Q3 2021 Poshmark Inc Earnings Call

Word on 10-K for the year ended December 31, 2020, and our 10 Qs for the quarter ended March 31st in June 30 of 2021, and our subsequent filings with the SEC, including our 10-Q for the quarter ended September 32021, any forward looking statements. We make on this call are based on our beliefs and assumptions as of today and we don't have any obligation to update them all.

During the call, we'll present GAAP and non-GAAP financial measures a reconciliation of non-GAAP to GAAP measures is included in today's earnings release, which you can find on our IR website, along with the replay of this call and with that I'll turn it over diminish.

Thanks, Christine Hello, and welcome everyone. Thank you for joining us for our third quarter earnings call.

Our vision for Bosch markets to become the worlds, leading social marketplace and the number one destination for sellers along the water. We're laser focused on making strategic investments that drive the continued growth of our business give them. The best overall experience for sellers and make our marketplace. The number one most trust.

The destination for buyers are social marketplace was built to support sellers of all sizes and we wanted to empower each and every one of them to be successful while fueling a more circular shopping engine.

While we faced greater than expected headwinds during the third quarter due to <unk> and Apple privacy changes, we grew <unk> revenue year over year by 18% and 16%, respectively to $442 $5 million and $79 7 million.

Despite difficult comparisons on a two year basis, <unk> revenue grew 64% and 59% year over year, respectively.

We delivered our sixth consecutive quarter of adjusted EBITDA profitability with zero point $3 million, and adjusted EBITDA, and <unk>, 3% and adjusted EBITDA margin.

While increasing our marketing spend to counter the impact of Apple privacy changes.

Investing in marketing and product innovation in the quarter helped drive a 17% growth in TTM active buyers up from 16% in the second quarter.

Our asset light model holds no inventory, leading to consistent high gross margins of 85% in the third quarter, resulting in a scalable business with a highly engaged community of loyal cohorts.

Third quarter sales reflected ballpark as a go to destination to source strengths such as picked up inspired styles searches for Tictoc increased 15% to 100% over the last two years and we have seen a surge in demand for brands that are trending with tic Toc influencers.

We grow the <unk> of our marketplace by growing our overall community of users. These users to activate as buyers and sellers, creating a virtual flywheel of growth and monetization.

When users join the connect with each other through social interactions, which grew 37% year over year. During TTM Q3, 21 to $38 9 billion, our marketplace makes shopping online fun and interactive and we continue to add features to increase engagement.

Accelerating growth, while navigating the impact of Apple privacy changes as our top priority and we will continue to adjust our marketing strategy accordingly to grow GMB, we began adjusting our marketing spend in the middle of Q3 and have seen an early positive impact on October <unk> of the growth.

Product innovation category expansion international growth and new seller tools built a foundation for driving <unk> revenue and active buyer growth.

I'm confident in the opportunities for accelerating future growth driven by continued progress of these four growth strategies first we continue to focus on product innovation to drive user engagement, which is fundamental to the retention of our user cohorts and <unk> growth at the end of July to enhance the biotechs.

<unk>, we expanded our partnership with a firm to include their split based products for items between $50 and $200. As a result of this new pricing tier we have seen an increase in <unk>.

And number of orders at these price points.

Since we completed the full rollout of buy it alerts at the end of second quarter. We have seen an increase in listing views engagement order conversion and incremental daily GMB. This enhancement creates an urgency to buy four items with competing offers and creates a more personalized and curated shopping experience by merchandising similar or.

Identical items to the buyer would be items like has been sold.

We recognize the importance of premium priced products in the resale market and have seen strong growth in this category with $200 plus items now representing in the low twenties as a percentage of <unk> up from 17% in 2019.

Last month, we completed our milestone first acquisition of suite, one in New York City based sneaker authentication platform that combines machine learning technologies computer vision and human expertise to conduct virtual authentication. This will build more trust and loyalty with our shoppers create a more efficient then.

Sustainable approach to authentication and help accelerate growth and sneaker and luxury categories.

Expanding our international footprint as our second key strategic focus and we continue to invest ahead of revenue.

In mid September we launched posh, Mark India as our first marketplace in Asia.

The Indian market has over 622 million active internet users in a rapidly growing base of sustainability and value conscious consumers, who seek a more socially connected experience, particularly gen Z and millennials, India is an ideal fit for our unique social commerce model, both from a cultural and.

Business perspective, though still very early India is off to a strong start with higher than expected user growth as we begin building the community.

Growing <unk> through category expansion as our third strategy with the launch of our Grand Closets program, we're opening our social marketplace to large scale brands and retailers, allowing brands to directly connect conversed with and sell to <unk> community of over 80 million users with a suite of social merchandising tools.

Our social Commerce platform allows us to bring rich insights about fashion trends and real time data about consumer interests to our Grand Plaza partners, helping them reach new audiences, including millennials and Gen Z.

Some brands have a larger following on <unk> and their own social media channels and 17, 9% of our buyers have purchased a brand for the first time on <unk>, we already have 140, plus community brands using brand closets to reach our 80 million registered users. Some have built their entire brand using posh mark.

We have piloted brand clauses with a few large scale brands since 2020, developing a full scale program that offers the features a large brand needs to thrive on Bosch Mark. We're excited about this new program as more brands see the value of social commerce and circular models NBC brand clauses as an important inflection point as we.

Worked together to shape the future of shopping day.

Delivering innovative easy to use it effective set of services to help sellers market merchandise and sell their listings is core to our strategy.

Our cofounder Tracy Sun is now officially leading a new organization at Bosch Mark that is exclusively dedicated to empowering our sellers anticipating their needs and innovating to bring fresh ideas solutions and tools that will help them grow and scale their businesses sellers of the heart of Bosch Mark community keeping.

Our marketplace constantly refreshed with curated merchandise that reflects current and emerging trends and lifestyle preferences. The four powerful bulk lifting tools that we launched at the end of June have help sellers to improve their sales productivity.

During the third quarter, we saw a strong adoption of these tools with professional sellers, having the highest adoption rate of 30% professional sellers, who adopted bulk action show a higher increase in sales driven by an increase in orders than did listeners who did not use bulk actions. We see continued opportunity for increased adoption of this feature.

To drive <unk> growth.

<unk> introduced a new slate of tools to help sellers replicate the best part of client service when shopping at a physical boutique. This includes my shoppers, a social selling and client telling tool that is unique to push more closet insights providing sellers with real time data on their sales of inventory direct messaging, allowing <unk>.

Sellers to communicate directly with their buyers and a new gold badge in the Boston Bachelor program to recognize and reward outstanding members of our seller community.

We announced these new product enhancements in October at our ninth annual Bosch Best Our conference with our wideband and passionate community members connect network and learn how to grow and succeed by selling on <unk>.

<unk> of the virtual event came from all 50 States, Guam, Puerto Rico, Canada, Australia, India, The Netherlands, UK, Mexico, Spain, and Colombia, evidenced of the global appeal and reach of our community.

Our highly engaged community gives us the confidence that we will be able to navigate near term headwinds and we will continue to adjust our marketing to accelerate growth as we celebrate Bosch marks <unk> 10th anniversary next month, we believe that our business model. The standard bank to thrive in the current environment because on millions of sellers are constantly listing new products.

Our marketplace is highly adaptable and entry I believe its sponsor buyers changing events and were not impacted by supply chain disruptions. We're optimistic that this holiday season consumers once again attend events and see friends and family all reasons that drive demand for apparel and accessory purchases with the potential for more.

Self gifting and gift, giving a resale marketplace enables shoppers to rotate styles mixed strengths and give a second life two items contributing to a more sustainable fashion ethos for consumers and with that I will turn it over to capital.

Thank you Manny.

As Manny mentioned, despite a difficult comparison and the headwinds of appetite. We continue we delivered solid <unk> and revenue growth year over year, and our consecutive quarter of adjusted EBITDA profitability. During the third quarter of 2021, our cohorts have remained resilient and helped us generate $442 5 million in JV.

18% growth from $75 4 million in the third quarter of 2020.

64% growth on a two year basis.

Putting stock based compensation audit B C was $35 $4 million in the third quarter of 2021, and 89 cents an increase from $18.8 million in the third quarter of 2020, when would be dramatically reduced marketing spend in response to the Covid cases on a full year basis marketing only grew 6%.

From 232092 <unk> 2021.

The third quarter humiliate two other who used visitor marketing we've continued to see the impact of appetite changes since our marketing makes it highly diversified and but we had just take by focusing on strong Ottawa user efficient janas as well as investing in upper funding strategies such as.

E V and theater partnerships to counteract the effect of idea fate marketing was 44.5% of net revenue in the third quarter of 2021 is the increased spending during the later part of the Walker, who navigates the impact of appetite changes.

<unk> investment in marketing also accelerated the growth rate of <unk> bias to 17% in the third quarter up from 16% in the second quarter.

Moving to other operating expenses office about excluding SBC was $12.4 million in the third quarter of 2021 stimulus with the second quarter, all sorts of Holocaust slightly lower than expected and was $15, 6% of revenues up from 45% in the third quarter last year R&D excluding.

B C was $9.2 million in the third quarter similar to the second quarter R&D was alone 5% of revenues up from 10.4% of revenue in the third quarter of 2020 does.

To us due to the blinding fees in hiding we have previously discussed as you continue to invest in additional resources across a number of key strategic initiatives jannie, excluding SPC of $10.2 million in the third quarter of similar to the second quarter and was slightly lower than expected you to period in person event and lower Terry cost.

Daniel <unk>, 90% of revenues up from 9155 in the third quarter last year due to the ongoing costs of being a public company.

Stock based compensation was $617 million in the third quarter of 2021 and increase from $2.6 million last year, mainly due to performance based Misty of outstanding Odysseys upon completion of our ideal in January 2021.

Regenerated adjusted EBITDA, which exclude S. P T zero point $2 million with a district beta Marty of 0.3% as compared to $15 million and $21, 90% Martin in the third quarter of 2020 degrees and profitability was ruined by an increase in marketing investment as compared with the last year.

There'd be significantly lowered our marketing pain during the initial onset of COVID-19, as we have discussed before for the remainder of 2021 will continue to invest in marketing to actually Jimmy code operating loss, excluding SBC was negative zero point $6 million in the third quarter of 2021, it's operating Martin.

Means of negative, 0.7% compared to $14.3 million with margins of 20.8% in the third quarter of 2020.

Third quarter of 2021 net loss, two Commonwealth negative $7.2 million compared to $8.1 million in income last year.

Dash Gastric Orleans, and marketable securities what $589 million at the end of the third quarter. When are you Gonna do one as you think about Capulet location. Our number one priority is using a strong balance sheet to make strategic investments to drive long term growth moving to the cash flow statement for the nine months ended September 30th.

And you're gonna be one free cash flow was that the $1.3 million compared to $57.1 million for the first nine months ended in 2020 are strong cash flow generation significantly strengthened our balance sheet and liquidity.

We expect fourth quarter revenues, all 80 $282 million does that get me in a growth rate of 15% to 18%.

Nancy early signs of the positive impact of a peace marketing investment that we started in the first quarter with escalated Jamie called in October cumulative Tidewater, we expect to see a pressure on our fourth quarter papers from last year as we expect continuous makeshift two artist date within $15.

In addition.

Anticipate that Usps's once again experienced logistics disruption during the holidays as the ship to e-commerce outpatient Capex PD.

We expect negative you better off turn two $8 million in the fourth quarter as we continue to invest in marketing to escalate top line growth, while navigating the impact of appetite changes.

It just said gross margin during the third quarter of 2021, well ahead of our initial expectations and for the remainder of 2021, we expect at district gross margin to be similar to 2020 level due to the absence of nonrecurring Fedex and payment processing fees, we expect often support excluding SBC in the fourth.

Water as a percentage of revenue to be slightly higher than last year due to anticipated logistical challenges faced by USPS during the holiday season.

R&D, excluding SBC in the fourth quarter is expected to increase as a percentage of revenues from last year as we continue to increase our investment in product innovation to accelerate growth.

The remainder of the year G&A, excluding SBC as a percentage of revenue should be higher than last year.

Due to the ongoing costs for being a public company.

We expect marketing, excluding SBC as a percentage of revenues to be in the high forties due to high Boston digital advertising as a result of appetite changes I would ask satellite hi, gross margin business and consistent behavior of alcohol gives us the confidence that we will be able to adapt to the changes in the digital advertising landscape.

By investing in marketing now to accelerate growth.

He will be disciplined in our marketing investment and are diversified marketing mix will enable us to build our user base to go at Dubai, which will put us in a stronger position in the long term.

We expect that uncertainty due to COVID-19 and its effect on reopening timeline across international market Lodge in 2021 will be 13, a slower ramp up than what we had initially a ticket for next year impacting grocery.

But we will expect growth next year to estimate from the current block us as the begin to benefit from our investment in Makati getting expansion and the launch of guns closet.

A social market based as nimble as evidenced by the resilience of alcohol.

As a slight model or no immunity to supply highly responsive Tobias changing demand.

What'd, you seen as well to solving the current embalm. It we have a long dunnville goes ahead do about the education of our growth strategy and a relentless focus on building a more seamless most ocean and most of that will have me to shop.

And I will now turn the call over to the operator, so we can take your question.

[noise] at this time I would like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad.

Courtesy please limit yourself to one question and one follow up question in the interest of time you're.

Your first question comes from the line of Lauren Shenk with Morgan Stanley. Your line is open.

Hi, you've got Nathan feather unfair for Lauren.

Just one in mind, I guess trying to figure out a little bit more on the impact of ideas to send the case Guy cares Uhm I would assume that would've had the most at our impact on active buyer growth, but that did accelerate in the corner. So can you just talk about how I D. F. A with impacting can give G M D and revenue growth almost.

Or is it really more kind of a new user getting in the door impact. Thank you.

Thanks.

The thing with idea failures. It has really increased the cost of digital advertising and decrease the efficacy wasn't running targeted marketing programs and so for us being a data driven organization. We spent June and July really measuring the Ottawa and figuring out what the right level of spend is and in fact, if you recall in the last call, we actually decreased or.

Marketing spend at the end of second quarter to allow our marketing team time to assess how to navigate Apple privacy inefficiency.

Once we sort of realized where where the light level of spend was we increased our marketing spend starting in the second half of the third quarter and that's when we saw an acceleration in ppm active by rose, 17% and we've seen in early positive impact of October G. M. B, a and because of this increased marketing expense. So really the dynamic started on the positive.

Side, a little bit later in the quarter.

Okay. Great. That's helpful. And then can you just give an update on how things are progressing with the posh Mark many app integration into Star Trek.

Sure.

Yeah, So snap and Bosch Mark partnership continues to be a really great partnership, which allows our sellers inventory to be distributed insight snapshot and brings snapshot users too posh monk inventory natively in Snapchat as you know Snapchat has a predominant community of Ginger here. So this is.

I'll just be a very relevant and very fast growing part of our community generally makes up 77% of daily active player choosing bunch Mark many and our goal is to really make borscht months Ubiquitously available you see that on all the platforms you see that in the browser and suddenly stamp is an important platform for reaching young young consumers, who seek a more socially.

Sustainable way to shop. So we continue to make good progress there in terms of just penetrating that and scaling though.

[noise] Okay. Thank you.

[noise]. Your next question comes from the line of Ross Sandler with Barclays. Your line is open.

Hi, This is parmesan for us any high level comments on retention given the uptick in marketing as a percent of G. M. D is this gonna remarketing previous cohorts are new customers any color here is pretty helpful. Thanks.

Yeah, when we think of marketing really think of it in two buckets you. The New York, New use acquisition to drive growth and really that comes from organic growth word of mouth sellers and then direct response advertisement breakfast sponsors both Google and Facebook uncertainty other other channels out there, but those are the most dominant ones and then the third is <unk>.

<unk>, which is C V M creators of influence are out there now if you think of these channels. Some of these channels drive both new growth as well as Ah retained growth, but we think of purely marketing to the tension. It comes predominantly to our own channels email notification blog, social events Posh party that whether the social network. So when we think of bar over there.

Grilled strategy would think of that that makes that sort of impacts that healthy mix between focusing on new user growth and the order you Zip code.

The cost per user on the new user site was definitely the most impacted in terms of that Apple privacy changes an idea.

Your next question comes from Ralph sure Cart with William Blair. Your line is open.

Good afternoon. Thanks for taking my question you know there's been a lot sort of talking about it on D. F. A an industrywide cats have gone up pretty significantly. So just curious how your khakis trend relative to what's going on with industry with these recent changes and then sort of your current thoughts and L. T V to CAC as you look forward, you think you'll be able to.

So to get back to where you were historically or do you think this will take some time to sort of grind through and I have a follow up question.

Yeah.

I think as as it's no surprise her costs have gone up and when we think of how we invested it ultimate you'll be rely on a long term behavioral cohorts and Ah high gross margin business, which allows us to recoup. These costs certainly represented and we've talked about how we have talk in terms of payback period, which is being in that.

Two year timeframe in order to accelerate the spending growth you have to give a little bit of lipitor marketing team to do that and it will impact our payback three which temporarily but let me think of the long term we have successfully navigated several different digital advertising landscape changes over the last few years going all the way back 28th.

<unk> Facebook it changes algorithm. If you remember in Q2 of 2018 and it took us about a year year and a half to sort of digest that cost to normalize it didn't get back to normal pay period last year, Google went through a search changes and that was also pretty fast fever Dream I D. F is changing us taking a little bit more time to digest, both on Rd Vectoring in our partner Street.

But we expect over time, it'll get normalized and we'll be able to rebalance.

To our normal payback periods.

Oh, great just fall if I could please just in terms of the guide that calls for negative EBITDA is that a reflection of what you see in the current market environment with IBSA and if so how should we think about that sort of investment period going forward.

2022, and I guess, a bolt on to that question is there's some commentary about slower growth in 2022.

Colleges I missed it if you could just sort of repeat some of that commentary I really appreciate it. Thank you.

[noise] Bankfrauds plus so there are two key ademption, which are driving our EBITDA garden for the fourth quarter. First is we are impeding our marketing investment from mid forties in the third quarter too high for these to counter the impact of ideas and do a quick game vehicles and second Dominican walk you saw last year, we expect potential disruption at USPA yoga.

The influx of online shopping over the holidays and that could be that can hide often caused everyone to maintain a high level of customer service. During the peak holiday season, and Athletics 2022 is considered drive it's too early for us to be an outlook on 23, two I'd be out in the middle of our planning second, but given a strong balance sheet will continue to.

Investment marketing next year, we create our top line goes.

Ah the only thing I think between the Doc a little bit about route which I wanted to just be emphasized is the fact that we are counting on these non U S and Canada markets to have a slower ram to sort of becoming critical to our business. So that's the one thing. We are asked you not to sort of included in your twenties.

22 assumptions because of Covid. These markets have taken time, they're seeing early signs of good good engagement et cetera, but if we wanted to be just much more cautious about correcting them too much into 2022 Coke.

Okay. Thanks finished with that relative to the commentary about slower 20 twenty-two growth is I think I understood. During the prepared remarks, yeah, mostly around that yeah. Yeah on the core side, we actually expected to grow to actually from Q3 numbers.

Okay. So it's just the COVID-19 impacts from some of the international markets.

Yeah in terms of I mean, you're seeing different countries sort of behave differently I mean I was just reading.

And sadly about Germany's condition right now so each each market is just sort of in a different trajectory overall.

[noise] understood. Thank you.

Your next question comes from Oliver Chen was Cowan Your line is open.

Hi, there. This is Katie heartburn gone for all of our Chen which is like a little bit more details on the learning Semiarch me launch an Indian now that it and several months and then I have a follow up after that.

Sure absolutely, we launched India in mid September and really been thrilled by the vibrancy of the market.

Tremendous potential they are 622 million active users in a rapidly growing base of sustainable and valued conscious consumer we're seeing strong user engagement and actually use the growth is ahead of plan there and we're seeing good listings growth good sort of engagement over at all so for us that'd be C. A country, which is slightly.

Different than say, Canada, and Australia has some very specific local dynamics and see the market sort of five it's very encouraging about the universal appeal of our model and and I think India still readjusting from Covid. So that's sort of that in fact is still there, but overall the court social flywheel is very valid.

Progress in showing very good traction in India.

That's great. Thank you so much and then I just love to know a little bit more about the trends cost categories. If you could just speak to home and pet are are non apparel prices apparel, and then and then specifically just a little bit more on maintenance account would be much appreciated. Thank you.

Could you repeat the last question again.

Just a little bit more detail on the trends across the category. So non apparel verses apparel and specifically had it went into power look in Q3.

Thank you.

Uh-huh.

You hope the data.

Let me, let me try to see what we can <expletive> on that front, but broadly when we think of some of the newer categories to continue to take hold very well, particularly pets, which we launched in queue to <unk>.

We've seen an acceleration in nonfederal categories for showed including sneakers and handbags, but on the federal side can we get the data.

So just to give you a sense that no one apparel categories worst 6% of G. M V 2020, and have sort of scaled to.

6% in the third quarter of 2021, so they're sort of at the same level.

Okay, great. Thank you so much.

Your next question comes from Erin Kessler was Raymond James Your line is open.

[noise] great. Thank you a couple of questions. Maybe just first on the brand of closet program can you talk a little bit about the rollout of this kind of a go to market strategy, maybe with power brands will do us for logistics there as well. Thank you.

Yeah. Thanks, I'm Super excited about the growth opportunity with brand closets as brands can interact and sell to a community of over 80 million registered users, helping them reach new customers one of the great things about ranch selling new items and posh Mark are that they're participating in a very different shopping ecosystem. It's in.

The ecosystem there items can have multiple lives exchange hands spending time over to be just like read posh and continue to get resold.

Many brands of a larger following posh marked in their own social media channels, and that's sort of one of the interesting fact us that they look at the other thing is we bring branch new by or 79% of our buyers of Bush's a brand for the first time Unpartial Mark. We currently have a handful of large bronze who are active in our platform three people lucky but.

<unk> those of color and hue.

We've seen interest in Black Grand project Wise significantly since I don't know instruments and we are inactive discussion with several other large branch we have about 140, plus smaller bands using a grandfather program.

And ultimately the grandfather program brings all of the social tools that we have but adds to it enterprise integration as well as giving them extra traffic with a grand closet, a button official band called the button on the brand pages and allows them to leverage the fanbase that they haven't boshart for their brands to get new distribution, new buyers, but also reconnected byers.

That they have.

That's great. Thank you.

Your next question is from the line of rock Sandmeyer with M. A came out M partners. Your line is open.

Great. Thanks for taking my question. My question was on your other than just take initiative swayed. One I was wondering if you could elaborate on your strategy to go after I'm more luxury market. How you see the ramp there and any you know what kind of time and and further investment.

I need to you know to communicate the authentication and to gain the trust of the of your customer base. Thanks a lot.

We're excited about the suede, one acquisition, which really.

Gives us an extra tool to sort of expand our authentication from where it is which is at the $500 plus price point to lower price points, but also being special expertise to authenticating sneakers, we recognize the importance of these premium price products, particularly in the resale market and we've seen strong growth in this category of these 200.

US dollar items, there now represent in low twenties as a percent of G. M V up from 17% and 2019.

When we think of this milestone acquisition and its integration into our platform. It's adaptively allows us to broaden that trust and safety to a much wider price point, then we could do with physical authentication.

We've just closed the acquisition in fourth quarter of 2021, we expect it to go live in 2022 in our platform. It's it's pretty blurry to give sort of the pull it back but you should have some some more progress on it in in 2022.

Great. Thank you.

Your next question is from the line of Tom Nick Cage with Wedbush Security.

Hey, good afternoon. Thanks for taking my question, well I want to ask about the the marketing costs ratio. So.

Uhm nose, yeah mid forties in Q3 high forties you all for two four is that do you think that high forties, great for Q4 represents a high watermark and as you start to.

Maybe you know reap some of the benefits of the.

Accelerated investment in the back half of 2021, you maybe.

Step off the gas pedal a little bit next year or do you think you know you're going to have to keep accelerating the the the marketing investment beyond two four.

No I think the honest answer to that is simply that there's a little bit of uncertainty. We were hoping that idea favorite balanced by end of cute boat, it's taken a little bit longer. So once we sort of see that rebalancing, yes, we should be able to take to put up the battle, but for now just given you know a strong balance sheet of acid like model.

Strength of our cohort, we don't want to slow down in growth as we as we set up navigate through this idea of a challenge. So that's sort of B B N said, it's not something that we want to do is something we are doing to counteract the impact of just higher user costs in the short term.

Oh understood. Thank you.

Your next question comes from the lineup, Brian Mcnamara with fur and bird capital to your line is open.

Okay. Thank you for taking the question I guess, if it's just a follow up on the the last question I guess, how can you just talk in layman's terms of how you expect the I D F. A to balance as you said and what gives you confidence that growth will reaccelerate. After you work through the marketing efficacy issues. Thanks.

Sure a couple of things I think whenever you have sort of looked at rebalancing out of marketing a resistance. It boils down to you know what's your what's your.

Going to the customers of how your marketing to it using the strength of our community word of mouth and sort of leveraging the organic and backed up all debate marketing that we do in third is rebalanced to get across channel, but it stop at the final channels like awareness channel or creative channels out there. So those are the ways in which we have traditionally sort of rebalanced out whenever one specific channel.

Comes exceptionally effective the second thing is the platforms themselves, whether you looked at sort of any of the social platform. Some older platforms. I'll also actively rebalancing that and we expect that to also have a benefit on our site or not counting on and click on a modem to work that we are doing with our site to to counteract the impact of this church.

Thanks, So just a quick follow up I mean, the the sarcasm perform well on your kind of first three or four earnings reports out of the gate I'm just curious what should you'll leave longterm investors west in terms of something that should be calm confidence within the business moving forward. Thank you.

Oh great.

Great. Great question I think look it's been it's been definitely not a great sort of three four quarters from a stock performance perspective, I think the foundation of the business is very solid when you think of the community. We have to use us we have the scale of the business in high gross margin and for US when you look into the future we.

See a future that is all of the trends that we are investing in actually shaping the future of shopping certainly you know as a market basically a asset light. So we can respond to trends in a barrel and all these things changes happening second is we continue to invest in innovation, which allows our sellers and shoppers to connect faster in a cellar cell fast.

Her and Curtis continue to diversify the people who can sell on the platform.

Two years, four photo pedal for accessories progression of not being late and yet it any way you know we've stopped going out with people just starting to read to get good Society, we started and they'd have to stop again. So all of this volatility has not made for a great sort of a parallel climate, but despite that we've done pretty well I'm going for the last few years. So as you look into the next.

There's a world opens up in normal social activities resume there should be a lot more excitement as we look into into that so that's I think ultimately the foundation of an asset like model social model secondhand reuse and high gross margin should given masters of confidence that over the long term. This is a great.

Company to own.

Okay. Thank you.

Again, if he would like to ask a question press are followed by the number one on your telephone keypad. Your next question comes from and and driver with need your line is open.

Hi, Good afternoon. Thanks, guys for taking my question, we wanted to follow up on the 10th grade like a little bit lower than what you had expected and you talked about the next shift to the higher priced items could you maybe talk about how we should think about K crash as little as house put in a cup.

A quarter cent on that and maybe remind us what's the percentage of a professional as opposed to a market seller.

Seller percent of your salary community just trying to think about the potential to monetize some of the salaries service that you guys have been pay that I need to thank you so much.

Yeah, I'll take a gaming at the 18% in the third quarter and that was due to an increase in order is greater than $15, Richard Otto mix of it from artist $13 and as a result, a blender secret decrease slightly because our flag commission of $2.95 per artist below $15 generic the heartbeat, great video contingency strong momentum.

In premium site items going to study than non luxury items and that also can see now if you talk about Q full there are two factors ritual diehard atheist.

<unk> for one is engineered mix shift too high price items, but also expect disruptions B U S. P. S. During during the holiday at the ship week on my outfit the shipping capex fee and that could potentially increase cancellation similar to the fourth quarter last year Ah why disruptions to U S. P. S are most easily to put butter is taught to predict mixed <unk> influence.

22.

And just to go to go to your question and about professional those we haven't broken down the split there, but there is definitely as time has gone on over the last eight or nine years. So very significant presence of people, who are using posh, mark or or selling in high volumes and some of the initiatives launched over the last year.

Really recognize that so when you think of tools like my shoppers can you start to think of closet, insides et cetera, and certainly they've been asking for more than more tools and many of them pay for third party services. So there's definitely an opportunity there we haven't announced anything concrete, but but that's definitely an area that people.

I've been asking us for more than more cooling in more than more services as as as they scaled their business on <unk>. So the whole professionals. Each other community has become a pretty might be forced and the retail universe.

That's great. Thank you so much that and just as a as a quick follow up you mentioned the October G N D, a and flaccid and yeah, you're getting something definitely with a marketing upper final type of initiatives can you just maybe dive into that a little more and are there specific categories that are also driving that inflection.

Thank you so much.

Yeah on the marketing side I think we continued to to balance out the various channels, but one of the channels that obviously is very very active at the minute because French are shifting constantly is.

Is the creator channel and the influence of channels just to give you a couple of sense of specific trends that are that are happening. We saw for example.

Taylor lounge fly as sort of having a huge momentum and just that bran at a 99% growth and <unk> and <unk> and a lot of it's driven by their focus uncollectible backpacks wallets and purses driven by partnership with entertainment franchises like marble, adding bother in Star Wars.

So so that's sort of some of the trends you're seeing on Boschvark in terms of what's driving the the growth and that's sort of part of that creator channel. If you look at the categories. We haven't seen any significant shift in categories in October so far it. It it continues to go well in line and friends for the Q3.

Okay, Alright, well. Thank you so much and best of luck for the holiday.

Thank you.

There are no further questions at this time I will turn the call back over to Mr. Many shandra for closing remarks.

Thanks, everyone for joining a call and for your questions. We look forward to speaking with you again next quarter.

Ladies and gentlemen. This concludes today's conference call you May know just.

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