INVESTOR PRESENTATION

11.18
SAFE HARBOR

This presentation contains forward-looking statements within the meaning of federal and state securities laws. All statements other than
statements of historical fact contained in this presentation—including statements regarding our future results of operations and financial
position, business strategy and plans, and objectives of management for future operations—are forward-looking statements. In some
cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these terms or other similar
expressions.

Forward-looking statements are based on current expectations of future events. We cannot guarantee that any forward-looking statement
will be accurate, although we believe that we have been reasonable in our expectations and assumptions. Investors should realize that if
underlying assumptions prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially
from the Company’s expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking
statements. These forward-looking statements speak only as of the date of this presentation and, except as required by applicable law,
we undertake no obligation to publicly update or revise any forward-looking statements contained herein, whether as a result of any new
information, future events, or otherwise.

A list and description of risks, uncertainties and other factors that could cause or contribute to differences in our results can be found under
Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and the Company’s subsequent
filings with the Securities and Exchange Commission. We qualify all of our forward-looking statements by these cautionary statements.

Market data information, including growth rates and online penetration, used in this presentation are based on management’s knowledge
of the industry and their good-faith estimates. Management has relied, to the extent available, upon their review of industry surveys and
publications and other publicly available information prepared by a number of third-party sources. The market data information, including
indicative market growth and online penetration, provided in this presentation involves a number of assumptions and limitations, and you
are cautioned not to give undue weight to such information. Although we believe that these sources are reliable as of their respective dates,
we have not verified the accuracy or completeness of this information from independent sources. In addition, this information involves
important risks, uncertainties, and other factors, including those discussed above, which could cause results to differ materially.

In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP measures are in
addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation
of non-GAAP measures to GAAP measures is contained in the Appendix to this presentation.

2
INVESTMENT HIGHLIGHTS

·· ~$600B total addressable market rapidly moving from brick and mortar to online

·· Utilizing in-house software development capability to build and leverage proprietary technology
as key enabler

·· Partnering with fragmented and largely unbranded supplier base of over 10,000 suppliers

·· Solving unique challenges of the category by building a business customized for home

·· Highly recognized brand with increasing engagement from repeat customers

·· Investing in logistics, international markets, and new teams to continue outsized share-taking

·· Attractive financial profile with robust growth at scale, proven unit economics,
and inventory-light business model

·· Co-founders are largest shareholders, with focus on sustainable long-term growth,

operational discipline, and customer-first orientation

3
OVERVIEW
01. Our Business
02. Strategic Priorities
03. KPIs & Financial Metrics
04. Appendix

4
01.
OUR BUSINESS
5
 OUR BUSINESS: INDUSTRY BACKDROP
BILLIONS IN REVENUE IS UP FOR GRABS WITH SECULAR SHIFT
FROM BRICK AND MORTAR TO ONLINE

Large, Addressable Market …with Further Headroom for

Transitioning Away from Brick and Mortar… Online Penetration…
U.S. Home Market by Channel ($B) Estimated U.S. Online Penetration of Selected Verticals
34%
CAGR
28%
’17–’22 ’22–’27 12%
$396 3.7% 3.7%
Home Goods Apparel Consumer
$330 Electronics
$128 15.0% 15.0%
$275 $64
$32 …and Tailwind from Millennials
Fragmented Beginning To Enter the Category
brick-and-mortar Illustrative Distribution of Home Goods Customers by Age
market with
regional and $243 $267 $268 1.8% 0.1%
national specialty
retailers, big box
Millennials
retailers, and
department stores
Age 18–35
(80 million¹
2017 2022 2027 people)

Offline Online Age 35 Age 65

Source: Euromonitor, Wayfair estimates. 6

OUR BUSINESS: INDUSTRY BACKDROP
WE ARE WINNING WITH CUSTOMERS AND TAKING MARKET SHARE

With the Home Category Online Growing by …We Are Taking a Significant Share of
Approximately 15% in the U.S. in 2017... Dollars as They Shift Online
U.S. Home Online Market Size Forecast 2017 Online Growth Breakdown, $B and % of Total

$35B
$31.6B $4.1B
$30B
$ Billions U.S. Home Category
Online Market Size Estimate

$25B

Others
$20B 75%
$3.1B

$15B $27.5B $27.5B

$10B

Wayfair
$5B U.S. Growth 25%
$1.0B
$0B
2016 2017

7
OUR BUSINESS: BUILT FOR THE HOME CATEGORY
HOME CATEGORY HAS SPECIFIC CHALLENGES WHEN SHOPPED ONLINE

Problem Solution
1 Confidence To Buy: 3 Inspiration and 4 Customer Service and Delivery: We have purpose-
In the absence of being able Product Discovery: Home is characterized by heavy, built our business to
to touch and feel a product, Home is browsed and bulky, and damage-prone items. solve these issues
customers typically require not searched, as it is Delivery speed can be slow and and transform how
greater comfort and advice difficult for consumers customers have limited visibility customers shop
on the item they are buying. to describe what on order timing. Third parties for the home, from
they are looking for typically play a large part in their home.
2 Visualizing Products: and brands are not the transportation and delivery
Understanding how a sofa or known. Additionally, process, resulting in a customer
dining room table will look in home shoppers desire experience that can be poor
a shopper’s home is central to uniqueness. relative to other categories.
the purchase decision.
8
OUR BUSINESS: BUILT FOR THE HOME CATEGORY
WE HAVE BUILT AN EXPERIENCE THAT ENABLES CUSTOMERS
TO CONFIDENTLY SHOP FOR THEIR HOME ONLINE

1 Confidence To Buy:
Inspires Confidence in the Purchase
·· Customer reviews
·· Specialized sales team
·· Swatches and samples
·· In-depth product information & specifications
·· Customer Q&A
·· Plus more...

I was pleased by the

wrapping of the product
in the package. And
again pleased by the
quick assembly, I was
able to do it alone in 5
minutes. It fits perfect in
my small living room.
– Customer from
Bradenton, FL

9
OUR BUSINESS: BUILT FOR THE HOME CATEGORY
WE HELP SHOPPERS VISUALIZE THEIR PURCHASE
THROUGH THE USE OF TECHNOLOGY

2 Visualizing Products:
Customers “See” Before
They Buy
·· 3D View in Room
·· Room Planner
·· Room Ideas
·· Search with Photo
·· Customer-uploaded
product photos
·· Plus more...

Tap Results!

Snap

10
OUR BUSINESS: BUILT FOR THE HOME CATEGORY
WE HELP INSPIRE SHOPPERS AND
EQUIP THEM TO PLAN THEIR PERFECT ROOM...

3 Inspiration and Product Discovery:

Find the Right Product Faster Recommended for You

·· Product recommendations
·· Personalization
·· Visual filters
·· Idea Boards
·· Plus more...

My Dream Bedroom
5 items

11
OUR BUSINESS: BUILT FOR THE HOME CATEGORY
…INCLUDING 70+ PROPRIETARY HOUSE BRANDS ACROSS STYLES AND
PRICE POINTS TO HELP CUSTOMERS FIND PRODUCTS THEY LIKE

3 Inspiration and Product Discovery:

Curated brand experience, enabling customers to more easily discover the items they love
from our range of more than 10 million products.

Nautical, Contemporary,
low price point mid price point

American Industrial,
Traditional, high price point
mid price point

12
OUR BUSINESS: BUILT FOR THE HOME CATEGORY
HOUSE BRANDS ARE RESONATING WITH SHOPPERS

3 Inspiration and Product Discovery:

House Brands Account for the Majority of
Wayfair.com Revenue
House brands have grown from 6% of
Wayfair.com revenue to 57% in two years.

60%
House Brands as a % of Wayfair.com Revenue

50%

40%

30%

20%

10%

0%
2015 2016 2017

13
OUR BUSINESS: BUILT FOR THE HOME CATEGORY
CUSTOMER SERVICE BUILT TO BE A COMPETITIVE DIFFERENTIATOR

4 Customer Service and Delivery:

In-house customer service team of over
2,500 people in the U.S. and Europe.
Support for customers throughout their
shopping and delivery experience.
Specialized customer service staff with deep
expertise in specific product categories.
Additionally, approximately 66% of our U.S.
large parcel deliveries now go through
Wayfair last mile delivery facilities.

“Dealing with the customer service at

Wayfair has been fantastic! I’ve never
had anything better.”

“You guys are so quick and

easy to deal with.”

“Prompt delivery, quality products and

wonderful customer service are the reasons
Wayfair gets top marks from me.”

14
 OUR BUSINESS: BRANDS AND CUSTOMERS
WAYFAIR IS OUR CENTRAL BRAND AND THE DRIVER OF OUR BUSINESS

Our Marquis Brand 1. 3.

84% US aided brand Unparalleled selection of
awareness since Wayfair.com over 10 million products
launch in 2011¹. across styles and price
points appealing to the
mass market customer.

2.
Customers attribute
Wayfair to ‘the rewarding
feeling of turning my house
in to a home’ twice as often
as the next highest brand².

1 Source: Qualtrics and Hanover Research. 2 Source: Wayfair customer survey

15
OUR BUSINESS: BRANDS AND CUSTOMERS
WAYFAIR FOCUSES ON THE MASS MARKET CUSTOMER; ADDITIONALLY OUR
LIFESTYLE BRANDS SERVE SPECIFIC CUSTOMER STYLES AND SEGMENTS

High End
($175K+
household income)

Mass Market
($60K–$175K household income)

Low End
($60K household income)

16
OUR BUSINESS: BRANDS AND CUSTOMERS
OUR FOUR DISTINCT HOME SITES EACH HAVE A UNIQUE IDENTITY

Affordable Home of classic

discoveries for designs and
gorgeous living. fresh finds.

Unbelievable The widest-

prices on ever selection of
everything premium home.
modern.

17
OUR BUSINESS: BRANDS AND CUSTOMERS
INCREASING ENGAGEMENT FROM REPEAT CUSTOMERS

Repeating Customers
Our knowledge of returning Loyalty Is Growing
customers is higher than that ·· Our base of loyal
for new visitors, which means customers is growing.
that we can target our
·· In December 2017, 31%
marketing more efficiently
of Wayfair.com orders
and utilize free channels
came from customers
such as email and app
who already purchased
alerts. This drives lower
at least two other times
overall ad spend for repeat. Brand-new to Wayfair in the prior 12 months.
·· In December 2013, this
Shopper visits our site / app, starts figure was 13%.
to engage, signs up for email
communication / app alerts
As the % of orders
coming from repeat
customers grows, our Makes a first
total advertising cost purchase
as a % of total revenue
averages down
Customer returns
to make repeat
purchases

18
OUR BUSINESS: BRANDS AND CUSTOMERS
MARKETING TO CUSTOMERS VIA PAID AND FREE CHANNELS

People are consuming more content

than ever, and in different places.
Online Paid
Reaching shoppers
through display, social,
and transactional ad
channels

Brand Integrations
Partnering with
Discovery/Scripps and
other networks to reach
our target customers
through TV ads

Direct Mail Major Organic

Reaching new Promotional Engagement
and current Campaigns Engaging with
customers with millions of brand
Emailing our large
catalogs and followers across
base of opt-in
direct mail inserts social media
email subscribers
in the U.S. and platforms
and reaching
internationally
customers via app
19
notifications
02.
STRATEGIC
PRIORITIES

20
STRATEGIC PRIORITES
TAKING A LONG-TERM APPROACH TO GROWTH

We are investing in three main areas

of strategic importance:
1 Logistics
Scaling our logistics capabilities in warehousing,
supply services, transportation, and delivery to
improve customer experience and drive efficiencies.

2 International
Expanding our business in Canada, the UK, and
Germany by strengthening our customer offering and
raising brand awareness.

3 Further Penetrating the TAM

Building an ever-strengthening customer offering
across all home product categories and related
services to continually increase share of wallet.

21
STRATEGIC PRIORITIES
HOME CATEGORY CHARACTERIZED
BY HEAVY, BULKY, AND DAMAGE-PRONE ITEMS

Average Wayfair Average Wayfair

Small Parcel Item Large Parcel Item
30 pounds | 3 cubic feet 80 pounds | 22 cubic feet

1 Logistics: Transportation Challenges

Products in our category are challenging to transport, which can result in the delivery experience
being far from satisfying for customers in terms of speed, visibility, and risk of damage.
Our increasing scale has allowed us to invest in building a proprietary logistics network.
This is enabling us to speed up deliveries, reduce costs and damage over time, and increase
convenience, which is resulting in a better offering for customers and suppliers.
22
STRATEGIC PRIORITIES
INVESTING IN CASTLEGATE AND SUPPLY CHAIN SERVICES

United Kingdom

Germany
Canada

United States

CastleGate
Warehouses

1 Logistics: CastleGate
CastleGate warehouses forward-position supplier Penetration of sales via CastleGate We are building end-to-end,
inventory to create fast delivery for small parcel has considerable opportunity to fully integrated supply chain
(1–2 days) and large parcel (1 week+). grow in small and large parcel. services including recent launches
Approximately 19% of U.S. small of freight, drayage, and ocean
We have built our strategic footprint of warehouses parcel direct net revenue was shipped services for our suppliers. We
in the U.S., and post-2018 will be adding space to from the CastleGate network in Q4 can take a much more strategic
support ongoing growth in volume. 2017, up from 10% in Q4 2016. approach than a third-party
Suppliers are working increasingly closely with us, logistics company, reducing
CastleGate expansion in Canada costs for suppliers, customers,
with approximately 65% of the inbound volume and Europe strengthens our offering
into U.S. CastleGate facilities having and Wayfair, and improving our
in those regions and accelerates our visibility of supply.
been container-direct at the end of 2017. flywheel.
23
 STRATEGIC PRIORITIES
TAKING CONTROL OF LARGE PARCEL TRANSPORTATION AND
DELIVERY WITH THE WAYFAIR DELIVERY NETWORK

Logistics: Wayfair
1 WDN Locations
Delivery Network (WDN)
In September 2018,
approximately 90% of our U.S.
large parcel orders flowed
through the Wayfair-controlled
middle mile network, and our
last mile delivery facilities
covered 66% of U.S. large parcel
deliveries and just under 40%
of Canadian large parcel home
deliveries.

Customer satisfaction
improvements resulting from
control of the last mile are
significant, and we expect to
drive higher customer lifetime
value. We will generate efficiency
gains as recently opened last
mile delivery facilities operate
more effectively over time as
volume grows.

We plan to take greater control

of middle and last mile delivery Consolidation Centers & Cross Docks
with continued investment in new
facilities, both in the U.S. and Wayfair Last Mile Home Delivery
internationally.

Note: chart does not show third-party delivery agent locations

24
STRATEGIC PRIORITIES
SCALING OUR BUSINESS IN CANADA, THE UK, AND GERMANY

2 International
International competitive landscape is similar to the U.S., with a fragmented base of brick-and-mortar retailers
that is typically regionalized with no dominant online player. Our U.S. playbook positions us well to be the winner.

United Kingdom
Germany
Canada Europe
~$300B

United States North America

~$300B

U.S. Canada UK Germany

·· $275BN TAM ·· $20B TAM ·· $50B TAM ·· $75B TAM
·· CastleGate opened 2014 ·· CastleGate opening ·· CastleGate opened 2016 ·· CastleGate opened Q1 2018
·· Wayfair.com aided brand Q2 2018 ·· London office ·· Berlin office
awareness of 84% as of Q3 2017 ·· Aided awareness 80% ·· Aided awareness 41% ·· Brand TV launched summer
·· Net revenue $4.2B in 2017 as of Q3 2018 as of Q2 2017 2018
25
STRATEGIC PRIORITIES
INVESTING IN DOZENS OF PRODUCT CATEGORIES AND SERVICES
TO FULLY PENETRATE OUR TOTAL ADDRESSABLE MARKET

3 Further Penetrating the TAM

Growing share of wallet by deepening and broadening our
value proposition to customers within the home category.
Hiring new people to expand or create new dedicated cross-
functional teams including merchandising, marketing, and
engineering as well as specialized customer service staff.
Implementing this expansion with a proven playbook and a
clearly defined ROI.
Product
Categories
·· Window
treatments
·· Lighting
·· Textiles
·· Housewares
Services ·· Mattresses
·· Financing ·· Seasonal decor
·· Loyalty ·· Plumbing
·· Registry ·· Decorative
·· Design services accents
·· B2B ·· Large appliances
·· Specialized sales ·· Flooring and tile
·· Gift cards ·· Outdoor decor
·· Assembly ·· Storage and
·· Installation services organization
·· Plus more... ·· Plus more...
26
03.
KPIs & FINANCIAL
METRICS
27
 KPIs & FINANCIAL METRICS
ROBUST GROWTH AT SCALE
$6,204

$4,721

$3,380

$2,250

$1,319
$916
$517 $601

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q3 ’18
LTM
240+ Niche Websites; Wayfair Brand Wayfair U.S.
Platform Development Launched Brand Building

U.S. Net Revenue ($M) International Net Revenue ($M)

Note: International net revenue not disclosed separately before 2012

28
KPIs & FINANCIAL METRICS
STRONG CUSTOMER ACQUISITION AND GROWING SHARE OF WALLET

13.86
12.79
11.80
10.99
10.25
9.55
8.85
8.25
7.36
6.67
6.07
5.36
4.59 $440 $443
$432
4.04 $422
$408
3.60 $404 $406 $395 $402
$392 $394
3.22
2.86 $381
2.64 $371
2.41
$357
$342 $342 $346
$323 $332

Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18

Direct Retail Net Revenue / Active Customer Active Customers (Millions)

29
 KPIs & FINANCIAL METRICS
NEW AND REPEAT ORDERS BOTH GROWING WITH REPEAT TAKING SHARE

7 70%

6
65%

5
60%

4
Orders (Millions)

55%
3

50%
2

45%
1

0 40%
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18

Orders from New Customers Orders from Repeat Customers % of Orders from Repeat Customers

30
 KPIs & FINANCIAL METRICS
CUSTOMERS ARE ORDERING MORE FREQUENTLY

LTM Orders per Active Customer

1.85

1.80

1.75

1.70

1.65

1.60

1.55

1.50
Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18

31
KPIs & FINANCIAL METRICS
U.S. HOVERING +/- BREAKEVEN DESPITE SIGNIFICANT INVESTMENT;
INTERNATIONAL EARLIER IN ITS LIFECYCLE

FY 2016 Q1 ’17 Q2 ’17 Q3 ’17 Q4 ’17 FY 2017 Q1 ’18 Q2 ’18 Q3 ’18

U.S. Direct Net Revenue $2,993.4 $837.6 $976.7 $1,033.7 $1,227.5 $4,075.4 $1,186.2 $1,397.0 $1,460.1
Direct Growth 53.9% 24.5% 39.0% 36.1% 43.0% 36.1% 41.6% 43.0% 41.2%

U.S. Total Net Revenue 3,110.5 858.0 997.1 1,050.6 1,247.3 4,153.1 1,201.6 1,411.3 1,473.3
Total Growth 45.7% 21.5% 36.1% 33.4% 41.1% 33.5% 40.0% 41.5% 40.2%

U.S. Adjusted EBITDA 0.2 3.7 20.4 4.5 7.2 35.9 (7.9) 7.2 (26.0)
Margin 0.0% 0.4% 2.0% 0.4% 0.6% 0.9% -0.7% 0.5% -1.8%

International Direct Net Revenue 265.5 102.8 125.8 147.6 191.7 567.8 202.7 243.9 232.4
Direct Growth 180.0% 162.6% 136.2% 102.9% 90.9% 113.9% 97.2% 93.9% 57.5%

International Total Net Revenue 269.9 102.8 125.8 147.6 191.7 567.8 202.7 243.9 232.4
Total Growth 136.0% 148.1% 131.8% 100.1% 90.7% 110.4% 97.2% 93.9% 57.5%

International Adjusted EBITDA (88.9) (24.6) (22.7) (27.2) (28.4) (102.9) (42.0) (42.0) (50.4)
Margin -32.9% -24.0% -18.0% -18.4% -14.8% -18.1% -20.7% -17.2% -21.7%

32
 KPIs & FINANCIAL METRICS
LONG-TERM TARGET MODEL

Long-Term
2015 2016 2017 Q3 2018 Target

Net Revenue 100% 100% 100% 100% 100%

Better wholesale economics with
increasing scale
Gross Margin 24.0% 24.0% 23.9% 23.4% 25–27%
Logistics cost efficiency gains
Scale in international regions
Customer Service + Merchant Fees 3.6% 3.7% 3.5% 3.8% 4%

Advertising 12.4% 12.1% 11.6% 11.9% 6–8% Ad cost % decreases as size of repeat
customer base grows as a % of total

Selling, Operations, Technology,

5–7% Gains leverage with scale but offset
General & Administrative 8.8% 10.9% 10.2% 12.2%
by current investment in hiring
(primarily OpEx headcount)

Total Operating Expenses 24.8% 26.6% 25.3% 27.9% 15–19%

Adjusted EBITDA (0.7%) (2.6%) (1.4%) (4.5%) 8–10%

Note: All expense line items exclude equity-based compensation, related

taxes, depreciation, and amortization 33
 KPIs & FINANCIAL METRICS
CAPITAL-EFFICIENT BUSINESS MODEL

Net Revenue and Inventory Receivable and

$6,204 Payable Days1

$4,721

$3,380 38.8

$2,250

$1,319

$916

2.1
$20 $20 $19 $28 $36
$15

2013 2014 2015 2016 2017 Q3 ’18 Days Days

$ Millions (Net Revenue Receivable Payable
is LTM)

Net Revenue Inventory

1
Average of last four quarters
34
04.
APPENDIX
35
APPENDIX
ILLUSTRATIVE CUSTOMER ACQUISITION COST

(All units in millions, except per-customer figures) 2017

Total Advertising Spend $549.9

Partner Ad Spend $7.0
Direct Retail Ad Spend $542.9

Active Customers 10.99

Total Orders 19.41
% of Orders from Repeat Customers 61.4%
Implied New Customers 7.50
Implied Orders from Repeat Customers 11.91

AOV $239.2
Assumed Revenue from Repeat Customers $2,850

Assume 7% Direct Retail Ad Spend on Repeat Revenue $199.5

Implied Direct Retail Ad Spend for New Customers $343.4

Customer Acquisition Cost adjusted for Repeat Ad Spend $46

Annual Direct Retail Revenue per Customer $422

Annual Contribution per Customer $84.96
Contribution Margin 20.1%

36
APPENDIX
WE ARE ADDING VARIABLE HEADCOUNT TO KEEP UP WITH GROWTH &
INVESTING IN OPEX HEADCOUNT TO STAFF OUR STRATEGIC INVESTMENTS

Global Headcount by Functional Group

11,000 10,908

10,000 9,713

8,753
9,000

8,000 7,751
6,122
6,890
7,000 5,271
6,049 4,730
6,000 5,610 5,637 5,708 4,114
5,398

5,000 4,604 3,682

3,272
3,174
4,000 3,150 3,110
3,002
2,556
3,000 4,786
4,442
2,000 4,023
3,636
3,208
2,777
2,460 2,527 2,534
1,000 2,048 2,396

-
Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18

Customer Service, Variable Logistics and Sales1 Marketing, Engineering, Technology, etc.
1
These figures include interns and co-ops 37
 APPENDIX
CASTLEGATE WAREHOUSES ENABLE NEXT-DAY
AND 2-DAY DELIVERY FOR SMALL PARCEL¹

Traditional Drop Ship Model for Small Parcel Example

Supplier
End customer
warehouse in FedEx / UPS
in New York
southern California

6–8 total touches, 4–5 day delivery time

CastleGate for Small Parcel Example¹

CastleGate warehouse Wayfair-dedicated End customer
FedEx / UPS
in New Jersey transportation in New York

Pre-sorting at Wayfair builds dedicated trailer

CastleGate warehouse for destination hubs

2–4 total touches, 1-day delivery time

1 Large parcel shipments can also go out of CastleGate but would

use WDN instead of FedEx / UPS for last mile
38
 APPENDIX
WAYFAIR DELIVERY NETWORK (WDN) FOR LARGE PARCEL DELIVERIES

Traditional Drop Ship Model for Large Parcel Example

Supplier Third-party carriers traveling less Third-party End

warehouse in than truckload (multiple stops and last mile customer in
southern California carrying non-Wayfair products) delivery agent New York

6–8 total touches, 2–3 week delivery time

WDN Example

Supplier Wayfair consolidation Full truckload Wayfair last mile delivery

End customer
warehouse in center & cross docks transportation (only agent (major markets) or
in New York
southern California Wayfair products) third party (other areas)

3–4 total touches, 1+ week delivery time

39
 APPENDIX
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS)

2014 2015 2016 2017 Q3 2017 Q3 2018

Net Income ($148.1) ($77.4) ($194.4) ($244.6) ($76.4) ($151.7)

Depreciation and Amortization1 $22.0 $32.4 $55.6 $87.0 $22.9 $32.5
Equity-Based Compensation 2
$63.2 $33.0 $52.0 $72.6 $19.6 $36.3
Interest (Income) Expense, Net ($0.4) ($1.3) ($0.7) $9.4 $2.0 $7.1
Other Expense (Income), Net $0.5 ($2.7) ($1.8) ($0.7) $0.2 ($1.1)
Taxes $0.2 $0.1 $0.6 $0.5 $0.2 $0.5
Other1 -- -- -- $8.8 $8.8 --

Adjusted EBITDA ($62.5) ($15.9) ($88.7) ($67.0) ($22.7) ($76.4)

Includes one-time charges related to terminating use of our warehouse in Ogden, Utah, in July 2017
40
1

2
Includes related taxes
APPENDIX
RECONCILIATION OF FREE CASH FLOW ($ IN MILLIONS)

2014 2015 2016 2017 Q3 ’17 Q3 ’18

Net Cash Provided by Operating Activities $4.1 $135.1 $62.8 $33.6 $24.8 $7.8
Purchase of Property and Equipment ($31.9) ($44.6) ($96.7) ($100.4) ($30.1) ($49.4)
Site and Software Development Costs ($14.1) ($17.5) ($31.4) ($46.4) ($12.2) ($17.2)

Free Cash Flow ($41.9) $72.9 ($65.3) ($113.2) ($18.5) ($58.8)

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