events or circumstances.

FIGS, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES

(Unaudited)

The following table presents a reconciliation of net income, as adjusted to net income, which is the most directly comparable financial measure calculated in accordance with GAAP, and presents diluted earnings per share ("EPS"), as adjusted with diluted EPS:

The following table presents a reconciliation of adjusted EBITDA to net income, which is the most directly comparable financial measure calculated in accordance with GAAP, and presents adjusted EBITDA margin with net income margin, which is the most directly comparable financial measure calculated in accordance with GAAP:

The following table presents a reconciliation of free cash flow to net cash provided by operating activities, which is the most directly comparable financial measure calculated in accordance with GAAP:

FIGS, INC.

KEY OPERATING METRICS

(Unaudited)

Active customers as of December 31, 2024 and 2023, respectively, net revenues per active customer as of December 31, 2024 and 2023, respectively, and average order value for the year ended December 31, 2024 and 2023, respectively, are presented in the following tables:

FIGS, INC.

DISAGGREGATED NET REVENUES

(In thousands, except percentages)

The following table presents the disaggregation of the Company's net revenues for the year and three months ended December 31, 2024 and December 31, 2023:

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Contacts

Investors:

Tom Shaw

[email protected]

Media:

Todd Maron

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