Third quarter 2026
Filed Nov 4, 2026Purple Innovation Reports Third Quarter 2026 Results; Positive Operating Cash Flow for the Third Consecutive Quarter; Preparing for Major Mattress Portfolio Refresh to Strengthen Performance in 2027
Third-quarter revenue declined 18.7%, led by wholesale weakness, and gross margin fell 410 basis points. The GAAP net loss narrowed substantially and year-to-date operating cash flow was positive, while the company maintained revenue guidance and guided to $15 million to $20 million of adjusted EBITDA.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenue, three months ended September 30, 2026GAAP | $96.5M | – | down 18.7% |
| Net revenue, nine months ended September 30, 2026GAAP | $290.5M | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $41.92M | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $126.6M | – | – |
| Gross margin, third quarter 2026GAAP | 43.4% | – | a decrease of 410 basis points versus last year |
| Total operating expenses, three months ended September 30, 2026GAAP | $51.7M | – | down 24.7% |
| Total operating expenses, nine months ended September 30, 2026GAAP | $157.4M | – | – |
| Marketing and sales expense, three months ended September 30, 2026GAAP | $36.27M | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | $11.96M | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | $2.36M | – | – |
| Restructuring, impairment and other related charges, three months ended September 30, 2026GAAP | $1.10M | – | – |
| Operating loss, three months ended September 30, 2026GAAP | −$9.77M | – | – |
| Operating loss, nine months ended September 30, 2026GAAP | −$30.86M | – | – |
| Net loss, three months ended September 30, 2026GAAP | $1.4M | – | – |
| Net loss, nine months ended September 30, 2026GAAP | −$35.24M | – | – |
| Net loss attributable to Purple Innovation, Inc., three months ended September 30, 2026GAAP | −$1.40M | – | – |
| Basic net loss per share, three months ended September 30, 2026GAAP | $ (0.32 ) | – | – |
| Diluted net loss per share, three months ended September 30, 2026GAAP | $ (0.33 ) | – | – |
| Basic net loss per share, nine months ended September 30, 2026GAAP | $ (8.09 ) | – | – |
| Diluted net loss per share, nine months ended September 30, 2026GAAP | $ (8.09 ) | – | – |
| EBITDA, three months ended September 30, 2026non-GAAP | $10.22M | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | −$536K | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | −$3.25M | – | – |
| Adjusted net loss, three months ended September 30, 2026non-GAAP | −$10.52M | – | – |
| Adjusted net loss per share, diluted, three months ended September 30, 2026non-GAAP | $ (2.41 ) | – | – |
| Adjusted net loss, nine months ended September 30, 2026non-GAAP | −$30.72M | – | – |
| Adjusted net loss per share, diluted, nine months ended September 30, 2026non-GAAP | $ (7.06 ) | – | – |
| Cash flow from operating activities, nine months ended September 30, 2026GAAP | $10.6M | – | a $38.7 million improvement over the prior year’s same period |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Direct-to-consumer revenue, third quarter 2026Includes e-commerce and showroom channels. | $60.9M | – | – |
| E-commerce revenue, third quarter 2026The company cited improving momentum as the quarter progressed, supported by stronger conversion rates on Purple.com. | $42.4M | – | – |
| Showroom revenue, third quarter 2026The company opened two new showrooms during the quarter, bringing its network to 57 stores. | $18.5M | – | – |
| Wholesale revenue, third quarter 2026Lower wholesale revenue was the primary driver of the net-revenue decrease; management said wholesale was not where it needed to be. | $35.6M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full year 2026 outlook
- Revenue$420 million to $440 million
- NoteAdjusted EBITDA is now expected to be in the range of $15 million and $20 million.
What drove it
- The revenue decline was primarily driven by lower wholesale revenue, along with declines in showroom and e-commerce revenue.
- Approximately one quarter of the reduction was due to an increase of $4.0 million in reductions of revenue due to certain payments to customers and a manufacturer under common control with a customer.
- Gross-margin decline reflected lower production leverage and inventory adjustments, partially offset by lower tariff costs and favorable channel mix.
- Operating-expense improvement reflected lower restructuring costs versus the prior period, lower marketing expenses, and lower employee-related and professional services expenses.
- The company expects an improved marketing plan, normal seasonal strength in DTC, and new product introductions to support its full-year revenue guidance.
Concerns
- Wholesale revenue was $35.6 million versus $51.5 million in the prior year period.
- Gross margin was 43.4%, a decrease of 410 basis points versus last year.
- Adjusted EBITDA was a loss of $0.5 million, compared with adjusted EBITDA of $0.2 million in the prior-year period.
- The company reported total stockholders’ deficit of $ (65,171 ) as of September 30, 2026.
- Related party debt – current portion was $ 135,083 as of September 30, 2026.
What to watch
- Execution of the major product refresh planned for early 2027, including new Essentials and Hybrid collections representing almost 90% of mattress unit volume.
- Whether increased sales coverage and changes to product positioning and differentiation improve wholesale performance.
- Sustainability of improved e-commerce conversion rates on Purple.com and normal seasonal strength in DTC.
- Delivery of full-year revenue guidance of $420 million to $440 million and adjusted EBITDA guidance of $15 million to $20 million.
- The company’s ability to manage upcoming debt maturities, which it identified as a forward-looking matter.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $28.3 million; compared with $24.3 million as of December 31, 2025.
- Net inventories as of September 30, 2026: $53.5 million; down $6.2 million from December 31, 2025.
- Related party debt – current portion as of September 30, 2026: $ 135,083; compared with $ — as of December 31, 2025.
- Related party debt, net of current portion as of September 30, 2026: $ —; compared with $ 111,305 as of December 31, 2025.
- Total liabilities as of September 30, 2026: $ 313,448; compared with $ 325,928 as of December 31, 2025.
- Total stockholders’ deficit as of September 30, 2026: $ (65,171 ); compared with $ (29,669 ) as of December 31, 2025.
- Net cash provided by operating activities, nine months ended September 30, 2026: $ 10,638; compared with $ (28,030 ) for the nine months ended September 30, 2025.
- Purchase of property and equipment, nine months ended September 30, 2026: $ (5,217 ); compared with $ (6,076 ) for the nine months ended September 30, 2025.
- Investment in intangible assets, nine months ended September 30, 2026: $ (1,076 ); compared with $ (454 ) for the nine months ended September 30, 2025.
- Net cash used in investing activities, nine months ended September 30, 2026: $ (6,293 ); compared with $ (6,066 ) for the nine months ended September 30, 2025.
- Net cash used in financing activities, nine months ended September 30, 2026: $ (346 ); compared with $ 37,443 for the nine months ended September 30, 2025.
- Cash and cash equivalents, end of period, September 30, 2026: $ 28,344; compared with $ 32,358 at September 30, 2025.
Analysis
Purple reported third-quarter net revenue of $96.5 million, down 18.7% from $118.8 million in the prior-year period. The decline was led by wholesale, where revenue was $35.6 million versus $51.5 million, while direct-to-consumer revenue was $60.9 million versus $67.2 million. E-commerce revenue was $42.4 million versus $45.3 million and showroom revenue was $18.5 million versus $22.0 million. The company said approximately one quarter of the revenue reduction was due to an increase of $4.0 million in reductions of revenue tied to certain customer payments and a manufacturer under common control with a customer.
Profitability showed offsetting developments. Gross margin was 43.4%, down 410 basis points versus last year, reflecting lower production leverage and inventory adjustments, partly offset by lower tariff costs and favorable channel mix. Total operating expenses were $51.7 million, down 24.7%, as restructuring, marketing, employee-related and professional-services costs declined. GAAP net loss narrowed to $1.4 million from $11.7 million, but adjusted EBITDA moved to a loss of $0.5 million from adjusted EBITDA of $0.2 million.
Cash generation improved on a year-to-date basis. Cash flow from operating activities was $10.6 million through September 30, 2026, described as a $38.7 million improvement over the prior-year same period. The company ended the quarter with $28.3 million of cash and cash equivalents, versus $24.3 million at December 31, 2025, while net inventories totaled $53.5 million, down $6.2 million from December 31, 2025. The balance sheet also showed $ 135,083 of related party debt in the current portion and total stockholders’ deficit of $ (65,171 ) at September 30, 2026.
Management maintained full-year 2026 revenue guidance of $420 million to $440 million, citing an improved marketing plan, normal seasonal strength in DTC and new product introductions, partially offset by continuing wholesale pressure. Adjusted EBITDA is now expected to be $15 million to $20 million. The principal operating milestone is the early-2027 product refresh, including Essentials and Hybrid collections representing almost 90% of mattress unit volume. Near-term execution hinges on restoring wholesale performance, sustaining e-commerce conversion improvement and converting cost actions into the guided full-year adjusted EBITDA range.
Management, verbatim
Third quarter performance was mixed as we continued to navigate a challenging mattress environment.
Rob DeMartini, CEO of Purple Innovation
We were encouraged by improving momentum in our e-commerce business as the quarter progressed, supported by stronger conversion rates on Purple.com, and we opened two new showrooms during the quarter, bringing our network to 57 stores.
Rob DeMartini, CEO of Purple Innovation
We have taken steps to improve our cost structure, and are consistently generating cash, with positive operating cash flow for the third consecutive quarter.
Rob DeMartini, CEO of Purple Innovation
Not in the filing
stated, not guessed- Previous-period outlook was not provided; comparison of actual results with prior guidance is unavailable.
- Free cash flow was not reported.
- Quarterly cash flow from operating activities was not reported.
- Share repurchases and dividends were not reported.
- Prior-quarter comparisons were not reported for the listed operating metrics.
- Prior-year percentage changes were not reported for direct-to-consumer, e-commerce, showroom and wholesale revenue.
- Prior-year gross-margin percentage was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.