Company: WRBY
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001504776-25-000033
Chunk: 61

Company: Warby Parker Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 61
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million of finished goods, including ready-to-wear sun frames and eyeglass cases as of September 30, 2025 and December 31, 2024, respectively, and approximately $32.4 million and $39.4 million of component parts, including optical frames and prescription optical lenses, as of September 30, 2025 and December 31, 2024, respectively. Inventory is stated at the lower of cost or net realizable value, with cost determined on a weighted average cost basis. The Company continuously evaluates the composition of its inventory and makes adjustments when the cost of inventory is not expected to be fully recoverable. The estimated net realizable value of inventory is determined based on an analysis of historical sales trends, the impact of market trends and economic conditions, a forecast of future demand, and the estimated timing of product retirements. Adjustments for damaged inventory are recorded primarily based on actual damaged inventory. Adjustments for inventory shrink, representing the physical loss of inventory, include estimates based on historical experience, and are adjusted based upon physical inventory counts. However, unforeseen adverse future economic and market conditions could result in actual results differing materially from estimates.InvestmentsIn 2023 and 2024, the Company invested $1.0 million and $2.0 million, respectively, in a private optical equipment company. As part of these investments, the Company will automatically receive shares of the entity or cash based on a conversion price dependent upon an ultimate conversion event. The investments are recorded within other assets on the condensed consolidated balance sheets and are measured at cost less impairment, if any. No impairment has been recorded for the nine months ended September 30, 2025 and 2024.Cloud-Based Software Implementation CostsThe Company enters into cloud-based software hosting arrangements for which it incurs implementation costs. Certain costs incurred during the application development stage are capitalized and included within prepaid expenses and other current assets or other assets, depending on the long or short-term nature of such costs. All other related costs are expensed as incurred. Capitalized cloud-based software implementation costs are amortized on a straight-line basis, from the date the related software or module is ready for its intended use through the end of the contractual term of the hosting arrangement, inclusive of any reasonably certain renewal periods, as a component of selling, general, and administrative expenses, the same line item as the expense for the associated hosting arrangement.As of September 30, 2025, the Company had $17.1 million of