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

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

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,

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

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

23,669

6,850

23,669

Loss on project write-off

—

1,355

Non-recurring and debt issuance legal fees

310

655

940

Strategic alternative costs

698

—

1,958

—

Executive interim and search costs

—

409

—

3,383

Severance costs

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

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)

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.

(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.

SOURCE Purple Innovation, LLC