Q4 2024 Revolve Group Inc Earnings Call

Sarah: Hello, my name is Sarah and I will be your conference operator today. At this time, I would like to welcome everyone to Revolve's fourth quarter and full year 2024 results conference call.

All lines have been placed on mute to prevent any background noise.

Sarah: After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Thank you.

Sarah: At this time I would like to turn the conference over to Eric Randerson, Vice President of Investor Relations at Revolve. Thank you. You may begin.

Eric Randerson: Good afternoon everyone and thanks for joining us to discuss Revolve's fourth quarter and full year 2024 results.

Eric Randerson: Before we begin, I'd like to mention that we have posted a presentation containing Q4 and full year 2024 financial highlights to our investor relations website located at investors.revolve.com.

Eric Randerson: I would also like to remind you that this conference call will include forward-looking statements, including statements related to our future growth, our inventory balance,

are key priorities in operating and innovation initiatives, industry trends.

Marking events.

Eric Randerson: and their expected impact, our partnership and strategic acquisitions, our physical retail stores, and our outlet for net sales, gross margin, operating expenses, and effective tax rate.

Eric Randerson: These statements are subject to various risks, uncertainties, and assumptions that could cause our actual results to differ materially from these statements.

including the RISC-mention in this afternoon's press release.

Eric Randerson: as well as other risks and uncertainties disclosed under the captioned risk factors and elsewhere.

Eric Randerson: and our filings with the Securities Exchange Commission, including, without limitation, our quarterly report on Form 10-Q for the quarter ended September 30, 2024, and our annual report on Form 10-K for the year ended December 31, 2024, which we expect to file with the SEC on February 25, 2025.

Eric Randerson: All of which can be found on our website at Investors.Revolve.com

Eric Randerson: We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we'll also reference certain non-GAAP financial information, including adjusted EBITDA and free cash flow.

Eric Randerson: We use non-GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results.

Eric Randerson: Presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information presented and prepared in accordance with GAAP.

Eric Randerson: and our non-GAAP measures may be different from non-GAAP measures used by other companies. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures, as well as the definitions of each measure, their limitations, and our rationale for using them, can be found in this afternoon's press release and in RCC filings.

Speaker Change: Joining me on the call today are our co-founders and co-CEOs Mike Karanikolas and Michael Mente, as well as Jesse Timmermans, our CFO. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn it over to Mike.

Speaker Change: Hello everyone, and thanks for joining us today. We finished the year with an outstanding fourth quarter, highlighted by double-digit top-line growth year-over-year and a more than doubling of net income in adjusted EBITDA year-over-year.

Speaker Change: Most importantly, we achieved these strong financial results while continuing to invest in key initiatives that we believe set us up well for profitable growth and market share gains over the long term.

Speaker Change: I'll start by briefly discussing highlights from our fourth quarter results before shifting to the full year 2024 accomplishments and closing out with our key priorities of 2025.

Speaker Change: Starting with the fourth quarter recap, net sales were 294 million, an increase of 14% year-over-year, driven by improved trends across both segments and geographies relative to our year-over-year comparisons in the third quarter of 2024.

Speaker Change: In fact, net sales increased by a double-digit rate year-over-year across Revolve, Forward, Domestic, and International for the first time in two and a half years.

Speaker Change: Net sales in the revolve segment increased 15% year-over-year and net sales in the forward segment increased 11% year-over-year.

Speaker Change: Ford returned to growth for the first time in seven quarters as our investments begin delivering results within a luxury landscape that remains challenging.

Speaker Change: Gross Margin increased by approximately 50 basis points year-over-year, well ahead of our Gross Margin Outlook shared last quarter.

Speaker Change: Net income for the fourth quarter of $12 million, or $0.17 per diluted share, was more than triple the $3 million in the prior year quarter.

Speaker Change: Adjusted EBITDA was $18 million, an increase of 114% year-over-year, driving a 290 basis point expansion of our adjusted EBITDA margin.

Speaker Change: In addition to the gross margin expansion, contributing to our exceptional growth and profitability were significant marketing efficiencies and meaningful efficiencies in our logistics costs, which benefited from a more than two point decrease in our return rate year over year.

Speaker Change: Beyond the numbers, I'm excited by our team's execution that has led to continued great progress on the strategic priorities we outlined on prior calls.

Speaker Change: I will now shift to a review of our performance and accomplishments for the full year 2024 before touching on our key areas of focus for the coming year.

Speaker Change: Entering 2024, our most critical objective was to return to growth and meaningfully improve our net sales performance.

Speaker Change: We executed extremely well on this priority, as our net sales growth rate improved measurably each quarter throughout 2024, exiting with solid double-digit growth in the second half of the year.

Speaker Change: Net sales growth in our core domestic market improved every quarter throughout 2024, and we exited the year with double-digit growth in the U.S. during the fourth quarter.

Speaker Change: International net sales increased 14% year-over-year, driven by growth across nearly all regions that also improved as the year progressed.

Speaker Change: In 2024, we achieved record net promoter scores in international markets, underscoring our successful investments to further elevate the shopping experience for our international customers.

Speaker Change: We continue to drive impressive net sales growth in adjacent product zones.

Speaker Change: Sales of beauty, men's, and home products each increased by a healthy double-digit percentage year over year, more than tripling our consolidated growth rate on a combined basis, and further validating our opportunity to expand our share of wallet.

Speaker Change: As a company focused on profitable growth, I'm very pleased that our 2024 profitability increased at a much faster rate than net sales. Net income and adjusted EBITDA increased 73% and 60% year-over-year, respectively.

Speaker Change: Unpacking the drivers of profitability growth, reducing our global logistics costs was a top priority for us in 2024.

Speaker Change: We achieved a nearly 130 basis point reduction in our variable logistics costs as a percentage of net sales driven by strong execution on initiatives designed to drive operating cost efficiencies and to reduce our return rate.

Speaker Change: Importantly, many drivers of this lower return rate in 2024 even further elevate the customer experience such as our size and fit initiatives.

Speaker Change: Marketing was also a powerful driver of our profitability in 2024.

Speaker Change: We achieved a nearly 130 basis point reduction year-over-year in marketing spend as a percentage of net sales fueled by efficiency gains across both the performance and brand marketing channels.

Speaker Change: Operating in a highly competitive environment, we successfully optimized spend across our marketing channels and leveraged the strength of our brands to reduce our average cost to acquire customers year over year.

Speaker Change: The percentage of our net sales at full price improved three points year-over-year to approximately 82%, which we believe is appreciably higher than the industry benchmarks.

Speaker Change: The increased percentage of net sales at full price helped to drive gross margin expansion of 65 basis points year-over-year.

Speaker Change: Cash flow generated from operations in 2024 further strengthened our balance sheet, all while deploying capital to reduce the number of shares outstanding through stock repurchases as part of our efforts to enhance shareholder value.

Speaker Change: Finally, we meaningfully advanced our AI technology and personalization capabilities, further elevating the customer experience and contributing to our strong financial results. Here are a few highlights.

Speaker Change: On our e-commerce websites, we launched AI-powered search algorithms for improved product discoverability.

Speaker Change: In product merchandising on our sites, we drove increased consumer engagement and conversion through AI-driven product recommendations and other site optimizations.

Speaker Change: In marketing, our AI algorithms expanded the reach in one of our largest performance marketing channels.

Speaker Change: In Operations, we created AI algorithms to intelligently route customer service inquiries and used our data and algorithms to intelligently balance inventory units across our multiple global locations.

Speaker Change: And finally, AI served an important role in reducing our return rate through a number of initiatives.

Speaker Change: As a powerful illustration of our core competency, in a variety of instances, our internal solutions handily outperformed AI solutions from third-party technology vendors.

Speaker Change: I will wrap up with a discussion of our key priorities for 2025. As co-founders in the company's largest shareholders owning more than 31 million shares of Revolve Common Stock, or approximately 45% of the total shares outstanding, Michael and I are very aligned and focused on maximizing value over the long term.

Speaker Change: Our strategic priorities for 2025 are guided by this long-term owner mindset.

Speaker Change: We are focused on extending our momentum in driving attractive top-line and bottom-line performance while continuing to invest in exciting growth opportunities imported to the long-term, such as own-brand expansion, deploying AI technology, and exploration of physical retail expansion.

Speaker Change: As we look ahead, we see multiple levers for growth that we believe will enable us to gain market share for the years to come.

Speaker Change: First and foremost, we will continue to invest in expanding our brand awareness, acquiring new customers, and strengthening our connection with the next-generation consumer.

Speaker Change: We will continue to focus on the core and invest in marketing, leveraging brand strength and strong merchandising to acquire new customers, further engage with existing customers, and expand our market share. In addition, a new and exciting way we are increasingly engaging with consumers is through physical retail.

Michael will talk more about these initiatives in his remarks.

Speaker Change: Second, we will continue to build on the successful expansion of our assortment to gain a greater share of our customers' spending on apparel, beauty, footwear, and accessories. We have earned our customers' trust and proven that with the right merchandising, they are eager to expand their purchases with us.

Speaker Change: In fact, as just one example, revenue generated from our curated ski shop increased more than 850% year-over-year in the fourth quarter.

Speaker Change: With the strength of our brands and our outstanding customer experience, we see an incredible amount of white space to deepen customer relationships in many zones beyond the core event dressing and going out wear often associated with Revolve, including beauty, men's, home and premium essentials.

Speaker Change: Third, we will further expand our international presence where we are investing in a market opportunity that is several times larger than the U.S. The great progress we have made to improve the international customer experience in recent years now allows us to confidently invest marketing dollars to drive profitable growth in key international markets.

Speaker Change: Finally, we will further enhance our technology stack and leverage AI and other technologies across our platform to drive growth and efficiency.

Speaker Change: Since our founding, our teams have operated with a data-driven mindset and culture of technology innovation, leveraging our proprietary technology stack that is ingrained in nearly all aspects of our operations.

Speaker Change: Our increasing success with AI technology in 2024 further confirms our competitive advantages and reinforces our commitment to invest as we expand the use of AI throughout the organization.

Speaker Change: I would like to thank our talented and passionate team for their incredible efforts, innovations, persistence, and amazing ability to simply get things done that drove such strong execution in the fourth quarter. As our results attest, we believe we are gaining market share and further strengthening our foundation for future growth.

Speaker Change: I feel great about our current momentum and the exciting opportunities ahead in 2025 and beyond.

Now, over to Michael.

Michael Mente: Thanks Mike and hello everyone. I'm proud of our strong results in the fourth quarter that were driven by our team's great execution across the business.

Michael Mente: Key contributors to our double-digit growth in net sales were vastly improved site merchandising and exciting gains in emerging product zones.

Michael Mente: The strong top-line growth combined with incredible efficiencies and remarking logistics costs that are more than tripling of net income year-over-year in the fourth quarter.

Michael Mente: With that as an introduction, I will focus my reports on the strategic areas we are investing in and that we are especially excited about. Merchandising and product assortment, brand awareness, physical retail expansion, and luxury and the high-end consumer.

First, merchandising and product assortment.

Meaningfully improved site merchandising and on-point inventory

Michael Mente: Leveraging technology and data analytics, our teams are doing an outstanding job of improving our assortment across a broader range of use cases and creating compelling merchandising to drive increased consumer engagement and conversion.

Michael Mente: I attribute much of the incredible growth and demand for our winter styles that Mike mentioned to our site merchandising improvements and assortments put in front of our customers to optimize channel strategies.

Michael Mente: Looking forward, one area that I am truly excited about is premium essentials.

Michael Mente: Our customers trust our brands and delight in our shopping experience, creating a strong point of leverage for us to capture a greater share of wallet. One of the first steps in this journey was the launch of the Foundations Shop on our Evolve site, featuring a selection of premium essentials from third-party and known brands.

Michael Mente: It's still early, but the merchandising looks fantastic and has begun to fulfill our customers' desire to shop on Revolve for their everyday wardrobe needs, including for fall fashion and colder weather styles that were strong growth drivers in the fourth quarter.

Michael Mente: Response from our brand partners has been incredible, with two coveted forward brands choosing to cross the SunRevolve after hearing about our foundation shop strategy that we expect to build on in the coming quarters.

Michael Mente: We will also continue to see exciting gains in newer areas like beauty, which has more than quadrupled in size in the past five years. In fact, our beauty, men's, and home products all achieved record sales in the fourth quarter.

Michael Mente: This validates our ability to tap into our customer loyalty to drive adoption in adjacent products.

Michael Mente: Through further product expansion and side merchandising improvements, we see a great deal of opportunity to both acquire new customers and capture more share of our existing customers' wallet. Helping us to capitalize on these efforts are new AI algorithms developed by our internal teams to recommend complementary items in adjacent product zones after the purchase transaction is complete.

Michael Mente: We are also very excited about the progress we made within Ombrandt last year. Our goal coming into the year was to create a solid foundation for future growth and expansion. We did just that.

Michael Mente: Our own brand mix of Revolve segment net sales of 18% for the full year in 2024 is well below its long-term potential And we believe the underlying foundational metrics are better than ever Setting us up well for 2025 and beyond. We are very excited about the pipeline of new own brands in development this year

Michael Mente: Second, brand awareness. Our marketing efficiency meaningfully outperformed our outlook for the fourth quarter, contributing significantly to our outstanding results. Total marketing investment in the fourth quarter represented 14.8% of net sales, a decrease of approximately 170 basis points year-over-year.

Michael Mente: Our teams deserve a lot of credit for being very nimble in involving our marketing events and partnerships with content creators to maximize returns on our investments and increase our brand heat.

Michael Mente: This innovation of marketing strategies continues to elevate and further differentiate our brands, resonate with consumers, and deliver great results on the KPIs we are focused on.

Michael Mente: We hosted several impactful events at our Holiday Shop in Los Angeles and in Aspen, many in partnership with brand partners. We have found these events to be highly efficient for building our brands and acquiring new customers.

Michael Mente: In fact, our New Year's Eve activation in Aston was our most successful and productive event of 2024, based on the number of views generated per video posted on our social media channels. And notably, this event was produced at a modest investment.

Michael Mente: Each video produced in connection with the Aspen's New Year's event was viewed an average of nearly 400,000 times, substantially outpacing the content views for our other marketing activations.

Michael Mente: Another way we are expanding our brand reach is by capitalizing on shifts in culture that have created new types of influencers. We were early to recognize the powerful intersection of fashion and sports, including collaboration with WNBA star and fashionista Angel Reeds.

Michael Mente: was recently featured on the cover of Vogue. More recently, we are partnering with a new women's professional volleyball league where our Revolve logo is prominently featured on the back of every player's jersey and our brand is featured throughout their arenas. As the new league's online fashion retail partner, we are collaborating with the league's top stars, including former USA Olympic medalists.

Michael Mente: On a different, more somber note, as a company found in Los Angeles, Mike and I and the team are devastated by the physical and emotional damage caused by the LA wildfires that impacted many of our employees and partners.

Michael Mente: In January, we were able to leverage our influence for the benefit of our local community with the opening of the Revolve Free Shop, a temporary shop in downtown Los Angeles, to support hundreds of members of our local community directly impacted by the wildfires.

Michael Mente: We provided a broad selection of free clothing, shoes, beauty and hygiene products, and blankets to support those most in need. I have also personally donated $1 million to several charities and causes, including the Los Angeles Fire Department Foundation, the World Central Kitchen, and many individuals directly impacted by the wildfires.

Michael Mente: Third, physical retail expansion. I am very excited about the long-term growth opportunity in physical retail. We recently crossed the one-year mark in our successful Aspen store and are busy preparing for the opening of our Los Angeles store, which will be our first permanent retail destination in a major metropolitan area.

Michael Mente: The temporary Revolve holiday shop discussed last quarter was an excellent and well-executed preview of our future of retail, located within the high-end retail and entertainment district of the Grove of Los Angeles.

Michael Mente: In one of the most visited holiday shopping destinations in LA, we created incredible buzz and excitement by hosting dozens of impactful marketing events featuring VIP appearances from Kendall Jenner, Cardi B, Megan Fox, Dwayne Wade, Nicole Richie, Elsa Hosk, and Shay Mitchell.

Michael Mente: Of note, even on our home turf of Los Angeles where our brands are most well known, more than a third of the customers transacting at the Ropa Holiday Shop were new to file.

Michael Mente: This reinforces the magnitude of opportunity to increase our brand awareness, expand our customer profile, and increase our market share.

Michael Mente: We also saw early indications of lift in e-commerce in local communities surrounding the Grove, particularly among new customers. Confirming the physical retail can be extremely complementary and provide a favorable halo effect on our core e-commerce operations.

Michael Mente: Also very encouraging is that the Revolve Holiday Shop has generated a significantly higher mix of net sales from owned brands than we generate online. While it's a small sample size, this reinforces the exciting opportunity ahead of us to drive much higher owned brand penetration and corresponding gross margin in physical retail.

Michael Mente: We are very early in our physical retail journey, and we are continuing to test and iterate with the invaluable learnings gained so far I am confident that we have a clear path for improvement as we pursue our physical strategy We intend to hire a senior leader with deep industry experience who will help us maximize this growth opportunity over the long term beginning with our Los Angeles store

Michael Mente: Speaking of which, I'm thrilled to share the details of our permanent store in Los Angeles slated to open in the fall. We will occupy the exact same location as the Revolve Holiday Shop at the Grove.

Michael Mente: We believe our incredible permanent destination will elevate our brands within a central and high traffic location in the Grove, providing great exposure and exciting growth opportunities for years to come. We expect to break ground on construction next month, and I can't wait for everyone to see our brands come to life.

Finally, luxury and the high-end consumer.

Michael Mente: In early 2024, we talked about the disruption of the luxury e-commerce market on the heels of two distressed sales of large competitors in late 2023.

Michael Mente: As a profitable company with consistent cash flow generation, we saw an opportunity to benefit from this industry turmoil by investing in the luxury segment while others seemingly had no choice but to cut back.

Michael Mente: Capitalizing on the opportunity, last year we made key investments in talent at Ford, particularly focused on penetrating the high net worth segment of consumers that drive a disproportionate share of the luxury industry revenue.

Michael Mente: Our fourth quarter results are a powerful indication that our forward investments are paying off, particularly in key customer metrics. For instance, our average revenue generated per forward active customer increased by a double digit percentage year-over-year.

Michael Mente: We believe our investments were a key contributor to Ford's 11-point improvement in top-line growth year-over-year compared to the prior quarter.

Michael Mente: Another key driver of Forward's improved growth in the fourth quarter is our Forward Renewal offering of pre-owned handbags. Renewed sales continue to gain scale and nearly double year-over-year in the fourth quarter.

Michael Mente: To wrap it up, we are thrilled with our momentum in delivering strong growth and profitability and excited about the potential of our long-term initiatives and investments as we pursue significant market opportunities at LIHEAD.

Now I'll turn it over to Jesse for the financials.

Jesse Timmermans: Thanks, Michael. And hello, everyone. I am extremely pleased with our fourth quarter results, highlighted by double-digit net sales growth across segments and geographies and a more than doubling of our net income and adjusted EBITDA year over year.

Jesse Timmermans: I'll start by recapping our fourth quarter results and then close with updates on recent trends in the business and commentary on our gross margin and cost structure for 2025.

Jesse Timmermans: Starting with the fourth quarter results, net sales were $294 million, a year-over-year increase of 14%, and a four-point improvement from our net sales growth in the third quarter of 2024.

Jesse Timmermans: Revolve Segment Net Sales increased 15% and Forward Segment Net Sales increased 11% year-over-year in the fourth quarter.

Jesse Timmermans: By territory, domestic net sales increased 11% and international net sales increased 29% year-over-year.

Jesse Timmermans: Active customers, which is a trailing 12-month measure, grew to 2.7 million, an increase of 5% year-over-year.

Jesse Timmermans: Total orders placed were 2.2 million, an increase of 7% year-over-year and our highest order growth in more than a year.

Jesse Timmermans: Average order value was $301, a decrease of 1% year-over-year that was due to lower AOV in the forward segment driven by product mix.

Jesse Timmermans: Consolidated growth margin was 52.5% and came in well above our guidance range.

Jesse Timmermans: The increase of 53 basis points year-over-year primarily reflects meaningful margin improvement in our forward segment and an increased mix of net sales from the higher margin revolve segment.

supported by strong full price mix in both segments.

Jesse Timmermans: Moving on to operating expenses, a high level summary is that much better than expected efficiency in marketing, selling and distribution, and fulfillment expenses in the fourth quarter was partially offset by higher than expected general and administrative expenses.

Jesse Timmermans: Fulfillment costs were 3.2% of net sales, a decrease of 27 basis points year over year, and slightly better than our guidance.

Jesse Timmermans: Selling and distribution costs were 16.5% of net sales, a decrease of 129 basis points year-over-year, and outperforming our guidance by roughly 80 basis points.

Jesse Timmermans: This impressive result reflects outstanding execution by our teams to drive efficiency in our logistics costs as well as a meaningful decrease in our return rate year-over-year.

Jesse Timmermans: Our marketing investment came in much more favorable than expected, representing 14.8% of net sales, a decrease of 168 basis points a year over year, which reflects efficiency gains across both the brand and performance marketing channels.

Jesse Timmermans: General and administrative costs came in $6 million higher than our guidance, although most of the overage reflects costs that are excluded from adjusted EBITDA.

Jesse Timmermans: First, there were $2.7 million in non-routine costs that were not factored into our outlook and are excluded from adjusted EBITDA.

Jesse Timmermans: Second, also contributing to the higher G&A costs, is that stock-based compensation came in much higher than expected and increased $1.7 million year over year.

Jesse Timmermans: These non-cash costs are also excluded from adjusted EBITDA. In addition, we continue to invest in many longer-term initiatives that we believe set us up for profitable growth well into the future.

Jesse Timmermans: Our tax rate was 20% in the fourth quarter, down from 28% in the prior year.

Jesse Timmermans: The decrease was primarily due to excess tax benefits realized as a result of the exercise of non-qualified stock options.

Jesse Timmermans: The meaningfully increased net sales and gross profit year over year, the improved marketing efficiency, and great progress driving efficiencies in our logistics costs result in an exceptional growth on the bottom line.

Jesse Timmermans: Net income more than tripled to $12 million or $0.17 per diluted share from $3 million or $0.05 per diluted share in the fourth quarter of 2023.

Jesse Timmermans: Adjusted EBITDA was $18 million, an increase of 114% year-over-year. For the full year 2024, adjusted EBITDA was $70 million, an increase of 60% year-over-year.

Jesse Timmermans: Moving on to the balance sheet and cash flow statement. We delivered improved net cash provided by operating activities and free cash flow in the fourth quarter compared to the prior year period, further strengthening our balance sheet.

Jesse Timmermans: Comparisons were less favorable for the full year 2024, however, as our net cash provided by operating activities of $27 million and free cash flow of $18 million decreased 38% and 54% year-over-year, respectively.

Jesse Timmermans: Our much higher net income year-over-year was more than offset by unfavorable changes in working capital, including our investment in inventory during the year.

Jesse Timmermans: Importantly, we exited the fourth quarter of 2024 with inventory growth much more balanced.

Jesse Timmermans: which we believe positions us to generate increased cash flows in 2025.

Jesse Timmermans: Inventory at December 31st 2024 was 229 million dollars, an increase of 13% year over year, which was slightly outpaced by our 14% net sales growth for the fourth quarter, demonstrating the important progress we have made in rebalancing our inventory.

Jesse Timmermans: As of December 31st, 2024, cash and cash equivalents were $257 million, an increase of $11 million, or 5% year-over-year, and we had no debt.

Jesse Timmermans: Since the end of 2019, we have increased our cash balance nearly fourfold, an increase of $191 million in five years, while returning more than $40 million to shareholders through stock repurchases over the last 18 months.

Jesse Timmermans: Approximately $58 million remained available in our $100 million stock repurchase program at year-end, unchanged from last quarter.

Jesse Timmermans: Now, let me update you on some recent trends in the business since the fourth quarter ended and provide some direction on our cost structure to help in your modeling of the business for 2025.

Jesse Timmermans: Starting from the top, our net sales through the first seven weeks of the first quarter of 2025 have increased by a high single-digit percentage year-over-year.

Jesse Timmermans: In terms of linearity, month-to-date sales trends in February have been very solid.

Jesse Timmermans: helping to offset softer net sales growth in January when the Los Angeles wildfires temporarily impacted demand in our largest region of California and during which time we paused social media activity to focus on our relief efforts and in reverence to those impacted by the wildfires.

Jesse Timmermans: For modeling purposes, for the balance of the first quarter of 2025, remember that February 2025 has one less day than the prior year comparison due to leap year in February 2024.

Jesse Timmermans: This uneven calendar year over year creates an approximately one point headwind to net sales growth in the first quarter of 2025.

Jesse Timmermans: Shifting to gross margin, we expect gross margin in the first quarter of 2025 of between 52.2 and 52.7 percent.

Jesse Timmermans: which implies an increase of 15 basis points to your rear at the midpoint of the range.

Jesse Timmermans: For the full year 2025, we expect gross margin of between 52.4 and 52.9 percent, which also implies a year-over-year increase of around 15 basis points at the midpoint of the range.

Jesse Timmermans: Embedded in our 2025 expectations for gross margin are higher net sales at full price year rear and notable margin improvement in the forward segment, which we expect to be partially offset by the new China tariffs that are most relevant to our revolve segment.

Jesse Timmermans: Also important to the discussion of potential tariff impacts and supply chains is that we have extremely limited sourcing exposure to Canada and Mexico.

Jesse Timmermans: Fulfillment. We expect fulfillment as a percentage of net sales of approximately 3.2% for the first quarter of 2025.

Jesse Timmermans: A decrease of approximately 30 basis points from the fulfillment efficiency ratio in the first quarter of 2024.

Jesse Timmermans: For the full year 2025, we expect fulfillment costs of between 3 and 3.2 percent of net sales.

Jesse Timmermans: A decrease of approximately 20 basis points year-over-year at the midpoint of the range.

Jesse Timmermans: Selling and distribution. We expect selling and distribution costs as a percentage of net sales of approximately 17.4% for the first quarter of 2025, which implies a year-over-year improvement of approximately 50 basis points.

Jesse Timmermans: For the full year 2025, we expect selling and distribution costs of between 17 and 17.2% of net sales, a decrease of 20 basis points year-over-year at the midpoint of the range.

Jesse Timmermans: Marketing. We expect our marketing investment in the first quarter of 2025 to be approximately 14.9% of net sales.

A decrease of around 40 basis points year-over-year.

Jesse Timmermans: For the full year 2025, we expect our marketing investment to represent between 14.9 and 15.1 percent of net sales, an increase of approximately 20 basis points year-over-year at the midpoint of the range.

Jesse Timmermans: As we expect continued efficiencies in marketing to be partially offset by continued investments to support brand building and customer acquisition

General and Administrative

Jesse Timmermans: We expect G&A expense of approximately $39.5 million in the first quarter of 2025 and between $155 million and $158 million for the full year 2025.

Jesse Timmermans: This implies a 10% year-over-year increase in GNA costs for the full year 2025 at the midpoint of the guidance range.

Jesse Timmermans: as we continue to invest in longer-term growth initiatives such as the launch of several exciting own brands and further expansion of AI technology throughout the organization.

Jesse Timmermans: It also includes a full year of investment in the Alexandre Vautier fashion house we acquired in the second quarter of 2024.

Jesse Timmermans: And lastly, we continue to expect our effective tax rate to be around 24-26% for the full year 2025.

Jesse Timmermans: To recap, I am very encouraged by our fourth quarter and full year results.

Jesse Timmermans: Highlighted by an inflection in our top-line growth and more than 70% growth in net income for the full year 2024.

Jesse Timmermans: Most importantly, we achieve these strong results while investing meaningfully in growth and efficiency initiatives that we believe position us well to continue to gain market share over the long term in pursuit of the very large opportunity ahead of us.

Now, we'll open it up for your questions.

Speaker Change: Thank you. At this time I would like to remind everyone in order to ask a question please press star 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Speaker Change: Your first question comes from Randy Connick of Jeffreys. Your line is open.

Speaker Change: Jesse, question for you. Really helpful color on the gross margin outlook, great performance in the quarter. Just curious, you talked about the ability to even increase the amount of full price proportion of sales.

Speaker Change: in the business and, I guess, in Revolve. Give us some perspective on what drived that thought process going forward. And then on forward, actually, maybe give us some perspective of just how much lower the gross margins are at this point in time and where you can see those margins.

going ahead. Thanks.

Speaker Change: Yeah, sure. Thanks. And yeah, definitely a great quarter and good to see that forward margin starting with a four again. We still see opportunity there, especially on a full year basis. You know, again, a reminder in the first half of the year was more challenge than the back half of the year.

Speaker Change: So we're entering 2025 in a really good place in terms of inventory on forward and expect that full price to continue.

Speaker Change: On the overall full price landscape, you know, I think it's a couple things. One, styles continue to expand. The team gets better and better at bringing in those new styles. The merchandising is really resonating. So we do see further opportunity there for full price, even on top of the really healthy full price we exited 2024 on. And again, reminder, the first half of 2024 was more pressured than the back half. So we see

A good full year 2025 ahead.

And one last question, just on the outlook.

Speaker Change: On the outlook for logistics, especially internationally, where does that sit right now?

Speaker Change: I'm sure the international margins, I don't know if it's the case, but I'm sure they're a little bit lower than the domestic margins. Maybe give us some perspective where those margins sit internationally relative to the domestic piece of the business that revolve and kind of how that journey will unfold in the years ahead, thanks.

Speaker Change: Yeah, yeah from a growth margin perspective, it's relatively in line There's always some product mix differences there, but call it in line and then when you work down to contribution margin You know call it neutral It is more expensive to ship internationally, but that's offset by a lower return rate internationally than we see domestically So there's some puts and takes throughout You know, but it's comparable to that of domestic

Super helpful. Thanks, guys.

Speaker Change: The next question comes from Oliver Chen with TD Cowan. Your line is open.

Oliver Chen: Hi, Mike, Mike and Jesse. Great results. As we look forward, the comparisons get a little tougher in terms of the revenue growth as we go throughout the year. What are your thoughts in terms of average order value relative to number of orders and how that may manifest?

Oliver Chen: as well as, are you expecting a better first half versus second half given the nature of the comparisons?

Speaker Change: Secondly, as we think about physical retail, what are just some key things you're thinking about longer term with physical and stores? Thanks, Jesse.

Speaker Change: Yeah, yeah, I'll take that first one and then pass it along. In terms of orders versus AOV and customers, we expect strong growth.

Speaker Change: you know in that customer and orders with a slight increase in AOV again going back to the full price mix with a higher full price mix assumed you know we should see a slight uptick in AOV but nothing meaningful so most of the growth coming from orders and customers.

And then in terms of physical retail and housing.

Speaker Change: Thinking about it, it's a huge long-term opportunity. We're really excited about our experiences there thus far. The Aspen store entering its second year now and then the Grove pop-up which was a great success and you know really excited to

Speaker Change: And again, long term, it's a massive opportunity. Half of the apparel market or more is still offline. And so, you know, we're, we're putting the pieces in place to go after that.

Okay, and on return rates, which have trended...

Speaker Change: better. What should we know about what you're seeing now with return rates and any implications that has for the nature of the health of your consumer? When we do model revenue growth in the year ahead, do you think it'll be pretty bumpy or just consistently positive ideally? Thank you.

Speaker Change: Yeah, really hard to say what the cadence of revenue growth will be over the course of the year. I think one thing to hit on maybe is seasonality, because seasonality has been so volatile over the last few years. And then this past year, with a lot of our initiatives kicking in in the back half of the year, we did see that revenue in absolute dollars increase sequentially each quarter.

So I think if we look ahead to 2025.

Speaker Change: You know, absent any, you know, bigger macro factors, we'd expect seasonality to return closer to where we were.

Speaker Change: back in the pre-COVID era with Q2 being the highest and 1Q and 4Q being a little bit lower, but more muted than it has been in the pre-COVID period, just given the great success we've had in other product categories outside of that core kind of

Speaker Change: event, kind of festival going out apparel that we've had in the past.

Speaker Change: And then return rate, you know, we're, for modeling purposes, we're modeling in a flat return rate for 2025. Now, that's not to take away from the optimism we have in, in generating further gains there, but from a modeling perspective, we're still modeling a flat return rate with.

Speaker Change: More opportunity to beat that in the first half of the year than the second half given the progress we made in 2024.

Thank you. Bye.

Speaker Change: The next question comes from Jim Duffy of Stiefel. Your line is open.

Jim Duffy: Thank you. Really nice quarter, guys. Going to ask on Q1,

Jim Duffy: No doubt a challenge for the team operating amidst the wildfires. Are you able to size the January impact of the disruption from both the customers in the area and the pause you had in performance marking to the January figures?

depressed sales specifically during that time period.

Jim Duffy: And from a couple different perspectives, one in that core market of California and then more specifically around L.A. and you could really see that at the Grove Store.

Jim Duffy: And then second, you know, which impacted, you know, more kind of nationwide sales was our pause on social.

Jim Duffy: And then also just a lot of the social attention was focused on, you know, wildfires. There was also a lot of kind of weather challenges, especially on the East Coast, and then also a lot of call it noise from administration change tariffs, etc. So January was challenging from a number of

Jim Duffy: perspectives but you know to our point in the in the prepared remarks February really picked up and is it performed solid through that first couple weeks of February so feeling optimistic about the progress despite the challenge we had in January

Speaker Change: And then maybe like within that, if you could speak to the own brands that you're most excited about.

Speaker Change: So I think Michael is having trouble with his line. Normally Michael would answer these questions.

Yeah, can you guys hear me?

We got you, Michael.

Michael Mente: Oh, sorry guys. Yeah, I get interrupted with a lot of muting and un-muting from the operator. But yeah, the C-Shape has been incredible and that's something we'll be continuing to expand, but broader cold weather has been, you know, very, very strong for us, you know, over the past 20-some years.

Michael Mente: We've been known for, you know, a lot more warmer weather, but with the Aspen store and with, you know, merchandising focus, we've been able to connect really strong with outerwear, sweaters, and knits this past cold weather season. We're also seeing, you know, a lot more tailoring and sophisticated, kind of, um...

Michael Mente: You know styles which can translate to you know a more affluent customer as well as kind of workwear which has been super exciting for us

Michael Mente: Long-term wise also we think that foundational basics and essentials things that you know that our customers have historically thought of has gone quite well. The foundation shop is launching we see that as a long-term journey so we really see a lot of traction in all aspects of our wardrobe. Long-term wise even more there's you know other things that we haven't even yet to tackle yet but those are three huge areas that we do our customer shops for and is now really shopping with us for so.

The team's done an incredible job there.

Speaker Change: The next question comes from Nathan Feather of Morgan Stanley. Your line is open.

Speaker Change: Hey everyone. Thanks for the question. You know, really encouraging to see forward return to double-digit growth here. I guess, do you feel you're back to sustainable positive growth in that segment, you know, absent additional macro volatility there? Then, can you give us an update on the inventory situation? How far would you say you are from normalized levels, specifically at forward? Thank you.

Speaker Change: from commenting on precise projections going forward, but we're continuing to see some positive momentum.

Speaker Change: We feel like we made great investments last year, you know, really tapping into the higher net worth customer segment, as Michael mentioned. Also, we feel like we're starting to see some signs that the luxury market is turning up a bit. So, you know, we're certainly optimistic. We're going to see positive growth there in the quarter to come.

Speaker Change: But, you know, we'd like to see a couple more months of progress.

Thanks everyone for joining us.

Speaker Change: of nice quarters in a row before we get too bullish on that segment.

Speaker Change: The next question comes from Michael Benetti with Evercore ISI. Your line is open.

Hey guys great quarter great holiday

Michael Benetti: Jesse, would you, just to kind of put a final stamp on the question earlier, would you say the February run rate, or whatever the run rate is since you went back to, restarted social media, is back to levels similar to 4Q, just so we can understand that that's kind of the normal rate here, given the volatility. And then, I'm curious, you know, on the gross margin outlook for the year, what...

Michael Benetti: What should we think about as the inputs that dictate the high-end?

Speaker Change: Up 40 basis points versus the low end down 10 basis points that I understand

Michael Benetti: I know that took a lot of work for you guys, very impressive.

Michael Benetti: especially as more of the orders come from international, which I think has always been harder to serve. When did you get to that run rate and what are the incremental drivers from here? Are there other projects that can drive that higher from here?

Michael Benetti: Yeah, okay, I'll try to hit all those. So maybe starting with February and the growth rate there, it did bounce back really nicely and it was really solid. And, you know, I'd say I'd put it in the zone of that Q4, which helped offset some of that January softness that we saw. So, you know, hard to say what happens from here, but, you know, our hope is that that continues.

Michael Benetti: On the puts and takes on gross margin, there's a couple things I think, you know, the things we called out, you know, how, how successful we are in driving that full price mix, which

Michael Benetti: and the other probably bigger factor that is somewhat out of our control is what exactly happens with tariffs when that comes into play, timing of inventory receipts.

Michael Benetti: And then our mitigating factors. We have a number of mitigating factors in the works, which is why we're not getting too precise on specifying that tariff impact, but that is definitely a variable.

Michael Benetti: We feel good about the inventory as we head into the year, as Mike called out, so that definitely gives us a good start to 2025.

Michael Benetti: On the variable, really good work by the team in 2024 with, you know, outside of the return rate impact, which I'll get to, but we had, you know, 20, 20-plus specific initiatives of different size and scale that were in play that helped that selling and distribution.

Michael Benetti: efficiency gain in 2024. If you look at the combination of selling and distribution and fulfillment, there was about 160 basis point improvement. About two-thirds of that was due to return rate and a lower return rate year over year. So that definitely has a significant impact. And we're optimistic we can continue to drive those gains. So that will be one factor.

Michael Benetti: And the team continues to work on other efficiency gains. They've already identified a number of things as we head into 2025. Not to get specific on those, but we're optimistic we can continue to manage those variable line items.

Michael Benetti: And thank you for calling out the international, too. That is a factor. So, even with that international pressure and international growing at 29%, being able to get those logistics efficiencies down was really impressive.

Speaker Change: The next question comes from Mark Altrager with Baird. Your line is open.

Mark Altrager: Good afternoon. Thanks for taking my question. You called out the reduction in your customer acquisition costs. I was hoping you could contextualize how much of that improvement is your internal initiatives and marketing approach versus perhaps a more favorable backdrop on the performance marketing front.

Mark Altrager: And then separately, Jesse, just G&A, I think you're guiding to about 10% growth in G&A dollars in 2025. It's, I think, a higher leverage point than you communicated in the past, and maybe I'm missing some one-timers in that calculation, but maybe just unpack that a little bit and help us understand the G&A investments. Thank you.

Mark Altrager: So on the marketing side, in terms of the marketing agencies we saw during the year, it was largely driven by internal team initiatives.

Mark Altrager: with Performance Marketing. Some of them actually related to some of those AI initiatives that we talked about. Of course, there were initiatives beyond that. And then on the brand marketing side, really phenomenal work by the team structuring our brand marketing events in a way that was much more efficient but also more impactful than previous years. So tremendous job by the team on the marketing side.

Yeah, and then on GNA...

Mark Altrager: You know, in 2024 there were, you know, meaningful amounts of call it non-routine costs that were included in GNA to the tune of about four million dollars. So, hard to predict those going forward, but, you know, assume those go away in 2025.

Mark Altrager: ThoughtComp is also hiring in 2024, so expecting that to normalize as we get into 2025.

Mark Altrager: That 10% is really, you know, core G&A growth plus investments that we continue to make, expecting additional investment in physical. We've got a number of own brand launches planned that we're really excited about and that takes upfront investment in team and infrastructure there.

Mark Altrager: and then Vautier will have a full year of cost impact versus the half year of 2024. So those are a couple of the kind of outliers outside of the core G&A growth.

Speaker Change: The next question comes from Ana Andreeva with Piper Sandler. Your line is open.

Ana Andreeva: Great, thank you so much and let me add my congrats as well, great end to the year. Just to follow up on the quarter to date, great to hear that February improved so nicely. Just what are you seeing across the two brands and also international versus US and any particular categories to call out that are driving the business and then we had a follow-up as well.

Ana Andreeva: Yeah no additional color on the seven weeks in part because it's only seven weeks so we don't want to give too much there other than to say we did see growth across both segments and both domestic and international so you know optimistic that the growth is coming from all aspects of the business.

Speaker Change: Okay, that's perfect. And just on marketing, you've been getting really nice efficiencies all of last year. Just curious, can you talk about how you approach the Revolve Festival coming up in April? You got some pretty nice marketing efficiencies last year already with the event. Just how do you think about that this year? And thanks again.

Speaker Change: This year from an investment perspective we're looking at the same range but of course we're always challenging the team to do better and better so you know I decided not to miss it that we can continue to improve on our investments in these areas but you know from a dollars perspective compared to last year it'll be you know quite similar.

Jay Soule: The next question comes from Jay Soule of UBS. Your line is open.

Jay Soule: Great, thank you so much. Mike, my question is for you. You know, you talked a lot about AI in the prepared remarks, about all the different ways that, you know, the companies utilize it to impact the business, but AI seems to be changing so fast. Can you just talk about maybe in the last 90 days how you've seen new opportunities emerge just based on AI technology getting better and what might you, you know, what new things you're working on to maybe help drive the business forward using AI?

Jay Soule: Yeah, 100%. That's what's so exciting about it. We've gotten so much in terms of incredible results in the past year and it's changing so fast and the team is working on new things every day. So, you know, we've got several really exciting projects.

Jay Soule: We made some time for consumers to adapt but really excited about that one. We're continuing to leverage ML and AI in all facets of our business to improve efficiency and improve our existing algorithms. You know, we made huge gains in terms of site merchandise sales.

Jay Soule: search product recommendations last year, the team's continuing to tap into some of those.

Jay Soule: with the improved technology so yeah it's exciting you know I'm excited to see what the year comes.

Jay Soule: I think the nature of R&D type development is it can come in spurts, right, so you don't actually know what's going to hit until you fully validate everything, but there's a number of projects in the works that we're excited about.

Thank you. Bye.

Speaker Change: The next question comes from Dylan Carden with William Blair. Your line is open.

Speaker Change: Any follow-up to that question? The comments about the expanded reach on the performance channels via AI, anything you can provide there as far as details? Is that a proprietary versus third-party initiative? What are you seeing there?

Speaker Change: But, you know, we were able to deploy some technology in an effective way to expand our reach, and it was among many things that helped our market in the 50G and reach during that time.

Speaker Change: All right and then just two quick ones here. Are you seeing any meaningful impact on the return rate de-leverage or decline as relates to product or category mix men's, beauty, home?

Or is it too early for that?

Speaker Change: So with regards to return rate reductions, you're just kind of wondering if we're seeing it sort of more broadly across the board or some categories are more impacted than others, is that the question?

Speaker Change: You're getting bigger in categories that are theoretically lower return, right? Is that too small at this point to be showing up more meaningfully in that return rate on any given quarter?

Yeah, so category makeshift, including...

Speaker Change: What is the one meaningful impact in the return rate reduction that we saw in 2024? It wasn't the largest area of impact, but it had a meaningful impact.

Thanks, everyone.

Thank you for joining us. We'll see you next time.

Speaker Change: The next question comes from Ashley Owens with KeyBank Capital Markets. Your line is open.

Ashley Owens: So just anything you've done from a merchandising standpoint to really highlight these brands. Is it up front so the customers immediately gravitate towards it? Is it the majority of inventory? Or what do you think is driving the higher mix there? Thank you.

Speaker Change: Yeah, I'll take that first one and then pass it along. So, on the growth margin, no further specificity on the tariff impact.

other than to say that

Speaker Change: The margin improvement that we do see is largely coming from the forward segment and bringing that back into a more healthy zone. On Revolve, we're planning essentially flat, maybe a little bit of an increase there.

Speaker Change: So most of the margin improvement is coming from the forward segment. We do anticipate a call it slight to moderate increase in own brand mix in 2025 that is helping offset some of the tariff impacts.

Speaker Change: And regarding the physical store, you know, part of why I'm so excited about physical retail is that we're far from optimal on many areas, one of those including our own brand version, I think, within store.

Speaker Change: And I believe we actually have less own brand product on a percentage basis in the store compared to the penetration on the site. But those styles are just performing incredibly well without massive optimization and visibility. You know, a lot of the own brand section, you know, it's actually upstairs in far from optimal location.

Speaker Change: I think when the customer is in person and encounters this product, she's loving it. So as we focus long term, I think that there's huge upside potential from where we are to where we can be. It's great to see those initial results being awesome.

Speaker Change: The next question comes from Lorraine Hutchinson with Bank of America. Your line is open.

Lorraine Hutchinson: Thank you. Good afternoon. On last week's conference call, you talked about 15 to 16 percent marketing for 2025, and now you're guiding it to 15. Can you talk about the drivers that caused that change? Was it just the efficiencies in 4Q, or are there other initiatives in place to help bring that down?

Lorraine Hutchinson: Yeah, it was really just the continued efficiencies that we're seeing in both channels, both in brand and performance, that gave us the confidence to guide to that 15 in 2025.

Speaker Change: The next question comes from Janine Stitcher with BTIG. Your line is open.

Janine Stitcher: Hi, thanks and congrats on the momentum. A few questions for me.

Janine Stitcher: First, just on product categories, you mentioned a lot of success with some of the more everyday essentials and some of the newer categories, so can you elaborate on what you've seen within the core business, particularly in dresses? And then, just on the cash balance, you've accumulated quite a nice balance of cash here. Any thoughts on go-forward uses, potential acquisitions? Thank you.

Thank you. Thank you.

Janine Stitcher: Yeah, on the first part, dresses performed well. We saw great growth in some of those other categories, but dresses was up.

Janine Stitcher: I think 10% in 4Q, so, you know, a little south of the overall growth rate, but still very healthy double digit.

Janine Stitcher: And the cash balance, you know, we're continuing to look at a number of opportunities and continue to You know be opportunistic there. So not much more to say other than that We have the buyback plan in place and then again just continuing to look at strategic opportunities

Okay, thank you.

Speaker Change: The next question comes from Matt Karanda with Roth Capital. Your line is open.

Matt Karanda: Hey guys, I just had two I guess. It sounds like a decent portion of the higher DNA guide is related to the store build-out, so maybe just if you could help us understand how we should interpret that.

Speaker Change: In the context of the one permanent store that you're adding in LA, is there more to come in 26?

Speaker Change: I look at the full year guide, looks like maybe contribution margin a little bit better, but operating margin potentially kind of flattish depending on what we plug in for sales growth. So I wanted to maybe see if you could put a little bit of a finer point on how we should think about the opportunity for margin expansion over the next year or two.

Speaker Change: Yeah, maybe on the first one, store build out and the cost associated with stores in this upcoming year is a factor. I wouldn't say it's the most significant factor in that G&A increase. There's other investments there, including the own brand expansion and some other things we're working on. So it's a factor. It's not the leading factor in the G&A increase. And the overall margin expansion, I think you're in line there. And it's largely dependent

Speaker Change: as a scenario, but again, depending on where top line shakes out.

Speaker Change: The next question comes from Simeon Siegel with BMO Capital Markets. Your line is open.

Simeon Siegel: Thanks. Hey guys. Afternoon. Hope you're all doing well. Grats on the nice end of the year.

Simeon Siegel: Mike or Michael, do you think your customers know that your own brands are yours? I'm curious if you think there's different customers that come exclusively for third-party or for own brands or if it's really just not that segmented and then Jesse, can you just remind us the gross margin differential for own brands and then I have a follow-up after. Thanks.

Simeon Siegel: You know, to be honest, I don't think our customers really know what their own brands are. I think they really, you know, shop the brands, you know, really for the merits of their, you know, design, fit, quality, and such like that. It's really, you know, we really drive, you know, our merchandising mix to put the best product in front of our customer. And a lot of times that's, you know, our own brand, but when there's a great third-party product, we, you know, put that, you know, aggressively as well. So, I think it really shows that, you know, the team's really working hard to make sure that we just have amazing products internally.

Speaker Change: Yeah, and then on the growth margin differential, I guess the reminder is that we don't disclose that other than to say that it is meaningfully richer than the third-party margin. But maybe one additional kind of note there is that the own brand margin is healthier today than it was back in 2019, so that differential has increased. You know, the underlying fundamental metrics that we're looking at on own brands are really healthy. That was our goal as we kind of went into 2023

for this presentation.

Speaker Change: All right, that's great. And so then in the back of that and on the OPEX implications you've been seeing and guiding to, just any thoughts that you're thinking about in the age of the long-term even margin opportunity? It looks like the margin's really moving in the right direction.

Speaker Change: Yeah, definitely moving in the right direction, made a lot of progress in 2024. Again, entering the year with a focus on efficiency and those variable costs, getting a return rate down, while making investments in AI and other areas. So, you know, to see that come through while making investments and delivering those results was great. So, you know, over the long term we do see opportunity in EBITDA margin expansion. You know, our goal is to get, you know, into that

Hi, single digits and ultimately into the double digits.

Speaker Change: That's all the time we have for questions today. I will turn the call back to management for closing remarks.

Speaker Change: Thanks guys, really proud of the fourth quarter and really proud of really the steady progress over, you know, all of 2024, you know, great progress operation, great, you know, through and through all aspects of the organization, all while making, you know, aggressive investments to the future that have potential transformational outcomes.

Speaker Change: Really proud of the team through and through all across the board and really excited for all that we're working on this coming year.

This concludes today's conference call. You may now disconnect.

Thank you. Bye.

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