Purple Innovation (NASDAQ: PRPL) posts Q2 2026 loss but turns EBITDA positive
Rhea-AI Filing Summary
Purple Innovation, Inc. reported second-quarter 2026 net revenue of $98.3 million, down 6.5% from $105.1 million a year earlier, as weaker wholesale demand offset growth in direct-to-consumer channels. Showroom revenue rose 16.6% while e-commerce revenue slipped 1.4%; wholesale revenue declined 19.1% to $37.4 million.
Gross profit increased to $44.4 million and gross margin reached 45.2%, helped by a $5.3 million tariff refund and cost reclassification. Operating expenses fell about 14.3% to $48.7 million, reflecting lower restructuring and employee-related costs. GAAP net loss narrowed to $3.2 million from $17.3 million, and adjusted EBITDA improved to a positive $2.1 million from a $2.4 million loss.
Purple ended the quarter with $23.3 million of cash and cash equivalents and generated $3.6 million of operating cash flow in the first half of 2026. The company regained compliance with the Nasdaq minimum bid price requirement. For full-year 2026, revenue guidance was lowered to $420–$440 million, while adjusted EBITDA is projected at $20–$25 million.
Positive
- GAAP net loss improved to $3.2 million from $17.3 million year-over-year in Q2, reflecting higher gross margin and lower operating expenses.
- Adjusted EBITDA turned positive at $2.1 million versus a $2.4 million loss in the prior-year quarter, indicating better underlying operating performance.
- Year-to-date operating cash flow improved to $3.6 million from a $27.1 million use of cash in the prior-year period.
- Purple regained compliance with Nasdaq’s minimum bid price requirement, closing a previously disclosed listing deficiency.
- Showroom revenue grew 16.6% and direct-to-consumer revenue increased 3.4%, demonstrating strength in the company’s own channels despite category softness.
Negative
- Second-quarter net revenue declined 6.5% to $98.3 million, driven mainly by weaker wholesale demand.
- Wholesale revenue fell 19.1% to $37.4 million, reflecting lower industry demand and higher payments to certain customers and a related manufacturer.
- Purple reported a GAAP net loss of $3.2 million in Q2 and an accumulated deficit of $659.1 million, with total stockholders’ equity in a deficit position.
- The company lowered 2026 revenue guidance to a range of $420 million to $440 million amid continued category softness, particularly in wholesale.
Filing Explained
At June 30, current liabilities of $219,714 thousand exceeded current assets of $114,475 thousand, while related-party debt was $127,006 thousand.
This Form 8-K reports the completed second quarter ended
At quarter-end, the balance sheet reports
The company says that moving card-processing and third-party financing fees from cost of revenue to marketing and sales increased reported gross margin by approximately 500 basis points, without changing revenue, operating loss, net loss, adjusted EBITDA, or cash flow.
Adjusted EBITDA is a supplemental non-GAAP measure rather than a substitute for GAAP results, and the company says it cannot quantitatively reconcile its full-year
At
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
warrant liabilities financial
Nasdaq Listing Rule 5450(a)(1) regulatory
non-GAAP financial measures financial
Operating lease right-of-use assets financial
Earnings Snapshot
For 2026, the company lowered revenue guidance to $420–$440 million and projected adjusted EBITDA of $20–$25 million, citing category softness, particularly in wholesale, and continued strength and cost discipline in its direct-to-consumer business.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§240.12b–2 of this chapter).
Emerging growth company
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 10, 2026, Purple Innovation, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2026, and providing revised net revenue guidance for 2026. A copy of this press release is furnished as Exhibit 99.1 to this report and incorporated by reference herein.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The press release furnished herewith in Exhibit 99.1 contains non-GAAP financial measures. Management believes non-GAAP financial measures assist management and investors in evaluating and comparing period-to-period results and projections in a more meaningful and consistent manner. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the press release.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Press Release dated August 10, 2026, regarding financial results for the second quarter ended June 30, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: August 10, 2026 | PURPLE INNOVATION, INC. | |
| By: | /s/ Robert G. Lucian | |
| Robert G. Lucian | ||
| Chief Financial Officer | ||
Exhibit 99.1
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
Lehi, Utah, August 10, 2026 – 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.
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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
stacy.turnof@edelmansmithfield.com
917-362-2581
3
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 | ||||
4
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 | ||||||||||||
5
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 | ||||
6
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 | ) | |||||
7
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. |
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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. |
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