FIGS Raises 2026 Outlook After Q3 Revenue Jumps 26%

FIGS Inc. (NYSE: FIGS) raised its full-year 2026 outlook after third-quarter net revenue increased 26% year over year to $190.7 million, supported by growth in customers, spending and international sales. Operating leverage lifted adjusted EBITDA margin by 410 basis points even as gross margin declined.

The healthcare apparel company now expects 2026 net revenue to grow approximately 23.5% from 2025, compared with its prior outlook of about 20%. It forecasts a full-year adjusted EBITDA margin of approximately 15.8%, up from its previous range of 14.8% to 15.0%. For the fourth quarter, FIGS expects net revenue growth of about 15%.

Customer growth and higher order values lift revenue

Active customers increased 14% to approximately 3.2 million on a trailing-12-month basis. Net revenue per active customer rose 13% to a company record of $236, while average order value increased 11% to $126.

Scrubwear, which accounted for 83% of quarterly revenue, grew 24%. Non-scrubwear revenue increased 35% and represented the remaining 17%, reflecting expansion beyond the company’s core apparel assortment. During the quarter, FIGS introduced healthcare-focused jewelry and accessories following its acquisition of V Coterie, expanded its FIBREx product range and added waistband options to several scrub-pant franchises.

U.S. revenue rose 21% and accounted for 81% of the total. International revenue increased 51%, contributing 19%. Nearly 90% of the international increase came from existing comparable markets, with the company highlighting growth in Latin America, Mexico, the Middle East and Europe.

FIGS said it expanded its reach from 58 countries at the end of fiscal 2025 to 85 countries through November 2026. The company has also increased localized marketing, Ambassador recruitment, user-generated content and search and social-media activity in overseas markets.

Expense leverage offsets lower gross margin

Gross margin declined 60 basis points to 69.3%. FIGS attributed the contraction primarily to unusually large improvements in returns processing in the prior-year period and higher inventory reserves. Pricing increases and continuing efficiency efforts partly offset those pressures.

Operating expenses fell to 57.6% of revenue from 63.6% a year earlier. Selling, marketing and general and administrative expenses each declined as a percentage of revenue, mainly because higher sales provided leverage across the cost base. Favorable shipping rates and digital marketing efficiency also helped, while fuel costs, supplier transitions, international mix and investments in personnel provided partial offsets.

Adjusted EBITDA increased to $31.5 million from $18.9 million, and adjusted EBITDA margin expanded to 16.5% from 12.4%. On a GAAP basis, net income rose to $19.3 million from $8.7 million, while net income margin increased to 10.1% from 5.8%.

For the nine months ended September 30, net revenue totaled $547.2 million, compared with $429.2 million in the prior-year period. Adjusted EBITDA was $82.0 million, representing a 15.0% margin, while GAAP net income reached $53.9 million.

International, institutional and retail expansion remain priorities

Management identified international markets, institutional sales through its TEAMS business and physical retail locations as key expansion areas.

Within TEAMS, FIGS is seeking deeper relationships with existing institutional customers, larger potential accounts and additional functionality for its Team Store platform. Recent partnerships include Bupa Dental Care, which has about 400 dental centers in the U.K., and European Wax Center, with more than 1,000 U.S. locations.

The company’s five Community Hubs delivered record third-quarter results, supported by comparable-store performance and new-store contributions. FIGS plans four openings in the fourth quarter, in Scottsdale, Arizona; Tysons Corner outside Washington, D.C.; Valley Fair near San Jose, California; and Aventura Mall in Miami. The company said its stores have produced an above-average mix of new customers, payback periods well below its two-year target and accretive margins.

Cash position reaches a record

Cash, cash equivalents and short-term investments totaled a record $331.2 million at the end of the quarter, up 37% year over year. Year-to-date free cash flow was $89.8 million, compared with negative $5.1 million in the corresponding 2025 period.

FIGS allocated approximately $60 million to share repurchases and tax withholdings related to net share-settled employee equity awards. The company reported $40.0 million of share repurchases and $6.6 million associated with equity-award settlement in its year-to-date cash-flow presentation.

Management said the third quarter marked the fourth consecutive quarter of net revenue growth above 25% and indicated that performance early in the fourth quarter supported its revised annual forecast.

The outlook remains subject to risks including the company’s ability to sustain growth and profitability, attract and retain customers, develop new products, manage inventory and forecast demand. FIGS also cited competitive pressure, changes in consumer spending, international expansion risks, supplier concentration, shipping disruptions, raw-material costs, global trade policy and execution of its TEAMS and retail strategies as potential uncertainties.