All right, great. OK, welcome. My name is David Rosenblatt. I'm the CEO of First Dibs. And thank you for your time and interest in our story. I think we have a special company, and I'm happy to explain why. So how do I advance this? Yeah, there we go. OK, so who is First Dibs? We are the world's leading curated online marketplace for luxury design our mission is to enrich lives with extraordinary design we've been at it for 25 years and you know we I think we occupy a unique place in the pantheon and the universe of digital companies in the sense that we truly are a we're a digital business but we are truly a luxury business and I think unique in that. And just to kind of put a little point of emphasis on it, our average order value is $2,700. By contrast, some of the other leading online luxury marketplaces in other categories, mostly fashion, are in the sort of $500 to $600 range. And since inception, we have done over $3 billion worth of online sales. So this is a real business. it's liquid, it's scaled, and, you know, again, it's unique. You know, I was actually debating whether or not I should tell the story, but I will. Let me tell you one other story. For those of you who are not familiar with First Dibs, and this point that we kind of occupy a special and unique place in the world of luxury, let me give you a quick story to kind of illustrate, you know, how that is or why that is, what that means. So my background is in tech. I ran a company called DoubleClick for many years and now part of Google. And so I come at the business from that side, not from the luxury side. And after I've been in the job for some time, I'm not the founder. I joined about 11 years after the company was founded. I get an email, a cold email from DVF, from Diane von Furstenberg, asking me to have lunch with her. And so I wrote her back and I said, you know i'm not sure that you have the right guy like i'm not really like a fashion certainly not a fashion person uh not even really a luxury person um and so you know i sort of wanted to give her an opportunity to back out of this and if if in fact she had sent it by mistake she said no no i know exactly what i'm doing uh and i'd still love to have lunch with you so come on over i'll explain why when when you get here so um we were a few blocks away at the time i walk over to her office, which is above her store in the meatpacking district of New York City. And I asked her, you know, why did you want to have lunch with me? And she said, other than my own, there's only one website I truly love. Actually, sorry, two websites I truly love. One is Amazon and one is First Dibs. I've met the guy doing Amazon and I wanted to meet the person doing First Dibs. So that's, you know, that's, I think probably as much as anything sort gives you a feel for how we're regarded within the design industry among people who really love luxury okay history of the company so we uh by internet standards uh were fairly long in the tooth so we're 25 years old we were founded in 2000 in order to put the paris flea market which is the design district of paris online primarily for the benefit of us-based interior designers which is their primary buyer base. The founder, who is American, moved to New York shortly thereafter, kind of restarted the company here. And from 2001 to 2011, it grew very organically, meaning it was very small. He took no outside financing. And what he really focused on was building a small but highly qualified seller base of vintage and antique furniture sellers, dealers, all professionals. 2011 Benchmark, the West Coast VC, invested in the company's first outside round. I came in as part of that. And, you know, I took a look at the business. Again, we were very small with fewer than 40 people, you know, significantly less than $10 million in sales. And basically, my team and I came up with a strategy that still today really defines kind of what we're focused on and they're really there are basically three parts one which is now over but it's never optimizing it is never really over was to transactionalize the business the founder had started it as a listings business basically a bulletin board in which sellers would list items along with their phone number and email contact information in exchange for a monthly listing fee but there was no e-commerce you couldn't check out on platform so priority number one was to convert the business from a listings business to e-com. So think changing Craigslist into eBay. The second was to globalize the business. So at that point, despite the fact that we've been founded in Paris, we were basically a U.S. company on both the supply and the demand sides. Luxury is a global industry, particularly in the one-of-the-kind part of it. You know, if there's one thing that you want, you don't care where it is, and you have the means to afford it, you don't care where it is, but you want to see it all in one place. So today, you know, roughly 50% of our sellers and 40% of our listings are from outside the U.S. on the supply side and then on the demand side. We're still majority U.S., but we have a large minority that's outside the U.S. And then the third is to expand into other categories. So again, you know, initially the business was only for the purpose of marketing vintage and antique furniture, which is important to people who care about design, the diamond first and first of the world. But of course, it's a relatively small market compared to others in luxury and so and yet at the same time you know we had two things right we had a very strong brand that i thought could accommodate expansion in other categories and we had a very strong network effect which meant that you know we could easily add both sellers and buyers and so we we've since then we've added jewelry we've added fashion, we've added art. And today, collectively, vintage and antique furniture is now down to 50% of our sales versus the original, of course, 100% that it was when I joined. We went public NASDAQ in June of 21. And in retrospect, that was the peak of the luxury real estate market, which is the biggest driver of our business. Since then, it's been going down. And both our GMV and our market cap declined along with it. However, we really doubled down on our product efforts. And over the last two years, we've been able to grow conversion each quarter on a year over year basis, which is one of our key metrics and inputs driving top line. And secondly, what that has resulted in is essentially a flat year over year GMV trend over the last four quarters. So sometimes a little bit up, sometimes a little bit down in a market where the end market demand for luxury real estate and by extension furniture has continued to decline at rates approaching double digits. We expect at some point, you know, that to bottom out. But we also believe that we have the ability to grow a top line for reasons I'll explain, even if that takes a little bit of time. OK, so what is the business model? We're a classic two-sided network effect marketplace business. Again, we do not own inventory, so we're asset light, so kind of similar to eBay in that sense. And that gives us very strong economics. We have gross margins in the low 70s and contribution margin in what, like mid-60s-ish. so low dependence on paid media and then lastly we guided to the fourth quarter for the fourth quarter to be our first EBITDA adjusted EBITDA so proxy for cash flow break-even quarter you know since we adopted our new e-commerce as this model over 10 years ago and again all of that is sort of in the face of a market that has continued to be relatively soft. Who are our sellers? So the supply side, importantly, are all professional sellers. So we do not take product. In that sense, we're different from eBay. We do not take product from consumers. All of our sellers are professionals. They're vetted. They have to apply and be approved, and many are not. They have to pay a subscription fee, which requires a commitment, especially for a small business, to the marketplace. So it's not an easy thing to be accepted as a seller on first dibs. And in fact, selling on the marketplace within the industry is regarded as a proxy for the quality of the seller in many cases. And in total, we've got about 6,000 sellers, a little bit under 5,800, and approaching 2 million individual items. Geographically, I mentioned 50% of our sellers are from outside the US and roughly 40% of our listings are outside the US. On the buyer side, we have two types of buyers. We have consumers who are about two thirds of our demand, our GMV, and we have professional buyers, interior designers, who of course are agents, they're buying for other people, their clients, who are of the balance, about a third of our GMV. Our audience, as you would expect, skews high net worth. It skews female. And it certainly is comprised almost entirely of people who value and understand luxury design and having nice things in their homes and on their body via jewelry and on their walls. In terms of total buyers, we report on a trailing 12-month basis, so I think that number was about 63,000 individual active buyers as of the end of last quarter. In terms of our revenue, so again, as I mentioned, we have an asset-like marketplace, so we do not take inventory. We don't touch it at all. We sometimes facilitate shipments, so we have a shipping team that will help sellers and help buyers get something shipped from point A to point B, but we never touch the inventory. We certainly don't take ownership of it. We don't have warehouses. We don't have trucks on the road. We don't have people making deliveries. We're really kind of a dating service for our sellers and our buyers, and the rest is up to them. We have two primary sources of revenue. So roughly three-quarters of our revenue is from commissions on the sale of items. And, you know, our GMB is roughly around $360 million a year. The next biggest revenue line item, about a little bit more than 20%, are subscription and listing fees that we charge sellers. And then the balance is what is today a relatively small ad business, which is comprised of sellers paying to market their listings and promote their listings on the marketplace. As we look forward, we don't expect a lot of growth from subscriptions. We don't want a lot of growth from the subscription and listings line. Rather, we're focused on growing commissions by growing GMB, of course. And I do think there's a very strong opportunity to grow our advertising business, both ad sales to both existing sellers and potentially advertisers who are so-called non-endemics, meaning they're not selling on the marketplace today, but they value having access to the audience that we've aggregated. Okay, a couple of key numbers I'd point out here. So I mentioned the GMB number, $368 million, revenue, $90 million. You know, gross margin, the zero dollars of owned inventory, which again, I mentioned, I think I've actually mentioned most of these. Again, I think maybe one number that we haven't talked about is the $10 billion of seller stock value. So that's an important number to understand. That is the value of all the items listed on the marketplace, right? So total number of items times average price per item. The reason why that's important is that, That, of course, indicates that we have a lot of runway if we're able to increase our sell-through of existing product. So we have aggregated a very high-quality buyer base on the demand side. We have aggregated, at scale, a qualified and large amount of supply. The biggest area of focus for us operationally to translate that into GMB and revenue growth is to increase our conversion rate. In other words, increase the percentage of people who come to the site who actually check out. And that really is, you know, there are a bunch of things that go into that. That's really the core of our roadmap. But again, these are not buyers we need to go out and get. We're not dependent on having to acquire more inventory what we're focused on is increasing the sell-through of the inventory and correspondingly can the conversion rate of visitors to the site i talked about this as well we started out life as only a vintage and antique furniture marketplace again it's a meaningfully sized market i think it's seven or eight billion dollars not gigantic but its significance i think for our future growth is it's an incredibly important market for people who both care about and have the means to invest in luxury design you know if you walk into the apartment in Manhattan or the house in Malibu or the equivalent in London or Paris and you know you sort of like did an inventory of the furniture and those houses and apartments what you'd find is that a very large percentage of the product not only falls in that category but actually was sourced from First Dibs. And in fact, when I was evaluating the company, the first person I called was not DVF, because I didn't know her, but an interior designer who had done some work for my wife and me. And I asked him, hey, Russell, have you heard of this company First Dibs? And he said, have I heard of the company First Dibs? 50% of both of your places was bought on First Dibs. So again, it sort of gives you a sense for, again, and what this company means within that market. The one other thing I would say actually on this category expansion point is, if you do look at the business and the categories we're in in terms of market opportunity, by far the biggest market we're in is fine jewelry, which is I think over a hundred billion dollar market. And that's a market that actually is quite friendly for both the internet and for our business, right? Unlike furniture, it ships easily, returns are easy. A lot of it is branded. So, you know, it doesn't require a big leap of faith to buy online. And we have, you know, we have the best quality in the world. And really eBay is the only other marketplace that's kind of aggregated as much inventory as we have at the quality levels that we have. And there's no, you know, unlike other marketplaces or other industries, there's no pure play jewelry marketplace. Really, the primary online competition is eBay, and the primary offline competition, which ultimately is the biggest source of competition, are substitutes, right? Walking into a Tiffany's or, you know, your local dealer or whatever. Okay, again, you know, these are, I mentioned earlier, I think this is a unique business, and it is in many respects, and I think we have a unique combination of assets. I think especially I would call out really two things here. One is the combination of the trusted brand name and our network effect. So in terms of our brand, trust, I would say, is at the end of the day our most important asset, right? And we take that very seriously. Our return rate plus our fraud rate is less than 5% combined. That's versus 25% to 30% on average with many luxury fashion marketplaces. So we have the buyer trust, and that's a very, very end-seller trust for those folks that transact at very high average order values. That's a very, very hard thing to develop. The network effect is really important in terms of our ability to sort of tweak the business model. So, for example, when we switched from being a listings business to being an e-commerce business, you know, it meant that we were increasing the take rate that we were charging sellers ultimately from, you know, 1% to 5% to, you know, 20% to 25%. And the reason, you know, we did it because we felt that it would be in the interest of sellers and buyers for us to accommodate online transactions. But that said, you know, as you can imagine, that wasn't a very popular decision to make. and we lost, I think, fewer than 2% of our sellers and that's because of this lock-in that they have. We've aggregated an audience that just doesn't exist anywhere else and that does give us some degrees of freedom in terms of being able to experiment with different models and treatments and that kind of stuff. The last thing I would say is I think we will ultimately be a very big beneficiary of artificial intelligence. We've sort of incorporated it. We've threaded it through almost everything we do. And it's already had, even in these early days, a very big impact on us. We've increased our engineering productivity by 25% to 30%. You know, we're using it to generate recommended pricing, which is a difficult thing to do in a one-of-a-kind, a marketplace of one-of-a-kind items. We just rolled out our kind of initial implementation of a customer service agent, which should be beneficial to our scalability and cost structure going forward. And really, when you look at the business, you know, we're investing in personalization, which has been very effective at other marketplaces like Etsy, like ThredUp. When you look at every part of our business and it can benefit and it will benefit from the application of artificial intelligence. And it's one of the things that makes me very optimistic about the business going forward. Let's see. Okay. Financials. Then I'll open it up. So the one other thing I would say, actually, just before we get to financials, is there is one other opportunity I briefly mentioned before that we're not in today that I think could have a really positive impact on the business, and that's growing our ads business. The logic for it is we have aggregated an audience that doesn't really exist anywhere else in terms of the extent to which it indexes to this very high demographic. We also, correspondingly, have a very brand-safe platform. Luxury advertisers care a lot about the risks of adjacency to brands and to experiences that aren't luxury. Given the major changes in the ad market, the primary thrust of digital advertising over the last 15 years has been to be able to separate out audiences from the context in which they're seen. in other words reach a person rather than reach a person you know irrespective of where that person is rather than reaching that person in an environment that's contextually appropriate to that which is being advertised we have the ability to do both and that's something that's really important to luxury advertisers in particular you're not going to see an ldmh ad on sketchy content so again it's early days for us but i think there's a lot of optionality there and that's one of the things that we're going to be looking at over the coming months and quarters. Okay, financials. So I think the key point here really, I mean, I don't want to not bury the headline, but it's really the kind of adjusted EBITDA. You know, I mentioned we're sort of trending flattish on the top line, which again, you know, is a difficult feat in a market that otherwise has been declining by approaching a number, approaching double digits. But in spite of that, we've been able, by squeezing out efficiencies in the business, and some of it has included AI, although not the majority, we've been able to guide to break even on an adjusted EBITDA basis in Q4. Q3 was negative 1%, so we were pretty close to it. And both of those are far in excess of what we had anticipated we would do at the beginning of the year and that really is a product of a combination of our marketing efforts and gaining efficiency especially in paid advertising as well as being as disciplined as possible in all the the non-marketing areas of the business and in spite of the fact that we're improving our cost structure what we've been able to do is free up a little bit of room to increase our engineering capacity and we would always like to be able to grow via product development rather than by spending ad dollars, just as is the case with most companies. And we're now in a position where we can increase our investment in R&D while decreasing our investment in kind of the non-R&D parts of the business. So we're very excited about that. And I think that's a wrap for my speech. So happy to answer any questions that you guys have. Yes?

David, I love your website. How much time do people spend on it to the point that you have to buy?

Yeah, so we have, you know, there's sort of, I think, broadly speaking, two types of buyers. One is people who are in market, right? So our interior designer base, they get paid. They are to design what media agencies are to advertising. They get paid when they buy things. So they're very purposeful when they go to the site and they have specific jobs to do. and then you know many consumers are in the same boat but at the same time we have a high top of funnel audience that uses the site for inspiration because they like looking at pretty things and so on so it's it's a it's a it's a it's about it probably you know I don't know two-thirds purpose-driven and I don't know making this up but my guess one-third inspiration oriented with more

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