Purple Innovation Reports Fourth Quarter and Full Year 2025 Results

Revenue Increases 9% in Fourth Quarter GAAP Net Loss of $3.2 Million in Fourth Quarter Delivers $8.8 Million in Adjusted EBITDA in Fourth Quarter Full Year Adjusted EBITDA Positive; Gross Margin Exceeds 40% Target , /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 fourth quarter and full year ended December 31, 2025. "2025 marked an important inflection point for Purple," said Rob DeMartini, CEO of Purple Innovation. "In the fourth quarter, we delivered revenue growth of approximately 9%, delivered gross profit expansion, and generated $8.8 million in adjusted EBITDA. We also finished the year profitable on an adjusted EBITDA basis, a significant milestone that reflects the structural improvements we have made across the business." DeMartini continued, "Over the past year, we strengthened our foundation through disciplined cost actions and manufacturing consolidation, while reinforcing our premium positioning. Rejuvenate 2.0 continued to outperform, our expanded Mattress Firm partnership and Costco programs drove meaningful wholesale growth, and our showroom fleet delivered improved profitability. As we enter 2026, we are operating from a stronger margin profile and a more efficient cost structure, supported by what we believe is a clear and disciplined strategy to scale profitably." Fourth Quarter 2025 Financial Results Fourth quarter 2025 net revenue was $140.7 million, representing growth of approximately 9.1% compared to the fourth quarter of 2024. Growth was driven primarily by the wholesale channel, reflecting a full quarter of expanded Mattress Firm placements and continued momentum with Costco, partially offset by a decline in e-commerce. Gross profit for the fourth quarter increased to $59.0 million or 41.9% of net revenue, compared to $55.3 million or 42.9% in the prior-year period. Gross margin was up against a period when it rose 970 basis points, driven by sourcing initiatives and the profitable liquidation of inventories. On a two-year basis, gross margin rose 870 basis points, reflecting direct material savings, plant efficiencies, restructuring benefits, and volume leverage. Fourth quarter operating expenses were $61.2 million, down 2.9% from $63.0 million in the prior year quarter. The improvement was primarily driven by ongoing benefits from restructuring and cost-saving initiatives, partially offset by strategic alternatives costs. Net loss attributable to Purple Innovation, Inc. for the fourth quarter was $3.2 million, an improvement from $(8.5) in the prior year. Adjusted EBITDA for the fourth quarter was $8.8 million, an improvement from $2.9 million last year, driven primarily by revenue growth and disciplined cost management. Full Year 2025 Financial Results Full year 2025 net revenue was $468.7 million, a decline of 3.9% compared to the full year 2024. The reduction was driven primarily by ecommerce headwinds, partially offset by expanded partnerships in the wholesale channel. Gross profit for the full year increased to $188.6 million, compared to $181.1 million in the prior-year period. Gross margin was 40.2%, up 310 basis points from last year, reflecting the continued impact of our restructuring initiatives, sourcing savings, and manufacturing efficiencies. Full year operating expenses were $231.6 million, down 15.3% from $273.3 million in the prior year, driven by restructuring actions and productivity initiatives. Net loss attributable to Purple Innovation, Inc. for the full year was $(51.4) million, an improvement from $(97.9) in the prior year. Adjusted EBITDA for the full year was $1.9 million, a significant improvement from $(20.8) million last year. Balance Sheet As of December 31, 2025, the Company had cash and cash equivalents of $24.3 million compared to $29.0 million as of December 31, 2024. Net inventories as of December 31, 2025, totaled $59.7 million, down 9.2% compared to September 30, 2025, and an increase of 5.0% compared to December 31, 2024. 2026 Outlook For 2026, the Company currently expects full year revenue to be in the range of $500 to $520 million and adjusted EBITDA in the range of $20 to $30 million. For the first quarter, the Company anticipates total revenue to be in the range of $100 to $105 million and adjusted EBITDA to be approximately $(7) to $(4) million. Conference Call and Webcast Information Purple Innovation, Inc. will host a live conference call to discuss financial results today, March 25, 2026, at 8:30 a.m. Eastern Time. To access the call dial 800-715-9871 (domestic) or 646-307-1963 (international). The call is also being webcast and can be accessed on the investor relations section of the Company's website, investors.purple.com. After the conference call, a webcast replay will remain available on the investor relations section of the Company's website for 30 days. 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, the timing of new product collection launches, our ability to improve profitability and optimize our business, the expansion of and benefits to us from our commercial relationship with Mattress Firm, the impact of other commercial relationships, including those with Walmart, Costco, and other traditional and non-traditional partners, our ability to drive profitable growth and create shareholder value, and our outlook for revenue and adjusted EBITDA for the first quarter and 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 gross profit, adjusted operating expenses, adjusted net income, and adjusted net income 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 first quarter and 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. Consolidated Balance Sheets (in thousands, except for par value) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 24,345 $ 29,011 Accounts receivable, net 41,272 33,057 Inventories 59,725 56,863 Prepaid expenses 5,487 6,023 Other current assets 5,891 1,414 Total current assets 136,720 126,368 Property and equipment, net 77,961 93,874 Operating lease right-of-use assets 67,271 75,516 Intangible assets, net 6,346 8,890 Other long-term assets 7,961 3,197 Total assets $ 296,259 $ 307,845 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 40,312 $ 40,639 Accrued compensation 7,673 9,415 Customer prepayments 5,276 6,411 Accrued rebates and allowances 13,416 10,013 Accrued warranty liabilities – current portion 7,141 6,114 Operating lease obligations – current portion 17,366 15,661 Other current liabilities 10,339 12,750 Total current liabilities 101,523 101,003 Related party debt 111,305 55,394 Accrued warranty liabilities, net of current portion 19,570 26,091 Operating lease obligations, net of current portion 75,616 87,072 Warrant liabilities 16,150 16,067 Other long-term liabilities 1,764 2,009 Total liabilities 325,928 287,636 Commitments and contingencies (Note 13) Stockholders' equity (deficit): Class A common stock; $0.0001 par value, 210,000 shares authorized; 108,246 and  107,545 issued and outstanding at December 31, 2025 and 2024, respectively 11 11 Class B common stock; $0.0001 par value, 90,000 shares authorized; 163 and 165 issued and outstanding at December 31, 2025 and 2024, respectively — — Additional paid-in capital 595,582 594,053 Accumulated deficit (625,280) (573,866) Total stockholders' equity (deficit) attributable to Purple Innovation, Inc. (29,687) 20,198 Noncontrolling interest 18 11 Total stockholders' equity (deficit) (29,669) 20,209 Total liabilities and stockholders' equity (deficit) $ 296,259 $ 307,845 PURPLE INNOVATION, INC. Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended December 31, Year Ended December 31, 2025 2024 2025 2024 Revenues, net $ 140,688 $ 128,975 $ 468,725 $ 487,877 Cost of revenues: Cost of revenues 81,709 71,113 279,171 291,303 Cost of revenues - restructuring related charges — 2,583 995 15,442 Total cost of revenues 81,709 73,696 280,166 306,745 Gross profit 58,979 55,279 188,559 181,132 Operating expenses: Marketing and sales 39,678 45,485 147,040 171,263 General and administrative 18,879 14,006 63,557 69,117 Research and development 2,607 2,390 9,604 12,962 Restructuring, impairment and other related charges  — 1,092 11,387 19,973 Total operating expenses 61,164 62,973 231,588 273,315 Operating loss (2,185) (7,694) (43,029) (92,183) Other income (expense): Interest expense (8,342) (4,481) (28,766) (17,510) Other income, net 1,477 (64) 3,289 11,548 Loss on extinguishment of debt — — — (3,394) Change in fair value – warrant liabilities 5,883 3,615 17,202 3,504 Total other income (expense), net (982) (930) (8,275) (5,852) Net loss before income taxes (3,167) (8,624) (51,304) (98,035) Income tax benefit (expense) (59) 113 (207) (63) Net loss (3,226) (8,511) (51,511) (98,098) Net loss attributable to noncontrolling interest (14) (32) (97) (201) Net loss attributable to Purple Innovation, Inc. $ (3,212) $ (8,479) $ (51,414) $ (97,897) Net loss per share: Basic $ (0.03) $ (0.08) $ (0.48) $ (0.91) Diluted $ (0.03) $ (0.08) $ (0.48) $ (0.91) Weighted average common shares outstanding: Basic 108,246 107,528 108,081 107,139 Diluted 108,409 107,710 108,245 107,324 PURPLE INNOVATION, INC. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ (51,511) $ (98,098) Adjustments to reconcile net loss to net cash used in operating activities:  Depreciation and amortization 24,064 35,355 Non-cash interest 13,416 7,229 Paid-in-kind interest 15,804 9,679 Non-cash restructuring, impairment and other related charges 3,775 20,238 Loss on extinguishment of debt — 3,394 Loss on disposal of property and equipment 318 770 Change in fair value – warrant liabilities (17,202) (3,504) Stock-based compensation 1,729 2,815 Changes in operating assets and liabilities: Accounts receivable (8,215) 4,745 Inventories (2,862) 5,989 Prepaid expenses and other assets 3,141 2,345 Operating leases, net (2,917) (2,412) Accounts payable 61 (6,376) Accrued compensation (1,742) 4,351 Customer prepayments (1,135) 693 Accrued rebates and allowances (97) (3,230) Accrued warranty liabilities (5,494) (3,386) Other accrued liabilities (4,963) 1,553 Net cash used in operating activities (33,830) (17,850) Cash flows from investing activities: Sale of property and equipment 464 — Purchase of property and equipment (8,079) (7,244) Investment in intangible assets (664) (286) Net cash used in investing activities (8,279) (7,530) Cash flows from financing activities: Proceeds from related party loan 39,000 61,000 Payments on term loan — (25,000) Payments on revolving line of credit — (5,000) Payments for debt issuance costs (1,557) (3,466) Net cash provided by financing activities 37,443 27,534 Net increase (decrease) in cash and cash equivalents (4,666) (2,154) Cash and cash equivalents, beginning of the year 29,011 26,857 Cash and cash equivalents, end of the period $ 24,345 $ 29,011 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 gross profit, adjusted operating expenses, 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 income (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, debt extinguishment, stock-based compensation expense, restructuring related expenses, loss on project write-off, nonrecurring legal fees, strategic alternative costs, executive interim and search costs, severance cost, showroom opening and closing costs and non-operating facility expense. 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 December 31, Year Ended December 31, 2025 2024 2025 2024 GAAP net loss $ (3,226) (8,511) (51,511) (98,098) Interest expense 8,342 4,481 28,766 17,510 Income tax expense 59 113 207 63 Other income, net (1,477) 64 (3,289) (11,548) Depreciation and amortization 4,406 7,907 24,064 35,355 EBITDA 8,104 3,828 (1,763) (56,718) Adjustments: Change in fair value - warrant liability (5,883) (3,615) (17,202) (3,504) Loss on extinguishment of debt — — — 3,394 Stock-based compensation expense 464 685 1,729 2,815 Restructuring related charges — 1,378 6,850 25,047 Loss on project write-off — — — 1,355 Non-recurring legal fees 81 42 1,531 982 Strategic alternative costs 5,317 — 7,275 — Executive interim and search costs — 233 — 3,616 Severance costs 148 146 1,800 1,232 Showroom opening and closing costs — 174 147 956 Non-operating facility expense 614 — 1,578 — Adjusted EBITDA $ 8,845 $ 2,871 $ 1,945 $ (20,825) Reconciliation of GAAP Gross Profit to Adjusted Gross Profit A reconciliation of GAAP gross profit to the non-GAAP measures of adjusted gross profit is provided below. Adjusted gross profit represents net revenue less adjusted cost of revenue. Adjusted cost of revenues represents cost of revenues excluding restructuring charges recorded in cost of revenues. We believe adjusted gross margin provides additional useful information with respect to the impact of the restructuring and provides meaningful measures of our operating performance. (in thousands) Three Months Ended December 31, Year Ended December 31, 2025 2024 2025 2024 Revenues, net $ 140,688 $ 128,975 $ 468,725 $ 487,877 Total cost of revenues 81,709 73,696 280,166 306,745 Restructuring charges in cost of revenues  — (2,583) (995) (15,442) Adjusted cost of revenues 81,709 71,113 279,171 291,303 Adjusted gross profit $ 58,979 $ 57,862 $ 189,554 $ 196,574 Adjusted gross profit % 41.9 % 44.9 % 40.4 % 40.3 % Reconciliation of GAAP Operating Expenses to non-GAAP Adjusted Operating Expenses Our presentation of adjusted operating expenses assumes adjustments for certain nonrecurring items that we do not believe directly reflects our current core operations. Adjusted operating expenses is a supplemental measure of operating performance that does not represent, and should not be considered, alternatives to net loss and earnings per share, as calculated in accordance with GAAP. We believe adjusted operating expenses supplements GAAP measures and enables us to more effectively evaluate our performance period-over-period. A reconciliation of operating expenses, the most directly comparable GAAP measure, to adjusted operating expenses is set forth below: (in thousands, except per share amounts) Three Months Ended December 31, Year Ended December 31, 2025 2024 2025 2024 Total operating expenses $ 61,164 $ 62,973 $ 231,588 $ 273,315 Restructuring, impairment and other related charges  — (1,092) (11,387) (19,973) Strategic alternative costs (5,317) — (7,275) — Adjusted operating expenses $ 55,847 $ 61,881 $ 212,926 $ 253,342 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 December 31, Year Ended December 31, 2025 2024 2025 2024 Net loss $ (3,226) $ (8,511) $ (51,511) $ (98,098) Income tax expense, as reported 59 113 207 63 Revenue reduction due to SGI Contract 941 — 2,508 — Change in fair value – warrant liabilities (5,883) (3,615) (17,202) (3,504) Loss on extinguishment of debt — — — 3,394 Restructuring related charges — 3,675 12,382 35,415 Gain on insurance proceeds — (7,301) — (11,601) Strategic alternative costs 5,317 — 7,275 — Adjusted net loss before income taxes (2,792) (15,639) (46,341) (74,331) Adjusted income tax benefit(1) 723 4,051 12,002 19,252 Adjusted net loss $ (2,069) $ (11,588) $ (34,339) $ (55,079) Adjusted net loss per share, diluted $ (0.02) $ (0.11) $ (0.32) $ (0.51) Adjusted weighted-average shares outstanding, diluted(2)  108,409 107,710 108,245 107,324 (1) Represents the estimated effective tax rate of 25.9% for the three and twelve months ended December 31, 2025 and 2024, 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 diluted share is set forth below for the three and twelve months ended December 31, 2025 and 2024: For the Three Months Ended December 31, 2025 December 31, 2024 Net Loss Weighted Average Shares, Diluted Net Income per Share, Diluted Net Loss Weighted Average Shares, Diluted Net Income per Share, Diluted Net loss attributable to Purple Innovation Inc.(1) $ (3,212) 108,409 (0.03) $ (8,479) 107,710 $ (0.08) Assumed exchange of shares(2) (14) — (32) — Net loss (3,226) (8,511) Adjustments to arrive at adjusted loss before taxes(3) 434 (7,128) Adjusted loss before taxes (2,792) (15,639) Adjusted income tax benefit(4) 723 4,051 Adjusted net loss $ (2,069) 108,409 (0.02) $ (11,588) 107,710 $ (0.11) (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 December 31, 2025, 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. Also assumes the dilutive warrants, options and restricted stock as calculated in accordance with GAAP. (4) Represents the estimated effective tax rate of 25.9% for the three months ended December 31, 2025 and 2024, 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. For the Year Ended December 31, 2025 December 31, 2024 Net Income Weighted Average Shares, Diluted Net Income per Share, Diluted Net Income Weighted Average Shares, Diluted Net Income per Share, Diluted Net loss attributable to Purple Innovation Inc.(1) $ (51,414) 108,245 (0.48) $ (97,897) 107,324 $ (0.91) Assumed exchange of shares(2) (97) — (201) — Net loss (51,511) (98,098) Adjustments to arrive at adjusted loss  before taxes(3) 5,170 23,767 Adjusted loss before taxes (46,341) (74,331) Adjusted income tax benefit(4) 12,002 19,252 Adjusted net loss $ (34,339) 108,245 (0.32) $ (55,079) 107,324 $ (0.51) (1) Represents net loss attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding. For the year ended December 31, 2025, 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. Also assumes the dilutive warrants, options and restricted stock as calculated in accordance with GAAP. (4) Represents the estimated effective tax rate of 25.9% for the year ended December 31, 2025 and 2024, 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-fourth-quarter-and-full-year-2025-results-302728994.html SOURCE Purple Innovation, LLC