Q3 2025 Goodfood Market Corp Earnings Call

Operator: Q3 of Fiscal 2025 Earnings Call and Webcast.

Operator: At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. Please note that questions will be taken from financial analysts only.

good morning, ladies and gentlemen, welcome to the good food, Q3 of physical 2025, earnings call, and webcast,

At this time, all participants are in a listen-only mode.

For you to queue up for questions.

Operator: If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time.

Operator: I would like to remind everyone that this conference call is being recorded today, July 22nd at 8 a.m. Eastern Time.

Please note, that questions will be taken from Financial analysts. Only if anyone has any difficulties, hearing the conference, please? Press the star, followed by 0 for operator assistance at any time.

Operator: Furthermore, I would like to remind you that today's presentation may contain forward-looking statements about Goodfood's current and future plans, expectations and intentions, results, level of activity, performance, goals or achievements, or other future events or developments. As such, please take a moment to read the disclaimer on forward-looking statements on slide 2 of the presentation.

I would like to remind everyone that this conference call is being recorded today July 22nd at 8:00 a.m. eastern time

Operator: Please be aware that during the call, presenters will refer to certain metrics and non-IFRS measures. Where possible, these measures are identified and reconciled to the most comparable IFRS measures in our MD&A. Finally, let me remind you that all figures expressed on today's call are in Canadian dollars, unless otherwise stated.

Furthermore, I would like to remind you that today's presentation may contain forward-looking statements about Good Foods, current and future plans, expectations, and intentions results. Level of activity performance goals or achievements or other future events or developments as such please. Take a moment to read the disclaimer and forward-looking statements on slide 2 of the presentation.

Please be aware that during the call presenters will refer to certain metrics and non IFRS measures where possible. This measures are identified and reconciled to the most comparable IFRS measures in our mdna.

Jonathan Ferrari: I would now like to turn the meeting over to your host for today's call, Jonathan Ferrari, Goodfood Chief Executive Officer, Mr. Ferrari, you may proceed. Thank you.

finally, let me remind you that all 3 gears Express on today's call are in Canadian dollars and this otherwise is stated

Jonathan Ferrari: I would now like to turn the meeting over to your host. For today's call, Jonathan Ferrari, good food, chief, executive officer, Mr. Ferrari. You may proceed,

Jonathan Ferrari: Bonjour tout le monde. Bienvenue à l'appel conférence de marché Goodfood pour présenter nos résultats financiers du troisième trimestre qui s'éclose ce 7 juin. Good morning, everyone.

Thank you, good food.

Jonathan Ferrari: Welcome to our Goodfood Earnings Call in which we will present our results for the third quarter and the June 7. Ross Aouameur, our Chief Financial Officer, is with me today.

Jonathan Ferrari: Good morning everyone. Welcome to our good food earnings call in which we will present our results for the third quarter and the June 7th.

Jonathan Ferrari: You can find our press release, presentation and other filings on our website and CDAR Plus and all figures on this call are in Canadian dollars. Let's begin with slide three.

Jonathan Ferrari: Our Chief Financial Officer is with me today.

Jonathan Ferrari: You can find our press release presentation and other filings on our website and see our plus, and all figures on this call are in Canadian dollars.

Jonathan Ferrari: This quarter marks an important milestone, our 10th consecutive quarter of profitable execution as we look to scale a digital platform designed to build long-term shareholder value in Canada's food and beverage e-commerce landscape. Adjusted EBITDA reached nearly $3 million in Q3, or 8.6% of net sales. On a year-to-date basis, Adjusted EBITDA stands at approximately $6 million, representing a 6% margin. Despite macroeconomic headwinds weighing on consumer discretionary spending, we have maintained strict discipline on unit economics and operational efficiency. Our strong and consistent margin performance confirms our ability to deliver profitably, even in uncertain times.

Let's begin with slide 3, this quarter marks an important Milestone, our 10th consecutive quarter of profitable execution. As we look to scale a digital platform designed to build long-term shareholder value in Canada's food and beverage, e-commerce, landscape adjusted ibida. Reached nearly 3 million dollars in Q3 or 8.6% of net sales.

Jonathan Ferrari: On a year-to-date basis. Adjusted ebit does stands at approximately 6 million dollars representing a 6% margin.

Despite macroeconomic, headwinds Weighing on consumer, discretionary spending we have maintained strict discipline on unit economics and operational efficiency, our strong and consistent margin performance confirms our ability to deliver profitably. Even in uncertain times.

Jonathan Ferrari: Our product strategy also continues to evolve to meet customer needs. Recent enhancements including heat and eat meals in Quebec and expanded customization features are enabling more convenience and deeper engagement. These customer-driven innovations are driving record basket sizes as more members are choosing to build out their orders with a wide variety of meals and grocery add-ons.

Our products strategy also continues to evolve to meet customer needs.

Recent enhancements including heat and eat meals in Quebec.

Jonathan Ferrari: And expanded. Customization features are enabling more convenience and deeper engagement.

Jonathan Ferrari: We also continued to execute on our capital allocation strategy with precision. anchored in an enhancing intrinsic value per share. Our acquisition of Genuine Tea is proving to be both growth accretive and margin supportive. The brand is growing sales at over 30% annually while delivering consistent and healthy EBITDA.

Jonathan Ferrari: These customer-driven Innovations are driving record basket sizes as more members are choosing to build out their orders with a wide variety of meals and grocery add-ons.

We also continue to execute on our Capital allocation strategy with precision.

Jonathan Ferrari: Anchored in enhancing intrinsic value per share.

Our acquisition of genuine T is proving to be both growth accretive and margin supportive.

Jonathan Ferrari: Meanwhile, we have added $1 million to our Bitcoin ETF treasury reserves and our BTC investment generated gains that contributed positively to our balance sheet flexibility this quarter.

Jonathan Ferrari: The brand is growing sales at over 30% annually, while delivering consistent, and healthy ibida.

Jonathan Ferrari: Meanwhile, we have added 1 million dollars to our Bitcoin ETF treasury reserves and our BTC investment generated gains that contributed positively to our balance sheet. Flexibility this quarter.

Ross Aouameur: With those highlights in mind, I will now turn it over to Ross for a closer look at the financials. Thank you, John. Let's move to slide four to discuss your top line. Net sales for the third quarter were $30.7 million, down $7.9 million year-over-year, though showing some sequential improvement compared to the second quarter of fiscal 2025. A year-over-year decline reflects a lower active customer base, 76,000 this quarter versus 105,000 last year, reflecting both macroeconomic caution lowering order rates and a deliberate reduction in incentive-led customer acquisition to enable our margin-driven approach. While total customers were lower, our targeted approach is yielding higher quality cohorts.

Ross: With those highlights in mind, I will now turn it over to Ross for a closer look at the financials.

Ross: Thank you, John. Let's move to slide 4 to discuss your Topline metrics.

Ross: Net sales for the third quarter, were 30.7 million down, 7.9 million year-over-year, so showing some sequential Improvement compared to the second quarter of fiscal 2025.

Ross: A year-over-year decline, reflects a lower active, customer base 766,000. This quarter versus 105,000 last year, reflecting both macroeconomic caution, lowering order rates and a deliberate reduction in incentive, Le customer acquisition to enable our margin driven approach

Ross Aouameur: Net sales per active customer reached a record $404 this quarter. supported by record average basket size. This reflects the strength of our product offering and customer engagement. We are also deepening wallet share and lifetime value through value-driven personalized experience. and Parallel, we are expanding your profitable B2B relationships with Canadian companies. offering good food and genuine tea products to their employees, or cross-marketing select partners, brands, and brands through our platform.

While total customers were lower, our targeted approach is yielding higher quality cohorts.

Ross: Net sales per active customer reached a record, 404 dollars this quarter.

Ross: Reported by record average basket size.

Ross: This reflects the strength of our product offering and customer engagement.

Ross: We are also deepening, wallet, share and lifetime value through value-driven. Personalized experiences.

Ross: Though we are expanding a profitable B2B relationships with Canadian companies offering good food and genuine tea products to employee to their employees or across marketing select Partners Brands and Brands through our platform.

Ross Aouameur: Now turning to slide 5 and discussing margins and profitability, gross profit came in at $13.6 million, with gross margin improving to 44.3%, up 30 basis points from last year and 170 basis points from the second quarter. We have maintained margin resilience through disciplined cost controls, reduced promotional activity, and continuous improvement in fulfillment and procurement operations. Adjusted EBITDA reached $2.7 million, or 8.6% of sales, with breakeven net income of $0.1 million. Beyond operational efficiency, we are increasingly making our cost structure flexible to ensure sustainable profitability. Our results hence reflect strong contributions from lean logistics, SG&A discipline, and labour and product cost control.

Ross: Our turning to slide 5 And discussing margins and profitability gross profit came in at 13.6 million with gross, margin improving to 44.3%.

Ross: A 30 basis points from last year and 170 basis points from the second quarter.

Ross: We have maintained margin resilience through disciplined cost, controls reduced, promotional activity and continuous Improvement in fulfillment, and procurement operations.

Ross: Adjusted ebita reached 2.7 million or 8.6% of sales with break even net income of 0.1 million.

Ross: Beyond operational efficiency. We are increasingly making our cost structure. Flexible to ensure sustainable profitability.

Ross Aouameur: This is the outcome of embedding a cash flow first culture and maintaining financial agility amidst a tempered demand environment.

Our results, hence, reflects strong contributions from lean Logistics, sgna discipline and labor and pro product cost control.

Ross: This is the outcome of embedding a cash flow first culture and maintaining Financial agility and made a tempered demand environment.

Ross Aouameur: Moving now to slide 6, cash flow from operations turned positive at $0.6 million this quarter. Adjusted free cash flow came in at $0.2 million, a meaningful improvement over Q2, supported by margin and cost savings. Capital expenditures were $0.5 million, largely related to the final stages of fire code compliance and kitchen relaunch at our Montreal facility. We expect normalized levels in Q4 and beyond, which would further enhance our cash generation capacity. Our liquidity remains solid with $17 million in cash and marketable security.

Ross: moving now to slide 6 cash flow from operations, turned positive at 6 million this quarter

Ross: Adjusted free cash flow came in at 0.2 million, a meaningful improvement, over Q2 supported by margin and cost improvements.

Ross: Capital expenditures were 0.5 million largely related to the final stages of fire. Code compliance and kitchen. Relaunch at our Montreal facility.

We expect normalized levels in Q4 and Beyond Richard. Further enhanced our cash generation capacity.

Ross: Our liquidity remains solid with 17 million dollars in cash and marketable securities.

Ross Aouameur: With that improved cash flow profile, let's turn to slide 7 to review how our financial performance continues to support sustainable profitability and flexibility. We are overall pleased with the resilience of our core metrics, especially in a tough consumer lens. Gross margin remained at over 44%, adjusted EBITDA margin held above 8%, and we posted positive net income and adjusted free cash flow. This performance reinforces our disciplined approach to cost management, capital allocation, and consistent EBITDA positive trend, all with the goal of optimizing shareholder return on capital.

With that improved cash flow profile. Let's turn to slide 7 to review how our financial performance continues to support sustainable profitability and flexibility.

Ross: We are overall pleased with the resilience of our core metrics, especially in a tough consumer landscape.

Gross margin remained at over 44% adjusted, even though margin held above 8% and we posted positive net income and adjusted free cash flow.

Jonathan Ferrari: With that, I will now pass it back to Jon to walk through her Outlook.

Ross: This performance, reinforces our disciplined approach to cost management, Capital allocation, and consistent eval positive Trends. All with the goal of optimizing shareholder return on Capital

Jonathan Ferrari: Over to you, Jon. Thanks, Ross. Let's now turn to slide 8. Over the next 6 to 12 months, our focus is clear. We aim to deepen member relationships, expand our differentiated portfolio of meal solutions, and strengthen our balance sheet through capital discipline and targeted acquisitions, all to build long-term, first-share value. We are encouraged by the early success of our heat and eat offering. Without advertising, this offering has already reached a $1 million annualized revenue run rate in Quebec. The blend of convenience, health, and flavor is resonating with our members. With expanded delivery zones and recipe development underway, we are now preparing to scale this line across new markets, supported by growing product market fit, recipe expansion, and careful risk management as we scale.

John: With that, I will now pass it back to John, to walk through our Outlook, over to you, John.

Thanks Ross.

Let's now turn to slide 8.

John: Over the next 6 to 12 months, our focus is clear.

We aim to deepen member relationships, expand our differentiated portfolio of meal Solutions, and strengthen our balance sheet through Capital discipline and targeted Acquisitions all to build long-term. First Share value,

John: We are encouraged by the early success of our heat and eat offering.

John: Without advertising, this offering has already reached a 1 million dollar annualized Revenue, run rate in Quebec. The blend of convenience health and flavor is resonating with our members.

John: With expanded delivery zones and recipe development underway.

We are now preparing to scale. This line across new markets supported by growing product Market fit. Recipe expansion, and careful risk management as we scale,

Jonathan Ferrari: Our value plan continues to serve as an effective entry point, driving high conversion and upsell into higher value recipes. With global cuisine offerings and premium chef-designed meals, we are meeting diverse needs while maximizing order economics. On the M&A side, Genuine Tea remains a high-performing asset. The brand is expanding into a larger facility and showing strength in both food service and e-commerce segments. Margins remain in the mid-double digits, and it's been a margin-accretive contributor to consolidated EBITDA. This acquisition has validated our thesis. Founder-led brands that benefit from shared capabilities like fulfillment, logistics, and procurement are a scalable growth engine.

John: Our value plan continues to serve as an effective entry point driving High conversion and upsell into high higher value recipes.

John: With global Cuisine offerings and premium Chef design meals. We are meeting diverse needs while maximizing order economics.

On the m&a side. Genuine T remains a high performing asset.

John: The brand is expanding into a larger facility and showing strength in both food service and e-commerce segments.

John: Margins, remain in the mid-, double digits and it's been a margin of creative contributor to consolidated ibitta.

John: This acquisition has validated our thesis.

Jonathan Ferrari: We are actively reviewing new opportunities with similar DNA and are excited about the potential to spur new success. and Peril. and the American Realty Reserve continues to serve its dual purpose. edging inflation, and enhancing optionality. We realize gains this quarter, even before the recent BTC price acceleration and believe the reserve will continue supporting long-term value creation and remain confident in the optionality it adds to our balance sheet.

Founder-led brands that benefit from shared capabilities like fulfillment Logistics and procurement are a scalable growth engine.

We are actively reviewing new opportunities with similar DNA and are excited about the potential to experience success.

John: In parallel.

John: Reserve continues to serve as Dual Purpose, edging inflation, and enhancing optionality.

Jonathan Ferrari: In closing, we are confident that our customer first margin discipline and innovative innovation driven approach uniquely positions Goodfood to thrive in the years ahead. We look forward to continuing to deliver differentiated experiences to our members and consistent value creation for our shareholders.

John: And believe the reserve will continue supporting long-term value, creation and remain confident in the optionality. It adds to our balance sheet.

John: In closing, we are confident that our customer first margin discipline and Innovative Innovation driven approach.

John: Uniquely positions. Good food to thrive in the years ahead.

Operator: With that, I will now turn it over to the operator for the Q&A. And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star followed by the number two.

John: We look forward to continuing to deliver differentiated experiences to our members and consistent value creation for our shareholders.

With that, I will now turn it over to the operator for the Q&A.

Frederic Tremblay: And with that, our first question comes from the line of Frederick Tremblay with the Jordan Capital Markets. Please go ahead. Thank you. Good morning. Bon Appsetit! Just on your previous call, you had mentioned that the Q2 active customer account had been impacted by a lower seasonal order rate.

And ladies and gentlemen, we will now begin the question and answer session to ask a question. You may press star followed by the number 1 on your telephone keypad. If you're using a speaker-phone, please pick up your handset before pressing any keys to withdraw your question. Please press star followed by the number 2 and with that our first question comes from the line of Frederick trumbley with Dr. Jordan Capital markets, please go ahead.

Thank you. Good morning.

Morning side.

Jonathan Ferrari: I'm just wondering if you could maybe give us an update on what you saw in terms of the trends in order rates in Q3 relative to Q2 and if that was still a driver in the change in active customer account. Yeah, good question, Fred. I think there's definitely less of the holiday seasonality impact here, which was pretty big in Q2. So, I think if you think of order rates in two ways, basically, you have the subscriber order rates that convert subscribers into active customers. And that one, I'd say, remained pretty challenged, even in Q2, towards the end of January and February.

Speaker Change: um, just on your previous call, you had mentioned that the, you know, the Q2 active customer account had been impacted by lower seasonal order rate and just wondering if you could, maybe give us an update on what you saw in terms of the trends and Order rates in Q3 relative to Q2 and if that was still a driver in the change of inactive customer account,

John: 23.

Jonathan Ferrari: We saw some declines there, and that part has been stable. But once an active customer starts ordering, then the order rate is actually higher than it was in Q2, meaning that once someone places an order, they tend to place more orders after.

Frederic Tremblay: So, converting a subscriber into an active customer will be key in continuing to stabilize sales and provide room for growth. Okay, thanks for that. And then, I know we're in the slower summer season now, but just wanted to get your take on...

Yeah, good question. Um, Fred I think, um, there is definitely less of the, the holiday seasonality impact here, uh, which was pretty big in in Q2. So, I think if, if you think of order 8 in 2 ways, basically, you have the subscriber order rates that that convert subscribers into active customers. Uh, and that 1, I'd say remained, um, you know, pretty challenged even even in Q2 towards the end of January and February, uh, we saw some some decline there. And, and that part has been stable, um, but once in active customers starts ordering, then the, the, uh, order rate is actually higher than it was in Q2 meaning that. Uh, once someone places an order, they tend to place more orders after. So, uh, converting a subscriber into an active customer will be will be key in continuing to, to stabilize sales and, and provide room for growth.

Jonathan Ferrari: on when you think we might see some stabilization in the active customer count, and maybe more importantly, what are some of the levers that you think you have to reverse the current trend in active customers? I think, obviously, as you mentioned, June, July and August are not the right months to really do that, meaning that people travel, go to cottages, they eat out more, so there's usually less active customers during that period. December won't be an exception. I think as we move to Q1 of 26, there's both the September back to school, a bit of an improvised platform.

Speaker Change: Okay, thanks for that. And then um, you know, I know we're in the the slower summer season now but just wanted to get your take on, uh,

On when you think we might see some, um, stabilization in the active customer account. Um, and maybe more, importantly, what are some of the levers that you think you have to reverse the current Trend in active customers?

Jonathan Ferrari: I think from the levers perspective, beyond the usual marketing levers, I think there's the initiatives that we're working on, including Heat and Eat. Heat and Eat is now mostly an add-on, meaning that people can add it to their weekly meals, but we are just launching a Heat and Eat plan, meaning that people can order ready-to-eat as part of a weekly plan, where they get recipes just like ready-to-cook, so it's currently only in launch stage, but by September, it'll be available more and more and more and more visible. And then I think, depending on regulatory approval, accessing the rest of Canada beyond Quebec, I think will be also a lever in making Heat and Eat more available across the country.

Speaker Change: Yeah, I think, obviously, you mentioned the, the July June, July and August are not, um, the right months to really do that. Meaning that, you know, people travel, go to Cottages eat out more. So, uh, there's usually less active customers during that period. This summer won't be an exception, I think, as we move to, to, to 1 of 26. And there's the post of September back to school. A bit of an increase um uh marketing intensity, but also uh I think more routines developing uh that definitely provides a platform. I think from the levers perspective, um, beyond the the usual marketing level lever. Sorry, I think there's the, um, there's the, the the initiatives that we're working on including heat meet, um, heat needs is now, um, mostly an add-on meaning that people can add it to their weekly meals, but we are just launching a heat Meat Plant, meaning that people can order ready to eat as part of a weekly plan where they get recipes just like ready to cook.

Jonathan Ferrari: And then I think from a ready-to-cook perspective, there's the Goodfood travel series that provides more of an adventure. There's always partnerships and collaborations that we do that provide new flavour and give us sort of a ramp to go and market to folks, both to increase order rates and to bring in new customers.

Um, so it's currently only on in launch stage but by September, it'll be available more and more and more and more visible. And then I think, depending on on regulatory approval, uh, accessing the rest of Canada Beyond Quebec. Uh, I think we'll be, we'll be also a lever in in making heat, meet more available across the country. Um, and then I think from a, from a ready to cook perspective, there's um, uh, there's the the good food travel series that that

Jonathan Ferrari: I think maybe lastly on the genuine tea side, there's some exciting campaigns coming up but also generally the period just pre-holidays is a pretty big period starting with just before Black Friday and throughout November and early December, so that'll be another lever to both increase overall sales and activity.

Speaker Change: IES. A little more of an adventure, there's always Partnerships. And and collaborations that we do that, that provide new flavor and and give us sort of a rant to, to go and, and Market to folks, and both to increase order rate and and to bring in new customers,

I think maybe lastly on on the genuine T side. Um there's a there's a you some exciting campaigns coming up but also generally uh the period uh just pre pre holidays is a pretty big period starting with uh just before Black Friday and and throughout November and early December. So that'll be another lever to both, uh, uh, increase overall sales in inactive customers.

Frederic Tremblay: And just maybe coming back to the Eat and Eat aspect there, the press release mentions that that part of the business is ready for scaling in early fiscal 26. Is that referring to the launch of the Eat and Eat plan or is it more of a geographic initiative? And if it's geographic, can you maybe speak to some of the regions you would target and if there's Yeah, I think it refers to really three facets. The first one is the completion of the CAPEX here, both for fire safety and some modifications to the kitchen. That's mostly complete.

Aspect there. The press release mentions that uh, that part of the business is ready for scaling, uh, in early fiscal 26 is that referring to uh, the launch of the ethnic plan or is it more of a geographic, uh, initiative? And if it's Geographic, can you maybe speak to

Speaker Change: Some of the regions you would Target and if there's incremental capex involved with, uh, you know, adding capacity and that sort of thing.

Jonathan Ferrari: So that's step one to being ready. I think step two is geographical. So we're currently only allowed to sell the product in Quebec, given the CFIA, the regulator, has to approve your facility to be able to sell across provinces. You know, and the barriers we look forward to seeing removed over time, but for now it's still there. So I think the estimate we were given was sometime in the summer. So we're hoping that by the end of August, we'll be able to have that approval and then be able to target Atlantic Canada and Ontario first, and then shortly thereafter, with a few, looking at a few options on how to do things out West.

Speaker Change: Yeah, I think it it refers to really 3 facets. The first 1 is the the completion of of the capex here both for fire safety and and some modifications to the kitchen. That's mostly complete. So, um, that that's the point to being ready. I think Step 2 is is geographical, so we're currently only, uh, allowed to sell the product in Quebec. Um, given our the, the cfia, the regulator has to to approve, um,

Jonathan Ferrari: There's always the ability to do it from here, but then seeing what the options are over there and. I think we'll share further developments as they come, because they may not require CAPEX, but if they do, we'll make sure to make that clear, though that's not our base plan.

Speaker Change: Facility to be able to sell across provinces, you know, when the barriers we look forward to seeing you removed over time. But for now, it's still there. So I think the estimate we were given uh, with some time in the summer. So, um, we're hoping that by the end of August, uh, we'll be able to, to have that approval and and then be able to Target Atlantic Canada and Ontario, uh, first and then shortly thereafter, uh, with a few looking at a few options on how to do things out west. There's always the the ability to do it from here but then um seeing what what? The options are over there and, and I think we'll, we'll we'll share further developments, uh, with

Jonathan Ferrari: So that's, and then, sorry, the last piece, the plan, making it a plan, so making people, customers, members, having the ability to come on the platform and subscribe to a Heat & Meat plan, where they get Heat & Meat meals only as part of their plan is sort of the third pillar to how we're ready to scale the offer.

Speaker Change: They come because they they you know they may not require capex but if they do we'll make sure to to make that clear. Uh that that's not our our base plan. Um so that's that's and then the sorry the last piece the plan uh making it apply to making people customers members having the ability to come on the platform And subscribe to hate meet plan, where they get a heat meet, uh, meals only as part of their plan is, is sort of the third pillar to, to how we're ready to scale. The the offering,

Jonathan Ferrari: Okay, and last question for me, just curious on what you're seeing for customer acquisition cost. the trend is there, and then maybe just remind us what are your main sort of marketing channels that are bringing you new customers these days? Are you mainly like social media? Is it out of existing customers? I'm just curious to see what's driving sort of first-time orders these days. Yeah, I'll start on the CAC and John will take over on the second part. I think on the CAC, it's been relatively stable and still a meaningful improvement over a year ago.

Speaker Change: Okay. And last, uh, question for me just curious on the um, what you're seeing for customer acquisition cost. Uh,

Speaker Change: Um, the trends there. Uh, and then maybe just remind us. What are your main sort of marketing channels and that are bringing you new customers? These days. Are you, is it mainly like social media? Is it sort of now from existing customers?

Speaker Change: Just uh, just curious to see what's what's driving sort of first-time orders these days.

Ross Aouameur: I think it's managing the CAC curve and making sure that you're investing the right amount of dollars that don't get you into those marginal CACs that get higher and reduce, really, the return you make on the customers you acquire. So I think from a CAC perspective, stable. I think from a scaling of the marketing spend to keep it stable is where we're very, very disciplined. So we're keeping that in check.

I can, and John will take over on the second part. I think, on the tag, it's, it's been, um, relatively stable, um, and, and you still meaningful improvement over, um, over a year ago. Um, I think it's, it's managing, uh, you know, that the cat curve in making sure that you're investing the right amount of dollars that don't get you into those marginal cats that get higher and, and reduce really the return you make on, on the customers require. So, I say from a cat perspective, stable, I think from a, a scaling of the, the, the marketing spend

Jonathan Ferrari: And then John will talk about the channels and reactivation. I would say we're constantly optimizing our media mix. We have been leaning into some of the channels like online video that have been performing quite well. and our core focus continues to be on acquiring the highest quality customers and I think that was evidenced through our record sales per subscriber this quarter which was over $400 per quarter. So the idea is really to make sure that we're optimizing our mix not specifically for the volume of new customers but for the quality of the customers that we're bringing in.

Speaker Change: To keep it stable is is where we're we're very, very disciplined. So, we, we're keeping that in in check and John, we'll, we'll talk about the channels and, and reactivation.

yeah, I would say we're

Speaker Change: Constantly optimizing our uh, uh, media mix.

Speaker Change: Um, we have been um leaning into some of the uh uh channels like um online uh video that have been uh performing quite well.

Um, and our core Focus continues to be on acquiring, uh, the highest quality customers and I think that was, uh, evidenced through our, uh, record sales per, uh, subscriber this quarter, which was over, uh, 400 dollars per quarter.

so the idea is really to make sure that we're optimizing our mix, not not specifically for the volume of new customers, but for the quality of the, uh, of the customers that we're bringing in

Frederic Tremblay: Makes sense.

Operator: Thanks for taking the questions.

Speaker Change: Makes sense. Thanks for taking the questions.

Jonathan Ferrari: Alright, thank you and we have no further questions at this time.

Operator: I would like to turn it back to Mr. Jonathan Ferrari for closing remarks. Thank you for joining us on this call. We look forward to speaking with you again at our next call. Thank you, presenters.

Speaker Change: All right. Thank you. And we have no further questions at this time. I would like to turn it back to Mr. Jonathan Ferrari for closing remarks.

Thank you for joining us on this call. We look forward to speaking with you, again, at our next call.

Operator: And ladies and gentlemen, this concludes today's conference call. Thank you all for joining.

Speaker Change: Thank you for senators and ladies and gentlemen.

Operator: You may now disconnect.

Speaker Change: Today's conference call. Thank you all for joining me now. Disconnect.