Brilliant Earth Q2 2026 Earnings: Higher Order Values Drive Sales and EBITDA Growth

Brilliant Earth (Nasdaq: BRLT) reported Q2 2026 net sales of $115.1 million, up 5.7% from $108.9 million a year earlier, while GAAP diluted EPS improved to $0.01 from a loss of $0.01. Adjusted EBITDA rose 81.3% to $5.8 million as a higher average order value offset fewer orders and operating expense leverage supported profitability.

Core Financial Results

Sales grew faster than gross profit during the quarter. Gross profit increased 4.9% to $66.6 million, while gross margin declined 40 basis points year over year to 57.9%. However, gross margin improved by 360 basis points sequentially.

Profitability strengthened further down the income statement. Total GAAP operating expenses increased by about 2.3%, slower than sales, and the company reported 250 basis points of year-over-year leverage in adjusted operating expenses as a percentage of net sales.

Business and Operating Trends

The quarter’s sales growth came from larger transactions rather than higher order volume. Total orders declined 2.1% to 51,442, but average order value increased 7.9% to $2,238, more than offsetting the lower number of delivered orders.

Fine jewelry bookings grew 32% year over year, supporting Brilliant Earth’s effort to diversify beyond its bridal business. Bookings represent confirmed order value and are an indicator of potential future net sales rather than revenue already recognized. The company also opened its 43rd showroom in San Antonio, its second location using the new flagship showroom concept.

Profitability and Balance Sheet

The improvement in adjusted profitability was larger than the change in GAAP operating income partly because the non-GAAP calculation excluded several items. The largest unusual Q2 adjustment was a $1.8 million charge related to the write-off of information technology projects. Adjusted EBITDA also excluded $1.3 million of equity-based compensation and other specified costs.

Cash and cash equivalents were $74.9 million on June 30, 2026, down approximately $4.1 million from December 31, 2025. Net inventory remained essentially unchanged at $53.3 million, indicating that the balance sheet did not experience a material inventory build during the first half.

Q2 Improvement Has Not Erased First-Half Pressure

The stronger second quarter contrasts with weaker cumulative profitability for the six months ended June 30. First-half net sales increased 5.8% to $214.6 million, but gross margin fell 220 basis points to 56.2%. Adjusted EBITDA declined 75.0% to $1.1 million, and its margin contracted from 2.1% to 0.5%.

The first-half net loss also widened to $7.6 million from $4.4 million. Because adjusted EBITDA excludes the unusual IT write-off and other specified adjustments, the year-to-date decline cannot be attributed solely to those charges. Sustaining the Q2 margin and expense improvements will therefore be important to closing the first-half profitability gap.

Earnings Guidance

Brilliant Earth raised its full-year adjusted EBITDA guidance to $13 million-$15 million, citing its second-quarter performance and confidence in the second half. The release did not provide the previous numerical range, so the size of the increase cannot be determined from the available information.

The outlook assumes tariff levels and metal prices as of August 4, 2026. Changes in either factor could affect the cost and margin assumptions embedded in the guidance.

Risks Investors Should Watch

• Order volume remains under pressure. Q2 sales growth depended on a 7.9% increase in average order value offsetting a 2.1% decline in total orders. Slower AOV growth would make continued order weakness more consequential for revenue.
• Near-term sales growth is expected to slow. The company guided to approximately flat year-over-year net sales in Q3, compared with 5.7% growth in Q2.
• First-half profitability remains below the prior year. Despite the Q2 improvement, first-half adjusted EBITDA and gross margin were materially lower year over year.
• Tariffs and metal prices can affect margins. The outlook is based on conditions as of August 4, leaving guidance sensitive to subsequent changes in trade costs and commodity prices.

Summary

Brilliant Earth’s Q2 2026 results improved as higher average order value drove sales growth and operating expense leverage helped adjusted EBITDA rise. Fine jewelry bookings provided evidence of progress beyond bridal, but lower order volume and weaker first-half margins remain important counterpoints. The next tests are whether the company can maintain Q2’s profitability improvement while navigating approximately flat Q3 sales and cost exposure from tariffs and metal prices.