FIGS — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenues for Q3 2026 were $190.7 million, a 25.7% increase year over year.
• Net income was $19.3 million ($0.10 diluted EPS), compared to $8.7 million ($0.05 diluted EPS) in the prior year period.
• Net income margin improved to 10.1% from 5.8% year over year.
• Adjusted EBITDA was $31.5 million, an increase of $12.7 million year over year.
• Adjusted EBITDA margin expanded to 16.5% from 12.4% year over year.
• Gross margin was 69.3%, a decrease of 60 basis points year over year.
• Operating expenses were $109.9 million (13.9% increase year over year), decreasing to 57.6% of net revenues from 63.6% in the prior year period.
• Free cash flow for the nine months ended September 30, 2026, was $89.8 million, compared to a negative $5.1 million in the prior year period.
• Cash, cash equivalents, and short-term investments totaled approximately $330 million as of the reporting period.

Guidance and Future Outlook:

• Full-year 2026 net revenue growth is now expected to be approximately 23.5%, up from previous expectations.
• Q4 2026 net revenue growth is expected to be approximately 15%.
• Full-year 2026 Adjusted EBITDA margin outlook is approximately 15.8%.
• Management expressed increased conviction in Q4 2026 and a foundation for sustainable momentum heading into 2027.

Business Segments and Product Lines:

• Scrubwear net revenues were $157.5 million, up 24.0% year over year.
• Non-scrubwear net revenues were $33.2 million, up 34.6% year over year.
• U.S. net revenues were $153.9 million, up 20.8% year over year.
• International net revenues were $36.8 million, up 51.4% year over year.
• Average Order Value (AOV) was $126, an increase of 10.5% year over year, driven by higher average unit retail and favorable product mix.
• Net revenues per active customer reached a record $236, an increase of 12.9% year over year.

Market and Competitive Landscape:

• Active customers increased 14.3% year over year to 3.2 million as of September 30, 2026.
• The company noted consistent strength across categories, channels, and geographies.
• Management cited strong industry fundamentals and the power of the brand community as key drivers.

Risks and Challenges:

• Gross margin compression was attributed to outsized improvements in returns processing in the prior year and higher inventory reserves.
• Forward-looking statements highlight risks including the ability to maintain growth, profitability, brand value, and customer retention.
• Potential risks include macroeconomic trends, consumer spending behavior, supply chain disruptions, and global trade policy impacts.
• Risks related to international expansion, cybersecurity, and intellectual property protection are noted.

Management Commentary and Tone:

• CEO Trina Spear described Q3 as the fourth straight quarter of greater than 25% net revenue growth, calling it a "landmark year."
• CFO Sarah Oughtred stated the company performed at a high level, delivering better-than-expected results and demonstrating expense leverage.
• Management highlighted record cash levels and the execution of an expanded share repurchase program.

Other Key Points:

• The company utilized an expanded share repurchase program to return value to shareholders.
• Repurchases of Class A Common Stock totaled $46.6 million for the nine months ended September 30, 2026.
• The company serves healthcare professionals in the U.S. and internationally, including institutions via the TEAMS platform.
• Deferred revenue decreased to $3.4 million from $4.0 million at the end of the prior fiscal year.
• Inventory, net decreased to $121.3 million from $128.0 million at the end of the prior fiscal year.