Company: WRBY
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001504776-25-000010
Chunk: 132

Company: Warby Parker Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 132
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 than not that they will not be realized.

Our policy is to recognize interest and penalties expense, if any, related to unrecognized tax benefits as a component of income tax expense. 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our financial position because of adverse changes in financial market prices and rates. Our market risk exposure primarily results from potential changes in currency rates, interest rates, or inflation.

Foreign Exchange Risk

We are exposed to changes in foreign currency rates as a result of our foreign operations and international suppliers from whom we purchase in Japanese yen and euros. Revenue and income generated by our operations in Canada and our foreign denominated cost of goods sold are impacted by changes in foreign currency exchange rates. We do not believe that foreign exchange rates have a material effect on our business, financial condition or results of operations.

Interest Rate Risk

Our cash and cash equivalents as of December 31, 2024 consisted of $254.2 million in cash and money-market funds. Such interest-earning instruments carry a degree of interest rate risk. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate exposure. We believe that we do not have a material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents.

70

Inflation Risk

We believe that inflation, including from geopolitical unrest and other macroeconomic factors, has had a limited impact on our business, financial condition, and results of operations. Inflation may, however, have an impact on raw materials, transportation, labor, construction, rent, and other costs which materially impact operations. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with increased revenue. Our inability or failure to do so could harm our business, financial condition, and results of operations.

71

Item 8. Financial Statements and Supplementary Data

Warby Parker Inc.

Index to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)73Consolidated Balance Sheets76Consolidated Statements of Operations and Comprehensive Loss77Consolidated Statements of Changes in Stockholders’ Equity78Consolidated Statements of Cash Flows79Notes to Consolidated Financial Statements80Note 1Description of Business80Note 2Summary of