Revolve Group Delivers Record Profitability and Margin Gains in Q3 2025

Performance excellence and bold investment define a milestone quarter for the next-gen fashion powerhouse.

Standout Financial Results and Strategic Execution

Revolve Group, the e-commerce leader for Millennial and Gen Z fashion, posted strong third-quarter results for 2025. Net sales climbed 4% to $295.6 million, with domestic sales up 4% and international sales up 6% year-over-year.

Gross profit surged 11% to $161.5 million, driven by a leap in gross margin to 54.6% a 347 basis point increase thanks to shallower markdowns, a greater mix of full-price and owned brand sales, and higher realized margins per item. The company’s trailing 12-month active customer count reached 2.75 million, up 5%, with total orders placed also increasing 5% all while average order value ticked up to $306. Net income soared 97% to $21.2 million, and diluted EPS nearly doubled to $0.29. Adjusted EBITDA rocketed 45% to a third-quarter record of $25.3 million, highlighting robust margin expansion and operating discipline.

Strengthening Cash Flow and Balance Sheet Amid Investment

Revolve’s focus on sustainable growth is reinforced by free cash flow of $6.6 million for Q3, up 7% year-over-year, and a cash balance of $315.4 million a 25% boost compared to last year’s quarter-end. The company remains debt free and invested $0.3 million in stock repurchases. Inventory levels declined by 1% year-over-year to $238.8 million, reflecting effective inventory management.

Operating activities generated $11.8 million in net cash for the quarter, while free cash flow over nine months leapt 265%, primarily due to stronger income and favorable working capital shifts compared to the previous year.

Segment Insights and Outlook

REVOLVE segment net sales reached $254.6 million, up 5%.
FWRD, the luxury-forward segment, delivered $41 million in net sales, up 3%.

Revolve’s strategic long-term investments international expansion, proprietary brand development, leveraging AI, and advancing physical retail remain in full swing, enabled by healthy cash flow and a resilient balance sheet.

Management Commentary and Forward View

Mike Karanikolas, co-founder and co-CEO stated, “We had a very solid third quarter, highlighted by exceptional gross margin performance that drove an 11% increase in gross profit year-over-year and a 45% increase in Adjusted EBITDA to $25 million, our highest ever for a third quarter… Our nearly 350 basis point increase in gross margin year-over-year… puts us on track to expand our gross margin and Adjusted EBITDA margin in the full year 2025 for the second straight year.”

Looking Ahead

Management remains optimistic, guiding for continued gross margin and EBITDA margin expansion through the end of 2025, while acknowledging macroeconomic headwinds like tariffs, supply chain challenges, and inflation pressures. With a focus on innovation and operational agility, Revolve is positioned to build on its momentum as a digital fashion leader.

Additional trend information regarding Revolve Group‘s third quarter of 2025 financial results and operating metrics is available in the Q3 2025 Financial Highlights presentation available on the investor relations website.