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Purple Innovation Inc

Purple Innovation Reports Third Quarter 2025 Results

Purple Achieves Improved Net Loss and Positive Adjusted EBITDA, Advancing Its Profitability Turnaround

Rejuvenate 2.0 Drives Continued Product and Brand Momentum

Mattress Firm Rollout Remains on Track, Supporting Growth in Premium Segment

LEHI, Utah , Nov. 4, 2025 /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 third quarter ended September 30, 2025.

"Our third quarter results reflect the continued progress we're making in strengthening Purple's foundation and positioning the company for sustainable, profitable growth," said Rob DeMartini, CEO of Purple Innovation.  "We delivered results in line with expectations, achieving an improved net loss and  positive adjusted EBITDA and a sequential improvement in gross margin despite tariff headwinds.  These results highlight the discipline and focus that are driving improved performance across our business."

DeMartini continued, "One year after launching our restructuring program, Purple is a leaner, more agile company that is now firmly focused on scaling for growth.  The success of Rejuvenate 2.0, the ongoing expansion of our Mattress Firm partnership, and strong showroom performance all underscore the power of our innovation and our brand momentum, marking an important inflection point in sales trends after consecutive quarters of year-over-year declines.  We are entering the final months of the year with confidence, executing against our Path to Premium Sleep strategy and remaining on track to deliver positive adjusted EBITDA for the full year."

Third Quarter 2025 Financial Results
Third quarter 2025 net revenue was $118.8 million, up slightly compared to $118.6 million in the third quarter of 2024, fueled by the timing of Rejuvenate 2.0 shipments and the continued expansion of our Mattress Firm partnership.  Strength across showroom and wholesale channels was partially offset by softer performance in e-commerce.

Gross profit for the third quarter increased to $50.9 million or 42.8% of net revenue, compared to $35.2 million or 29.7% in the prior year period.  Adjusted gross margin, which excludes restructuring and related charges, expanded by 230 basis points to 42.8% in the quarter, compared to 40.5% in the year-prior period.  With the restructuring now complete, we also benefited as product continues to scale at our Georgia facility, and we delivered greater manufacturing efficiencies and direct material cost savings.  

Third quarter operating expenses were $63.0 million, down 23.2% from $82.0 million in the prior year quarter.  The improvement was primarily driven by the comparison to significant restructuring, impairment, and related charges recorded last year, which declined by $13.6 million.  Adjusted operating expenses, which excludes certain restructuring and impairment charges, were $57.7 million, down $5.4 million from the prior year period.

Net loss attributable to Purple Innovation, Inc. for the third quarter was $11.7 million, a decline from $39.2 million in the prior year.

Adjusted EBITDA for the third quarter was $0.2 million, an improvement from $(6.4) million last year, driven primarily by our strong gross margin performance and disciplined cost management.

Balance Sheet
As of September 30, 2025, the Company had cash and cash equivalents of $32.4 million compared to $29.0 million as of December 31, 2024.

Net inventories as of September 30, 2025, totaled $65.8 million, up 9.8% compared to September 30, 2024, and an increase of 15.7% compared to December 31, 2024.

2025 Outlook
The Company is maintaining its 2025 guidance, projecting full-year revenue of $465 to $485 million and adjusted EBITDA of breakeven to $10 million, supported by the strong performance of the Rejuvenate 2.0 mattress launch and the successful rollout of the Mattress Firm partnership.

Conference Call and Webcast Information
 Purple Innovation, Inc. will host a live conference call to discuss financial results today, November 4, 2025, at 4:30 p.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 is a premium mattress company and the leader in sleep technology. Their patented GelFlex Grid® is the only material that instantly relieves pressure for less pain and better sleep.

With over 30 years of innovation, Purple's product engineers are paving the way for everyone to experience a proven, deeper sleep by reducing their aches and pains. The GelFlex Grid® does it all—it instantly adapts as you move, balances temperature, relieves pressure, and offers support in all the right places. Purple products, including mattresses, pillows, cushions, frames, sheets, and more, can be found online at Purple.com, in 55 Purple stores, and over 3,800 retailers nationwide.

Purple
Less pain. Better sleep.

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, revenue-to-date for the third quarter, our ability to drive profitable growth and create shareholder value, and our outlook for revenue and adjusted EBITDA for the full year 2025.  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 14, 2025, 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 operating expenses, adjusted EBITDA, adjusted gross margin, 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 full year 2025, 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

PURPLE INNOVATION, INC.

Condensed Consolidated Balance Sheets

(unaudited – in thousands, except for par value)




September 30,



December 31,

2025

2024

Assets






Current assets:






Cash and cash equivalents


$

32,358



$

29,011

Accounts receivable, net



25,210




33,057

Inventories



65,770




56,863

Prepaid expenses



7,401




6,023

Other current assets



5,667




1,414

Total current assets



136,406




126,368

Property and equipment, net



79,495




93,874

Operating lease right-of-use assets



70,668




75,516

Intangible assets, net



6,895




8,890

Other long-term assets



8,657




3,197

Total assets


$

302,121



$

307,845









Liabilities and Stockholders' Equity








Current liabilities:








Accounts payable


$

35,661



$

40,639

Accrued compensation



7,765




9,415

Customer prepayments



5,209




6,411

Accrued rebates and allowances



13,820




10,013

Accrued warranty liabilities – current portion



7,635




6,114

Operating lease obligations – current portion



16,379




15,661

Other current liabilities



10,628




12,750

Total current liabilities



97,097




101,003

Related party debt



102,889




55,394

Accrued warranty liabilities, net of current portion



24,163




26,091

Operating lease obligations, net of current portion



80,837




87,072

Warrant liabilities



22,032




16,067

Other long-term liabilities



2,010




2,009

Total liabilities



329,028




287,636

Commitments and contingencies (Note 13)








Stockholders' equity (deficit):








Class A common stock; $0.0001 par value, 210,000 shares authorized; 108,246 issued and outstanding at September 30,
2025, and 107,545 issued and outstanding at December 31, 2024



11




11

Class B common stock; $0.0001 par value, 90,000 shares authorized; 163 issued and outstanding at September 30, 2025,
and at December 31, 2024



—




—

Additional paid-in capital



595,118




594,053

Accumulated deficit



(622,068)




(573,866

Total stockholders' equity (deficit) attributable to Purple Innovation, Inc.



(26,939)




20,198

Noncontrolling interest



32




11

Total stockholders' equity (deficit)



(26,907)




20,209

Total liabilities and stockholders' equity (deficit)


$

302,121



$

307,845

 

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Operations

(unaudited – in thousands, except per share amounts)






Three Months Ended



Nine Months Ended


September 30,

September 30,



2025



2024



2025



2024


Revenues, net


$

118,766



$

118,598



$

328,037



$

358,902


Cost of revenues:

















Cost of revenues



67,915




70,546




197,462




220,190


Cost of revenues - restructuring related charges



—




12,859




995




12,859


Total cost of revenues



67,915




83,405




198,457




233,049


Gross profit



50,851




35,193




129,580




125,853


Operating expenses:

















Marketing and sales



40,120




42,939




107,362




125,778


General and administrative



15,200




17,266




44,678




55,111


Research and development



2,367




2,920




6,997




10,572


Restructuring, impairment and other related charges



5,290




18,881




11,387




18,881


Total operating expenses



62,977




82,006




170,424




210,342


Operating loss



(12,126)




(46,813)




(40,844)




(84,489)


Other income (expense):

















Interest expense



(8,203)




(4,394)




(20,424)




(13,029)


Other income, net



1,742




7,165




1,812




11,612


Loss on extinguishment of debt



—




—




—




(3,394)


Change in fair value – warrant liabilities



6,892




4,795




11,319




(111)


Total other income (expense), net



431




7,566




(7,293)




(4,922)


Net loss before income taxes



(11,695)




(39,247)




(48,137)




(89,411)


Income tax expense



(53)




(63)




(148)




(176)


Net loss



(11,748)




(39,310)




(48,285)




(89,587)


Net loss attributable to noncontrolling interest



(28)




(82)




(83)




(169)


Net loss attributable to Purple Innovation, Inc.


$

(11,720)



$

(39,228)



$

(48,202)



$

(89,418)



















Net loss per share:

















Basic


$

(0.11)



$

(0.36)



$

(0.45)



$

(0.84)


Diluted


$

(0.11)



$

(0.36)



$

(0.45)



$

(0.84)



















Weighted average common shares outstanding:

















Basic



108,245




107,508




108,026




107,008


Diluted



108,409




107,508




108,191




107,008


 

PURPLE INNOVATION, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited – in thousands)






Nine Months Ended
September 30,




2025



2024


Cash flows from operating activities:







Net loss


$

(48,285)



$

(89,587)


Adjustments to reconcile net loss to net cash used in operating activities:









Depreciation and amortization



19,659




27,448


Non-cash interest



9,537




5,303


Paid-in-kind interest



11,266




7,028


Non-cash restructuring, impairment and other related charges



3,775




20,115


Loss on extinguishment of debt



—




3,394


Loss on disposal of property and equipment



318




770


Change in fair value – warrant liabilities



(11,319)




111


Stock-based compensation



1,265




2,108


Changes in operating assets and liabilities:









Accounts receivable



7,847




8,140


Inventories



(8,907)




2,971


Prepaid expenses and other assets



755




378


Operating leases, net



(2,080)




(2,105)


Accounts payable



(4,464)




(16,558)


Accrued compensation



(1,650)




10,045


Customer prepayments



(1,202)




(1,940)


Accrued rebates and allowances



307




(3,203)


Accrued warranty liabilities



(407)




(621)


Other accrued liabilities



(4,445)




1,592


Net cash used in operating activities



(28,030)




(24,611)











Cash flows from investing activities:









Sale of property and equipment



464




—


Purchase of property and equipment



(6,076)




(6,160)


Investment in intangible assets



(454)




(221)


Net cash used in investing activities



(6,066)




(6,381)











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



3,347




(3,458)


Cash and cash equivalents, beginning of the year



29,011




26,857


Cash and cash equivalents, end of the period


$

32,358



$

23,399


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 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 and debt issuance legal fees, Board special committee 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

 September 30,



Nine Months Ended

September 30,




2025



2024



2025



2024















GAAP net loss


$

(11,748)




(39,310)




(48,285)




(89,587)


Interest expense



8,203




4,394




20,424




13,029


Income tax expense



53




63




148




176


Other income, net



(1,742)




(7,165)




(1,812)




(11,612)


Depreciation and amortization



9,777




14,627




19,658




27,448


EBITDA



4,543




(27,391)




(9,867)




(60,546)


Adjustments:

















Change in fair value - warrant liability



(6,893)




(4,795)




(11,320)




111


Loss on extinguishment of debt



—




—




795




3,394


Stock-based compensation expense



420




791




1,265




2,108


Restructuring related charges



65




23,669




6,850




23,669


Loss on project write-off



—




—




—




1,355


Non-recurring and debt issuance legal fees



310




16




655




940


Strategic alternative costs



698




—




1,958




—


Executive interim and search costs



—




409




—




3,383


Severance costs



82




202




1,652




1,086


Showroom opening and closing costs



—




724




147




782


Non-operating facility expense



964




—




964




—


Adjusted EBITDA


$

189



$

(6,375)



$

(6,901)



$

(23,718)


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 revenues. 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
September 30,



 Nine Months Ended
September 30,




2025



2024



2025



2024


Revenues, net


$

118,766



$

118,598



$

328,037



$

358,902



















Total cost of revenues



67,915




83,405




198,457




233,049


Restructuring charges in cost of revenues



—




(12,859)




(995)




(12,859)


Adjusted cost of revenues



67,915




70,546




197,462




220,190



















Adjusted gross profit


$

50,851



$

48,052



$

130,575



$

138,712


Adjusted gross profit %



42.8 %




40.5 %




39.8 %




38.6 %


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
September 30,



 Nine Months Ended
September 30,




2025



2024



2025



2024


Total operating expenses


$

62,977



$

82,006



$

170,424



$

210,342


Restructuring, impairment and other related charges



(5,290)




(18,881)




(11,387)




(18,881)


Adjusted operating expenses


$

57,687



$

63,125



$

159,037



$

191,461


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 September
30,



 Nine Months
Ended September 30,




2025



2024



2025



2024


Net loss


$

(11,748)



$

(39,310)



$

(48,285)



$

(89,587)


Income tax (benefit) expense, as reported



53




63




148




176


Revenue reduction due to SGI Contract



941




—




1,568




—


Change in fair value – warrant liabilities



(6,892)




(4,795)




(11,319)




111


Loss on extinguishment of debt



—




—




—




3,394


Restructuring related charges



5,290




32,682




12,382




32,682


Gain on insurance proceeds



—




(7,301)




—




(11,601)


Board special committee fees



698




—




1,958




—


Adjusted net loss before income taxes



(11,658)




(18,661)




(43,548)




(64,825)


Adjusted income tax benefit(1)



3,026




4,833




11,279




16,790


Adjusted net loss


$

(8,632)



$

(13,828)



$

(32,269)



$

(48,035)



















Adjusted net loss per share, diluted


$

(0.08)



$

(0.13)



$

(0.30)



$

(0.45)



















Adjusted weighted-average shares outstanding, diluted(2)



108,409




107,703




108,191




107,203



(1) Represents the estimated effective tax rate of 25.9% for the three and nine months ended September 30, 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 nine months ended September 30, 2025 and 2024:

For the Three Months Ended




September 30, 2025



September 30, 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)


$

(11,720)




108,409




(0.11)



$

(39,228)




107,508



$

(0.36)


 Assumed exchange of shares(2)



(28)




—








(82)




195






 Net loss



(11,748)












(39,310)










Adjustments to arrive at adjusted loss before taxes(3)



90












20,649










Adjusted loss before taxes



(11,658)












(18,661)










Adjusted income tax benefit(4)



3,026












4,833










Adjusted net loss


$

(8,632)




108,409




(0.08)



$

(13,828)




107,703



$

(0.13)



(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 September 30, 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 September 30, 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 Nine Months Ended




September 30, 2025



September 30, 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)


$

(48,202)




108,191




(0.45)



$

(89,418)




107,008



$

(0.84)


 Assumed exchange of shares(2)



(83)




—








(169)




195






 Net loss



(48,285)












(89,587)










Adjustments to arrive at adjusted loss before taxes(3)



4,737












24,762










Adjusted loss before taxes



(43,548)












(64,825)










Adjusted income tax benefit(4)



11,279












16,790










Adjusted net loss


$

(32,269)




108,191




(0.30)



$

(48,035)




107,203



$

(0.45)



(1) Represents net loss attributable to Purple Innovation, Inc. and the associated weighted average diluted shares, of Class A common stock outstanding. For the nine months ended September 30, 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 nine months ended September 30, 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.

 

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SOURCE Purple Innovation, LLC