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Revenue: $118.8 million, up slightly from $118.6 million last year.

Gross Margin: Improved nearly 700 basis points sequentially to approximately 43%.

Adjusted EBITDA: Positive, with a gain of $200,000, compared to a loss of $6.4 million last year.

Showroom Sales: Net revenue grew 6.5% to $22 million.

Wholesale Revenue: Increased by 8% during the quarter.

E-commerce Revenue: Down 10% but showing early signs of improvement.

Operating Expenses: $63 million, down 23.2% from $82 million last year.

Adjusted Net Loss: $8.6 million, compared to $13.8 million last year.

Cash and Cash Equivalents: $32.4 million as of September 30, 2025.

Inventory: $65.8 million, up 9.8% compared to September 30, 2024.

Full Year Revenue Guidance: Expected in the range of $465 to $485 million.

Adjusted EBITDA Guidance: Between break even and $10 million positive.

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Release Date: November 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Purple Innovation Inc (NASDAQ:PRPL) reported a slight increase in revenue to $118.8 million, marking an inflection point after consecutive periods of decline.

The company achieved a significant improvement in gross margin, increasing nearly 700 basis points sequentially to approximately 43%.

The Rejuvenate 2.0 mattress collection outperformed expectations, contributing to strong showroom sales gains of 6.5%.

Wholesale revenue grew by 8%, supported by the expansion of the partnership with Mattress Firm.

The restructuring program initiated in 2024 has led to a reduction in fixed costs, with expected annual savings of $25 million to $30 million.

E-commerce revenue declined by 10%, although there were early signs of improvement following a site refresh.

The company is still facing challenges in the e-commerce channel, which remains pressured despite improvements.

The market environment remains mixed and soft, with no significant signs of improvement in the overall industry.

Despite improvements, the company reported an adjusted net loss of $8.6 million for the third quarter.

The gross margin is expected to be lower in the fourth quarter due to a competitive environment and promotional activities.

Q: As you see the acceleration in sales, can you speak to what encouraging signs might be seen in the industry versus the impact of your initiatives? A: Robert Demartini, CEO, noted that while the market showed mixed results post-Labor Day, Purple Innovation's growth is largely driven by their initiatives, such as expanded distribution and showroom performance. The company is well-positioned to capitalize on any market improvements in Q4 and early 2026.

Q: Can you discuss the margin outlook and any opportunities for improvement as we look to 2026? A: Todd Vogensen, CFO, highlighted that the company has achieved consistent gross margins around 40% due to plant consolidation and restructuring efforts. The business can now break even at lower revenue levels, allowing for rapid profitability as revenue scales.

Q: Can you bridge us on your adjusted EBITDA guidance for Q4, given the flat margin in Q3? A: Vogensen explained that Q4 revenue acceleration is expected from ongoing initiatives like the Mattress Firm expansion and Rejuvenate 2.0 launch. The company anticipates maintaining gross margins around 40%, with strong cost control allowing incremental revenue to flow through quickly.

Q: How should we think about the timing of reaching 12,000 Mattress Firm slots by March 2026? A: Demartini clarified that the incremental slots will be added towards the end of Q1 2026, focusing on the Rejuvenate collection, which is already performing well in the market.

Q: How much of the improvement in the wholesale segment was driven by additional Mattress Firm slots, and how is productivity with other retail partners? A: Demartini noted that while the Mattress Firm rollout initially impacts productivity due to floor sample loading, overall productivity has held steady. Growth is also supported by strong performance with partners like Costco.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.