Purple Innovation Reports Second Quarter 2026 Results

Showroom Revenue Up 16.6% and Comparable Revenue Up 18% GAAP Net Loss of $3.2 Million in the Second Quarter Adjusted EBITDA Improves $4.4 Million to $2.1 Million Regains Compliance with Nasdaq Minimum Bid Price Requirement , /PRNewswire/ -- Purple Innovation, Inc. (NASDAQ: PRPL) ("Purple"), a comfort innovation company whose mattresses promise to give you "less pain, better sleep," today announced results for the second quarter ended June 30, 2026. "The second quarter demonstrated continued progress in the areas we can control, even as industry conditions remained challenging and we fell short of our top-line expectations," said Rob DeMartini, CEO of Purple Innovation. "Our direct-to-consumer business grew, led by another strong quarter in showrooms, while e-commerce trends improved sequentially for the third consecutive quarter. GAAP Net Loss and Adjusted EBITDA improved compared with last year, including the benefit from tariff refunds." "These results reinforce that Purple is operating from a stronger and more disciplined foundation. We remain focused on helping consumers better understand why the GelFlex Grid is different, strengthening the experience across our direct channels, advancing our innovation pipeline and maintaining the cost discipline that is supporting improved profitability and cash generation in a difficult demand environment." Second Quarter 2026 Financial Results Second quarter 2026 net revenue was $98.3 million, down 6.5% compared to $105.1 million in the second quarter of 2025. The decrease was primarily driven by lower wholesale revenue, partially offset by strong growth in showroom revenue. Direct-to-consumer revenue increased 3.4%, reflecting a 16.6% increase in showroom revenue and a 1.4% decrease in e-commerce revenue. Wholesale revenue decreased 19.1% to $37.4 million, compared with $46.2 million in the prior-year period. The decrease reflected a $5.3 million increase in certain payments to customers and a manufacturer under common control and a $3.5 million decrease in wholesale sales volume related to lower industry demand. Gross profit increased 4.5% to $44.4 million, compared to $42.5 million in the prior-year period. Gross margin was 45.2%, an increase of approximately 470 basis points year-over-year, primarily due to the $5.3 million tariff refund. Beginning in the second quarter of 2026, the Company changed the presentation of costs associated with merchant credit-card processing fees and third-party consumer-financing fees from being presented in cost of revenues to now being presented in marketing and sales costs. Prior periods have been revised to conform to the current presentation. This reclassification had no impact on previously reported revenue, operating loss, net loss, adjusted EBITDA or cash flow. The reclassification increases GAAP gross margin in the second quarter by approximately 500 basis points, with a corresponding 500 basis point increase in marketing and sales expense. Second quarter operating expenses were $48.7 million, down approximately 14.3% from the prior-year quarter. The improvement was primarily driven by the absence of restructuring related costs incurred in the prior year period, lower employee related expenses and professional services and all other operating expenses, partially offset by an increase in advertising spending. GAAP Net Loss for the second quarter was $3.2 million, a $14.1 million improvement versus the prior period. Adjusted EBITDA for the second quarter was $2.1 million, an improvement of $4.4 million from an adjusted EBITDA loss of $2.4 million in the prior-year period. Adjusted EBITDA is a non-GAAP financial measure. See discussion under the heading "Non-GAAP Financial Measures" below for additional information. Balance Sheet The Company ended the second quarter with cash and cash equivalents of $23.3 million, compared with $24.3 million as of December 31, 2025. Net inventories as of June 30, 2026, totaled $55.4 million, down 7.2% compared to December 31, 2025. Cashflow from operating activities YTD as of June 30, 2026 was $3.6M, a $30.7 million improvement over the prior year's same period. Nasdaq Listing Update Subsequent to the end of the second quarter, Purple Innovation has received written notification from The Nasdaq Stock Market LLC confirming that the Company has regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5450(a)(1). Accordingly, the previously disclosed bid price deficiency matter has been closed. 2026 Outlook Given the continued softness in the category, particularly in wholesale, we are lowering our revenue guidance in the range of $420 million to $440 million. Importantly, the continued strength of our DTC business, coupled with our cost discipline, gives us confidence in our ability to deliver adjusted EBITDA of $20 million to $25 million for fiscal 2026. Conference Call and Webcast Information Purple Innovation, Inc. will host a live conference call to discuss financial results today, Monday, August 10, 2026, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 833-461-5787 (domestic) or 585-542-9983 (international) and enter Conference ID 765 786 843. The conference call will also be available through a live webcast on the investor relations section of the Company's website at investors.purple.com. Please visit the website at least 15 minutes prior to the start of the call to register and download any necessary software. After the conference call, a webcast replay will remain available on the investor relations section of the Company's website for one year. About Purple Purple exists to help people get the best sleep of their lives — by reducing pain, deepening sleep, and unlocking the potential for brighter dawns and better days. At the center of that mission is our signature innovation, the GelFlex Grid®. Originally developed in medical settings to support the body in its most vulnerable moments, the GelFlex Grid delivers a one-of-a-kind combination of pressure relief, alignment, and temperature balance that helps people fall asleep easier, stay asleep longer, and wake up with less pain. That same comfort technology extends beyond mattresses into pillows, bedding, and cushions designed to make everyday life feel a little lighter and a lot more comfortable. Because when pain eases and sleep improves, everything else gets better too — your energy, your outlook, and your ability to show up for the moments that matter. Less pain. Better sleep. Learn more at www.purple.com Forward Looking Statements Certain statements made in this release that are not historical facts are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company's expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These statements include, but are not limited to, statements regarding our innovation pipeline, our ability to improve profitability, manage costs, generate cash, and optimize our business, the expansion of and benefits to us from our commercial relationships, our ability to drive profitable growth and create shareholder value, and our outlook for revenue and adjusted EBITDA for the full year 2026. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Factors that could influence the realization of forward-looking statements include, among others: changes in economic, financial and end-market conditions in the markets in which we operate; fluctuations in raw material prices and cost of labor; the financial condition of our customers and suppliers; competitive pressures, including the need for technology improvement, successful new product development and introduction; changes in consumer demand, including pullbacks in consumer spending; disruptions to our manufacturing processes; and the risk factors outlined in the "Risk Factors" section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2026, and in our other filings made with the SEC. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures EBITDA, adjusted EBITDA, adjusted net loss, and adjusted net loss per diluted share are non-GAAP financial measures that remove the impact of certain non-cash and non-recurring costs. Management believes that the use of such non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments, which we view as a better measure of our operating performance. Refer to the attached table for the reconciliation of such non-GAAP financial measures to the most comparable GAAP financial measure. With respect to the Company's adjusted EBITDA outlook for the full year 2026, a quantitative reconciliation to the corresponding GAAP information cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted, including but not limited to warrant liabilities and stock-based compensation. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results. Investor Contact: Stacy Turnof, Edelman Smithfield [email protected] 917-362-2581 PURPLE INNOVATION, INC. Condensed Consolidated Balance Sheets (unaudited – in thousands, except for par value) June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 23,300 $ 24,345 Accounts receivable, net 26,229 41,272 Inventories 55,397 59,725 Prepaid expenses 4,131 5,487 Other current assets 5,418 5,891 Total current assets 114,475 136,720 Property and equipment, net 73,763 77,961 Operating lease right-of-use assets 64,424 67,271 Intangible assets, net 5,909 6,346 Other long-term assets 5,925 7,961 Total assets $ 264,496 $ 296,259 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 41,186 $ 40,312 Accrued compensation 3,818 7,673 Customer prepayments 4,035 5,276 Accrued rebates and allowances 11,633 13,416 Accrued warranty liabilities – current portion 8,135 7,141 Operating lease obligations – current portion 16,967 17,366 Related party debt – current portion 127,006 — Other current liabilities 6,934 10,339 Total current liabilities 219,714 101,523 Related party debt, net of current portion — 111,305 Accrued warranty liabilities, net of current portion 20,030 19,570 Operating lease obligations, net of current portion 71,209 75,616 Warrant liabilities 15,715 16,150 Other long-term liabilities 1,628 1,764 Total liabilities 328,296 325,928 Commitments and contingencies (Note 13) Stockholders' equity (deficit): Class A common stock; $0.0001 par value, 210,000 shares authorized; 4,353 issued and outstanding at June 30, 2026 and 4,330 issued and outstanding at December 31, 2025 4 4 Class B common stock; $0.0001 par value, 90,000 shares authorized; 7 issued and outstanding at June 30, 2026 and at December 31, 2025 — — Additional paid-in capital 595,280 595,589 Accumulated deficit (659,051) (625,280) Total stockholders' equity (deficit) attributable to Purple Innovation, Inc. (63,767) (29,687) Noncontrolling interest (33) 18 Total stockholders' equity (deficit) (63,800) (29,669) Total liabilities and stockholders' equity (deficit) $ 264,496 $ 296,259 PURPLE INNOVATION, INC. Condensed Consolidated Statements of Operations (unaudited – in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues, net $ 98,270 $ 105,100 $ 194,000 $ 209,271 Cost of revenues: Cost of revenues 53,857 62,509 109,366 120,101 Cost of revenues - restructuring related charges — 77 — 995 Total cost of revenues 53,857 62,586 109,366 121,096 Gross profit 44,413 42,514 84,634 88,175 Operating expenses: Marketing and sales 33,733 35,447 70,316 76,688 General and administrative 12,445 14,991 30,478 29,478 Research and development 2,485 2,178 4,933 4,630 Restructuring, impairment and other related charges — 4,137 — 6,097 Total operating expenses 48,663 56,753 105,727 116,893 Operating loss (4,250) (14,239) (21,093) (28,718) Other income (expense): Interest expense (7,812) (7,457) (16,031) (12,221) Other income, net 1,455 1 2,946 70 Change in fair value – warrant liabilities 7,393 4,378 435 4,427 Total other income (expense), net 1,036 (3,078) (12,650) (7,724) Net loss before income taxes (3,214) (17,317) (33,743) (36,442) Income tax expense (32) (54) (79) (95) Net loss (3,246) (17,371) (33,822) (36,537) Net loss attributable to noncontrolling interest (16) (26) (51) (55) Net loss attributable to Purple Innovation, Inc. $ (3,230) $ (17,345) $ (33,771) $ (36,482) Net loss per share: Basic $ (0.74) $ (4.01) $ (7.77) $ (8.45) Diluted $ (0.74) $ (4.01) $ (7.77) $ (8.45) Weighted average common shares outstanding: Basic 4,353 4,329 4,344 4,317 Diluted 4,360 4,329 4,351 4,317 PURPLE INNOVATION, INC. Condensed Consolidated Statements of Cash Flows (unaudited – in thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ (33,822) $ (36,537) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 8,888 9,881 Non-cash interest 6,797 5,656 Paid-in-kind interest 9,249 6,797 Non-cash restructuring, impairment and other related charges — 3,816 Loss on disposal of property and equipment 152 224 Change in fair value – warrant liabilities (435) (4,427) Stock-based compensation (221) 845 Changes in operating assets and liabilities: Accounts receivable 15,043 11,974 Inventories 4,328 (4,040) Prepaid expenses and other assets 3,755 2,671 Operating leases, net (1,960) (1,018) Accounts payable 947 (17,111) Accrued compensation (3,855) (2,783) Customer prepayments (1,241) 2,079 Accrued rebates and allowances (1,783) (2,572) Accrued warranty liabilities 1,454 514 Other accrued liabilities (3,660) (3,031) Net cash provided by (used in) operating activities 3,636 (27,062) Cash flows from investing activities: Sale of property and equipment — 363 Purchase of property and equipment (3,557) (5,222) Investment in intangible assets (778) (285) Net cash used in investing activities (4,335) (5,144) Cash flows from financing activities: Proceeds from related party loan — 39,000 Payments for debt issuance costs (346) (1,557) Net cash (used in) provided by financing activities (346) 37,443 Net (decrease) increase in cash and cash equivalents (1,045) 5,237 Cash and cash equivalents, beginning of the period 24,345 29,011 Cash and cash equivalents, end of the period $ 23,300 $ 34,248 PURPLE INNOVATION, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (In thousands) Management believes that the use of the following non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments, which we view as a better measure of our operating performance. These non-GAAP financial measures are EBITDA, adjusted EBITDA, adjusted net loss and adjusted net loss per diluted share. Other companies may calculate these non-GAAP measures differently than we do. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for our financial results prepared in accordance with GAAP. Reconciliation of GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA A reconciliation of GAAP net income (loss) to the non-GAAP measures of EBITDA and adjusted EBITDA is provided below. EBITDA represents net loss before interest expense, income tax expense, other income, net, and depreciation and amortization. Adjusted EBITDA represents EBITDA excluding costs incurred due to changes in the fair value of the warrant liability, stock-based compensation expense, restructuring related charges, nonrecurring legal fees, strategic alternative costs, severance cost and showroom opening and closing costs. We believe EBITDA and Adjusted EBITDA provide additional useful information with respect to the impact of various adjustments and provide meaningful measures of our operating performance. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 GAAP net loss $ (3,246) $ (17,371) $ (33,822) $ (36,537) Interest expense 7,812 7,457 16,031 12,221 Income tax expense 32 54 79 95 Other income, net (286) (1) (515) (70) Depreciation and amortization 4,461 4,831 8,888 9,881 EBITDA 8,773 (5,030) (9,339) (14,410) Adjustments: Change in fair value - warrant liability (7,393) (4,378) (435) (4,427) Stock-based compensation expense (377) 439 (221) 845 Restructuring related charges — 4,137 — 6,785 Non-recurring legal fees 189 907 189 1,140 Strategic alternative costs 706 1,086 5,030 1,260 Severance costs 168 361 2,058 1,570 Showroom opening and closing costs — 114 — 147 Adjusted EBITDA $ 2,066 $ (2,364) $ (2,718) $ (7,090) Reconciliation of GAAP Net Loss to non-GAAP Adjusted Net Loss and Adjusted Net Loss per Diluted Share Our presentation of adjusted net loss assumes that all net loss is attributable to Purple Innovation, Inc. (i.e. there is no allocation of net loss to noncontrolling interests), which assumes the full exchange at the beginning of the period of all outstanding Paired Securities for shares of Class A common stock of Purple Innovation, Inc., adjusted for certain nonrecurring items that we do not believe directly reflect our core operations. Adjusted net loss per share, diluted, is calculated by dividing adjusted net loss by the total shares of Class A common stock outstanding plus any dilutive warrants, options and restricted stock as calculated in accordance with GAAP and assuming the full exchange of all outstanding Paired Securities as of the beginning of each period presented. Adjusted net loss and adjusted net loss per diluted share, are supplemental measures of operating performance that do not represent, and should not be considered, alternatives to net loss and earnings per share, as calculated in accordance with GAAP. We believe adjusted net loss and adjusted net loss per diluted share, supplement GAAP measures and enable us to more effectively evaluate our performance period-over-period. A reconciliation of net loss, the most directly comparable GAAP measure, to adjusted net loss and the computation of adjusted net loss per diluted share, are set forth below: (in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net loss $ (3,246) $ (17,371) $ (33,822) $ (36,537) Income tax expense, as reported 32 54 79 95 Revenue reduction due to SGI contract 941 627 1,882 627 Change in fair value – warrant liabilities (7,393) (4,348) (435) (4,427) Restructuring related charges — 4,213 — 7,092 Strategic alternative costs 706 1,086 5,030 1,260 Adjusted net loss before income taxes (8,960) (15,739) (27,266) (31,890) Adjusted income tax benefit(1) 2,321 4,076 7,062 8,260 Adjusted net loss $ (6,639) $ (11,663) $ (20,204) $ (23,630) Adjusted net loss per share, diluted $ (1.52) $ (2.69) $ (4.64) $ (5.46) Adjusted weighted-average shares outstanding, diluted(2) 4,360 4,336 4,351 4,324 (1) Represents the estimated effective tax rate of 25.9% for the three and six months ended June 30, 2026 and 2025, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company's blended state tax rates. (2) Assumes options and restricted stock units calculated in accordance with GAAP and the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period. A reconciliation of net income (loss) per share, diluted, to adjusted net loss per share, diluted is set forth below for the three months ended June 30, 2026 and 2025: For the Three Months Ended (in thousands, except per share amounts) June 30, 2026 June 30, 2025 Net Loss Weighted Average Shares, Diluted Net Loss per Share, Diluted Net Loss Weighted Average Shares, Diluted Net Loss per Share, Diluted Net loss attributable to Purple Innovation Inc.(1) $ (3,230) 4,360 $ (0.74) $ (17,345) 4,329 $ (4.01) Assumed exchange of shares(2) (16) — (26) 7 Net loss (3,246) (17,371) Adjustments to arrive at adjusted loss before taxes(3) (5,714) 1,632 Adjusted loss before taxes (8,960) (15,739) Adjusted income tax benefit(4) 2,321 4,076 Adjusted net loss $ (6,639) 4,360 $ (1.52) $ (11,663) 4,336 $ (2.69) (1) Represents net loss attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding. For the three months ended June 30, 2026, the Paired Securities are included in the beginning weighted average shares, diluted. (2) Assumes the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period. Also assumes the addition of net income attributable to noncontrolling interests corresponding with the assumed exchange of the Paired Securities for shares of Class A common stock. (3) Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes. (4) Represents the estimated effective tax rate of 25.9% for the three months ended, June 30, 2026 and 2025, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company's blended state tax rates assuming no valuation allowance. A reconciliation of net loss per share, diluted, to adjusted net loss per share, diluted is set forth below for the six months ended June 30, 2026 and 2025: For the Six Months Ended June 30, 2026 June 30, 2025 Net Income Weighted Average Shares, Diluted Net Loss per Share, Diluted Net Income Weighted Average Shares, Diluted Net Income per Share, Diluted Net loss attributable to Purple Innovation Inc.(1) $ (33,771) 4,351 $ (7.77) $ (36,482) 4,317 $ (8.45) Assumed exchange of shares(2) (51) — (55) 7 Net loss (33,822) (36,537) Adjustments to arrive at adjusted loss before taxes(3) 6,556 4,647 Adjusted loss before taxes (27,266) (31,890) Adjusted income tax benefit(4) 7,062 8,260 Adjusted net loss $ (20,204) 4,351 $ (4.64) $ (23,630) 4,324 $ (5.46) (1) Represents net loss attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding. For the six months ended June 30, 2026, the Paired Securities are included in the beginning weighted average shares, diluted. (2) Assumes the full exchange of all outstanding Paired Securities for shares of Class A common stock as of the beginning of the period if not already included in weighted average diluted shares in footnote (1) above. Also assumes the addition of net income attributable to noncontrolling interests corresponding with the assumed exchange of the Paired Securities for shares of Class A common stock. (3) Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes. (4) Represents the estimated effective tax rate of 25.9% for the six months ended June 30, 2026 and 2025, applied to adjusted net income before income taxes. The estimated effective tax rates are what the Company would be subject to and consist of the combined federal statutory tax rate and the Company's blended state tax rates assuming no valuation allowance. View original content to download multimedia:https://www.prnewswire.com/news-releases/purple-innovation-reports-second-quarter-2026-results-302847380.html SOURCE Purple Innovation, LLC