BRLT

Brilliant Earth Group, Inc.

NASDAQ · CONSUMER DISCRETIONARY · JEWELRY, SILVERWARE & PLATED WARE

1.51

−0.02 −1.31%

USD · close Oct 23

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FLAG · shorts 23

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nobody we score has called it yet

MKT CAP $14.5MP/E —DIV YIELD —FCF YIELD 19.92%REV TTM $449.3M +6.4%NET INCOME −$4.5MNET CASH $74.9M52W 1.03 – 2.80SEC XBRL · TTM TO Invalid Date

How BRLT rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

78%

of sentences unchanged

Added

new sentences

Dropped

116

sentences removed

Length

−417

words, now 31,548

New in FY2025

Risks Related to Our Business and Industry Fluctuations in the pricing and supply of diamonds, other gemstones, and precious metals, particularly responsibly sourced natural and lab-grown diamonds and repurposed precious metals such as gold and platinum, which account for the majority of our merchandise costs, increases in labor costs for manufacturing such as wage rate increases, as well as inflation, and energy prices could adversely impact our sales, earnings and cash availability.
For example, gold, platinum and other precious metal prices have been highly volatile, and significant price increases occurred in 2025.
Sustained elevated prices for gold, platinum and other precious metals could increase our merchandise costs and working capital requirements and adversely impact demand, particularly if we cannot timely or fully pass through cost increases or if competitors price more aggressively.
If we are unable to increase retail prices to reflect higher diamond, gemstone, or precious metal costs, our profitability could be adversely affected.
There could also be a lag time before particularly sharp increases or other volatility in diamonds, gemstones, and precious metal costs can be reflected in retail prices and even if price changes are implemented, there is no certainty that these changes will be sustainable or sufficient.
We use primarily repurposed precious metals in our gold and silver fine jewelry.
A significant change in the balance of supply and demand of natural diamonds, continued increase in the supply of lab-grown diamonds, or both, may influence consumer perception of the value of natural and lab-grown diamonds and has contributed and may continue to contribute to decreases in prices of natural and lab-grown diamo nds.
Further, diamond prices declined during 2025, and such declines could influence consumer expectations and perceived value.
As retail prices for diamonds decline, consumers who purchased at higher prices may be disappointed with their purchases’ relative value, which could harm our reputation and that of the jewelry industry.
Sustained price compression could pressure our average order value, product margin, and inventory valuation, and may require us to adjust pricing and assortment decisions more frequently.
In addition, any sustained increases in the cost of diamonds, other gemstones, and precious metals could increase costs, disrupt sales, cause some customers to be discouraged by reduced affordability potentially leading them to delay purchases or choose alternatives, or require higher inventory levels or changes in the merchandise available to customers.
We were founded in 2005 and since then, we have grown to 42 showrooms across the U.S. as of December 31, 2025.
In addition, international supply chains may be impacted by events outside of our control, such as the imposition of tariffs, which may limit our ability to cost-effectively procure timely delivery of supplies or finished goods and services.
For example, beginning in the first quarter of 2025, the U.S. imposed additional tariffs on imports from China, announced both reciprocal and sector-specific tariffs on imports from other countries, and may implement new reciprocal tariff rates in the future.
Several of the materials that go into the manufacturing of our products are sourced internationally.
We face many other challenges in opening additional showrooms in the U.S., including: • selection and availability of and competition for suitable showroom locations; • reductions in customer traffic due to local economic conditions, increased crime or security concerns, or changes in the desirability of the surrounding retail environment; • the impact of the opening of new showrooms upon our prior showrooms in nearby geographies; • negotiation of acceptable lease terms; • ongoing volatility in construction, tenant improvements, and labor costs; • strategically picking new markets to expand into; • placement of showrooms in easily accessible locations with high visibility; • securing required applicable governmental permits and approvals; • impact of natural disasters and other acts of nature and terrorist acts or political instability; • employment, training, and retention of qualified personnel; • incurrence or assumption of debt to finance acquisitions or improvements and/or the assumption of long-term, non-cancelable leases; • availability of financing on acceptable terms; and • general economic and business conditions.
They may also be able to spend more than we do on advertising.
If our costs are greater than our competitors', the pricing of our products and services may not be as attractive, thus depressing sales or the profitability of our products and services.
We may not always be successful in protecting our trademarks, and we may suffer dilution, loss of reputation, or other harm to our brand.
Many customers locate our platform through internet search engines, such as Google, and advertisements on social networking sites such as Facebook, Instagram and TikTok and online streaming services.
Additionally, if the costs of search engine marketing services, such as Google Words, or the costs of other advertisements increase, we may incur additional marketing expenses, we may be required to allocate a larger portion of our marketing spend to this channel or we may be forced to attempt to replace it with another channel (which may not be available at reasonable prices, if at all), and our business, financial condition, and results of operations could be adversely affected.
Additionally, changes in regulations could limit the ability of search engines, social media platforms, and other advertising partners, including, but not limited to, Google and Meta, to collect data from users and engage in targeted advertising, making them less effective in disseminating our advertisements to our target customers.
Securities and Exchange Commission (the “SEC”) of the type and “aggregate value” of user data used by harvesting companies, such as, but not limited to, Meta, Google, and Amazon, including how net sales is generated by user data and what measures are taken to protect the data.
As we expand our operations, it may be more difficult to effectively manage our inventory, and we may need to maintain higher inventory levels than we have historically, requiring additional cash expenditures for inventory.
Because we have a short history of operating at our current scale, we may be unable to accurately predict operating results, and may be unable to generate sales growth, profitability and positive cash flow.
We will need to generate and sustain increased revenue and manage our costs effectively to sustain profitability.
While we employ security measures designed to prevent, detect, and mitigate potential for harm from the misuse of user credentials on our network, these measures may not be effective in every instance.
Due to concerns about data security and integrity, a growing number of national and international legislative and regulatory bodies have adopted mandatory breach notification and other requirements in the event that information subject to such laws is misused or accessed by unauthorized persons and additional regulations regarding the use, access, accuracy and security of such data are possible.
For example, laws in the EU and UK may require businesses to provide notice to individuals whose personal information has been disclosed as a result of a data security breach, and in the United States, we are subject to laws in all states and numerous territories that require notification.
Complying with such numerous and complex regulations in the event of unauthorized access or a data security breach would be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability.
We may also be contractually required to notify customers or other counterparties of a security incident, including a data security breach.
Regardless of our contractual protections, any actual or perceived data security breach, or breach of our contractual obligations, could harm our reputation and brand, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach.
Investors, employees, customers, governmental and regulatory bodies and other stakeholders are judging companies’ performance on a variety of environmental, social, and governance (“ESG”) matters, which are considered to contribute to the sustainability of companies’ performance.
A variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are publicized.
Such topics considered may include, among others, the company’s efforts and impacts, including impacts associated with our suppliers or other partners, on climate change and human rights, ethics and compliance with law, human capital management, and the role of the Board.
There can be no certainty that we will manage such issues successfully, or that we will successfully meet society’s varied expectations as to our proper role or our own ESG goals and values, including in respect of our diamond sourcing standards.
Both advocates and opponents to ESG strategies may also resort to a range of activism forms, including media campaigns, shareholder activism, and litigation to advance their perspectives.
In addition, various authorities have imposed, and may continue to impose, mandatory substantive and/or disclosure requirements with respect to ESG matters.
For example, we may be subject to the requirements of the European Union Corporate Sustainability Reporting Directive (“CSRD”) and its implementing laws and regulations and other directives, regulations, disclosure requirements (such as information on greenhouse gas emissions, climate-related financial risks, use of offsets, and emissions reduction claims) such as the State of California's climate rules, among other regulations or requirements.
Notably, the CSRD has extra-territorial reach both directly (for in-scope companies) and indirectly, as companies in the value chains of in-scope companies may be asked to provide relevant data if there are in-scope entities in their value chains.

and 58 more.

Gone since FY2024

Risks Related to Our Business and Industry Fluctuations in the pricing and supply of diamonds, other gemstones, and precious metals, particularly responsibly sourced natural and lab-grown diamonds and repurposed precious metals such as gold, which account for the majority of our merchandise costs, increases in labor costs for manufacturing such as wage rate increases, as well as inflation, and energy prices could adversely impact our sales, earnings and cash availability.
Similarly, we use primarily repurposed precious metals in our gold and silver fine jewelry.
Our inability to increase retail prices to reflect higher diamond, gemstone, or precious metal costs would result in lower profitability.
There could also be a lag time before particularly sharp increases or other volatility in diamonds, gemstones, and precious metal costs can be reflected in retail prices.
Even if price changes are implemented, there is no certainty that these changes will be sustainable or sufficient.
Additionally, a significant change in the balance of supply and demand of natural diamonds, continued increase in the supply of lab-grown diamonds, or both, may influence consumer perception of the value of natural and lab-grown diamonds and has contributed and may continue to contribute to decreases in prices of natural and lab-grown diamonds.
In addition, any sustained increases in the cost of diamonds, other gemstones, and precious metals could increase costs, disrupt sales, or require higher inventory levels or changes in the merchandise available to customers.
We were founded in 2005 and since then, we have grown to 40 showrooms across the U.S. as of December 31, 2024.
Many of ou r existing showrooms are relatively new, and we cannot be certain of the net sales, earnings and cash flows that will be generated by these showrooms or future showrooms, especially as we move to new geographic markets.
There may also be delays in the development of our planned new showrooms.
Moreover, certain occurrences outside of our control such as, for example, the COVID-19 pandemic, have in the past and may again result in the closure of our showrooms or delay the development of new showrooms.
Further, many of our showrooms are leased pursuant to multi-year short-term leases, and our ability to negotiate favorable terms on an expiring lease or for a lease renewal option may depend on factors that are not within our control.
In addition, international supply chains may be impacted by events outside of our control and limit our ability to cost-effectively procure timely delivery of supplies or finished goods and services.
Importing and exporting has involved more risk as since at least the beginning of 2018, there has been increasing rhetoric, in some cases coupled with legislative or executive action, from several U.S. and foreign leaders regarding tariffs against foreign imports of certain materials.
For examp le, since February 2025, the U.S. has imposed new tariffs on imports from China and twice announced and subsequently paused implementation of tariffs on imports from Canada and Mexico until April 2, 2025.
Several of the materials that go into the manu facturing of our products are sourced internationally.
We face many other challenges in opening additional showrooms in the U.S., including: • selection and availability of and competition for suitable showroom locations; • the impact of the opening of new showrooms upon our prior showrooms in nearby geographies; • negotiation of acceptable lease terms; • strategically picking new markets to expand into; • placement of showrooms in easily accessible locations with high visibility; • securing required applicable governmental permits and approvals; • impact of natural disasters and other acts of nature and terrorist acts or political instability; • employment, training, and retention of qualified personnel; • incurrence or assumption of debt to finance acquisitions or improvements and/or the assumption of long-term, non-cancelable leases; • availability of financing on acceptable terms; and • general economic and business conditions.
They may also be able to spend more than we do for advertising.
If our costs are greater compared to those of our competitors, the pricing of our products and services may not be as attractive, thus depressing sales or the profitability of our products and services.
Despite these efforts, we may not always be successful in protecting our trademarks, and we may suffer dilution, loss of reputation, or other harm to our brand.
Many customers locate our platform through internet search engines, such as Google, and advertisements on social networking sites such as Meta (formerly, Facebook), Instagram and TikTok and online streaming services.
Search engines revise their algorithms from time to time in an attempt to optimize their search results.
Additionally, if the costs of search engine marketing services, such as Google AdWords, or the costs of other advertisements increase, we may incur additional marketing expenses, we may be required to allocate a larger portion of our marketing spend to this channel or we may be forced to attempt to replace it with another channel (which may not be available at reasonable prices, if at all), and our business, financial condition, and results of operations could be adversely affected.
Additionally, changes in regulations could limit the ability of search engines, social media platforms, and other advertising partners, including, but not limited to, Google and Facebook, to collect data from users and engage in targeted advertising, making them less effective in disseminating our advertisements to our target customers.
Securities and Exchange Commission (the “SEC”) of the type and “aggregate value” of user data used by harvesting companies, such as, but not limited to, Facebook, Google, and Amazon, including how net sales is generated by user data and what measures are taken to protect the data.
As we expand our operations, it may be more difficult to effectively manage our inventory.
Because we have a short history of operating at our current scale, we may be unable to accurately predict operating results, and may be unable to generate sales growth and profitability.
We will need to generate and sustain increased revenue and manage our costs to sustain profitability.
While we employ security measures to prevent, detect, and mitigate potential for harm from the misuse of user credentials on our network, these measures may not be effective in every instance.
Due to concerns about data security and integrity, a growing number of national and international legislative and regulatory bodies have adopted breach notification and other requirements in the event that information subject to such laws is misused or accessed by unauthorized persons and additional regulations regarding the use, access, accuracy and security of such data are possible.
In the United States, we are subject to laws in all states and numerous territories that require notification.
Complying with such numerous and complex regulations in the event of unauthorized access would be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability.
Investors, employees, customers, governmental and regulatory bodies and other stakeholders are increasingly judging companies’ performance on a variety of environmental, social, and governance (“ESG”) matters, which are considered to contribute to the long-term sustainability of companies’ performance.
A variety of organizations measure the performance of companies on ESG topics, and the results of these assessments are widely publicized.
Topics taken into account in such assessments include, among others, the company’s efforts and impacts, including impacts associated with our suppliers or other partners, on climate change and human rights, ethics and compliance with law, diversity, and the role of the Board in supervising various ESG issues.
In light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet society’s expectations as to our proper role or our own ESG goals and values, including in respect of our diamond sourcing standards.
In addition, various regulatory authorities have imposed, and may continue to impose, mandatory substantive and/or disclosure requirements with respect to ESG matters.
For example, we may be subject to the requirements of the European Union Corporate Sustainability Reporting Directive (“CSRD”) and its implementing laws and regulations and other directives, regulations, disclosure requirements (such as information on greenhouse gas emissions, climate risks, use of offsets, and emissions reduction claims) such as the State of California as well as the SEC’s climate disclosure rules, among other regulations or requirements.
Notably, the European Union’s CSRD has extra-territorial reach both directly (for in-scope companies) and indirectly, as companies in the value chains of in-scope companies may be asked to provide relevant data if there are in-scope entities in their value chains.
The SEC has also adopted rules that will require public companies to disclose extensive climate change-related information in their SEC filings, but those rules are being challenged in court and not expected to be enforced by the current U.S. federal administration.

and 76 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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