Q1 2022 1stdibs.Com Inc Earnings Call
[music].
Good evening and welcome to <unk> earnings call for the quarter ended March 31st 2020.
I'm, Kevin the Buzz head of Investor Relations and corporate development.
Joining me today are CEO , David Rosenblatt, and CFO , Tom enter Gina.
David will provide an update on our business, including our strategy and growth opportunities and Tom will review, our first quarter financial results and second quarter outlook.
This call will be available via webcast on our Investor Relations website at investors got first dibs Dot com.
Before we begin please keep in mind that our remarks include forward looking statements.
Including but not limited to <unk>.
Statements regarding guidance and future financial performance.
Market demand.
Growth prospects and business plans.
Our actual results may differ materially.
Forward looking statements involve risks and uncertainties, which are described in our SEC filings.
Any forward looking statements that we make on this call are based on our beliefs and assumptions as of today.
And we disclaim any obligation to update them.
Additionally, during the call, we will present, GAAP and non-GAAP financial measures.
A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release.
You can find on our Investor Relations website, along with the replay of this call.
Lastly, please note that all growth comparisons on a year over year basis.
Unless otherwise noted.
I'll now turn the call over to our CEO David Rosenblatt.
Thanks, Kevin Good evening and thank you for joining us today in the first quarter, we delivered results near the high end of guidance, while laying the foundation for future growth. Once again, our trade business posted strong results and continues to have great momentum in contrast.
Consumer <unk> declined modestly year over year due to lower new buyer conversion a trend that has continued into the second quarter.
In 2020 in 2021 pandemic related Lockdowns and other restrictions shifted consumer spending online as the world Reopens. The pendulum is swinging back in the other direction with consumers spending more in categories like travel and restaurants.
Traffic and top of funnel engagement metrics remained strong, but new buyer conversion headwinds, resulting from rising macro uncertainty and economic reopening have reduced our GMB growth outlook for the second quarter relative to our previous expectations.
While our near term consumer demand outlook is lower we remain optimistic about the future for.
1999 through 2019 U S e-commerce penetration rates consistently increased during COVID-19, they inflected upward and we're now seeing this trend unwind. We believe this is a temporary dynamic when we think about the next decade e-commerce will be a much larger market than it is.
Today.
Said another way when the environment normalizes, we expect that e-commerce will resume its historical growth trend, we aim to capitalize on that growth.
Encouragingly top of funnel activity as measured by consumer traffic registration volume and item favored ing is strong however, consumers are not converting their interest into orders that historical levels likely due to temporary external factors.
Given our strong balance sheet and large opportunity we have chosen to continue to thoughtfully invest for future growth.
Despite current consumer headwinds our high gross margin asset light business model and strong balance sheet provide us the flexibility to continue to execute on our strategic roadmap.
Our plan for 2022 and beyond is to enhance our marketplace growth rate by focusing on four strategic areas.
<unk> growth auctions international expansion and Ftes each.
Each represents a meaningful <unk> opportunity in the first quarter, we made progress on all four.
Our first priority is accelerating supply growth there is no other marketplace with our breath of unique luxury design. However, the number of our current listings is just scratching the surface of potential qualified items.
For two sided marketplaces supply begets demand given the heterogeneous and long tail nature of our listings more supply increases marketplace liquidity supply drives traffic broadened spiders options makes search results more robust and increases the chances that we will return to <unk>.
For a given search.
Our goal is to aggregate the world's most beautiful items, regardless of where they're located to accelerate supply growth, we launched our pricing test for new sellers in January .
This allows sellers to choose the plan that best fits their business and includes a subscription free tier with higher commission rates.
This option reduces friction by lowering the upfront cost of trying the first dibs marketplace.
Early results have been encouraging.
We signed over 700, new sellers in the first quarter ending March with over 5400 seller accounts up over 25% year over year.
Our monthly seller acquisition was over three times higher than our monthly average in 2021.
In general these new sellers are drawn from our geographies price points and verticals and a similar proportion to our existing sellers. Additionally, the new pricing options are helping to reduce churn, particularly for sellers with lower volumes.
Sellers are responding well to having a choice of pricing options of note about 85% of new seller accounts are choosing the subscription free option.
Even so the higher volume of new sellers means that the number of sellers electing plans with the subscription component is still about 50% of our 2021 monthly new seller run rate highlighting the value of the services we offer on subscription tiers.
Given the highly considered nature of our purchases. It takes time for sellers to get up and running the average seller. It takes about 90 days to make their first sale still.
Still we are encouraged by the early progress we've seen new seller accounts in the first quarter.
Listed over 12500 items and generated over $300000 in CMV.
Our second priority is commercializing auctions, we made progress on this front as well.
<unk> provide a new way for buyers to discover and own the world's most beautiful things this new purchase format leverages, our existing supply and demand at the common luxury purchase format to our marketplace increased urgency and creates opportunities for buyers to find exceptional deals.
Auctions also provide a new on ramp to our marketplace for more price sensitive consumers.
While it's still early we're seeing healthy order growth offset by <unk> below fixed price marketplace Ao vs. As expected encouragingly and most important new buyer conversion rates for auction items are three times higher versus the same metric for non auction items. Additionally sell through rates.
An auction items are about two times higher than non auction items, increasing new buyer activation in sell through rates were key objectives of introducing the auction format and we're excited to see them playing out.
Since launching in November 2021, we've enhanced the product experience through weekly updates this quarter, we launched additional buyer urgency drivers through platform updates E mail and App notifications and new tools for sellers to manage their listings update pricing and provides circumstance offers.
In the first quarter, our efforts focused on providing sellers with pricing guidance listings with low starting bids competitive reserves and attractive buy it now prices have higher bidding activity and correspond to buyer expectations of value for auctions we've.
We've seen a sharp increase in the adoption of our pricing guidance. The number of options that meet all three of our pricing criteria has increased to over 20% at the end of March from below 1% at the start of January .
Optimizing pricing allows us to get more aggressive marketing auctions and building awareness setting the stage for higher bid participation and ultimately higher future <unk> growth.
Our third priority is international expansion, we see a meaningful global opportunity and have a multiyear roadmap today about 40% of our sellers one third of our traffic and one fifth of our buyers are located outside the United States. Additionally, in the first quarter.
Our national Sellers GMB growth outpaced U S seller GMB growth.
In late April we smoothly launched in Germany, and we plan to launch in France. In May. These countries are our largest non English speaking markets by order volume.
Localizing, our product strengthens the first dibs marketplace and allows buyers and sellers to transact in the language, they're most comfortable with.
With time this should grow our buyer base and increase the unique supply on the marketplace.
Supporting our launch in the first quarter, we completed the bulk of our upfront translation work over 400 million words in total to support localized production for Germany and France.
Other international expansion progress included localizing sort order and search translating marketing campaigns hosting press events in Berlin, and Paris, and building out European buyer and seller support.
These launches are a cross functional effort encompassing product engineering operations logistics marketing supply and customer experience I'd like to thank everyone involved.
Our final priority is in Ftes in the first quarter, we made additional improvements to our <unk> platform in early March launch self minting capabilities and creator profiles sulfur.
Supplementing allows digital artists to create and sell their tokens and our self serve fashion.
Since those launches the supply of Ftes on the first dibs marketplace has grown over 50% the number of artists on the marketplace has nearly doubled and our Twitter followers almost doubled.
While expanding at Ft supply is our near term focus we believe these first quarter accomplishments are precursors to future <unk> growth.
We are cognizant of the fact that the e-commerce operating environment has become challenging and unpredictable over the past few months, we remain confident that in the long term E. Commerce adoption will continue to grow and luxury design will continue shifting online. This confidence is reinforced by the healthy top of funnel active.
<unk>, we've seen year to date. Additionally, our past success with initiatives like SCO and expanding the marketplace beyond the vintage and antique furniture category.
Give us the confidence to invest in our roadmap today about half of our <unk> comes from our newer verticals like new <unk> custom furniture, jewelry art and fashion and Seo traffic mix has increased substantially.
Each of our initiatives is a tried and true marketplace growth tactic and has the perimeters in place to be successful. For example, auctions are a common luxury purchase format, a significant percentage of our supply and our traffic come from outside the U S growing supply increases marketplace liquidity.
The hardest part of scaling an online marketplace is cracking the chicken and egg problem with supply and demand. We've done this with auctions international and supply we are making these investments because we expect attractive rois in terms of new buyers and GMC.
Margins matter to us profitability matters to us generating free cash flow matters to us as we think through our roadmap. We do so with these considerations in mind.
Turning away from strategic initiatives. We also continue to improve our core platform, while new buyer conversion declined top of funnel activity remains healthy with traffic registrations and item favor, it's growing double digits.
We also redesigned our mobile web product pages and increased parcel pre co coverage today, 99% of our eligible parcel items have a pre quote to buyers.
In the U S Europe and other international markets. However continued shipping inflation represents a conversion headwind.
Since our last earnings call changing consumer behavior, rising macroeconomic uncertainty and consumer conversion headwinds have reduced our second quarter GMB growth outlook relative to our previous expectations undoubtedly the macroeconomic environment has become more uncertain due to inflation rising interest rates.
Geopolitical tensions increased mobility, changing consumer spending patterns stock market volatility and other issues.
Our high gross margins asset light business model and strong unit economics provide us the flexibility to think long term and make disciplined investments in our growth.
I'll turn it over now to Tom who will discuss our financial results and outlook.
Thanks, David I'm delighted to have joined <unk>, a few weeks ago and I'm looking forward to helping drive growth for years to come.
In addition to being our first <unk> customer I am a longtime admirer of the brand the business model and the company's unique position in luxury e-commerce.
Turning to the first quarter, we delivered results at the high end of our guidance range, which I'll review, along with providing an outlook for the second quarter.
First quarter JMP was $117 million up 3% as a reminder, we lapped historically strong GMB growth of 64% from the first quarter of 2021.
Yes.
Similar to the last few quarters, Trey GNP growth outpaced consumer GMP growth with trade GMP hitting a quarterly record. Once again, we grew both the number of spending trade firms and the average spending per firm.
Many of the firms that we work with have full pipelines and the trade business continues to have great momentum.
While trade GNP growth remained robust consumer GMP modestly declined due to traffic mix shift from returning buyers to new buyers and softness in new buyer conversion.
Additionally, as the World Reopens, we believe there is pent up demand for spending on experiences and travel.
As a reminder, when we referenced <unk> or consumer GMP. We're speaking of the subsets of on platform GMB attributable to each of these buying groups.
Fashion, and new and custom furniture were our fastest growing verticals consistent with the fourth quarter vintage.
<unk> in cheek furniture accounted for less than 50% of JMP and the majority of our first time orders continue to come from our new categories like art jewelry, and new one custom furniture.
Continuing the trend from 2021 average order value was over $2900 up 11% on broad based strength across categories. This illustrates the trust we built over the past two decades, there's no other digital marketplace operating at our scale transacting at our price points across multiple verticals.
Average order value growth was offset by order softness due to two traffic mix shifts a shift towards mobile web and a shift towards new buyers both of which have lower conversion rates.
For context, returning buyer conversion is materially higher than new buyer conversion sort of <unk>.
Traffic mix shift towards new buyers puts downward pressure on overall conversion.
Many of these new buyers are coming from organic channels like SCO.
We have several projects in tests in flight to increase conversion and engagement from new buyers, including overhauling remarketing for a post <unk> world Redesigning, our mobile web product pages, updating our mobile web checkout and increasing awareness of auctions, which have higher new buyer conversion versus non auction orders.
Importantly conversion for returning buyers grew year over year and top of the funnel activity remains healthy.
We ended the quarter with approximately 71300 active buyers up 10% year over year, but down 2% quarter over quarter. As a reminder, active buyers is a trailing 12 month metric and could be choppy near term as we cycled through some strong comps from the pandemic related e-commerce boost.
On the supply side of the marketplace, we closed the quarter with over 5400 seller accounts up over 25%.
As David mentioned, we've seen great response from our new seller pricing test, which launched in January .
Net revenue of $26 6 million grew 4% driven by GMB growth.
Transaction revenue, which is tied directly to GMB growth was approximately 70% of revenue with subscriptions, making up the bulk of the remainder.
Gross profit was $18 9 million up 2%.
Gross profit margins were 71, 1% down from 72, 5% a year ago as expected gross margins normalized following elevated shipping losses in the fourth quarter.
While we continue to see shipping price inflation. The measures we implemented starting in December have kept shipping costs in line with historic norms.
We're reviewing shipping data on a regular basis, and we will continue adjusting our shipping rates to reflect market trends.
Sales and marketing expenses were $11 8 million up 2% consistent with the fourth quarter, we pulled back on some performance marketing due in part to continued IGF headwinds.
Sales and marketing as a percentage of revenue was 44% down versus 45% a year ago.
Technology development expenses were $5 $8 million up 46% driven by head count growth and expenses supporting the launch of our localized sites in France, and Germany, including translation.
As a percentage of revenue technology development was 22% up from 15%.
General and administrative expenses were $6 $4 million up 45% the.
The increase was mainly driven by expenses related to public company costs, including D&O insurance and increased head count.
As a percentage of revenue general and administrative expenses were 24% up from 17%.
Lastly, provision for transaction losses were $1 $7 million up 59% driven primarily by an uptick in transactional losses related to shipping damages and items lost in transit.
Looking forward, we are working to mitigate these issues by optimizing our carrier network.
Valuation carrier SLA and partnering with sellers to improve packaging practices provision for transaction losses were 6% of revenue up from 4%.
Adjusted EBITDA loss was $4 $7 million compared to a loss of $1 $3 million last year.
Adjusted EBIT margin was a loss of 18% versus a loss of 5% last year.
This year over year change was driven primarily by higher G&A expenses due to public company costs and higher investment in technology development spend due to head count growth and product localization.
Moving onto the balance sheet, we ended the quarter with a strong cash and cash equivalents position of $161 million.
Now turning to our outlook, we forecast second quarter <unk> of $104 million to $111 million equating to a year over year change between a decline of 3% and growth of 3%.
Net revenue of $24 4 million to $25 5 million.
Waiting to year over year change between a decline of 1% and growth of 3%.
Justice EBITDA margin loss of minus 32% to minus 28%.
As David mentioned due to shifting consumer demand rising macroeconomic uncertainty and consumer conversion headwinds, it's a tricky environment. Your forecast ecommerce demand. While you are not providing full year guidance, we'd like to share some additional context on the assumptions underlying our <unk> outlook.
We've widened our <unk> guidance range to reflect increased uncertainty.
Last quarter, our outlook was that year over year GNP growth would be the lowest in the first quarter. This is no longer the case due to the issues, David and I discussed earlier.
The midpoint of our second quarter guidance implies that <unk> growth is flat year over year.
We continue to expect <unk> contribution from our strategic initiatives to increase in the second half of the year.
Turning to adjusted EBITDA margins guidance reflects a sequential decline in revenue continued disciplined investment in our four long term growth drivers when we resume growth we expect to generate operating leverage that said 2022, EBITDA margins will be dictated by the pace of GMB growth.
In the first quarter, we made foundational progress in our four strategic initiatives, which represent meaningful upside potential over the next few years over time, our objective remains scaling the first dibs marketplace, improving our buyer and seller experience and achieving profitability and free cash flow generation.
Thank you for your time I'll now turn the call over to the operator to take your questions.
Thank you if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key we ask that you limit yourself to one question one follow up question before reentering the queue.
Our first question comes from the line of Ralph <unk> with William Blair. Your line is open. Please go ahead.
Good evening, Thanks for taking the question David you called out a lot of macro headwinds that are fairly well known in the marketplace today, but just curious it sounds like your upper funnel traffic is still remain the same which is great. You are having more sort of new buyers come to the platform. However conversion is going to be a work in progress just curious how quickly do you think.
The platform can mobilize to drive stronger conversion with the new buyers despite.
Despite some of the I guess given the macro headwinds.
Sure Hey, Ralph.
Thank you for the question.
Youre absolutely right top of the funnel remains as healthy as it's ever been in terms of traffic growth, what we call dealer contacts, meaning the number of buyers who reach out to sellers with product inquiries and so on in other words people are walking into the store. They are just not checking out.
So we have a bunch of projects and initiatives pointed at that some are more tactical in near term others are longer term.
Near term ones include things like for example, we're putting a lot of energy into optimizing the mobile.
Flow because a lot of the traffic growth has been driven by mobile and mobile web.
<unk> has lower checkout or lower conversion rates typically than than desktop and app.
We're putting some energy into that.
Shipping as well, we're increasing our prequel coverage for parcel items, which carry lower shipping prices in general.
And then in terms of the longer term bucket all of our core strategic initiatives are focused in one way or another on improving conversion rate. So international is a good example of non U S visitors checkout at a or convert rather at half the rate of U S buyers.
Launch, France yesterday or today, rather we launched Germany two weeks ago.
By increasing the number of items on the site, we reduced the number of pages that buyers land on with very few products on them.
Which is fairly widespread given that we're a long tail marketplace.
And so.
In auctions our point.
At exactly the same thing so all the data that we're seeing in terms of the projects are encouraging but.
Again, the extent to which they win against the macros.
People above my pay grade.
Probably the better people to ask in terms of when those macro change.
Great and then just a follow up I think you talked about it compared remarks, I apologize, but just remind me if you talked about already what happen with shipping costs I guess.
With respect to last quarter end.
How has that trended sort of according to date. Thanks.
Sure.
Thanks for the question.
The there is two different shipping issues last quarter. The shipping issues that we were talking about there were on pre quote losses that we had.
We effectively and quickly address those in Q1.
And that's why you're seeing that our margins.
We're at 71% so they reverted back to historical levels.
In this quarter, what we're seeing is is an increase a little bit of an increase in the loss provision as a percentage of GMB.
And we've seen a little bit of a trend on that over the past few quarters.
Increasing.
Hi to the higher end of what we've seen as a percentage of revenue in the past.
<unk>.
It's primarily driven by items that are being lost or damaged in shipping.
And based on kind of the state of logistics services today, we're seeing some degradation in the service levels as many of the carriers are operating at or above their capacity.
So we're doing three things to really mitigate the losses, we're optimizing our carrier network.
We will be reevaluating and strengthening all of our carrier SLA.
And we're partnering with our sellers to improve their <unk>.
<unk> practices. So we expect these actions to take the losses down too.
The historic percentage of revenue the lower end of the historic percentages, but it is going to take some time to realize those impacts.
Okay, great. Thank you.
Thank you and our next question comes from the line of Justin Post with Bank of America Merrill Lynch. Your line is open. Please go ahead.
Great. Thanks.
Just a quick numbers question can you give us any help on the mix of.
Of revenues between.
Sorry here between transaction and non transaction and as you change the fee structure and have less people on subscriptions what does that mean for overall take rates and then I have a couple of follow ups.
So yes this is Tom.
The breakout of transactional is about 70 30.
Can you repeat the second part of that question.
On the call you mentioned more sellers are kind of joining the platform subscription free I think you said, 85%. So just wondering as more people adopt kind of that format of pricing what does that mean for overall take rates. So as you think out the next couple of years.
Yes, I can answer that I can answer that Justin so.
New seller pricing plan, so far has been.
<unk> been quite happy with actually we've tripled the growth rate or the number of sellers rather that we've added.
In the first quarter versus Q1, a year ago. The program is designed to be take rate neutral.
So.
That's how we think about it.
Great.
And then I guess the last one is on.
On auctions, obviously, you've got some new data here you mentioned it.
It's kind of higher conversion is it is it at all material to <unk> or something that could be helpful. As you get out to Q4 and how do you think about that now that you have a quarter into it about converting I think you said last quarter 2000 $14 billion of inventory, but is it something that could make a difference by Q4.
Our next year. Thank you.
Yes, so we're quite happy with the progress so far.
We're focused given that it just launched basically mid Q4 has been on the operational or behavioral drivers that ultimately convert into <unk>. So specifically our focus in the first quarter was on helping educate sellers to price in a way that is most effective for the.
The auction format.
And we went from 1% of items meeting our criteria pricing criteria to roughly 20% the impact of that operationally was.
We basically doubled orders in Q1 versus Q4.
Add a lower <unk> than in Q4, but that's okay. Because again, while we're optimizing for is effective pricing for this format.
In terms of making headway on.
Kind of.
The opportunity that this product is pointed at which as you point out was primarily conversions, specifically new buyer conversion.
Did see as I mentioned in the script that conversion rates for new buyers for auction items.
We're about three ex that of conversion from non auction items. If you look at that Conversely on a supply basis sell through for items in auction was about to ask sell through for items in the marketplace. So we are making progress against our strategic objectives specifically.
In terms of being able to better monetize the large amount of unsold inventory on the marketplace. We continue to make progress each quarter I don't want to put any kind of specific quarter on when it turns into.
Any specific GMB number, but again, we're very happy with the inputs there and we're confident that it will translate into <unk> growth.
Thanks, and last question on the <unk> guidance, if you take the midpoint, it's down nine or 10.
For <unk> quarter over quarter.
19, it was flattish clearly last year, it was down as well on.
Panic pandemic stuff, but any reason why quarter over quarter, it's down is that normal seasonality or is it some of the macro factors have really intensified here in April . Thank you.
Yes so.
There are a lot of.
Growth areas in the business.
I think it's worth calling that out I mean trade for example had a very strong quarter and again all of the kind of inputs to that business continue to remain very healthy top of funnel as we mentioned before is also very healthy.
Returning buyer conversion grew year over year.
The primary driver of the <unk> softness in Q2 is on conversion and specifically new buyer conversion. So what's happening is we're getting a lot of growth from Seo traffic in particular and that has among the lowest conversion rates.
All of our traffic channels and in particular those growth rates.
Rather the change in conversion from that channel declined and we feel like we were pretty good handle on why certainly part of that has to do with macros part of it also has to do with things that are specific to that channel and we're working on addressing those.
Great. Thank you.
Thank you and our next question comes from the line of Ross Sandler with Barclays. Your line is open. Please go ahead.
Hey, just wanted to follow up on the trade comment so.
The fact that that is holding up pretty well.
Interesting is there like a.
Reason like a notable noticeable difference in like the end customer either being like more premium or disease.
These designers just have a larger backlog.
Maybe they are working through currently.
The consumer part of your business is more a reflection of like.
People feeling the pinch in real time.
Just curious like you got it.
Is it a little bit more insulated.
The recessionary impact on the trade side.
As youre, adding more trade buyers can you can you potentially grow through it I guess is the question.
So that would be number one and then.
On the ship on the freight increases like you guys did a good job of improving the prequel margin. So.
Nice job there in the first quarter, but.
Our higher shipping costs in general just deterring people from buying any color on that versus I guess, the less bulky items that wouldn't be subject to huge ship.
Shipping cost and then last one.
A third of traffic from international is that a good proxy for kind of a north star I think international and <unk> at like 7% or something like that.
Is that how we should think about that and any early read on the Germany I know, it's only been a couple of weeks.
Initial reads there right.
Hey, Ross.
So just taking those in order first train so we are seeing strength in trade.
Both in terms of kind of actual spend also in terms of our sales pipeline and what our designers are reporting to us in terms of their own pipelines.
Why is that happening is at a different market than the rest of our business.
I mean I think it's.
More of a direct proxy of course on the luxury real estate market, which remains very strong and yes, our buyers do tend to rely on designers so as long as that market remains healthy.
The volume of new sales.
It maintains then I think that business will remain healthy for us I'd say another point there is that we've now been in the business for I don't know four ish years or so.
And I think just the more of that.
Interior designers use <unk> to source.
The more it becomes embedded in their muscle memory, the farther up the learning curve. They become designers tend to shift firms. They typically bring that are kind of approach to purchasing from firm to firm. So I think there is something of.
A network effect, there as well that we're benefiting from but obviously, it's very hard to quantify that.
In terms of shipping.
Look I mean, we the market is dynamic enough that I don't know that we have a kind of specific ability to quantify it. However, intuitively of course shipping prices increase it has to have a negative effect on conversion, particularly for the roughly kind of 2025% of our order volume.
That is freight rather than parcel.
And then third in terms of the Northstar in international.
As we've said a couple of times I mean conversion rates for non U S. Buyers are roughly half that of U S. Buyers I don't know that that closes a 100% but in terms of the goal that is the goal.
I would say, though a couple of other things to caveat that right. One is it takes a while to get there. We just for example, we launched Germany two weeks ago, We just submitted our German site map to Google for Seo indexing, we launched France today, we of course.
Haven't done that yet once we get some traction on SCO then we'll layer in paid so that is.
Is out a bit as well so I think that's.
That is our primary source of leverage we have in terms of driving growth.
Then of course, we have ultimately new markets beyond that so and then lastly, once where local language. We also have the ability to localize the supply side, meaning translate our seller tools into local languages. In addition to translating the consumer experience, which is what we've done to date, which should allow us.
To expand supply so everything I said does provide I think a healthy long term runway for international but it's also not something that happens overnight.
Terms of Germany, specifically, which I think was your last question.
Too early its only two weeks.
I think what we're encouraged by is that the launches were smooth from a technical point of view and from a marketing point of view.
But again it was only a couple of days ago that we submitted site map for indexing by Google.
So we haven't it's a little bit too early to draw any conclusions in terms of performance.
Thank you and again if you have a question at this time. Please press Star then one and our next question comes from the line of Dan <unk> with Evercore ISI. Your line is open. Please go ahead.
Thanks for taking the question.
One just around the mix between cross vertical and single vertical buyers.
Maybe over the last couple of quarters, how thats trended I know that that was kind of really.
A really big positive for you guys at the time of IPO.
And then actually maybe just to follow up on that.
Newer vertical so new and custom furniture art jewelry et cetera, what what kind of vertical do you have the most confidence around.
Growing through the back half of this year.
Understanding that.
The difficult macro environment, but just any color behind vertical mix and then as well as the single to multiple vertical buyer trends would be great. Thank you.
Yes in terms of.
<unk> share of wallet, meaning cross vertical purchasing those trends have remained relatively constant over the last quarter.
In terms of how we feel about different sort of differential category performance right now, our new <unk> custom, meaning contemporary furniture category and our fashion categories.
Were growing the fastest.
It's very encouraging is that the fashion category has significantly ramped up it's supply growth its posting activity.
And so again I think we do expect to see that continue new and custom.
Is helped by strength in trade there.
Mary buyers of new and custom furniture.
So again.
The same fundamental as long as the fundamentals don't change.
We don't expect to see a dramatic change in the relative growth rates versus what we saw in Q1, which was which had a new <unk> customer in fashion growing the fastest.
Got it thank you so much.
Thank you and this does conclude today's question and answer session, Ladies and gentlemen. This also does conclude today's conference call. Thank you for participating and you may now disconnect everyone have a great day.
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Okay.
Yes.
Okay.
Yes.
Okay.
Okay.
Yes.
Okay.
Okay.
Yes.
Okay.
Okay.
Okay.
Okay.
Sure.
Yes.
Okay.
Yes.
Okay.
Okay.
[music].
Yes.
Yes.
Yes.
Yeah.
Yes.
[music].
Yes.
Yes.
Yes.