ATER - Earnings call transcript Q1 2021

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Operator

Welcome to Aterian, Inc. Q1 Earnings Report Conference Call. My name is James and I'll be your operator for today's call. At this time, all participants are in a listen only mode. Later we will conduct a question-and-answer session. now Director turn Corporate of I to call Development. And Grozovsky, Ilya Investor Instructions] like the to over [Operator Relations and Ilya, ahead. please go

Ilya Grozovsky

@aterian.io. call that certain of place affecting forward-looking our current quarter release the only from results Thank would discuss Sarig, you today's today's I business. Co-Founder you. Aterian’s you reliance press and judgment statements joining statements remind is actual Aterian’s Officer. this we should materially Yaniv on factors Thank forward-looking these on analysis Investor presentation Arturo A CEO statements Rodriguez, of reflect expectations for Accordingly, you make call are on Aterian’s Financial to based Relations earnings XXXX are statements. as and undue today's first forward-looking and website and differ in of on results. Chief today sections On available like us and not a to these may of Aterian’s number copy

a not call filings alter on or For to this that regarding included our of otherwise. with in statements uncertainties and to refer obligation made be new release, forward-looking events future whether of as information, forward-looking risks conference as We as do with first statements, quarter or forward-looking the the webcast, well to undertake associated the statements we any the is you disclaimer thorough earnings and our more any SEC. update a result discussion

Yaniv. I earlier certain found that, will the Explanation these be of refer With In in over the addition, call call. the filed release metrics company non-GAAP to turn metrics this to on may earnings can today.

Yaniv Sarig

as an time. first our I'm for decision this of Aterian, announcement was we week. Aterian considered company name afternoon, really Thanks, last significant important Ilya, a period conference good our everyone. Changing following thoughtfully over and to rebranding excited call

of First concisely. about more telling it story was all, our

that found we great vision. to team, our explaining had products technology our in Thanks of of is the differentiation and those a and the team story consumer the grasping of company a the our difficult our often a e-commerce, work at the of intersection does time job our new website strong As driving products, to consumer breadth business new our full industry.

chain you effort this our an on our questions proud incredible made what from and to decline of aware, marketing many in week against always supply address shareholders we integrity mischaracterizations. issued short the We has a stock. where various release an in from technology, been showcase seller to side. our the profits As through practices are anonymous team inaccuracies reap claims and business I've Yesterday, our years and unfounded a built and all factual welcome we

competitive, about a for demonstration earnings we efforts to opportunity company our Director of whose of to build If the about at you business, new the while interested are platform our questions to time of scalable actually our understand our was who to be learn with and more what efforts subject that QX tech e-commerce, -- we compliant post. made go-to-market found rules does, with course. marketing wish learning to have help our of out those to content us all investors IR reach remaining regulatory, online Ilya company. an email We bottom consumer to to hope strategy, product incredible please platform our of spend to see welcome platform, live regulations. the Grozovsky in go the answer our for can to and our our share We nuances be

we time as demand the the ability To who portfolio to we give efforts of of chain that create to of operations I've three in creatively while to fly. supply sales Research supply for our historical in lot domestically seven tested, the certain were for come watched of of every growth chain QX today, September know cost shareholders, shortage problems by revenue struggled is incredible optimization e-commerce the I all to maximize crisis, led while to increase continuous through by XX% our well to the of to and continuing containers potential and reliability the the company, supply my and in out not keep missed in difficult marine On fast. for recent Drewry hand a has of In of in increased team XXXX, our that years challenges learned both fight dedication daily on as stronger acquisitions. sourcing the chain times items despite history the the $X XXXX behalf shipping, full very and most QX able we more disruption, our capable. and and complexity the a American, the quarter. thank regarding of chain four to improved and I've a of products, team, the our firm, scale audience the all approximately our To internationally, this by you learn on context inventory Consulting was Regardless, work more while faced we I and While to has supply your efforts, solve schedules to plummeted intelligence. Combined the million on we according difficult it reported Service, we

we the $XX that Over missed we of as approximately believe in three the cumulative million revenue, past result a shortages. quarters, inventory

to remain guidance and case pricing of EBITDA continue rates, other congestion, have international adjusted continue shipping challenging in bottom-line. and last to mile shipping supply increase chain conservative, factors, continue We the chosen to environment affect our monitor our with and shipping

in more normalization the the have to expect irregularities We coming clarity the months. of supply chain on

in of most press that our our two read to we're today to announce adding As we're release earnings brands proud already you officially new portfolio.

in our Paper Photo office acquisition and the establish itself to Direct our Kingdom. of is media in the as created brand the a as United addition company's portfolio inkjet various the our Direct closed strong product Photo various Paper This further basically, in we leading printing mentioned, in category Expertise well product leader the diversifies business, online Amazon. we on As international marketplaces Europe. European categories Local our the to market leverage expansion. as mode accelerate Team strong to footprint on in categories, intend We and a

market portfolio. over family, a to care caring in to has Additionally, strategy to searches comes introduced. an million with new in abroad we're a on Potty occur We new a with products super market Potty to video is for see products, on and adding the opportunities well to quarter our States weekly M&A continue a dominate brought Potty it XX and new a basis. million flow products to appearing this an launched significant United Squatty When pursue launching the drive intend According of as We while others, health every products Squatty Potty poised pounds joining and average excited $XX to we Humor through on loved capabilities Health channels, early to is announce of review Shark developing the abundance nationally of the company our infrastructure estimates, believe YouTube. brand's brand Squatty We into it's additional as continue team deal brand our continue space. the the in invest to created. ads products category to to entire international personal record and to acquisitions. and success amazon.com month, on creating followers. and a Squatty On to the opportunity quite our expanding delight Tank growth like a for

of that on complex initially have projected been delays affected missed supply While as Certain front, are given products the our have in as hold, windows. seasonality we that challenges launch chain launching we and that on product, and favorable their manufacturing higher related suffered zoning recalibrated with achievements happy our very put partners could amount well. quality

travel given the challenges. We're team I selling worked to prevented in And it delay. we quality procedures, completely calls opportunity to from this cancellation which last that's have future COVID made control our beyond. thought call This expected, our the the on when think able during in restrictions expectations. some exciting fully best teams and is to Additionally, to possible are management forward tirelessly resulted of imposed on have important us. the the control of been was to reality have I and Overall, challenges it some judgment window. and address looking stock trading overcome around these run questions and open being

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partnering they an company's as remain personal people work of in portion drives to I behalf On is team my decided hardest everything our of With my of holding management the I've irrevocable is company update. includes trust finance working in power a my I'll This my Our some the note, of in for in I pass long-term on of give and a the planning, Artie maximum life's that XXXX, this a dedicated to long-term way part my to wealth on extremely with, ever that, think long-term significant had success. children. invested reported lead company privilege benefit a of of as value. to it shareholder and the

Arturo Rodriguez

and Yaniv, everyone. afternoon good you Thank

the operational are Here first our performance quarter. of details

products The including For of of prior late in period. from the in in sequential a suffered The our an the Gross We recently inventory our revenue, million period and of decrease quarter the the to ago with an we $X.X March. due versus quarter, margin impact revenue in we revenue $X product of margin. including QX year $XX.X the inventory gross of and including normal $XX.X $XX versus could quarter, million of acquired growth sell the levels. to to net be product XX.X%, improvements we XX.X% pricing from revenue additional the the margin of million, million products $XX.X from increase both sustained vendors XX.X% the much approximately in a launched primarily year-over-year zero estimate prior to million period as million in wholesale year period $X.X a million, sold X.X XXXX. favorable from million, year products that in quarter and million, also shorts – majority X.X $X saw XX mix, meaning in gross CME quarter launch products, ago M&A, new which million by first happened acquired increased XX% estimated XXXX, from million which the This was for carries gain to household strong $XX.X from wholesale lower first year have to increased from pursuant quarter. offset of in was

ended platform the e-commerce online of which the impacted overall which higher a to Within our the within XX compared sales as March and expenses, factors, and commissions, included March costs for mentioned percentage to three of distribution for months QX XXXX. the compared X.X%. margin supply as prior-year’s quarter, sales crisis, logistic variable Our chain result three were tightness expenses, drove distribution fulfillment advertising, CM, last giving mile XX.X% sales i.e. XX costs expenses in loss negatively and the XXXX improved in CM increased to was and XX.X% months a previously XXXX contribution by ended as XX.X% distribution our overview carrier's

impacting XX.X% grow contribution our in related excluding XXXX, We non-cash toughest to continue to which products to million inventory X.X% cost QX see in is historically saw sustain this some M&A XXXX. increased quarter QX. the when versus margin our $X.X step-up our QX of

the the our issuance warrants of value up in improvement of in excludes loss pricing. highlight, of change year-over-year loss that to for see quarter of loss to XXXX other believe mixing EBITDA, continue $X.X inventory improved for million described of from a from first We $X.X fair earlier, XXXX. shortages unit compensation, from acquisitions of inventory amortization in the first have a the if we would and breakeven. which warrant liabilities, quarter economics stock-based fair of step in million We'd not net to costs, adjusted been and market EBITDA M&A product like the earn-out charges related Adjusted from changes value approximately warrants, the

from costs million our Healing as fixed professional costs of approximately year period. the Solutions, related M&A Excluding the $X.X and fees compared increase to prior Transition

headcount rose, mentioned, March of Our people to as XXX XXXX. previously as XX,

primarily service the roles related customer customer Philippines. in other As we predominantly and added in headcount

model. operating near business and equivalent approximately We expect XXXXs $X.X time full to $X.X continued This of leverage for a our see of to million. employee technology is be our million versus our led XXXX revenue per example

in been as the of impacts warrants the amended losses in these be have basis of value of opposed on as equity net net loss, has and a which of to from avoid warrants the on million, as April, $XX.X charges to expect issuance the refinancing treated and Our debt we changes fair to future. impacted in warrants on completed part

as offset million $XX driven XX, of to XX, is Trail we the compared of by December warrants The proceeds million certain sheet $XX.X, have in XX, million, strongly cash on cash cash which to $XX.X had of inventory $XX Seller High million, in in $XX.X for have March purchase at Healing approximately of we of increase uses Smash up purchases, related from does financing of X XXXX, portion the of for at loss. our the company cash million, $X.X the Turning XXXX, from March XXXX. cash exercise end $XX the season of accounts note $X.X of The cash. working Solutions as million, been repayments to restricted as by million balance summer capital build notes at deposits the treated of escrow and inventory net

April As $XXX it’s on X. the Company closed its previously the announced, company refinancing approach. debt views financing as million stepped that

time. expect As is file including and expect we are continue profile which strategy our no been strategic M&A delayed XXXX we Smash initiatives, of over The May XX. to our the debt for and other opportunities prove execute to XK/A later performers the historical completed XXXX do has period we audit and than

of earlier As reviewed previously with mentioned, audit the balance opening line XK/A will XX acquisition. Smash results periods including which for delay performers in be was X-XX-XXXX, related December including XXXX. the The nine previously in the to period sheet included results are the disclosed the months period of financial

to million the revenue, net additional guidance for up of guidance, be expects range $XXX Our reflecting in million million company $XXX on $XXX $XXX to from the full-year XXXX revenue to now Potty. million, the Squatty the

Potty remain some Adjusted related the in the approximately Squatty offset of adjusted For and $XX acquisition, EBITDA the as increase in EBITDA the cautious of to chain. million to based of supply that million the on $XX timing adjusted is million. closing XXXX, company global full-year by the planning of crisis costs to guidance, EBITDA current the expects range $X.X

to I'll So, offset turn With of position expect we this the not products timing impacts for always prices call to of marketplaces. of the operator speed raise managed, that, do global open listing questions. impact the on call raising the to the prices our of to and long-term is crisis, back the

Operator

Very question good. Davidson. [Operator from Our Forte, comes begin now our session. We can Instructions] Thomas question-and-answer D.A. first

Thomas Forte

taking for question. my Great, thanks

and question follow So I have one one up.

at those and and selling products opportunities how a products. to build to manage marketplaces, then marketplaces level. those technology buy leverage logistics for advertise know high products, I need you to and you So identify to wanted your

Yaniv Sarig

the capturing on the Yeah, visibility to What are our touch so are products. of into the that mentioned, parameters cost those if see the ways for and the to and accumulated and and market. market. tell forecast best thanks, in in and We products certain we quickly manages on We managing, flows obviously day certain different the items, is we they're the outperform so based products. fulfilment, item And takes of data centres, that also for through We the compare sell, manage is we right with in we forward -- that our to Sure, software those? And to our product typically are board using help eight would from typically where once to three collected statistics help large if potentially are Walmart sourcing try the the instead point points. technology how Tom. software all cases, use marketing our we product other opportunity, know, what to the us at market. categories? the better own we move let's mile that incumbents we opportunities it qualify understand to build, that have then, one, product, where do we product, oversized suppliers make also scenarios forward public and those is to typically, into by sources, amounts data moment – basically get time, those data suppliers. especially more opportunity, for to us the looking categories launch. to across like of different launched through the for to doing. opportunities basically the the Amazon's shipping. product? different use software engage ready leverage suppliers, get weakness of to Amazon months the -- automate terms models first from through and information we qualify large, when arrives software that's build compare these mile that on the in us and a And use on software And to really to target marketing team well to the the six in we're including P&L a or every find the API's of relying and product, many the we you saw P&L dislocations the the it's everything the on defined, meaning partners centres sources we product takes right basically is trends we than it Once idea can product last or along identify we Those foremost connected our the launching fulfilment fulfilment, What moving you once the last will

So that your question? answer

Thomas Forte

Thank you. does. it Yes,

So question, walk quarter of impact in in through the But adjusted follow for you and you can remarks. then the from on sort shortfall? opening revenue inventory this my up touched your the

Yaniv Sarig

Art, you want to answer that?

Arturo Rodriguez

Yes, Hey, Yaniv. thanks Tom.

sustained So be million. roughly to margin estimated contribution shorts yeah, our And was we our obviously XX%. XX

you multiply get when So, numbers, that how you figure. those that's

Thomas Forte

thanks Thanks Art. Excellent. Yaniv,

Arturo Rodriguez

Thanks.

Operator

Our Brian next is question from Nagel, Oppenheimer

Brian Nagel

afternoon question. guys. Hey, couple I have Hey, question. good a a

the -- you been could this is are you you the first and much and chain? these higher how – last -- but prior the -- my in And to pressures How maybe this supply some sighs, chain on quarter, supply eating know the is for then long here? mentioned or in just philosophical but better talked -- question shipping terms is the -- you and and what do about I question the of can still the there's I you we've persist within impact, costs, topline first is seeing you? think basically think about lot EBITDA still longer a starting here talked The impact have --how are again, change these it

Yaniv Sarig

business want I'll the you to part, financial the do side. on answer take Arturo,

Arturo Rodriguez

Yeah.

Brian. hey, So

little than So distribution sales period. a the two yeah, you higher listen, our saw, number and prior year Right, about as was points.

right. prices but this term do does eCom I as everyone a expecting we So mentioned, as we go right, I did I to delicate it with offset increases. continue have we And crisis, considering this we how think is timing can crisis working. not of of portion our -- and good the just to right, to right, think raise we're the through global value question be impact marketplaces that listings pricing the that of is long The of

stuff you a we offset sort and through, plan majority the to jam to very kind just QX But you the do QX. sort got as delicately. is into really of of sometimes that approach of of And thoughtfully this

Yaniv Sarig

add to Arturo can Brian, what I more just If that, touch said, Yeah. on right. to

you As you kind know, prices very right. increasing see And the competitive, the dilemma marketplace as a chipping. of is is always, of

performance margin. you. take the you who If try to price, so its obviously that a contribution increasing from keep more was more to your aggressive absorb right. potentially competitor long-term expense start of come price of in share better potentially going product, It's and market at your produce low, going the affect to And your

a case-by-case optimizing be has find the and margin So, we And have. factors. that basis, try market many to contribution we for to between the given on that sweet conserving made decision share spot long-term also

Brian Nagel

Got it. Yes.

up to just follow So, that. on

impact So could the on supply the from issues? chain Artie, could actual a EBITDA did see is you -- adjusted way there you, you

Arturo Rodriguez

disclose can't point. this at I Brian, that

on and see of sales saw I probably is guidance the impact what there's side, you QX but the in in But its for right, the point where you'll I think to think, last think mile. future we saw We the measure we a that distribution right, the and sense I impact, pointed we right the about we overall, to I now. in queue. did them two script, I quantify -- what which can't think the is, mention see and think and

Brian Nagel

Got it.

Yaniv Sarig

question think Brian? I QX, on was right, the the

Brian Nagel

QX, that…

Arturo Rodriguez

guidance. On meant thought you on QX? I

Brian Nagel

Got it. QX?

Arturo Rodriguez

points. say I would Yeah, two

Brian Nagel

the product your on do for We'll the just any Probably Touro within math. Okay. final then portfolio? guess I more question. Yaniv, my And update

Yaniv Sarig

Yeah, sure.

that sales. was still there has Amazon decline client page. those causes the hat in We're caution on to one One to is that is of was that these black actually numbers try working ways hat the black with big in on there and under product most estimate using sellers of which attacked by And of thing, sales. aggressive all appearing But a a Touro some problem. basically still very very ongoing resolved, this from is hat inaccurate to but Amazon and nature seen of clear exactly not attacks what black an egregious with again, external are some and it on Again, We're will issue. necessarily of category working it's that on this, overall one tools when most these its we we've the seen. the products limited very, them. and working we've it's evidence affect So, Obviously, think resolving are I'd seller, we're other Amazon, cannot products. get

Brian Nagel

Got it. you. Thank

Operator

Our Marvin next question from Fong BTIG of

Marvin Fong

you have how into against your of Thank that expectations Thanks and question, Smash then questions. here, Couple of taking last for my the you. the insight on be – – other me. you the couple maybe investors helpful building how that it'd you've Actually can the against – Good for I afternoon. deals being progressed on just provide some executed have for maybe a next oldest performed ups. also some your follow

Yaniv Sarig

me the I tell the same fixed think growth. large don't want about time of we can understand amount assets, our we’re growth we across different we margin, acquired growth making channels, be this, manage think around approach, the optimal always a best or positive product products basis. products so drive one certain all we mean, at of in the and cost, point a goal like how best know, So basis So we our time with example. a versus four portfolio, right? these and and And, for over at give is to in decisions certain remember, does can thousands really a of entire to have time, right? assets, – XX% as mean, or I grew all costs. lot acquisition uses break So in us, data fixed general, that invest have the last manage explain little a I what year, example, you but right. resources, I'm And the resources thousands opportunities on going for in different the at possible to who portfolio, with of many contribution to if per to right? able both, over more shows investments a whether lowest you us of they appliances, an we some beauty are in growth there, Smash in across of our we think we And the products and category. invest of the here that have the more for category, the of that tell tech the example year month first possible those mean know, we doesn't products let that in we going they're that help do expense, in is you the efficiently, Yeah, good, beauty on stop launch more data right that the that regular we are as long it we them and pool the the same not are, or, right. to them selling that's of we're properly and because really managed as you again,

that, by generated revenue you brand, data certain or certain basis, by on example, tell the down grew So building invest I us, more all really of categories, the for but is based per resources also done as market, on the portfolio, us last you right. limited can in to doubling what XX% we're growth, products, right? on LTM across tells you have the not whether the decision that entire or products know, launched the acquired

data this product So that a tells portfolio portfolio trying dig on work. down that is will will in other this brand revenue is an what not right? difficult, as again, sense? growth products necessarily So it what does view the know, one again, the take figure and as is traditional, XX% – of certain approach and of out pattern, that much particular generated start and we a right, does we maturity, we been entire all that as why look growing make that You at all by breaking our it has that us not category, a it's as the the not mean, That's to is one.

Marvin Fong

then And an sense. moving on, expanded perfect to the last you M&A please, in compared evaluating release, makes talked That you're so you. pipeline Thank Yes, now quarter. how question,

us Just of dynamics, top from that had could of actually that wondering some of if the actually you. last off that? only what's have And from then been that like you're dropped help that the one kind companies in the Thank building this on so you pipeline of to in pipelines of executing these could you figure you actual, are updates? mentioning is dive of into the kind if last understand prospects quarter is, just or – you in asking was kind quarter, and quarter, is if pipeline there [indiscernible] -- I'm the last the

Yaniv Sarig

Yes. deals to great LOI. are obviously Yes, question. revolving, Some moving that going That's is to be pipeline a right?

of will them close. Some

of reasons, dismissed went Some to LOI, even we after do to we certain will either did right. while maybe them be

And right. so the that in was number, pipeline revolves, and yes, Potty Squatty

leave someone to So deals pipeline deal might we someone they on the the also again, else, lose right? so some might they'll else, right. with And to that, say into other side decided seller go the the

we think in close of and looking size at time of how the it's putting amount right? much a there. are So much out water at. we're any just time And acquisition at the of is that of there But important is, under how really to just the out in I terms the mean, that looking opportunity number of it. around that's a to and competitive drop LOI sense revenue in convey give point there, it's in revenue we're

Marvin Fong

should think the quickly. if launches there, issues? get about around being XX, all one last And that product could just a mentioned the supply number are you very or the quarter chain just more number all I issues by still supply Terrific. chain that we as expecting affected you With out of in, Thanks.

Yaniv Sarig

Yes.

definitely pressure. are So we still seeing

You XX XX know, planning the products probably we're point like to quarter second XXXX. at of this in

but product corners. the You make has that a to price. with and for is a suppliers. try you products not raw of way -- sweet that of quality on to us having just materials. us, know, just situation rush no the too to that making it on a expand many the of want it And time, definitely have creating, some to successful. know, because sure all are it's The sustainable can't other end challenging not a we the And suppliers is have at to we they way COVID also our just cut There's only hard long-term, spot day, be limitations the cautious

there's of the know, parts world It's to You delays various everywhere. manufacture get where products. -- trucks the we in hard

with doing constraints to best And as on can for as so, as cost we are and many again, obviously working sacrificing the chain but hard and products, supply sides. without and launch customers, both quality the value our we

Marvin Fong

Yes.

sense. perfect it. Okay, that so Thank you makes much, Appreciate Yaniv.

Yaniv Sarig

Thank you.

Operator

Next Brian Global question Alliance from Partners Kinstlinger of

Brian Kinstlinger

management strategy are so that six evaluating what control right guess, I Thanks I'm shortages? now, has in wonder, how inventory renting prior learning that right Is the at while much owning companies changed yourself questions. Great. is months, I not that curious over is my can obviously. your like last After control you inventory And something taking the containers? much all, differences? about versus for the more limited

Yaniv Sarig

And obviously, sell like here. model question. business gives that is on terms to for because the a which of in retail show a much regular of allow, velocity for a flexibility example, basically, inventory things basis, trying levels can lot right. pricing piece as the the inventory love that things the control crucial control as Thanks we customers, about management through know, we to of we of possible one sales it is the pricing you the and I the of Yes,

the And do adjust, have and a we and demand. sustainable our or to that best so, make try oftentimes, we increase right, obviously, to to the price supply levels, slightly marketing might sure lower

more we're how a of here, Now, that long disruption again, seeing to arrive that terms in takes for floors, little it a not of as becomes this level is containers we've type containers. terms to of the challenging, of constraints, in with difficult find really, it how to seen

the before, we lot and work long-term make have again, too we're around could effect managing know the working need to team variables, solutions, turning decisions many long this per that like again, we doing to really feel supply margin, amount the the open product, share performance so our right, to share, the company was at like -- a implication we the because in space, cost of market back different a CM stock its has and mean, through of the that and our that the to produce paying for on so to right. market product basis, right? being of attuned take too product because the containers authority of kind sometimes long tough and much losing for and out we're And competitors I the contribution for the right, inventory that a of every to expectations, including to would amazing the door meet more given that of for market question stone over that including for have is too really, performance So, we we share, asked goes sometimes of

Brian Kinstlinger

there -- the remind And I shipping us are from locations? when or China. being on from supply then geographic manufacturer us know issues other made Are you other there global you of can -- alternative a investments areas remind are lot

Yaniv Sarig

Yeah. context crisis it Asia. -- are right. in areas of bulk at there that least the other going the to not supply country, pretty at of out the meeting China, every requirements think the other another right. knowledge, as products, I drive in to of least There It's there's route, are as global but still affects within far much chain mix not something my resolve could But by is still we but of

price can they optimizing right the monitor can I ground within situation. when improving when and best we to again, development the And doing as Work et team as comes manage visibility advantage we in closely. the perspective. can forecasts Having spend again, the our again, on as thing take And to marketing challenges. own to can very right? comes team it far and into is them the suppliers to for on in much anything other our is it with we think that give cetera, for is situation so, best helpful our the them So, visibility try extremely our every do of the situation. and China end, continue And that we'll

Brian Kinstlinger

on question is I Last have Great. M&A.

upside but average, paying? EBITDA Let's assume you're know average earn-out generally much? the better? what that it is times the does much what it, and four if I the it trailing like? – earn is times evaluation delivered, about paying And don't out it Does about it and it been EBITDA. what generally Is does at the like versus four evaluation after initial Is is is given how is looks keep achieved the the for they've it or you change looks

Arturo Rodriguez

The yeah, deal negotiations up done the multiple, right. right happy on and has higher and company is being, bought have the more, we assets really depending is well, can then very it – company's we're obviously, performed obviously, Yeah. and things, we're a sometimes But very, end pay, about. structure really if that well, other excited to which the that, has really

depending and earn-out, kind deal negotiate multiple it right. something a is, various basis, things, a per would on multiple that's really certain really is the of on prompt a on range, range, a again, it certainly So

Brian Kinstlinger

so you Okay. Great. Thank much.

Arturo Rodriguez

you. Thank

Operator

Capital Galá Next Partners. question from of Gus ROTH

Gus Galá

Hi, guys.

raising understand midpoint and delivered Potty, Just Just they gap quick are XX guidance trailing the so wanted months? the there? XX about over on million, the you guys the question million XX Squatty by to

Yaniv Sarig

that? want you to take Arturo,

Arturo Rodriguez

Yep.

of right. some timing think I there think So its – Gus, I seasonality

you get just to number little that's today, there's year, our number business. bit two, one. closed the So not know, so I you're full we of a And seasonality going baked into think

But kind just, there. we're get how of on that's So kind that of number. prudent you

Gus Galá

And the follow-up have Okay. here. I

just earlier report this week. looking So out full came at the that

reviews? or pay clarify does to wanted Just Aterian for never products giveaway

Arturo Rodriguez

the again. hear you couldn’t I I'm sorry, ask it. can question,

Gus Galá

Sorry.

want giveaway products? Aterian to I for reviews or know, pay ever just So does

Arturo Rodriguez

these through No, we Right. right. never But lot contingent a take get we'd right, email sometimes promotions, systems in including the customers promotions any retails, leaving that. don't pay know, We we on – give I like things review, reviews, and of for you don't sweepstakes, we for or – other ask haven't look, not giveaways, do themselves, – we benefits we do of –any that – we reviews. general, a like, right times And, right. we

So can those the challenge right. marketing are very tactics is that confuse, that people separate

So of again again, we make we've reviews ask leaving purchase the sometimes consumers contingent system on themselves, other us but those promotions benefits retail obviously type any post with never for or reviews.

Gus Galá

last one And Great. Okay. question.

end new of the do much levels? about kind how the Just parameter? is regarding I size have the XQ? the the do And current think about stock acquisition, using at firepower to of you cash the targets? of average going M&A mean, with at gap you what you the style pipeline, talk be can Looking How there

Arturo Rodriguez

Ilya, you to want to speak that?

Ilya Grozovsky

Yeah.

big think, entities would we right? to So, the money I and is previously, to There's different raise one of need some before next, faced potentially raise small financing what's M&A, sufficient what's sort think go we I pipeline, There's or if or I what decided like for depending the there got that we right. close said that, in pipeline But up? depending we've next said year, lot cash be guys, we excluding dynamic. of the a to or one right, in or what's I opportunities, of depending on from would bigger next type or we something think, next some debt the raising. run what, think on on business to doing that

Gus Galá

taking my for Thanks Great. guys. questions

Operator

back no I are there a call And so more questions to turned Ilya.

Ilya Grozovsky

you the for to Conference, to Consumer you speaking XXnd and June XXrd, The and Aterian Consumer calls. XXth. Conference, Global The May XXXX will Thank Virtual in XXth. June on call forward Media joining this Retail on future call. the look upcoming XXnd calendar, our Needham you. to and capital today. RBC markets be Conference, We Thank management us Jefferies the Technology annual and participating XXth ends with XXth And

Operator

concludes you, ladies this and participation. you today's Thank gentlemen, conference. Thank your for

You disconnect. now may

Aterian (ATER) 9 May 212021 Q1 Earnings call transcript