Financial Performance - Net sales for the three months ended September 30, 2023, were $322.0 million, a 0.6% increase from $320.3 million for the same period in 2022[179]. - Net income for the three months ended September 30, 2023, was $2.8 million, down 78.2% from $12.8 million for the same period in 2022[179]. - Adjusted EBITDA for the three months ended September 30, 2023, was $20.9 million, a decrease of 25.2% compared to $28.0 million for the same period in 2022[179]. - The adjusted EBITDA margin for the three months ended September 30, 2023, was 6.5%, down from 8.7% for the same period in 2022[179]. - Gross profit for the three months ended September 30, 2023 was $66.827 million, representing a 9.7% increase compared to $60.918 million in the same period of 2022[245]. - For the nine months ended September 30, 2023, net income was $2.793 million, a decrease of 78.2% compared to $12.839 million for the same period in 2022[271]. - Adjusted EBITDA for the three months ended September 30, 2023, was $7.624 million, down from $9.961 million in the same period of 2022, reflecting a margin of 6.7%[259]. - Gross profit for the nine months ended September 30, 2023 increased by $15.1 million, or 9.0%, with gross margin improving by 440 basis points compared to the same period in 2022[252]. Order and Sales Trends - The company experienced a 16.7% increase in order volumes, partially offset by a 12.2% decrease in average order value (AOV) for the three months ended September 30, 2023[225]. - The company experienced a 16.2% increase in order volumes for the nine months ended September 30, 2023, despite a 13.4% decrease in average order value (AOV)[251]. - Total orders for the nine months ended September 30, 2023, increased by 16.2% to 121,641 compared to 104,715 in the same period of 2022[278]. Expenses and Costs - Selling, general and administrative expenses for the three months ended September 30, 2023 increased by $10.2 million, or 18.7% compared to the same period in 2022, with expenses as a percentage of net sales rising by 780 basis points[226]. - Selling, general and administrative expenses for the nine months ended September 30, 2023 rose by $29.1 million, or 19.2%, with expenses as a percentage of net sales increasing by 880 basis points[253]. - Interest expense for the three months ended September 30, 2023, increased by 69.9% to $3.808 million, primarily due to rising variable interest rates[270]. - Marketing expenses increased significantly due to higher investments aimed at enhancing brand awareness and supporting growth initiatives[269]. Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2023, was $15.514 million, compared to $9.019 million for the same period in 2022[263]. - For the nine months ended September 30, 2023, net cash provided by operating activities was $15.5 million, an increase of $6.5 million compared to $9.0 million for the same period in 2022[289]. - The increase in net cash from operating activities was primarily driven by $13.5 million from changes in assets and liabilities, offset by a $7.0 million decrease in net income adjusted for non-cash expense addbacks[289]. - As of September 30, 2023, the company had a cash balance of $147.1 million, with working capital of ($22.0) million[300]. - Net cash used in financing activities for the nine months ended September 30, 2023, was $12.3 million, a decrease of $10.1 million from $22.4 million in the same period in 2022[304]. - The decrease in financing activities was primarily due to lower tax distributions paid to members of $8.4 million and reduced debt activity compared to 2022[304]. - The company has sufficient liquidity to meet projected operating, debt service, and tax distribution requirements for at least the next 12 months[262]. Strategic Initiatives - The company plans to strategically open new showrooms to drive growth and increase average order value compared to e-commerce orders[208]. - The company aims to leverage technology for dynamic product visualization and improve customer experience, which is expected to drive higher satisfaction and conversion rates[202]. - The company plans to leverage its marketing strategy to drive brand awareness and increase qualified consumer traffic to its website and showrooms[233]. - Future growth is anticipated from launching e-commerce in new overseas markets and expanding showroom locations in established digital markets[236]. - The company is in the early stages of expanding its global footprint, with localized websites for Canada, Australia, and the UK showing promising sales from over 50 countries[235]. Tax and Deferred Assets - The effective tax rate for the nine months ended September 30, 2023, was 4.09%, differing from the U.S. federal statutory tax rate of 21% due to various factors[192]. - The company has recorded a deferred tax asset of $8.9 million related to the tax receivable agreement as of September 30, 2023[195]. - The company expects to continue making quarterly distributions related to member estimated income tax obligations, totaling $9.9 million for the nine months ended September 30, 2023[261]. - The company is required to make cash payments under the TRA equal to 85% of the tax benefits realized, which are expected to be significant[308]. Operational Model - The operating model is asset-light, allowing for negative working capital and efficient inventory management, which supports attractive inventory turns[237]. - The company has historically had negative working capital driven by high inventory turns and early collection of payments from customers[300]. - There were no amounts outstanding under the SVB Revolving Credit Facility as of September 30, 2023[305]. Risks and Dependencies - Deterioration in the financial condition of Brilliant Earth, LLC could limit its ability to pay distributions to the company[295]. - The company has no independent means of generating revenue and relies on distributions from Brilliant Earth, LLC to cover income taxes and administrative expenses[292].

Financial Data and Key Metrics - Q2 revenue was $110.2 million, a 1% increase YoY, with a 23% growth on a 4-year CAGR basis [26] - Gross margin expanded by 450 basis points YoY to 57.6%, driven by brand resonance, proprietary products, price optimization, and procurement efficiencies [26] - Adjusted EBITDA was $7.7 million, representing a 7% margin, exceeding expectations due to strong gross margin performance and disciplined OpEx management [12][26] - Cash position at the end of Q2 was approximately $150 million, an increase of over $3 million compared to Q1 2023 [12] - Full-year 2023 net sales guidance remains $460 million to $490 million, representing 5% to 11% growth YoY [13] - Adjusted EBITDA guidance for 2023 increased to $22 million to $35 million, with a margin of 5% to 7% [14] Business Line Performance - Bridal segment saw double-digit growth in wedding bands, particularly in men's wedding rings, indicating strong brand resonance across genders [28] - Fine jewelry segment demonstrated strong growth, with personalized jewelry and signature offerings performing well [28] - Social media campaigns, including influencer activations, drove significant engagement, with over 1 million views on content featuring Brilliant Earth products [27] - The company expanded its quick-ship assortment with ready-to-ship engagement rings, catering to customer convenience [7] Market Performance - The company opened 4 new showrooms in Q2, bringing the total to 8 year-to-date, with plans to reach at least 35 by year-end [8][29] - Showroom expansion in major metro markets like Los Angeles, Chicago, and Washington, D.C., is yielding strong results [29] - The first indoor mall-based showroom is set to open soon, with expectations of strong ROI and customer engagement [16] Strategic Direction and Industry Competition - The company continues to focus on sustainability, transparency, and inclusivity, launching new collections like the Planet-Fit and Renewable collections to highlight its mission [9] - Investments in technology and systems are enabling growth, with a focus on refining the omnichannel experience [6] - The company is leveraging its asset-light operating model to maintain strong inventory turns and cash flow [10] Management Commentary on Operating Environment and Future Outlook - Management expects higher YoY revenue growth rates in H2 2023, driven by showroom performance and fine jewelry assortment [13] - The company anticipates normalization in bridal growth rates towards the end of 2023, with continued market share gains [52] - Marketing investments are being made to build brand awareness and position the company for success during the holiday season [34] Other Important Information - Stephanie Layton joined as Senior Vice President of Investor Relations, bringing significant experience in ESG and investor relations [30] - The company is testing and learning from its showroom expansion, with a focus on refining and optimizing the customer experience [29] Q&A Session Summary Question: Indoor Mall Showroom Economics and $10,000+ Price Point Trends - The indoor mall showroom is expected to offer compelling economics and drive brand awareness, with customer data supporting the move [16] - The $10,000+ price point continues to see moderation, but growth in the sub-$10,000 range is strong, reflecting the company's ability to meet demand across price points [16] Question: Gross Margin Performance and Long-Term Targets - Q2 gross margin outperformance was driven by brand strength, product differentiation, and price optimization enhancements [18] - H2 gross margins are expected to be in a similar range as H1, with ongoing investments in brand building and cost management [34] Question: Revenue and OpEx Phasing for Q3 and Q4 - Revenue distribution for Q3 and Q4 is expected to be consistent with 2021, with a slight weighting towards Q4 due to showroom openings and fine jewelry performance [62] - OpEx investments in Q3 and Q4 will focus on driving long-term brand awareness and preparing for the holiday season [62] Question: Precious Metals and Diamond Prices Impact on ASP - The company has developed internal capabilities to adjust pricing dynamically based on input costs, leveraging its asset-light model to manage inventory efficiently [42] - ASP moderation is driven by growth in the sub-$10,000 price range and fine jewelry acceleration, with strong performance during the Mother's Day gifting period [42] Question: Marketing Leverage and Long-Term Growth - Marketing investments are focused on driving long-term sustainable growth, with opportunities for leverage as showrooms mature and brand awareness grows [76] - The company is balancing growth investments with profitability, as evidenced by the increased adjusted EBITDA guidance for 2023 [76]

Brilliant Earth Group, Inc. (NASDAQ:BRLT) Q1 2023 Earnings Conference Call May 11, 2023 12:00 PM ET Company Participants Allison Malkin - ICR Beth Gerstein - Chief Executive Officer Jeff Kuo - Chief Financial Officer Conference Call Participants Oliver Chen - TD Cowen Dana Telsey - Telsey Advisory Group Noah Zatzkin - KeyBanc Capital Markets Amanda Douglas - J.P. Morgan Edward Yruma - Piper Sandler Randy Konik - Jefferies Rick Patel - Raymond James Oliver Chen - TD Cowen Dylan Carden - William Blair Operato ...

Financial Position - As of March 31, 2023, total assets amounted to $262.3 million, a slight decrease from $262.6 million as of December 31, 2022[22] - Total liabilities as of March 31, 2023, were $168.9 million, down from $169.4 million at the end of 2022[22] - Current assets decreased to $195.6 million from $205.9 million, primarily due to a reduction in cash and cash equivalents[22] - Total equity attributable to Brilliant Earth Group, Inc. increased to $11.2 million as of March 31, 2023, from $10.9 million at the end of 2022[22] - The current portion of long-term debt remained stable at $3.25 million as of March 31, 2023[22] - The company had a cash balance of $146.0 million as of March 31, 2023, with working capital of ($19.0) million[145] - As of March 31, 2023, cash, cash equivalents, and restricted cash totaled $146.2 million, down from $165.1 million at the end of the previous year[167] Revenue and Income - The company reported a net income of $356,000 for the three months ended March 31, 2023, compared to $3.0 million for the same period in 2022[27] - Net sales decreased by 2.3% to $97.7 million for the three months ended March 31, 2023, compared to $100.0 million for the same period in 2022[87] - The company reported a net loss of $0.4 million for the three months ended March 31, 2023, compared to a net income of $3.4 million for the same period in 2022[87] - Adjusted EBITDA was $5.5 million, down from $8.4 million for the three months ended March 31, 2022, resulting in an adjusted EBITDA margin of 5.7% compared to 8.4% in the prior year[87] - The income tax benefit for the three months ended March 31, 2023, was less than $0.1 million, compared to an income tax provision of $0.1 million for the same period in 2022[63] Inventory and Expenses - Total net inventories decreased from $39.3 million as of December 31, 2022, to $37.9 million as of March 31, 2023, representing a decline of approximately 3.6%[33] - The allowance for inventory obsolescence increased from $307,000 to $371,000, indicating a rise of 20.9%[33] - Total accrued expenses and other current liabilities decreased from $37.8 million as of December 31, 2022, to $30.1 million as of March 31, 2023, a reduction of approximately 20.5%[34] - Selling, general and administrative expenses rose by $9.0 million, or 20.0%, representing 55.0% of net sales, an increase of 1,023 basis points[125] - Depreciation expenses increased to $951,000 from $349,000 year-over-year, while equity-based compensation rose to $2,258,000 from $2,104,000[206] Cash Flow - For the three months ended March 31, 2023, net cash used in operating activities was $2.0 million, a decrease of $2.2 million compared to net cash provided by operating activities of $0.2 million for the same period in 2022[157] - Net cash used in investing activities increased to $4.4 million for the three months ended March 31, 2023, compared to $1.3 million for the same period in 2022, primarily due to increased purchases of property and equipment[169] - Net cash used in financing activities decreased to $2.3 million for the three months ended March 31, 2023, from $6.9 million in the same period in 2022, mainly due to lower tax distributions paid to members[170] - The Company reported a net decrease in cash, cash equivalents, and restricted cash of $8,677,000 for the period[206] Operational Highlights - The company operated 28 showroom locations and plans to strategically open more showrooms in the future to enhance brand awareness and drive sales[102] - The company has sold to consumers in over 50 countries, indicating a strong potential for global expansion[75] - The company aims to leverage its in-house design capabilities to expand its product assortment beyond engagement and bridal jewelry, targeting special occasions and self-purchase[91] - The company has invested in technology to enhance customer experience, including dynamic product visualization and augmented reality try-on, which are expected to drive higher satisfaction and conversion rates[85] - The company’s marketing strategy focuses on increasing brand awareness and customer reach through various channels, including digital and social media[76] Legal and Compliance - The Company is actively involved in legal proceedings, including a case related to the Illinois Biometric Information Privacy Act, which was dismissed[196] - The Company filed a petition to compel arbitration in a labor-related lawsuit, which was denied, and it plans to appeal this decision[197] - As of March 31, 2023, the Company was in compliance with all financial covenants under the SVB Credit Facilities[42] Market Conditions - The current inflationary environment and changes in macro-level consumer spending trends could negatively impact the company's operating results[95] - The company anticipates significant cash payments under the TRA, which will reduce overall cash flow available[163] - The company is subject to covenants in its financing arrangements that may restrict distributions from Brilliant Earth, LLC[162] - The company’s ability to declare and pay cash dividends may be limited if Brilliant Earth, LLC does not have sufficient funds to make distributions[173]

Financial Performance - The company reported net income of $19.0 million, $26.3 million, and $21.6 million for the years ended December 31, 2022, 2021, and 2020, respectively[336]. - The company has a history of incurring net losses and needs to generate and sustain increased revenue to maintain profitability[336]. Expansion and Growth Strategy - As of December 31, 2022, the company has expanded to 25 showrooms across the U.S.[319]. - The company’s growth strategy includes opening new showrooms throughout the U.S., but there is no assurance of success in new markets[333]. Operational Risks - The company faces risks related to fluctuations in the pricing and supply of diamonds, gemstones, and precious metals, which could adversely impact earnings and cash availability[327]. - The company may encounter unforeseen operating expenses and challenges that could result in losses in future periods[322]. - The company’s ability to meet increases in demand may be impacted by reliance on the availability of materials, leading to potential supply shortages[325]. - The company may not be able to effectively manage its inventory, which could have a material adverse effect on its financial condition and results of operations[341]. Cost Management - The company relies on maintaining a low cost of production and distribution, which is sensitive to various economic factors[327]. Market Sensitivity - The company’s business model is sensitive to consumer demand, which is influenced by economic conditions and consumer confidence[335].

Brilliant Earth Group, Inc. (NASDAQ:BRLT) Q4 2022 Earnings Conference Call March 15, 2023 5:00 PM ET Company Participants Allison Malkin – ICR Beth Gerstein – Chief Executive Officer Jeff Kuo – Chief Financial Officer Conference Call Participants Dana Telsey – Telsey Advisory Group Edward Yruma – Piper Sandler Oliver Chen – Cowen Amanda Douglas – J.P. Morgan Rick Patel – Raymond James Michael Binetti – Credit Suisse Dylan Carden – William Blair Noah Zatzkin – KeyBanc Capital Operator Good day and thank you ...

Brilliant Earth Group, Inc. (NASDAQ:BRLT) Q3 2022 Earnings Conference Call November 10, 2022 5:00 PM ET Company Participants Allison Malkin – Investor Relations Beth Gerstein – Chief Executive Officer Jeff Kuo – Chief Financial Officer Conference Call Participants Amanda Douglas – J.P. Morgan Oliver Chen – Cowen Michael Binetti – Credit Suisse Noah Zatzkin – KeyBanc Capital Markets Operator Hello, and thank you for standing by. Welcome to Brilliant Earth's Third Quarter 2022 Earnings Conference Call. [Opera ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40836 Brilliant Earth Group, Inc. (Exact name of registrant as specified in its charter) Delaware 87-10154 ...

Financial Data and Key Metrics Changes - Revenue grew 18% year-over-year to $108.8 million, with a three-year CAGR of 31% compared to Q2 2019 [10][23] - Gross margin reached a record 53.1%, a 460 basis point improvement over the prior year [10][28] - Adjusted EBITDA was $9.6 million, representing an adjusted EBITDA margin of 9% [10][23] Business Line Data and Key Metrics Changes - Fine jewelry, a fast-growing segment, saw over 350 basis points of growth in mix over the prior year, with strong demand for both men's and women's wedding bands [15][24] - The showroom strategy continues to expand, with the opening of the 21st showroom, contributing to increased customer engagement and bookings [11][26] Market Data and Key Metrics Changes - The company noted a mid-single-digit percentage decline in total blended AOV due to the lower average price points of fine jewelry and wedding bands [25] - The demand for bridal and wedding products remains strong, with wedding band sales growing faster than the overall business [24][56] Company Strategy and Development Direction - The company is focused on expanding its omnichannel strategy and plans to nearly double its showroom count this year [11][27] - Continued investment in technology and data is aimed at enhancing customer experience and operational efficiency [12][29] - The long-term growth target is revenue growth in the high 20s to low 30% range, with a gross margin target in the mid-50% range [36][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties while maintaining profitable growth [20][21] - The company anticipates continued year-over-year improvement in gross margin, although the rate of growth may moderate in the second half of the year [40] - Management remains optimistic about the upcoming holiday season, particularly for fine jewelry [57] Other Important Information - SG&A expenses increased to 47.9% of net sales, reflecting investments in marketing and showroom openings [31][32] - The company ended the quarter with $155.5 million in cash, indicating a strong liquidity position [35] Q&A Session Summary Question: Thoughts on pricing optimization and inflation impact - Management highlighted the importance of their premium brand positioning and noted that they have not faced broad-based inflation pressure, allowing for continued gross margin strength [44][46][47] Question: Revenue growth guidance and marketing efficiency - Management remains confident in their revenue growth guidance, citing strong demand and effective marketing strategies despite a dynamic digital environment [49][50][52] Question: Insights on fine jewelry and wedding bands - Management noted that while bridal purchases take longer, fine jewelry is experiencing strong growth, particularly as the holiday season approaches [55][57] Question: Current inventory position and supply chain management - The company operates a technology-enabled supply chain that allows for efficient inventory management, ensuring they can adapt to market trends [62][63] Question: Industry trends regarding independent jewelers - Management observed an increase in independent jewelers closing, presenting an opportunity for market share growth in a fragmented industry [88][90] Question: Differentiation from competitors - Management emphasized their premium positioning and mission-driven approach as key differentiators in the competitive landscape [92][93] Question: Future of supply chain integration - Management has no immediate plans for vertical integration but remains open to opportunities that enhance customer experience and reduce costs [94][95] Question: Consumer health and spending behavior - Management noted that bridal is typically recession-resilient and continues to see strong demand despite macroeconomic pressures [96]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40836 Brilliant Earth Group, Inc. (Exact name of registrant as specified in its charter) Delaware 87-1015499 (S ...