All righty, folks. Thank you so much. And again, welcome to the 17th Annual Ideas Conference. I am Erke with 3Part. Today we have First Dibs, Inc. traded on the NASDAQ with ticker DIBS. On behalf of the company, we have David Rosenblatt, CEO.

go great thanks okay welcome to first dibs first dibs is the world's leading curated digital marketplace for rare and luxury one-of-a-kind items the company was founded in 2000 in the Paris flea market which is an antiques neighborhood in Paris the original goal was to put that market online for mostly u.s. us interior designers. And our mission is and has remained to enrich lives with extraordinary design. I think probably the most important thing to understand about us is the unique place we have in the world of design. And for those of us who are not in that world day to day, it can be hard to really fully grasp it. Probably the best way to explain it is via, you know, like sort of a crazy story that happened to me a couple of years after I started at the company, which is you've all heard of Diane von Furstenberg, I presume. So one day I'm sitting at my desk and I get an email from her asking me to have lunch with her. And I'm a tech guy. My background was in ad tech at a company called DoubleClick and then Google. And, you know, I responded by saying, look, I think you may have not meant to send this email to me. That's okay. But, you know, just giving you an opportunity to opt out, you know, if in fact it was a mistake. And she said, no, no, no, no, I know exactly who I'm emailing. Why don't you come by for lunch and I'll explain to you why I wanted to get together. So I go over to her office for lunch a couple weeks later and I asked her and she said, other than my own, my favorite website in the world, my two favorite websites in the world are Amazon and First Dibs. I've met the guy who does Amazon, and I just wanted to meet the guy doing First Dibs. So it is, you know, for those of us who are not in the design world day-to-day, it may not be a kind of well-known platform. For people who are in the business, it has a kind of credibility and an equity unlike any other. My other favorite story, by the way, is Tom Ford, the designer, was interviewed by the FT once. And he was asked, what's your favorite thing to do online? And he said, well, my second favorite thing to do online is to go to First Dibs. So that really does kind of give you a little bit, think about that, does give you a little feel for how our audience relates to us. The core asset of the business, I think, is trust. That's demonstrated by the fact that our average order value is many, many times higher than other platforms that are also regarded as luxury. We'll get to that a little bit later. And we have some scale. So cumulatively, we've done $3.1 billion of GMV since we transactionalized the business. I'll get to that in a second. Over a million orders. And most recently, and I think arguably most important from the point of view of proving the business model, we guided to a positive EBITDA for the first time ever in Q4. and then positive adjusted EBITDA and positive free cash flow for the full year 2026. Okay, the history of the business. So as I mentioned, we were founded in the Paris flea market in 2000. The founder then quickly moved the business to the U.S. and we became primarily U.S. business. For its first 10 years, the company was really a bulletin board. actually longer than that for the first probably 15 years it was a listings model so think craigslist our sellers would post items with their number and contact information buyers would reach out to them off platform and then ultimately if they transacted consummate orders off of first dibs what happened is in 2011 the the founder raised money from benchmark in its Series A. I came in as part of that Series A and pretty quickly sort of arrived at a strategy that has remained mostly intact since then. Number one and most important was to transactionalize the business. So switching from a Craigslist kind of posting or listings model to a fully e-commerce model. So again, think Craigslist turning into eBay. where all orders are checked out on first dibs number one number two is geographic expansion so the thing about luxury design is as we all know it's a global business uh you know if you want a particular item and you have the means to afford it you don't really care about where it is in fact it's not likely to be near you so you got to go online and what that means is for us to be the preeminent aggregator in this category we need supply from all over the world so we've done that Today, I think roughly 50% of our sellers are from outside of the US. 60% of items are US, so 40% outside the US. And on the demand side, approaching 40% of our traffic is from the outside, or outside the US. And that is a kind of core part of our value prop to both buyers and sellers. And then lastly, category expansion has been the third priority. The business was started only to put vintage in antique furniture online. As I mentioned, I think trust and the ability to transact at high average order values is a core part of our business. And so the goal in category expansion is to amortize that trust across other categories that require a similar level of confidence on both sides, buyers and sellers and vice versa, in order to transact online. So we've added jewelry, we've added art, we've added vintage fashion. And today, vintage furniture has been diluted from 100% of our business not that long ago down to the 50% that it is today. Okay, who are we, how does the business work exactly? So we're a classic kind of network effect, two-sided marketplace. Our sellers are 6,000 curated slash vetted, meaning each seller needs to apply and be approved. It's not like eBay in the sense that anyone can sell. Sellers of the categories that I mentioned. The secondary market for luxury furniture, so vintage and antique dealers. Contemporary furniture, so think artisans from the East Bay or from Brooklyn, or the equivalent in Europe. Art galleries, mostly. Jewelry sellers, so jewelry dealers, everything from kind of 47th Street market makers to individual small brands, and then vintage fashion sellers as well. Like I said, they're all vetted. Half of them are outside the US, and I think all of them feel, to some degree, like they're sort of part of a club, because it really isn't that easy to get on first dibs, and the fact of being on the platform is itself a kind of endorsement of each seller's quality. On the demand side, 70% of our demand comes from interior designers, roughly. Sorry, 30% of our demand comes from interior designers. 70% comes from consumers, mostly relatively high net worth consumers. Interior designers are a very valuable audience. They are to this market what media agencies are to the ad market in the sense that their whole business is to buy, and it's relatively concentrated. So the kind of LTV to CAC, customer acquisition cost ratio, is very favorable and also helpful for reinforcing network effects and some of the strategic benefits that result from our having aggregated demand in one place. And the consumer side is appealing in the sense that it's just much bigger, right? And it's multi-category. designers obviously primarily buy furniture consumers buy everything and so that creates a much more expansive market opportunity for us our buyers like I mentioned skew high net worth they also skew female and you know that's I think in that sense we're similar to most luxury businesses overall in Q3 we had 63,000 active buyers which again gives you kind of some sense of the relative scale of the business. By comparison, the major auction houses, Sotheby's and Christie's, have roughly 5,000 active buyers. Their average order value is obviously much higher, but we believe we have a kind of similar high quality brand to them. In terms of the revenue model and how we make money, we earn money from all three revenue sources on the internet, subscriptions, commissions, and advertising commissions on final value are roughly 75 percent of our revenue so we're doing roughly 360 million a year in gmv uh and um you know that's that's that's what drives the commissions uh subscription fees we also charge sellers that's about 21 roughly in q3 of revenue That's obviously, like all subscription fees, predictable, very high margin. And important, we think, not just financially, but also strategically, because the fact of paying a subscription fee, which, of course, is somewhat unique in the marketplace world, kind of induces a level of commitment to the platform that sellers who don't pay subscription fees aren't as likely to feel. And then the balance is advertising. You know, our advertising today is mostly in the form of sponsored listings, so very similar to other marketplaces where we give sellers the ability to pay to buy advertising in order to promote their listings on the First Dibs marketplace. place. I think, you know, as we look forward, of those three, you know, we, commissions and advertising are likely to be the biggest drivers. Subscription fees are relatively, you know, they're just not going to grow as much because we are vetted and curated, so we're not going to add sellers at the same rate in the future as, you know, hopefully we add GMV or ad revenue. Okay, first dibs by the numbers. So I mentioned we're kind of roughly, what is this? This is trailing 12 months. Yeah, $368 million in GMV, $89 million in revenue. I think some of the, just to call out some of the data points here that are important to understand us in a strategic sense. So one is the $0 of owned inventory. We are asset light. We have really, other than people and a little bit of real estate, have almost no fixed costs. Sellers are responsible for fulfillment, and so we don't bear any of that cost. And all the vetting of sellers is done remotely. So there's very little investment, actually, and almost no, or very low level of fixed investment that we need to run the business. the other one is gross margin so gross margin of over 70% contribution margin approaching 60% we have a relatively low dependence on paid advertising I mentioned the sort of global distribution of our sellers and again as I also mentioned before importantly we are going to hit EBITDA break even in the fourth quarter And then our intention is to do the same for the full year next year. So this, I think, touches a little bit on a point that I had made before, which is we started out life as a marketplace for luxury furniture, basically. Antique and vintage, specifically. A core part of the strategy has been a diversify into other verticals. And it's not just an opportunistic one. It's also very helpful for making our economics work. And the basic idea is, you know, our buyer is very hard to find and hard to acquire. They buy a lot of things that are comparable to, in terms of price point and sort of complexity, to buying luxury design. And so having acquired that customer, we want to amortize that customer acquisition cost across as many purchases and verticals as possible. So, you know, we've added, as I mentioned, contemporary furniture. We've added both estate jewelry, which is just sort of the sophisticated name for the vintage jewelry market, contemporary jewelry, vintage fashion, and art as well, both primary and secondary market art. As we look at our competitive advantages, I think where the market we're in is quite big, over $100 billion. We have a brand that represents trust. I think, personally, that and the next benefit or the next advantage we have, our network effect, are probably the two most important assets that we have. We have been very cost-focused over the last three years, both in terms of people costs, real estate costs, advertising costs. That's part of the reason why we've been able to achieve EBITDA positive in the fourth quarter and beyond. And going forward, we believe that we can scale the business without adding meaningful costs. We have a very high operating leverage characteristic, and we think that'll really pay out as we resume growth top line. And then in terms of AI, I don't think we're necessarily that different from many other companies in this regard. But I think we're going to be a beneficiary of AI in a pretty significant way all the way up and down the income statement. So on the cost side, you know, we've already increased the efficiency with which our engineers are putting out new product by 25 to 30 percent. This week, in fact, two days ago, we just launched our first version, the first version of our customer service agent. So this one is seller-facing. I don't think that this will necessarily result in further headcount reductions, but it will, number one, allow us to deliver better service 24-7, completely accurate, and so on. And then secondly, it'll allow us to grow in the future with much less of a service headcount and service costs in general than we would have otherwise. On the demand side, you know, we're focused on things to both increase overall traffic and also increase conversion. So an example of the latter will be something like natural language search, right? Being able to just tell the search engine on the site what you want in the way that you would speak to a friend or a colleague versus having to rely on a kind of highly structured approach that doesn't correspond with how all of us talk and think in our regular lives. And there are many more examples. We're already applying it to what we call price recs, price recommendations, which is we give sellers advice on how to price their items. That's a very difficult exercise in a one-of-a-kind long tail marketplace particularly at these price points and so we rely on machine learning to generate those pricing recommendations and we've already seen in cases where sellers adopt those recommendations conversion increases and then lastly in terms of financials so you know last quarter gmv grew five percent revenues grew four percent our ebta margin was negative one percent which is substantially ahead of both guidance and our annual comp. And again, as I said, I think going forward, we feel like we'll be able to cross over into profitability. And the last thing I would say in terms of kind of growth, I mean, that growth, having achieved profitability on an EBITDA and next year free cash flow basis, growth is really our number one, number two, and number three priority. and part of the way I think about it is if you think about our growth rate relative to the market we've been in over the past year, we've been basically flat in a market, the biggest of our markets is luxury design, in a market that has been per syndicated credit card data has been declining at around a kind of high single digit-ish rate. So as I think about our business going forward and our performance relative to that market, Of course, at some point, the best thing would be for that market to recover. However, we're not really making a bet on that. And I believe that we have the opportunity to grow in spite of that. And the reason is we've got a couple of areas of optionality for top line growth that is outside of a market recovery. So one is AI, which I've talked about, and there's a kind of backlog of projects behind those that I described that we're very, very excited about. The second is we have a reinvigorated product roadmap. Our product team has been able to deliver growth and conversion for eight straight quarters. And so we have confidence in our roadmap and we believe we can continue to do that. And then the third thing is, I think there's some optionality around scaling our advertising business. we have a very low rate of advertising versus other marketplaces. So I think we have an option and ability to sell more advertising to our existing sellers than we have before, and that's super high margin. So that may not move the needle that much top line, but it could have a disproportionately positive effect bottom line, given the attractive margin characteristics of advertising. And then beyond that, we have aggregated, I don't want to say uniquely, but an audience that is rare in terms of how well it indexes on the internet to luxury. And we think based on that, there's potentially an opportunity to monetize our audience by selling advertising to non-endemic advertisers, meaning advertisers who are not existing sellers. And so between those three areas, and given the fact that we've been able to maintain kind of a flat, top-line trajectory in spite of a declining end market, we have confidence that we will have an ability to grow revenue, even if the market doesn't recover. But at some point, demand for luxury housing is not something that is in structural, secular decline. It's a cyclical problem, and over time, the cycle should reverse itself, will reverse itself. Okay, thank you very much, and happy to answer any questions. Yeah. Yeah, so it's a sliding scale that's a function of both the price of the item and also the specific package that a seller is on. But it ranges from kind of mid-single digits all the way up to the 20s. Our average order value is $2,700. And just to put that into context, if you look at public data from other luxury fashion marketplaces like Farfetch and The RealReal. They report that they're in the kind of five to $600 range. So we're five times that, obviously. Yeah, so we vet, I mean, authenticity is crucial for maintaining our buyer trust. We vet our supply side at the dealer, at the seller level, not at the item level. So we never take a look at an item. We don't touch it. We don't feel it. We don't look at it in person. That's all done by the sellers. And the sellers who violate that aren't able to stay on the marketplace. So the reason why that's so, and you know, at the end of the day, we have a, I think a, you know, on a combined basis, a lower than 5% return and fraud rate. So it works. Why does it work? Because we have a very strong network effect, meaning having aggregated so much of the qualified demand in this market, sellers can't really afford not to be on first dibs or, worse, to breach buyer trust via first dibs. And so they don't. There are always exceptions, of course, as in every business. But for the most part, it's really never been a problem of ours. Yeah, so it's 5% combined fraud and return rate together. International orders aren't really that much different than domestic orders. I mean, they still need to be fulfilled. They're fulfilled, obviously, they're fulfilled by a shipping carrier. So the shipping carriers likely be different often. So as an example, DHL for packages tends to be better at international. FedEx is probably the go-to domestically or USPS. There are some tariff issues and customs and duties issues, obviously. We have not been affected by the tariffs. And I think it's because, you know, while everything that we sell is one of a kind, it's also the case we have 1.9 million items on the marketplace. So for almost everything that's available from overseas, there's often a domestic substitute. It may not be exactly what the buyer wants, but if they have a preference for buying domestically, they have the ability to do so. Yeah, so it's at the seller election. in half the orders roughly sellers facilitate the shipping and we have nothing to do with it in the other half we facilitate but we're still we're not the carrier right so we don't bear any of the kind of logistical risk we're not you know we don't have trucks we don't have warehouses any of that stuff yeah so we don't break out the actual numbers but you know part of the reason why we were able to get to EBTA break even or a guide to EBITDA break-even in the fourth quarter is we were able to optimize our paid program and substantially reduce our paid spend, which will have some effect in the fourth quarter on order volume, but that'll be outweighed by the positive impact on profitability. That's a big part of the biggest part of the reason why we're able to achieve profitability in the fourth quarter in the first place. And in general, we have a relatively, relative to other marketplaces, most other marketplaces, low dependence on paid for overall demand. 75% of our traffic is organic, for example. Either, just not paid, so either, yeah, direct visits, email, social, whatever. Yeah, so there's no company that looks like us in the sense of being a multi-category, luxury, digital, curated marketplace. there are some smaller kind of vertical marketplaces so for example Cherish which was just acquired by a small UK publicly traded company called ATG is a competitor in furniture and there's no real online jewelry marketplace except for perhaps eBay is certainly the biggest in that category In art, there's a small company called Artsy, but Artsy is primarily not an e-commerce marketplace. They're a kind of advertising marketplace. And none of those folks, none of those companies are multi-category. I think the bigger competition is from substitutes, right? You could buy an engagement ring at Tiffany's, or you could buy it from us. And that's true, you could go into RH and buy a couch, or you could buy a couch from us. So that sort of phenomenon is replicated in all of our channels. The way we differentiate is what we try to do. We sort of think about the jobs to be done framework, if you've heard of that. The question we ask ourselves is what are we hired to do by our customers? So on the seller side, that's pretty straightforward. We're hired by our sellers to find demand and help them consummate orders online. We're hired by our buyers to find the right product for them and then to allow them to check out with as little friction as possible. So we're very, very focused on each sort of dimension of that whole equation, including reducing friction. And that's important because this is a high-friction vertical. It's buying a, I don't know, a Geoponte sunburst mirror wall hanging for $18,000 is not like buying a razor on Amazon. And it involves negotiation, which we support, and it involves messaging between the buyer and seller, which we support. It involves facilitating shipping, which we support, all of that. So we try to reduce the friction associated with all of that and the risk as much as possible. We have 6,000 sellers. And in terms of exclusivity, we do not ask for exclusivity. And again, similar to vetting, we rely on the fact that we've aggregated so much demand to produce, you know, to call it effective exclusivity would be a little strong, but most of the product on First Dibs is difficult to find off of First Dibs. There's quite a bit that is, but much of it isn't. And again, the reason is, you know, our supply side for the most part are small kind of one to three person and businesses, they're not digitally savvy. They don't wake up thinking about trends in GEO. GEO is like the AI substitute or equivalent for SEO. And yet they're dependent on all of that working well in order for them to meet demand that increasingly is kind of organically shifting online. So that's what we do for them. That's what we're hired to do for them. And that's sort of the core value that we offer. The only time the phenomenon you're describing where a single listing appears on multiple platforms in addition to first dibs is an issue is when the price for the same item is lower somewhere else. And this is something that many marketplaces deal with. And so one of our priorities is enforcing price parity to make sure that any item that's listed on first dibs is listed at a price that is no higher than the price for that same item on other marketplaces. Yeah, listen, the biggest, I mean, now that we've achieved adjusted EBITDA positive, it's all about driving top line and demand. The single biggest impact is the market. Beyond that, again, we have a healthy roadmap that we have a lot of confidence in to drive top line growth, even in the absence of a market recovery. So it's really all about execution. I mean, we've got an ambitious program for social media. We have an ambitious program to educate buyers on pricing of individual items. You know, we have an ambitious program to incorporate AI, as I mentioned, into both the cost and the revenue side. But you know, none of these things is a trivial project. And you know, half our head count is in product and engineering. So we very much, I mean, our customers wouldn't necessarily define us this way, but we very much think of ourselves as a technology company. And like any technology company, we want to create value by building better product. And as with all product development efforts, there's always execution risk. Well, that sort of bears on the authenticity question. So our sellers are obligated to list items that are authentically as described, and if an item is bought and it turns out that it wasn't as described, that's seller fraud, basically, right, and a basis for returning it. And we've seen very, very low incidence of that, and that's why I mentioned that combined return and fraud rate of 5%. which is very low and again I think that's because we've aggregated so much demand that it's just too big of a risk for sellers to take to kind of mess around with that and potentially be booted from the marketplace and lose access to the customers that we've aggregated so they self-police as a result I've got 30 seconds yeah yeah Yeah, so our contribution margin is roughly 60%, approaching 60%. So we have, you know, obviously have some costs below the line, but very few marginal costs below that line. I think the buzzer has sounded looking at this clock here. All right, thank you very much. Appreciate it.