Gary Friedman
Chairman & CEO

Albert Einstein's 3 rules of work. Out of clutter, find simplicity. From discord, find harmony. In the middle of difficulty lies opportunity. Seem especially relevant at this moment. Where compounding clutter from tariffs, global discord as a result of war and the most dire housing market in decades can make it difficult to separate the signal from the noise.

It's important to remember, necessity is the mother of invention, and our most important innovations were birthed during the most uncertain times. Transforming a nearly bankrupt Restoration Hardware into RH, the leading luxury home brand in North America was not a feat for the faint of heart. While the external challenges are somewhat familiar, our internal opportunities are massively different. We're not closing stores and fighting to survive. We're building a never seen before brand that's positioned to thrive. Before we get into the details of our strategy, let's start with a few facts that should quiet some of the noise.

In 2025, RH achieved revenue growth of 8% and 2-year growth of 15%, far outpacing our furniture industry peers by 8 to 30 points. Adjusted EBITDA reached $597 million or 17.3% of revenues versus $539 million or 16.9% of revenues in 2024. Free cash flow of $252 million versus negative free cash flow of $214 million in 2024, an increase of $466 million year-over-year. Those results were despite 2025 being our peak investment year with $289 million of adjusted CapEx to support our global expansion, plus an additional $37 million to purchase the Michael Taylor, Formations and Dennis & Lean brands to support the launch of our new concept, RH Estates. A strong performance considering the unusual circumstances.