Revolve Group reported fourth‑quarter 2025 results that surpassed expectations, with net sales of $324.4 million, a 10% year‑over‑year increase, and a gross margin of 53.3% versus 52.5% in 2024. Net income rose to $18.6 million, a 58% jump, while adjusted EBITDA climbed 44% to $26.3 million, the highest quarterly figure in the company’s history.
The growth was driven by strong performance in both the REVOLVE and FWRD segments. Active customers increased 6% to 2.84 million, and total orders grew 13% to 2.445 million. International sales expanded 13% year‑over‑year, with China contributing a 50% increase, underscoring the company’s momentum in key overseas markets.
Revolve’s earnings beat analyst expectations on both fronts. Earnings per share of $0.26 outpaced the consensus estimate of $0.16, a $0.10 or 62.5% beat, while revenue of $324.4 million exceeded the $305.4 million estimate by $19 million or 6.21%. The outperformance was largely driven by a shift toward higher‑margin owned brands, AI‑driven personalization that boosted conversion, and robust growth in the luxury FWRD segment.
Management guided for 2026 with a gross margin range of 53.7% to 54.2%, a selling and distribution expense ratio of 17.1% to 17.3%, marketing spend of 15.3% to 15.8% of sales, and fulfillment costs of 3.2% to 3.4%. Cash and equivalents stood at $303 million, the company remains debt‑free, and an unused $75 million credit line provides additional flexibility. The guidance signals confidence in margin expansion and continued investment in owned brands and AI, while acknowledging higher marketing spend and tariff uncertainty as potential headwinds.
"We finished the year with an outstanding fourth quarter, highlighted by double‑digit top‑line growth, a 58% increase in net income and a 44% increase in Adjusted EBITDA year‑over‑year," said Co‑Founder and Co‑CEO Mike Karanikolas. "We achieved these strong financial results while continuing to invest in many initiatives that we are very excited about, and which we believe set us up well for continued profitable growth and market share gains in 2026 and beyond." The company’s debt‑free balance sheet, strong cash position, and growing owned‑brand penetration—now 20% of REVOLVE segment sales—position it well for future expansion, including a permanent store opening in Los Angeles and continued AI integration.
The results demonstrate effective execution and margin expansion, but investors should monitor tariff risk, the impact of increased marketing spend, and the company’s valuation relative to peers as it pursues its growth strategy.
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