Warby Parker Stock Jumps 23% as Margin Gains and EBITDA Beat Spark Relief Rally Ahead of Google Smart Glasses

Shares of Warby Parker Inc. jumped 23% on Thursday after the eyewear retailer reported double-digit revenue growth and better-than-expected profitability, sparking a relief rally after a weak stretch for the stock.

Warby Parker shares rose $4.92 to $26.21 in Thursday trading, with about 2.4 million shares changing hands. The rally lifted the company's market value to about $3.2 billion, and the shares are now up about 26% over the past year.

The stock had shed roughly 19.5% over the prior three months heading into the report.

Mixed headline numbers

Net revenue increased 10.4%, or $23.1 million, to $244.7 million. That was slightly below the $244.92 million consensus estimate.

Earnings estimates varied. StockStory said GAAP earnings of 4 cents a share beat consensus by a penny. Investing.com compared the result with an 9-cent forecast, attributing part of the gap to spending on the upcoming Intelligent Eyewear launch with Google.

Profitability impresses

Investors focused on margins. Adjusted EBITDA of $28.6 million beat the company's guided range, and gross margin improved to 54.4% from 54.1%.

Higher gross margin reflected reduced tariffs, shipping savings, optical lab efficiencies and greater use of progressive lenses and other treatments, partly offset by higher occupancy costs from new stores.

Customers spending more

Active customers rose 3% to 2.74 million on a trailing 12-month basis, while average revenue per customer increased 6.7% to $342.

The store network continues to expand. Warby Parker opened 12 net new stores during the quarter, ending with 364.

Guidance

The company forecast 2026 revenue of $966 million to $976 million and adjusted EBITDA of $117 million to $119 million.

Smart glasses launch

Investment in the Google partnership weighed on cash flow. Third-quarter free cash flow was negative $2.0 million, reflecting investments related to launching Intelligent Eyewear. Management said it expects marketing activities to increase around the launch this quarter.

The company ended the quarter with $287.9 million in cash and cash equivalents. Investors will watch the reception of the smart glasses as a key test of Warby Parker's next phase of growth.