DIBS - Earnings call transcript Q3 2021

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Operator

Good day and thank you for standing by. Welcome to the 1stdibs.com Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Kevin LaBuz, head of investor relations. ahead. go Please

Kevin LaBuz

welcome ended and of earnings for call Relations. Good XX, to XXXX. quarter September Head I'm the evening, XstDibs Kevin Investor LaBuz,

website Joining our including This available our CFO investors.Xstdibs.com. and growth quarter Rosenblatt at provide CEO outlook. Tu call update financial strategy me via will results and our David fourth review an business, be Nguyen. investor quarter webcast will and our on opportunities; today are third will relations Tu on David and

Before but statements that performance, statements, and we and in remarks our mind financial prospects, begin, please not keep business include forward-looking plans. market future regarding including, demand, growth to, limited guidance

Our actual materially. results may differ

we risk are disclaim are uncertainties, which call involve and SEC based described on statements our filings. to as obligation and we on statements and make of today, beliefs this our Forward-looking them. that update assumptions any in Any forward-looking

present reconciliation today's GAAP non-GAAP investor CEO, the and financial call. our with call, during relations press website, release, A the earnings Rosenblatt. is we'll measures find which turn of over you call along measures. on Additionally, I'll this replay can David to to our GAAP included non-GAAP the of now in

David Rosenblatt

thank and Kevin. Good us today. for Thanks, evening you joining

quarter, most a design. begin, the I'd revenue, delivered thank for and XX% made world's to over like strong marketplace I'd to Before employees we wonderful grew their also to moment beautiful GMV buyers, leading third on we results. our the for and take like sellers, thank making year our a XstDibs XX%. for In support. priorities financial our progress strategic and investors year;

trade up of active hit which XX%. a record. rate, growth quarter ended year remain ever. year. was quarterly GMV COVID, Designers buyers, over with And than We nearly busier stacked normalizes the GMV the two-year impact XX,XXX XX% Our

supply chain in traffic addition, key saw disruptions us reasons. we date impacted few the The half have industries when growth exiting relative consumer June picked many GMV growth of back not In to moderated. consumer to the a up quarter what for roiling

of no manufacturing. are majority market the items our secondary First, listings and require

and vintage by of Second, and definition, furniture, antique represents GMV, ready our is, to in half ship. stock which

example, an XXXX. XXXX the in speeds as had in shipping same orders furniture fulfilled October and delivered orders As antique vintage October

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on Our GMV and liquidity primary marketplace. the is the focus growing XstDibs of

in last an Growing returns increasing more opportunity. and creates our quarter, on initiatives mentioned potentially a than financial value any via improves marketplace at experience. and buyer improved our the have one seller customer we process growth to value history. GMV roadmap I meaningful in As Each represents and via scale point

collection curated items. we XstDibs addresses marketplace. main and demand whose own our research Doonan, purchase concern. world's a morning, that purchase with this beautiful things. by and and provides that are one-of-a-kind adds most it's luxury from to pricing supply don't consumer for it ambassador-at-large launched format Auctions, Jonathan of buy our discovery, reasons be for for unique a XstDibs sell means which the off home price format efficient people from effective value ascertain learned new and kicking Auction York. way designer therefore, Barneys, our example, an is why this We've nonprofessionals rare to existing new way leverages common We're Adler; an to New of indeterminate. items one Auctions difficult the to For can former discover a goods and creative the and This Simon

result, will more convert with are our the increase hooks, create cases, users time, of and providing XstDibs. sellers, buyers. several key expect and In consumer-friendly million benefits Auctions XstDibs differentiators X.X a Over the buyer the a the urgency, premium, sell-through, registered enter in purchases into not buyers, the see aid like all buyer's upfront includes to approach and covering charging many our the a and generate We new discovery, to we with We aiding on help seller, buyer, auction addition to protection price marketing Auctions market shipping price already XstDibs advantage: item as discovery, program. marketplace. costs

including format our focus on a our is initial the this customers. other mid-century that For public many listings prints, initiative $X,XXX. have is furniture, we've modern new launched rare Auctions bids second new a iconic Birkin bags, of raising we existing jewelry, marketplace, growth awareness of spanning Because under estate and items among launch, company. thousands near-term feature, our as art starting the is with

first Our include XstDibs the to August in token, expanding NFT, non-fungible was marketplace an vertical.

our and then was securing and iterate as feedback. accomplished to market goal Our prioritize to to product exhibitions, Twitter. and primary crypto building content we native Discord blockchain bringing objectives, holding the and market from an community by and launching on launch creators, to speed presence a We high-quality and gather data quickly, six differentiated enhance platform recognized NFT-dedicated

sale been two X,XXX or the roughly range Our top time, ETH, the for was the rates. X,XXX about sales NFT from at digital to on artist, at whereas to have OgiWorlds, XX most ETH $XX,XXX current one

like NFT and a industry as the our other of into that platform technology game-changing auto-playing a adding We grow features significant digital the our tab. parts from browse marketplace blockchain and believe our adopted for to will we've market. video art see Additionally, search to

to within online ability places unique squarely our and one-of-a-kind Our to sell items right win. rare NFTs

Our product see half to international our for but the in expansion XXXX is priority as our with NFTs language process. another potentially an to that market market an us. example liquidity. several large platform continue are is modest, we multiyear priority of marketplace next enhancing We International investment. entered building a in plan first a initial quarters of and incremental building over the local business have

located our largest on the see XX% our up in Our sellers where investments language stepping be of will opportunity. local initial be international outside of grow and Today, the It that products and for XXXX. our into focus marketing quarter time. Western and will audiences. allows We'll in over sites, the fourth to buyers localized localization improve XX% we organic States. We us conversion paid Europe launching nearly believe also to non-U.S. United buyers local are without invest

XX% cross-functional SEO the year to third investments and XX% SEO off. second on from pay in third. Average quarter year improved in to quarter, Turning growth the continue to in traffic approximately accelerated over rank the

improvements. of XXXX, paying now and We is have Progress is many in investment incremental prioritized dividends. SEO this in the SEO sum

this giving the Hans us improve to new rank pages, launched for queries For creator opportunity quarter, like we example, Wegner.

is performance. Looking order orientation. we quarter. sort our customize to testing site we and items launched to to size refreshed Enhancing page in And and buyer added item filters and engagement ahead, content for too, is our while progress emphasize the drive are features. the In We highly we'll and experience and seller here, pieces. keep another buyer creation design option likely buyers more our jewelry, art, made additional for this and scaling speed us, focus we health that and ensuring personalization for

end strategic and our work our a asset. the made improving and seller and Continually on Additionally, trust consumers is publish we phone. engineering day are us initiatives their of growth our over the of our that has few create macro in teams trust products These to examples designers. out. GMV incremental greatest of the enhancements we and item on third end progress to allowing experience launched day listings a X,XXX face of earned upload, from lingering solid mobile quarter, buyer and uncertainties. This the version and the In delivered in sellers

like and shift extensibility allows the of adjacent to us modest our our start-up to investments. platform, features, benefit and cadence Auctions with In and we've NFTs efficiently markets, As unlock digital launch we're bringing we the stepped of new market. look to forward, to GMV XXXX, well-positioned large up new enter products from continued which opportunities

quarter to beyond, will execution. third Tu, look and turn results about I'm financial our we who of now our discuss and outlook. fourth it to As I'll over our and roadmap pace the quarter excited

Tu Nguyen

Thanks, our along which will results David, We evening, I in the and providing outlook. review, strong quarter everyone. delivered good with fourth third quarter,

was XX% in to GMV and XX%, a conversion up growing traffic, quarter. On with XX%, order second on was million, value, year average quarter compared year. growth the all XXX two-year Third stack, GMV

driving Our consumer traffic trade held quarter, GMV exit Relative third record expectation, strong June versus upside demand demand increased steady. consumer with growth quarter guidance assumes and demand AOV our guidance. a June, consumer and to velocity. our and exceeded consumer had consistent GMV Trade

Turning designers less months summer usual engaged. than trade, noted the being when historically are clients busier over to

less marketplace subject our the delays shipping stock of diversified, produced carriers traveling our majority disruptions. As are freight via ready David making chain mentioned, we listings and to to U.S. the to buyers, most and ship, our been in items as haven't are ports. sea and Further, supply to sellers, routes, well same vast susceptible

cycle quarter a grew GMV from On we GMV second exited two-year trade but to XX%. improved we grew difficult comparisons, consumer consumer through slowed As relative the year-over-year GMV growth more XX% June. growth where stack, and

will would tough growth long combination we the continue economy comps, drive of impact near-term believe growth that our While of impacted our macro and by consumer the the be to GMV lingering consumer reopening, term. uncertainties,

each of trade reference of we these reminder, speaking GMV GMV on-platform to groups. when we of these GMV, buyer a As consumer or attributable subsets are

Additionally, furniture all basis a new the mix year-over-year vintage split verticals. were all custom are unless antique verticals. other furniture otherwise fastest between second and GMV Similar and to quarter, fashion and and XX-XX comparisons growing on noted. our was

outside to the leading our solidify We for of were online our quarter, XX% orders In nearly third continued buyer as luxury vintage new grow of destinations and one of marketplace and the furniture. position antique design.

and of XX% trust our by active Our bulk value items revenue a lower both was saw automation We margin GMV buyers across XX.X Orders nearly as ago. $XX,XXX tied sellers million from XX.X%, like XX,XXX have grew quarter. growth. new third by growth the the platform was and million, which to making driven prospecting. XX.X growth we XX above-average driven and GMV were XX%, AOV directly our that continued Transaction marketing new is in growth the and connected quarter, in amortization. revenue, mail which grew online. revenue marketing was expenses high-value third well XX.X performance Net custom channels expenses. groups, to primarily scaling the In driven buyers, testing greater driven than in growth increased our of direct demand the approximately video AOV. of million, margin in quarter, had AOV orders program, furniture, our AOV order up subscriptions by average growth Gross XX%, XX%. by increased points has up XX%, up X%. remainder. marketplace demonstrates core growth, transact Sales and year in expansion XX% of generation up profit basis as efficiency and XX%. was was up Gross improved profit Gross with from buyer the

we to core it of marketing have A acquiring and graduate was Facebook ago efforts. as Our as upgraded is our is buyers. our we new performance When marketing as where is where a The Sales generation users we efficiency we our more revenue vast threshold, XX% channels, on Google on a new focus a testing marketing to targets. percentage channel majority we remainder spend like note channels. experiment XX%, strict The our and scaled year platforms program. demand with had of we X% compared million have was meets ROI impact accounted and XX, quarter, in channel. users X data. We XX%, to roughly headwinds to Through of to higher targeting response, our third saw first-party Technology the up X headcount. converting million to quarter. expenses on app X.X engagement were GMV iOS registrations our gather for are on increasing iOS sessions new total highest and our third approximately and In engage to to this some development estimate million, an focus the due retargeting. tactics

fourth the focused well work, at portfolio as here as NFT enhancing addition beginning and localization of we'll expansion. on to growth the Auctions As directed platform. our initiatives is David incremental and product both investments, quarter, investment international and like testing commercializing functionality of personalization Auctions in be In mentioned, our

as XX% and of was XX% percentage insurance was flat quarter, revenue, a expenses year related over technology development a million, headcount. including of by The XXX%, ago. this year G&A X.X primarily from company, year. up operating and was XX% a As driven expenses increased increase up public to revenue, D&O

year. X% Lastly, Adjusted losses provisions EBITDA year were GMV were to chargeback for million, of primarily versus driven XX%, transaction for change and margin X.X costs in losses transaction X.X X.X claims. due million, XX%, last Provisions marketing. million up flat by driven expenses sales loss last year. revenue, over a compared increased growth This of to higher Adjusted quarter and year. G&A and investments public was by full company was year-over-year X% continued EBITDA loss was

to For context, cement COVID design. quarter in investing of we many in starting position and online We pulled in grow our growth second for XXXX. luxury uncertainty, to the XXXX back leadership due marketplace on and investments see our resumed opportunities

As GMV manner such, remains growing disciplined a our in priority.

Our model, highly the invest. us and structure, cohort gave asset-light to business cost buyer stable variable confidence behavior

free We adjusted GMV expect EBITDA revenue. time leverage to and expand cash flow as margins and we and generate operating over grow

XXX we ended in the position onto quarter cash a equivalents. strong of cash sheet, million and third Moving balance the with

XX.X to million, a a stack XX%. and and a GMV between XX% XX% two-year Net stack to million growth year-over-year to quarter XX.X of our of XXX turning XX%. EBITDA XX% equating equating approximately XX% XX%. Now, to between Adjusted fourth loss and forecast to million of of million, to and of XXX growth revenue to to a XX% approximately XX% outlook. two-year XX% We year-over-year margin

Given context fourth our some share underlying near-term on assumptions uncertainties, quarter guidance. the we'd to additional like

GMV Given more fourth year. quarter of of to uncertain represents seen are a We XX% growth the macro quarter. assume IDFA our quarter. guidance no midpoint we've continued assuming dynamic in The Auctions. and seasonality XX% from and environment, we headwinds over approximately muted growth quarter-over-quarter Historically, X% contribution material this

content. relative to third guidance to our quarter. investments decision for accelerate adjusted reflects as expect expenses expansion. technology modeling From a of EBITDA revenue fourth fourth our increase in Localization guidance, a in quarter international we an and quarter and requires to translating to all of see margin percentage development listings perspective, upfront the Turning the investment

the the GMV quarter, While we're continue we comparisons not of beyond growth year-over-year providing guidance fourth half tougher specific note first into XXXX.

of year first of over we the GMV XXXX, will quarter As recovery XX% grew the quarter XXXX. a lap begin additionally, in reminder, And to the trade in XXXX first year.

unpredictable an roadmap. While strategy and outlook, confident evolving we the macro and are in near-term our landscape impacts

excited include We the purchase are team new third quarter progress in and are that about XstDibs the expansion, These adding future our new formats made of verticals, proud growing our Auctions. and the international opportunities. like

I and to in you we'll of phase over prioritize of time. our in and near-term questions. are growth your will We many your growth initial the Thank initiatives, for now investments continue sustainable take profitability. David

Operator

from instructions] [Operator the Our come America. Bank will first from of question line of Justin Post

You may begin.

Justin Post

we'll of would have how Great. good kind the the that Thank get And maybe inventory the Thanks then the start question. you. for if of over then Auctions talk move you my how And you, inventory? on sellers help with evolve go on that make taking get sell liquidity years well, follow-up and next a you Could do sure to and couple prices? about, David, I'll site? marketing.

David Rosenblatt

Justin. Thank you,

inventory, site. of additional we the monetize it's existing the to way listings the terms an way is on So, in regard Auctions

is both. a the buy, format. address the site. got, this do to -- of people too products leaves in of this which got in the discovery an we've or value summary million know additional you high. look difficulty do over price, XXX belief terms the be face billion products, less pretty is listed a obviously, bought at with reasons So, We'll price We've price year, predominant $XX able GMV than on in don't good million why are to X.X has opportunity. And a now which the and when Auctions, through we doing reason that either

to inventory. as inventory how use for very impact. it Auctions said, need we don't additional feel sellers remains GMV it's to a like a seen, not tool pull well meaningful could That Auctions lot a of So, have new needed. we be But and in

In one supply the commercialization already we terms the again, that product generating have of this of we side. is demand, in advantages have

item. the have We

the we're the have We lacking The thing buyer. that is format. only

view a I as don't bottleneck. again, demand So,

this I doesn't in our to many terms XX challenge them over since we that particularly among of and environment obviously worked with format, about have years buyers is Auctions. have have have us more for awareness that have habituated think biggest the commercialization of we raising an

Justin Post

Got and in Marketing And than Tu. it. maybe wondering, you few for little on over appreciate changes And are about seeing percentage I marketing know bringing our challenges the came as return spend And follow-up revenue? what of with IDFA higher marketing one then think just a estimates. down on your -- but everyone, how do a next any years you and that for there?

Tu Nguyen

question, Justin. for the and thanks Yes,

made One is other performance right? our is and marketing. and headcount spend marketing So, the of components, up sales two is

like then Our program into marketing find and If which headcount core scaling on ROI, program, have we QX see email, and our pulled will year. is made And acquisition platform The way our you the testing and our themes our in XXXX, have a partly then also XXXX. graduate meets investment that in expect scale. testing. and of low a new investment continue with has been our SEO, due to ROI. to when new to a increased core we year performance back is growth is it we set reflection Relative year-over-year up core a of acquisition channel to to function revenue a that on lifecycle, we increased in GMV, rate within testing test COVID channels as XXXX, which uncertainty, we program. And is to of

we as that and QX, a efficiency continue to started and than QX. at that into the wanted efficiency be. improvement we for growing rate note made quickly growth. where And will improvements increased QX. And a and efficient GMV throughout result, slower CAGR sales less QX two-year our than you is on If at look A marketing, revenue slightly

an a level say in continue channels So, which down you to us invest. into And again, that, cohort I stable, the as scale give marketing saw And intentional of saw is And we QX, any way on scale we marketing, one to a example will expect seen, exposure -- about but channel, could quality remained of to significant to looking also IDFA. would note that we business that our would as as have seek the impact a have to and and confidence like we our are QX. reduce we're sales acquisition that come QX. that one see overall, percentage we've continue And as focus in increase LTV versus We're been leverage to pleased with revenue increasing then we'll we diversifying further ROI to the seeing. to more going that on efficiency. buyer the

Operator

will Ross Our line next of question Barclays. from come Sandler from the

begin. may You

Ross Sandler

said Hey, everybody. Do participate then Question late think for just on DTC the consumer guys it the you trade this buyers of quarter. Auctions business? might third or is in have consumer And the format. side in the accelerated I

XX% reconcile trying the So, and do growth the a teens What quarter? just to guidance you with between comment fourth XQ. in see for lot. the trade and consumer that pretty low Thanks in GMV solid

David Rosenblatt

Ross. The about Hi, Auctions consumer? want to the to you of marketplace. format talk is users do available all Tu,

Tu Nguyen

Yes.

relative of a And we So, you Consumer relative that on some two-year stacked June. down steady. slowed and was saw saw from where XX%, in QX, held XX% to in basis, traffic coming AOV are increased. we right, consumer QX. out again GMV has context, consumer growth to has QX, growth traffic June consumer into And

So, seeing in acceleration a QX. we two-year growth are stack

our questions a terms on sequentially that are That growing about over midpoint performance. said, side, in on into On X% record we very quarter as we we're so don't the we for by the QX, quarter trade, guidance still of the that. pleased quarter assumes And, comment quarter. reached of a trade

more assuming this We years. seasonality year are than muted prior

to tend versus XX% we see fourth third So, the in to the quarter. XX% growth sequentially quarter

as rate of GMV we year guidance from on we growth And to QX use quarter than impacts we're the on And going basis, way the assuming Given thing behavior, past. we'll last note, just for future a and seasonal far in have more that to date, given contribution but the healthy us today, stacked seen Auctions that a and be to a but volatility launched to XX%. GMV information Auctions muted for that is QX represents that two-year what no -- this a more assuming material we've are seen data information have going so still from we that we with the collect Auctions, forward. consumer

Operator

Thank you.

Spencer Tan will question come ISI. from next of Our from the Evercore line

begin. may You

Spencer Tan

Hi. question. for Thanks the taking

I there seeing cohorts guess just high-level little From Just seeing, color cohorts to the pre-COVID regards growth of retention provide pandemic, a can the those you you. acquired data during in how cohorts? GMV maybe like cohort question. that and versus one you're you're us Thank bit within

Tu Nguyen

Yes.

So, thanks, question. Spencer, for the

been brought large on QX a of quality cohorts. XX% So, cohort new our something the just very pleased is by buyer close during XXXX. over We've we the consistent a reminder, been that very and active has pandemic, And buyer volume quality new with to we versus to. prior buyers pay grew buyers cohort attention see buyer that we

As you to AOV year we seeing of the platform. the for grew consumer. saw, this that and that though saw not of AOV Even growth is both on we're optimized an quarter for, And something bring is that health indication the year. the continue trade buyers AOV it the our we over we

we've buyer the very much very in far pleased overall with what buyers increase terms therefore, we're the continuing that so increasing LTV we of frequency, buyer focused and the have. and So, on quality, that existing of again, seen to

Spencer Tan

much. you Thank so it. Got

Operator

Thank come you. of from Blair. line Ralph from will [Operator William instructions] Schackart Our next the question

You may begin.

Unidentified Analyst

how potential understand how that has you color additional Ann or Mary provide compared our month-over-month for Farrell. view is possible, basis you David, And opportunity expectations? on if taking the that NFT This question. your to had a help you us Thank Thanks Can longer-term everyone. discussed platform. on you any trended TAM? Hey, better you. can

David Rosenblatt

Thank Sure. you.

emerge obviously early long-term We art opportunity. and we will launch growing August. that make launched goal NFT in real our a that goals well-respected A, about art, with platform inventory robust a the lastly, very rest The and that The initial optimistic B, crypto believe as were site, launched We NFT works. was had handle, we're And to sure blockchain overall goal category. supply blockchain quality a native long-term to, the is We successful the viable So, technology -- then and digital digital with were Discord which our was Twitter of a marketing us. on a with that was our of level that. number the consistent the we of in third and two our creators. was new first launch then a for also XstDibsNFT; channels, to presence,

pricing put early between of technology said, material So, to has super in we on expecting was in recall, met. dollar we were That if The GMV And on near been the in some time had $X,XXX. launch channels still established. our three The have points That and able said, all three Obviously, those board. goals average it's prongs. marketing stable. And And and ETH. those all the growing of is for we you said quality. $X,XXX were all a that terms. not the We the of us, it's was were high focus $XX,XXX sale been at term. supply

of go secondary still way and So, functionality table some have a example, to critical supply and our adding mass for like, of channels. demand growing also sales, lacking long we're in terms we support for a stakes

terms believe in a real, think in have we we and again, think So, it's long-term market. this the we that opportunity, right and that's it's on. strong of to But we're big win focused we what

Operator

further turn I'm showing you. at closing it to remarks. questions Thank this not like time. David back to I'd any for over any

David Rosenblatt

conference for happy you call, our well. Thanks. as holidays Thank and joining all

Tu Nguyen

year. next you Bye. See

Operator

for participating. today. for this will conference you And our call conclude Thank

Have now disconnect. a You day. great may

1stdibs.Com (DIBS) 12 Nov 212021 Q3 Earnings call transcript