1stdibs.com, Inc. Q1 FY2025 earnings call

• First quarter saw solid execution with GMV and revenue exceeding guidance midpoint, and adjusted EBITDA margins surpassing high end. • Product-led growth strategy is enhancing buyer and seller experience. • Returned to organic traffic growth in Q1 due to improvements in SEO and direct traffic. • ML-based pricing models fully rolled out across all verticals, leveraging transactional database for pricing transparency. • Partial self-service shipping rolled out to sellers, increasing parcel pre-quote coverage to nearly 100%. • Streamlined user experience from discovery to checkout, including better product discovery, enhanced trust signals, and simplified checkout. • 1stdibs became primary sales channel for sellers, surpassing showrooms for the first time, with over 1.8 million listings up 5%.

In the first quarter, GMV reached $94.7 million, marking a 3% year-over-year growth. Net revenue stood at $22.5 million, a 2% increase. Platform average order value (AOV) was nearly $2,600, up 4%, with median order value around $1,250 also rising 4%. GMV grew across all verticals except new and custom furniture, with jewelry and fashion experiencing double-digit growth. Organic traffic accounted for over 70% of total traffic, and conversion rates have increased for six consecutive quarters.

• Forecasts second quarter GMV to range from $85 million to $92 million, representing a 7% decline to 1% growth. • Net revenue is expected to be between $21.2 million and $22.5 million, a 5% decrease to 1% growth. • Adjusted EBITDA margin loss is projected to be between 14% and 10%, driven by lower gross margins towards the lower end of the 71%-73% range, higher headcount-related costs from annual merit increases in March, and provision for transaction losses at approximately 4% of revenue.

• Broader macroeconomic uncertainty posing challenges to discretionary purchases. • Evolving trade policies creating a tougher demand backdrop for luxury home discretionary spending. • Seller churn elevated due to subscription pricing optimizations, though expected to normalize in Q2 2025.

Q: Ralph Schackart from William Blair inquired about organic traffic and moderating conversion gains.

A: David Rosenblatt stated organic traffic was restored to growth due to product and engineering efforts, and conversion gains moderated due to macroeconomic changes but the focus remains on long-term value drivers.

Q: Mark Mahaney from Evercore ISI asked about active buyer growth.

A: David Rosenblatt mentioned active buyer growth is tied to conversion, which was impacted by the macro environment, and growth depends on conversion trends.

Q: Luke Meindl from Citizens questioned market share gains and ML pricing models.

A: David Rosenblatt said market share gains were observed in online and luxury furniture markets, and ML pricing models had high adoption for items below $9,000, with ongoing work for higher price points and shipping pre-quotes using machine learning