8-K: FIGS Surpasses Q4, FY25 Targets; Projects Robust 2026 Growth

FIGS, Inc. reported record fourth quarter and full year 2025 financial results, exceeding top and bottom line expectations and projecting low double-digit net revenues growth for fiscal year 2026.

Summary

• Fourth Quarter 2025 Net Revenues reached a record $201.9 million, an increase of 33.0% year over year.
• Full Year 2025 Net Revenues were $631.1 million, an increase of 13.6% year over year.
• Q4 2025 Net Income was $18.5 million, or $0.10 in diluted earnings per share, significantly up from $1.9 million, or $0.01 diluted EPS, in Q4 2024.
• Full Year 2025 Net Income was $34.3 million, or $0.19 in diluted earnings per share, compared to $2.7 million, or $0.02 diluted EPS, in FY 2024.
• Q4 2025 Adjusted EBITDA Margin was 13.2%, while Full Year 2025 Adjusted EBITDA Margin was 11.8%.
• Active customers as of December 31, 2025, increased 9.4% year over year to 2.9 million.
• Average Order Value (AOV) for Full Year 2025 was $120, an increase of 6.2% year over year.
• Free Cash Flow for Full Year 2025 was $53.0 million.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance, with significant revenue and net income growth, exceeding expectations, and providing a positive outlook for 2026 despite some gross margin pressures.

Positives

• Exceeded top and bottom line expectations for both the fourth quarter and full year 2025.
• Achieved record Q4 2025 Net Revenues of $201.9 million, representing a 33.0% increase year-over-year.
• Net income saw substantial growth, with Q4 2025 net income increasing to $18.5 million from $1.9 million in the prior year, and full year net income rising to $34.3 million from $2.7 million.
• Operating expenses as a percentage of net revenues decreased in both Q4 (to 53.6% from 61.4%) and FY (to 60.5% from 67.2%), indicating improved operational efficiency and fixed cost leverage.
• International net revenues demonstrated strong growth, increasing 55.1% in Q4 and 27.5% for the full year.
• Active customers grew by 9.4% to 2.9 million, and Average Order Value (AOV) increased by 6.2% to $120.
• Generated strong Free Cash Flow of $53.0 million for FY 2025.
• The balance sheet remains a source of strength and financial flexibility, with expectations for further improvement through strong cash flow.

Negatives

• Gross margin decreased by 440 basis points year-over-year in Q4 2025 to 62.9%, primarily due to higher tariffs and an inventory write-off.
• Full Year 2025 gross margin also decreased by 110 basis points to 66.5%, impacted by higher tariffs and the Q4 inventory write-off.
• A $5.6 million inventory write-off was recorded during Q4 2025.
• Adjusted EBITDA margin slightly decreased in Q4 2025 to 13.2% from 13.9% in the same period last year.

Risks

• Ability to maintain historical growth rates.
• Ability to maintain profitability.
• Ability to maintain the value and reputation of its brand.
• Ability to attract new customers, retain existing customers, and increase sales to those customers.
• The success of marketing efforts, including potential negative publicity related to marketing or social media use.
• Ability to successfully develop and introduce new, innovative, and updated products.
• The competitiveness of the market for healthcare apparel.
• Ability to maintain key employees and attract and retain highly skilled team members.
• Risks associated with expansion into, and conducting business in, international markets.
• Changes in, or disruptions to, shipping arrangements.
• The successful operation of fulfillment operations.
• Ability to accurately forecast customer demand, manage inventory, and plan for future expenses.
• The impact of changes in consumer confidence, shopping behavior, and consumer spending on demand for products.
• The impact of macroeconomic trends on operations.
• Reliance on a limited number of third-party suppliers.
• The impact of global trade policy on the ability to source and distribute products, including the latest announcement calling for 15% global tariffs.
• The fluctuating costs of raw materials.
• Ability to execute on its B2B growth strategy.
• Ability to execute on its retail growth strategy.
• Failure to protect proprietary, confidential, or sensitive information or personal customer data, or risks of cyberattacks.
• Failure to protect its intellectual property rights.
• Operations of many suppliers and vendors are subject to additional risks beyond its control.

Future Outlook

For Full Year 2026, FIGS anticipates net revenues growth of 10% to 12% compared to 2025, with Q1 growth expected in the low-20% range. The Adjusted EBITDA Margin is projected to be between 12.7% and 12.9%. The company expects increased profitability, even with the latest announcement calling for 15% global tariffs, and projects strong cash flow to drive expanded shareholder value.

Management Comments

• "Our 33% surge in Q4 net revenues was driven by successes across virtually every part of the business, while also lowering our discount rate for the period. With the COVID overhang past us and the structural advantages of this industry as tailwinds, we're excited to see our sustained success over the past few quarters continue into 2026. The opportunity to serve healthcare professionals globally is massive, and no one is better positioned than FIGS to capitalize on it." Trina Spear, Chief Executive Officer and Co-Founder.
• "We exited 2025 with tremendous demand momentum, improving profitability and record cash on the balance sheet—each measure well ahead of expectations and a testament to the strength of our strategy and execution of our team. Our success positions us for a great 2026 with continuing growth from the core foundational elements of our business as well as from International, TEAMS and Community Hubs. Given our momentum and while still adopting a prudent mindset, we expect top line growth in 2026 of 10-12%, including growth in the low-20% range for Q1. At the same time, we expect increased profitability, even with the latest announcement calling for 15% global tariffs. Finally, our balance sheet remains a source of strength and financial flexibility, and we expect that to improve even further with strong cash flow driving expanded shareholder value." Sarah Oughtred, Chief Financial Officer.

Industry Context

StockSavvy.ai notes that FIGS' strong international growth (55.1% in Q4) and continued expansion into new product categories and markets demonstrate its ability to capitalize on the global demand for specialized healthcare apparel. The company's direct-to-consumer model and brand strength appear to be insulating it from broader retail headwinds, positioning it favorably against traditional uniform suppliers.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to benchmark against global industry standards.

Stakeholder Impact

• Shareholders: Potential positive impact due to strong financial performance, exceeding expectations, and a positive future outlook with projected growth and expanded shareholder value from strong cash flow.
• Employees: Continued growth and success may lead to job security and potential opportunities within the expanding business.
• Customers (Healthcare Professionals): Continued focus on serving healthcare professionals globally, with product development and community engagement.
• Suppliers: Continued demand for products implies ongoing business for suppliers, though global tariffs could impact relationships or costs.

Next Steps

• Host a conference call and webcast on February 26, 2026, to discuss the company's financial and business results and outlook.
• Continue growth from core foundational elements of the business, as well as from International, TEAMS, and Community Hubs in 2026.
• File the Annual Report on Form 10-K for the year ended December 31, 2025, with the Securities and Exchange Commission (SEC).

Key Dates

Recommendation

The company significantly exceeded both top and bottom-line expectations for Q4 and the full year 2025, demonstrating strong execution and market demand. The guidance for 2026 projects continued low double-digit revenue growth and margin expansion, even with anticipated tariff headwinds. Strong free cash flow and a robust balance sheet further enhance its financial position. The positive momentum, strategic positioning in a massive global market, and operational efficiencies suggest a compelling investment opportunity.

Keywords

healthcare apparel, medical scrubs, FIGS, financial results, earnings, Q4 2025, FY 2025, revenue growth, EBITDA, direct-to-consumer, DTC, healthcare professionals, investor relations, NYSE: FIGS