NASDAQ:DIBS 1stdibs.com Q2 2025 Earnings Report $2.75 +0.12 (+4.56%) Closing price 08/6/2025 04:00 PM EasternExtended Trading$2.72 -0.02 (-0.91%) As of 08/6/2025 06:10 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast 1stdibs.com EPS ResultsActual EPS-$0.12Consensus EPS -$0.17Beat/MissBeat by +$0.05One Year Ago EPSN/A1stdibs.com Revenue ResultsActual Revenue$22.14 millionExpected Revenue$22.19 millionBeat/MissMissed by -$58.00 thousandYoY Revenue GrowthN/A1stdibs.com Announcement DetailsQuarterQ2 2025Date8/6/2025TimeBefore Market OpensConference Call DateWednesday, August 6, 2025Conference Call Time8:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by 1stdibs.com Q2 2025 Earnings Call TranscriptProvided by QuartrAugust 6, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: Q2 GMV and revenue came in above the midpoint of guidance and adjusted EBITDA exceeded the high end, while operating expenses declined 4% year-over-year. Positive Sentiment: The conversion rate increased for the seventh consecutive quarter thanks to product enhancements, with conversion trends rebounding in the second half of Q2 after tariff-related headwinds. Positive Sentiment: Machine learning-based pricing models are live across all verticals, early data show higher sell-through rates and reduced negotiations, and organic traffic now accounts for over 70% of site visits following site performance optimizations. Negative Sentiment: GMV modestly declined year-over-year amid a soft luxury home goods market and a slow U.S. housing environment, highlighting ongoing macroeconomic challenges. Neutral Sentiment: Third-quarter guidance calls for GMV of $83–89 million and net revenue of $21–22.1 million, implying modest growth range alongside continued adjusted EBITDA losses. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference Call1stdibs.com Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xThere are 6 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and thank you for standing by. My name is Chris, and I will be your conference operator for today. At this time, I would like to welcome everyone to the FirstDib Q2 twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:35I would now like to turn the conference over to Head of Investor Relations and Corporate Development, Kevin Labuzz. You may begin. Speaker 100:00:46Good morning, and welcome to First Dib's earnings call for the quarter ended 06/30/2025. I'm Kevin LeBuzz, Head of Investor Relations and Corporate Development. Joining me today are CEO, David Rosenblatt and CFO, Tom Medergino. David will provide an update on our business, including our strategy and growth opportunities, and Tom will review our second quarter financial results and third quarter outlook. This call will be available via webcast on our Investor Relations website at investors.firstdibs.com. Speaker 100:01:26Before we begin, please keep in mind that our remarks include forward looking statements, including, but not limited to, statements regarding guidance and future financial performance, market demand, growth prospects, business plans, strategic initiatives, business and economic trends, including e commerce growth rates and our potential responses to them and competitive position. Our actual results may differ materially from those expressed or implied in these forward looking statements as a result of risks and uncertainties, including those described in our SEC filings. Any forward looking statements that we make on this call are based on our beliefs and assumptions as of today, and we disclaim any obligation to update them except to the extent required by law. Additionally, during the call, we will present GAAP and non GAAP financial measures. A reconciliation of GAAP to non GAAP measures is included in today's earnings press release, which you can find on our Investor Relations website along with the replay of this call. Speaker 100:02:37Lastly, please note that all growth comparisons are on a year over year basis unless otherwise noted. I will now turn the call over to our CEO, David Rosenblatt. David? Speaker 200:02:50Thanks, Kevin. Good morning and thank you for joining us today. The second quarter demonstrated continued resilience amidst a dynamic market with GMV and revenue performing above the midpoint of guidance and adjusted EBITDA exceeding the high end. Our continued commitment to cost management resulted in a 4% year over year decline in operating expenses. This performance reflects a continued focus on what we can control and an ability to navigate a difficult external landscape for consumer discretionary. Speaker 200:03:24While GMV modestly declined, we continued to gain market share against the contracting luxury home goods market per syndicated credit card data. This performance is a testament to prioritizing core product initiatives and expense discipline. The team is committed to executing against a clear set of priorities to enhance the marketplace and reaccelerate growth. From a funnel perspective, we are pleased to report another quarter of conversion growth, a testament to our continuous optimization efforts. Our focus on product enhancements has now driven conversion gains for seven consecutive quarters. Speaker 200:04:05Encouragingly, we saw conversion trends improve in the second half of the quarter, following a slowdown after the April 2 tariff announcements. During the second quarter, we made sustained progress across our product roadmap, which is designed to enhance both the buyer and seller experience and drive market share gains. Our 2025 roadmap is centered on accelerating organic traffic growth, ensuring competitive pricing for listings and shipping and optimizing our multi step conversion funnel. We continue to execute on our organic traffic growth strategy, which is a critical driver of efficient buyer acquisition given that over 70% of traffic originates from organic sources. This approach centers on improvements to site performance and structure. Speaker 200:04:57A key project involved a targeted effort to reduce the number of low value pages across the platform, which improved the site's overall quality perception for search engines and enhanced crawl efficiency for the most relevant content. Furthermore, we deployed infrastructure improvements that bolstered indexation rates, ensuring that our unique listings are more readily discoverable. These efforts have boosted overall site reliability, creating a more robust and performance user experience. We are also actively tracking the emergence of AI and chatbots in the search ecosystem. While we are keenly aware of the potential shifts this technology could bring, to date, the impact on our organic search traffic has been low. Speaker 200:05:47This remains an area of ongoing surveillance, ensuring that we will be prepared for any potential future shifts. We also continue to optimize our account registration and email opt in experiences to expand our email audience, which grew for the third consecutive quarter. Competitive pricing remained a significant focus area. The objective here remains the same, ensuring that the marketplace offers competitive and transparent item prices and shipping costs. As we highlighted last quarter, machine learning based pricing models are now live across all verticals. Speaker 200:06:26These proprietary models leverage our proprietary transactional database to bring transparency to what has historically been an opaque market, reinforcing buyer trust and confidence. The integration of the first dibs estimate directly into product display pages, which began in March, continues to provide buyers with valuable pricing context, fostering trust and confidence and ultimately leading to higher conversion. With the foundational work of rolling out these models complete, we have shifted our attention to enhancement and adoption of our ML pricing recommendations. Specifically, we are now refining recommendation accuracy, incorporating a wider array of data attributes into the models for enhanced precision, including using AI tools to better utilize unstructured data and driving higher seller adoption. Early data from these initiatives are promising. Speaker 200:07:26Specifically, we are seeing increased sell through rates on items meeting our pricing recommendations compared to those that do not. We have also observed a reduction in price negotiations on items where pricing recommendations have been adopted. Alongside recommending the market clearing price, the second half of the year will see us prioritizing technology to strengthen seller adherence to our existing price parity policy. This will ensure that items on first dibs are priced consistently with other sales channels. Turning to funnel optimization, we maintain strong momentum in reducing friction and delivering a more compelling user experience. Speaker 200:08:09Our aim remains to make it easier for discerning shoppers to discover and purchase the unique items available on first dibs. Our multi step checkout process provides substantial headroom for ongoing optimization. A key project in the middle of the funnel was enhancing the product detail page, a critical touch point for buyer decision making. The price negotiation called action was optimized by including clearer, more action oriented language. This update successfully increased engagement on PDPs and importantly, the percentage of users entering checkout. Speaker 200:08:48This refinement underscores a commitment to making the buyer seller interaction more seamless and intuitive, especially given the highly considered nature of our listings where negotiations are common. Building on momentum from the first quarter, we made additional progress at checkout. We refined the user experience to provide an even smoother and more trustworthy transaction flow. In particular, highlighting key elements of the first fib's promise raised checkout completion rates, especially on mobile web. This directly reinforces buyer trust and confidence at the critical point of purchase. Speaker 200:09:29These targeted enhancements and many others are directly driving buyer trust and contributing to ongoing conversion growth. We are also actively embedding artificial intelligence throughout our platform, driving efficiencies and elevating capabilities. Development and deployment of AI extends across every function, from enhancing the ability to detect gray market order attempts, the streamlining our trade application, to building a client service chat agent, to enhancing item and recommendations and user personalization. These diverse applications, all either in flight or in design, underscore commitment to leveraging AI to grow revenues and drive efficiencies. Beyond core initiatives, we recently overhauled our sponsored listings pay for performance product. Speaker 200:10:23Additionally, we are beginning to explore non endemic advertising opportunities. Though we are optimistic about the long term potential here, no significant revenue impact is expected in the near term. We plan to share more details as these opportunities mature. Moving to supply, we continue to demonstrate our unique ability to aggregate the world's most beautiful items. Consistent with prior periods, we saw steady listings growth ending the quarter with nearly 1,900,000 listings, up 3%. Speaker 200:10:58This sustained growth underscores First Dib's growing relevance to sellers and reinforces our position as the premier destination for luxury design. As we mentioned last quarter, we are becoming more important to our sellers. Our 2025 Seller Sentiment Survey showed that First Dibs is now the primary sales channel for our sellers, surpassing their own showrooms for the first time. This marks a meaningful shift from the past four years when showrooms ranked first. We ended the quarter with approximately 5,900 unique sellers, down 21% year over year, but flat sequentially. Speaker 200:11:40As we've noted in recent quarters, this outcome was expected and is directly attributable to subscription pricing optimizations, including the retirement of our central seller program and other pricing adjustments from late twenty twenty four. The impact of this elevated churn has been minimal. In total, the churn cohort accounted for less than 50 basis points of GMV over the trailing twelve months and approximately 90 basis points of total listings. As we move forward, we expect continued listings growth throughout 2025. Before we conclude, I'm excited to share a significant addition to our leadership team. Speaker 200:12:22We are thrilled to welcome Bradford Shellhammer, who joined First Dibs as chief marketing officer and chief product officer this week. Bradford brings a unique and highly relevant skill set with deep experience in scaling online marketplaces in both startups and large public companies. We are confident that his understanding of online marketplaces, combined with his deep passion for design, will be instrumental in shaping marketing strategies, driving customer engagement and steering product development. In summary, our second quarter results reflect disciplined execution, prudent expense management and sustained progress against strategic objectives. We delivered strong results for adjusted EBITDA, met our GMV and revenue guidance and grew conversion for the seventh consecutive quarter, all while navigating a difficult landscape for both luxury design and discretionary consumer goods. Speaker 200:13:22The foundational platform work including the full rollout of ML pricing models and comprehensive funnel optimizations is steadily enhancing the user experience and marketplace value. Our commitment to a leaner, more efficient operation remains unwavering, positioning us for sustainable growth when market conditions inevitably improve. Thank you for your continued support. I will now turn it over to Tom to review our second quarter financial results and third quarter outlook. Speaker 300:13:53Thanks, David. Second quarter results demonstrated solid performance meeting or exceeding guidance across all key metrics. Our financial outcomes reflect the strength of our underlying strategy highlighted by our seventh consecutive quarter of conversion growth, continued market share gains and operating expenses falling 4%, underscoring our continued vigilance on costs and commitment to an efficient operating model. On a sequential basis, GMV growth rates decelerated due to softening traffic and moderating average order value growth, partially offset by continued conversion gains. While the quarter began with some softness in April around tariff announcements, we were encouraged to see conversion trends improve in the second half of the quarter. Speaker 300:14:38On platform average order value of nearly $2,600 was flat year over year, while median order values of approximately $13.50 dollars was up 10%. This dynamic was driven by a slight mix shift away from higher value orders. This suggests macroeconomic uncertainties may have prompted consumers to defer or trade down on significant high value purchases. A defining characteristic of First Dibs is the trust we have built with our community, enabling transactions at high average order values across multiple categories. This unique confidence allows us to deliver qualified buyers at prices ranging from under $100 to over $1,000,000 Returning to funnel trends, traffic growth softened driven by a slowdown in paid due in part to continued performance marketing optimizations. Speaker 300:15:28We ended the quarter with over 70% of traffic from organic sources. Conversion growth improved sequentially, partially offsetting softening traffic and AOV growth. Conversion rates have now increased year over year for seven straight quarters. Additionally, both new and returning conversion increased. From a buyer perspective, trade GMV was flat while consumer GMV declined modestly. Speaker 300:15:52Jewelry, which accounted for approximately 20% of total GMV, increased high single digits while all other verticals were flat or down. The broader impact of the soft housing market continue to be felt across our home categories, specifically furniture and art. Active buyers totaled approximately 64,400 at the end of the quarter, up 5%. On the supply side of the marketplace, we experienced steady listings growth, closing the quarter with nearly 1,900,000 listings, up 3%. We ended the quarter with approximately 5,900 unique sellers down 21% but flat sequentially. Speaker 300:16:29Seller churn remained elevated consistent with our expectations following recent subscription pricing optimizations. Importantly, this had a de minimis impact on both GMV and overall listings. We expect to see listings grow throughout the year. Moving on to the income statement. Net revenue was $22,100,000 flat year over year. Speaker 300:16:52Transaction revenue, which is tied directly to GMV, was approximately 75% of total revenue with subscriptions making up most of the remainder. Take rates were up approximately 30 basis points year over year due primarily to a mix shift to lower value orders. Gross profit was $15,900,000 flat year over year. Gross profit margins were 72%, also flat year over year. Sales and marketing expenses were $8,100,000 down 12% driven by performance marketing optimizations and lower headcount related expenses due to reduction in force in January. Speaker 300:17:28Sales and marketing as a percentage of revenue was 37%, down from 42% a year ago. Technology development expenses were $5,900,000 up 8% driven by higher headcount related costs due to our annual merit increases awarded in March. As a percentage of revenue, technology development was 27%, up from 24% a year ago. General and administrative expenses were $6,600,000 down 4% due to lower headcount related costs. As a percentage of revenue, general and administrative expenses were 30%, down from 31% a year ago. Speaker 300:18:05Lastly, provision for transaction losses were approximately $965,000 4% of revenue, flat year over year. Total operating expenses were $21,600,000 a 4% reduction. This is a direct reflection of our diligent expense discipline and ongoing vigilance in maintaining an efficient operating model. Adjusted EBITDA loss was $1,800,000 compared to a loss of $1,600,000 last year. Adjusted EBITDA margin was a loss of 8% compared to a loss of 7% a year ago. Speaker 300:18:37We continue to prioritize driving operating leverage through efficient scaling. Given that the majority of our operating expenses are headcount related, our asset light model allows us to increase revenue without a commensurate increase in hiring. In 2025, we expect to keep headcount approximately flat. Moving on to the balance sheet. We entered the quarter with a strong cash, cash equivalents and short term investments position of $94,000,000 Of the approximately $6,700,000 sequential reduction, dollars 3,200,000.0 was due to annual prepayments of various services and $1,300,000 was due to an increase in restricted cash held at a payment processor which reversed itself in July. Speaker 300:19:20Turning to the outlook. Our guidance reflects quarter to date results and our forecast for the remainder of the period. We forecast third quarter GMV of $83,000,000 to $89,000,000 down 2% to up 5% net revenue of $21,000,000 to $22,100,000 down 1% to up 4% and adjusted EBITDA margin loss of 12% to 8%. Our GMV guidance reflects continued conversion growth and a modest rebound in average order value growth. Our adjusted EBITDA margin guidance reflects the impact of seasonally low revenue, gross margins towards the lower end of our 71% to 73% range and continued benefits from paid marketing optimizations. Speaker 300:20:05To conclude, our second quarter performance reflects a commitment to disciplined execution and vigilant expense management. Despite a challenging demand backdrop, our ability to achieve guidance targets coupled with a 4% year over year reduction in operating expenses underscores our dedication to efficiency. Our consistent conversion growth remains a bright spot, directly reflecting ongoing improvements across our platform. We appreciate your continued support and look forward to updating you on our progress in the coming quarters. Thank you. Speaker 300:20:35I will now turn the call over to the operator to take your questions. Operator00:20:41And with that, our first question in queue is Ralph Schackart of William Blair. Please go ahead. Speaker 400:20:51Good morning. This is Justin on for Ralph. Thanks for taking the question. Just one for you. On the macro uncertainty, you noted that the environment for luxury home goods remains challenging, but have you seen any changes in the overall environment since the beginning of the year, even if just on the margin? Speaker 200:21:07Good morning. Thanks for the question. We haven't really seen major changes in the macro environment. Both The US housing market and the market for luxury home goods, which are our primary drivers, remain soft. Just as an example, The U. Speaker 200:21:23S. Housing market has posted, I think, the slowest spring selling season in thirteen years per Redfin. And to measure market share in luxury home goods, we mostly rely on syndicated credit card data. And that data shows that demand in that market also softened in Q2. On the other hand, while we're in a soft market, we do believe just comparing our GMV growth to that of the syndicated data, that we've been gaining market share over the past six quarters. Speaker 200:21:54So we're not satisfied or happy with our current GMV growth rate. But on the other hand, we do believe that it represents a market share gain, and we believe we can continue to do that based on the strength of our product roadmap and other opportunities in front of us. Operator00:22:14All right. Next up, we have Austin Riddick of Evercore. Speaker 500:22:22Hey, guys. Thanks for, taking the question. I think I heard over 70% of traffic originates from, organic sources. And so I guess I just wanted to ask, how vulnerable do you think that mix is to the growing share of AI driven search results and chat interfaces? I know that's not exactly the most easy question to answer, but curious to hear your thoughts. Speaker 200:22:42Good question. We think about that quite a bit. It's something that we track very actively. Obviously, AI and chatbots over time, we think, are going to be a significant have a significant impact on our traffic. On the other hand, while we're aware of those potential shifts, you know, we haven't actually seen any material impact to our organic search traffic and the kind of key terms or key keywords that we rely on to drive the most traffic yet. Speaker 200:23:14However, we're very focused on it. We're focused on AI and ML in general. This is one of many areas. And we'll report back as and if things change. Operator00:23:31All right. And with that, there are no further questions in queue. So this will conclude today's call. Ladies and gentlemen, thank you for joining us today. You may now disconnect your lines.Read morePowered by Earnings DocumentsSlide DeckPress Release(8-K) 1stdibs.com Earnings Headlines1stdibs.Com, Inc. (DIBS) Q2 2025 Earnings Call Transcript3 hours ago | seekingalpha.com1stdibs.com (DIBS) to Release Quarterly Earnings on WednesdayAugust 4 at 3:19 AM | americanbankingnews.comBREAKING: The House just passed 3 pro-crypto bills!THREE pro-crypto bills just passed the House! Now, experts believe altcoin season is officially here. | Crypto 101 Media (Ad)Weiss Ratings Reaffirms Sell (E+) Rating for 1stdibs.com (NASDAQ:DIBS)July 31, 2025 | americanbankingnews.comNASDAQ:DIBS (1stdibs.Com, Inc.) - The Motley Fool CanadaJuly 20, 2025 | fool.ca1stDibs to Announce Second Quarter 2025 Financial Results on August 6, 2025July 15, 2025 | businesswire.comSee More 1stdibs.com Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like 1stdibs.com? Sign up for Earnings360's daily newsletter to receive timely earnings updates on 1stdibs.com and other key companies, straight to your email. Email Address About 1stdibs.com1stdibs.com (NASDAQ:DIBS) operates an online marketplace for luxury design products worldwide. Its marketplace connects customers with sellers and makers of vintage, antique, and contemporary furniture; and home décor, jewelry, watches, art, and fashion products. The company was incorporated in 2000 and is headquartered in New York, New York.View 1stdibs.com ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Rivian Takes Earnings Hit—R2 Could Be the Stock's 2026 LifelinePalantir Stock Soars After Blowout Earnings ReportVertical Aerospace's New Deal and Earnings De-Risk ProductionAmazon's Earnings: What Comes Next and How to Play ItApple Stock: Big Earnings, Small Move—Time to Buy?Why Robinhood Just Added Upside Potential After a Q2 Earnings DipMicrosoft Blasts Past Earnings—What’s Next for MSFT? Upcoming Earnings Gilead Sciences (8/7/2025)Monster Beverage (8/7/2025)Constellation Energy (8/7/2025)Becton, Dickinson and Company (8/7/2025)Brookfield (8/7/2025)Canadian Natural Resources (8/7/2025)ConocoPhillips (8/7/2025)Diageo (8/7/2025)EOG Resources (8/7/2025)Flutter Entertainment (8/7/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 6 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and thank you for standing by. My name is Chris, and I will be your conference operator for today. At this time, I would like to welcome everyone to the FirstDib Q2 twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Operator00:00:35I would now like to turn the conference over to Head of Investor Relations and Corporate Development, Kevin Labuzz. You may begin. Speaker 100:00:46Good morning, and welcome to First Dib's earnings call for the quarter ended 06/30/2025. I'm Kevin LeBuzz, Head of Investor Relations and Corporate Development. Joining me today are CEO, David Rosenblatt and CFO, Tom Medergino. David will provide an update on our business, including our strategy and growth opportunities, and Tom will review our second quarter financial results and third quarter outlook. This call will be available via webcast on our Investor Relations website at investors.firstdibs.com. Speaker 100:01:26Before we begin, please keep in mind that our remarks include forward looking statements, including, but not limited to, statements regarding guidance and future financial performance, market demand, growth prospects, business plans, strategic initiatives, business and economic trends, including e commerce growth rates and our potential responses to them and competitive position. Our actual results may differ materially from those expressed or implied in these forward looking statements as a result of risks and uncertainties, including those described in our SEC filings. Any forward looking statements that we make on this call are based on our beliefs and assumptions as of today, and we disclaim any obligation to update them except to the extent required by law. Additionally, during the call, we will present GAAP and non GAAP financial measures. A reconciliation of GAAP to non GAAP measures is included in today's earnings press release, which you can find on our Investor Relations website along with the replay of this call. Speaker 100:02:37Lastly, please note that all growth comparisons are on a year over year basis unless otherwise noted. I will now turn the call over to our CEO, David Rosenblatt. David? Speaker 200:02:50Thanks, Kevin. Good morning and thank you for joining us today. The second quarter demonstrated continued resilience amidst a dynamic market with GMV and revenue performing above the midpoint of guidance and adjusted EBITDA exceeding the high end. Our continued commitment to cost management resulted in a 4% year over year decline in operating expenses. This performance reflects a continued focus on what we can control and an ability to navigate a difficult external landscape for consumer discretionary. Speaker 200:03:24While GMV modestly declined, we continued to gain market share against the contracting luxury home goods market per syndicated credit card data. This performance is a testament to prioritizing core product initiatives and expense discipline. The team is committed to executing against a clear set of priorities to enhance the marketplace and reaccelerate growth. From a funnel perspective, we are pleased to report another quarter of conversion growth, a testament to our continuous optimization efforts. Our focus on product enhancements has now driven conversion gains for seven consecutive quarters. Speaker 200:04:05Encouragingly, we saw conversion trends improve in the second half of the quarter, following a slowdown after the April 2 tariff announcements. During the second quarter, we made sustained progress across our product roadmap, which is designed to enhance both the buyer and seller experience and drive market share gains. Our 2025 roadmap is centered on accelerating organic traffic growth, ensuring competitive pricing for listings and shipping and optimizing our multi step conversion funnel. We continue to execute on our organic traffic growth strategy, which is a critical driver of efficient buyer acquisition given that over 70% of traffic originates from organic sources. This approach centers on improvements to site performance and structure. Speaker 200:04:57A key project involved a targeted effort to reduce the number of low value pages across the platform, which improved the site's overall quality perception for search engines and enhanced crawl efficiency for the most relevant content. Furthermore, we deployed infrastructure improvements that bolstered indexation rates, ensuring that our unique listings are more readily discoverable. These efforts have boosted overall site reliability, creating a more robust and performance user experience. We are also actively tracking the emergence of AI and chatbots in the search ecosystem. While we are keenly aware of the potential shifts this technology could bring, to date, the impact on our organic search traffic has been low. Speaker 200:05:47This remains an area of ongoing surveillance, ensuring that we will be prepared for any potential future shifts. We also continue to optimize our account registration and email opt in experiences to expand our email audience, which grew for the third consecutive quarter. Competitive pricing remained a significant focus area. The objective here remains the same, ensuring that the marketplace offers competitive and transparent item prices and shipping costs. As we highlighted last quarter, machine learning based pricing models are now live across all verticals. Speaker 200:06:26These proprietary models leverage our proprietary transactional database to bring transparency to what has historically been an opaque market, reinforcing buyer trust and confidence. The integration of the first dibs estimate directly into product display pages, which began in March, continues to provide buyers with valuable pricing context, fostering trust and confidence and ultimately leading to higher conversion. With the foundational work of rolling out these models complete, we have shifted our attention to enhancement and adoption of our ML pricing recommendations. Specifically, we are now refining recommendation accuracy, incorporating a wider array of data attributes into the models for enhanced precision, including using AI tools to better utilize unstructured data and driving higher seller adoption. Early data from these initiatives are promising. Speaker 200:07:26Specifically, we are seeing increased sell through rates on items meeting our pricing recommendations compared to those that do not. We have also observed a reduction in price negotiations on items where pricing recommendations have been adopted. Alongside recommending the market clearing price, the second half of the year will see us prioritizing technology to strengthen seller adherence to our existing price parity policy. This will ensure that items on first dibs are priced consistently with other sales channels. Turning to funnel optimization, we maintain strong momentum in reducing friction and delivering a more compelling user experience. Speaker 200:08:09Our aim remains to make it easier for discerning shoppers to discover and purchase the unique items available on first dibs. Our multi step checkout process provides substantial headroom for ongoing optimization. A key project in the middle of the funnel was enhancing the product detail page, a critical touch point for buyer decision making. The price negotiation called action was optimized by including clearer, more action oriented language. This update successfully increased engagement on PDPs and importantly, the percentage of users entering checkout. Speaker 200:08:48This refinement underscores a commitment to making the buyer seller interaction more seamless and intuitive, especially given the highly considered nature of our listings where negotiations are common. Building on momentum from the first quarter, we made additional progress at checkout. We refined the user experience to provide an even smoother and more trustworthy transaction flow. In particular, highlighting key elements of the first fib's promise raised checkout completion rates, especially on mobile web. This directly reinforces buyer trust and confidence at the critical point of purchase. Speaker 200:09:29These targeted enhancements and many others are directly driving buyer trust and contributing to ongoing conversion growth. We are also actively embedding artificial intelligence throughout our platform, driving efficiencies and elevating capabilities. Development and deployment of AI extends across every function, from enhancing the ability to detect gray market order attempts, the streamlining our trade application, to building a client service chat agent, to enhancing item and recommendations and user personalization. These diverse applications, all either in flight or in design, underscore commitment to leveraging AI to grow revenues and drive efficiencies. Beyond core initiatives, we recently overhauled our sponsored listings pay for performance product. Speaker 200:10:23Additionally, we are beginning to explore non endemic advertising opportunities. Though we are optimistic about the long term potential here, no significant revenue impact is expected in the near term. We plan to share more details as these opportunities mature. Moving to supply, we continue to demonstrate our unique ability to aggregate the world's most beautiful items. Consistent with prior periods, we saw steady listings growth ending the quarter with nearly 1,900,000 listings, up 3%. Speaker 200:10:58This sustained growth underscores First Dib's growing relevance to sellers and reinforces our position as the premier destination for luxury design. As we mentioned last quarter, we are becoming more important to our sellers. Our 2025 Seller Sentiment Survey showed that First Dibs is now the primary sales channel for our sellers, surpassing their own showrooms for the first time. This marks a meaningful shift from the past four years when showrooms ranked first. We ended the quarter with approximately 5,900 unique sellers, down 21% year over year, but flat sequentially. Speaker 200:11:40As we've noted in recent quarters, this outcome was expected and is directly attributable to subscription pricing optimizations, including the retirement of our central seller program and other pricing adjustments from late twenty twenty four. The impact of this elevated churn has been minimal. In total, the churn cohort accounted for less than 50 basis points of GMV over the trailing twelve months and approximately 90 basis points of total listings. As we move forward, we expect continued listings growth throughout 2025. Before we conclude, I'm excited to share a significant addition to our leadership team. Speaker 200:12:22We are thrilled to welcome Bradford Shellhammer, who joined First Dibs as chief marketing officer and chief product officer this week. Bradford brings a unique and highly relevant skill set with deep experience in scaling online marketplaces in both startups and large public companies. We are confident that his understanding of online marketplaces, combined with his deep passion for design, will be instrumental in shaping marketing strategies, driving customer engagement and steering product development. In summary, our second quarter results reflect disciplined execution, prudent expense management and sustained progress against strategic objectives. We delivered strong results for adjusted EBITDA, met our GMV and revenue guidance and grew conversion for the seventh consecutive quarter, all while navigating a difficult landscape for both luxury design and discretionary consumer goods. Speaker 200:13:22The foundational platform work including the full rollout of ML pricing models and comprehensive funnel optimizations is steadily enhancing the user experience and marketplace value. Our commitment to a leaner, more efficient operation remains unwavering, positioning us for sustainable growth when market conditions inevitably improve. Thank you for your continued support. I will now turn it over to Tom to review our second quarter financial results and third quarter outlook. Speaker 300:13:53Thanks, David. Second quarter results demonstrated solid performance meeting or exceeding guidance across all key metrics. Our financial outcomes reflect the strength of our underlying strategy highlighted by our seventh consecutive quarter of conversion growth, continued market share gains and operating expenses falling 4%, underscoring our continued vigilance on costs and commitment to an efficient operating model. On a sequential basis, GMV growth rates decelerated due to softening traffic and moderating average order value growth, partially offset by continued conversion gains. While the quarter began with some softness in April around tariff announcements, we were encouraged to see conversion trends improve in the second half of the quarter. Speaker 300:14:38On platform average order value of nearly $2,600 was flat year over year, while median order values of approximately $13.50 dollars was up 10%. This dynamic was driven by a slight mix shift away from higher value orders. This suggests macroeconomic uncertainties may have prompted consumers to defer or trade down on significant high value purchases. A defining characteristic of First Dibs is the trust we have built with our community, enabling transactions at high average order values across multiple categories. This unique confidence allows us to deliver qualified buyers at prices ranging from under $100 to over $1,000,000 Returning to funnel trends, traffic growth softened driven by a slowdown in paid due in part to continued performance marketing optimizations. Speaker 300:15:28We ended the quarter with over 70% of traffic from organic sources. Conversion growth improved sequentially, partially offsetting softening traffic and AOV growth. Conversion rates have now increased year over year for seven straight quarters. Additionally, both new and returning conversion increased. From a buyer perspective, trade GMV was flat while consumer GMV declined modestly. Speaker 300:15:52Jewelry, which accounted for approximately 20% of total GMV, increased high single digits while all other verticals were flat or down. The broader impact of the soft housing market continue to be felt across our home categories, specifically furniture and art. Active buyers totaled approximately 64,400 at the end of the quarter, up 5%. On the supply side of the marketplace, we experienced steady listings growth, closing the quarter with nearly 1,900,000 listings, up 3%. We ended the quarter with approximately 5,900 unique sellers down 21% but flat sequentially. Speaker 300:16:29Seller churn remained elevated consistent with our expectations following recent subscription pricing optimizations. Importantly, this had a de minimis impact on both GMV and overall listings. We expect to see listings grow throughout the year. Moving on to the income statement. Net revenue was $22,100,000 flat year over year. Speaker 300:16:52Transaction revenue, which is tied directly to GMV, was approximately 75% of total revenue with subscriptions making up most of the remainder. Take rates were up approximately 30 basis points year over year due primarily to a mix shift to lower value orders. Gross profit was $15,900,000 flat year over year. Gross profit margins were 72%, also flat year over year. Sales and marketing expenses were $8,100,000 down 12% driven by performance marketing optimizations and lower headcount related expenses due to reduction in force in January. Speaker 300:17:28Sales and marketing as a percentage of revenue was 37%, down from 42% a year ago. Technology development expenses were $5,900,000 up 8% driven by higher headcount related costs due to our annual merit increases awarded in March. As a percentage of revenue, technology development was 27%, up from 24% a year ago. General and administrative expenses were $6,600,000 down 4% due to lower headcount related costs. As a percentage of revenue, general and administrative expenses were 30%, down from 31% a year ago. Speaker 300:18:05Lastly, provision for transaction losses were approximately $965,000 4% of revenue, flat year over year. Total operating expenses were $21,600,000 a 4% reduction. This is a direct reflection of our diligent expense discipline and ongoing vigilance in maintaining an efficient operating model. Adjusted EBITDA loss was $1,800,000 compared to a loss of $1,600,000 last year. Adjusted EBITDA margin was a loss of 8% compared to a loss of 7% a year ago. Speaker 300:18:37We continue to prioritize driving operating leverage through efficient scaling. Given that the majority of our operating expenses are headcount related, our asset light model allows us to increase revenue without a commensurate increase in hiring. In 2025, we expect to keep headcount approximately flat. Moving on to the balance sheet. We entered the quarter with a strong cash, cash equivalents and short term investments position of $94,000,000 Of the approximately $6,700,000 sequential reduction, dollars 3,200,000.0 was due to annual prepayments of various services and $1,300,000 was due to an increase in restricted cash held at a payment processor which reversed itself in July. Speaker 300:19:20Turning to the outlook. Our guidance reflects quarter to date results and our forecast for the remainder of the period. We forecast third quarter GMV of $83,000,000 to $89,000,000 down 2% to up 5% net revenue of $21,000,000 to $22,100,000 down 1% to up 4% and adjusted EBITDA margin loss of 12% to 8%. Our GMV guidance reflects continued conversion growth and a modest rebound in average order value growth. Our adjusted EBITDA margin guidance reflects the impact of seasonally low revenue, gross margins towards the lower end of our 71% to 73% range and continued benefits from paid marketing optimizations. Speaker 300:20:05To conclude, our second quarter performance reflects a commitment to disciplined execution and vigilant expense management. Despite a challenging demand backdrop, our ability to achieve guidance targets coupled with a 4% year over year reduction in operating expenses underscores our dedication to efficiency. Our consistent conversion growth remains a bright spot, directly reflecting ongoing improvements across our platform. We appreciate your continued support and look forward to updating you on our progress in the coming quarters. Thank you. Speaker 300:20:35I will now turn the call over to the operator to take your questions. Operator00:20:41And with that, our first question in queue is Ralph Schackart of William Blair. Please go ahead. Speaker 400:20:51Good morning. This is Justin on for Ralph. Thanks for taking the question. Just one for you. On the macro uncertainty, you noted that the environment for luxury home goods remains challenging, but have you seen any changes in the overall environment since the beginning of the year, even if just on the margin? Speaker 200:21:07Good morning. Thanks for the question. We haven't really seen major changes in the macro environment. Both The US housing market and the market for luxury home goods, which are our primary drivers, remain soft. Just as an example, The U. Speaker 200:21:23S. Housing market has posted, I think, the slowest spring selling season in thirteen years per Redfin. And to measure market share in luxury home goods, we mostly rely on syndicated credit card data. And that data shows that demand in that market also softened in Q2. On the other hand, while we're in a soft market, we do believe just comparing our GMV growth to that of the syndicated data, that we've been gaining market share over the past six quarters. Speaker 200:21:54So we're not satisfied or happy with our current GMV growth rate. But on the other hand, we do believe that it represents a market share gain, and we believe we can continue to do that based on the strength of our product roadmap and other opportunities in front of us. Operator00:22:14All right. Next up, we have Austin Riddick of Evercore. Speaker 500:22:22Hey, guys. Thanks for, taking the question. I think I heard over 70% of traffic originates from, organic sources. And so I guess I just wanted to ask, how vulnerable do you think that mix is to the growing share of AI driven search results and chat interfaces? I know that's not exactly the most easy question to answer, but curious to hear your thoughts. Speaker 200:22:42Good question. We think about that quite a bit. It's something that we track very actively. Obviously, AI and chatbots over time, we think, are going to be a significant have a significant impact on our traffic. On the other hand, while we're aware of those potential shifts, you know, we haven't actually seen any material impact to our organic search traffic and the kind of key terms or key keywords that we rely on to drive the most traffic yet. Speaker 200:23:14However, we're very focused on it. We're focused on AI and ML in general. This is one of many areas. And we'll report back as and if things change. Operator00:23:31All right. And with that, there are no further questions in queue. So this will conclude today's call. Ladies and gentlemen, thank you for joining us today. You may now disconnect your lines.Read morePowered by