FIGS (FIGS) FY Conference June 10, 2025 11:15 AM ET Speaker0 Well, good morning. Thank you all for joining us. My name is Brian Nagel. I'm the senior equity research analyst here at Oppenheimer covering consumer growth and ecommerce. So this is our twenty fifth annual Oppenheimer consumer growth and ecommerce conference. We very much appreciate, you all attending. So I'm pleased to have with us our next presenting company, Figgs, and three of the company's senior executives. Katrina Spear, founder and CEO, ...

Financial Data and Key Metrics Changes - The meeting confirmed the election of three class one directors and the ratification of Ernst and Young as the independent registered public accounting firm for the fiscal year ending December 31, 2025 [9][11] - The compensation of named executive officers was approved on an advisory nonbinding basis [10][11] Business Line Data and Key Metrics Changes - No specific business line data or key metrics were discussed during the meeting [12] Market Data and Key Metrics Changes - No specific market data or key metrics were provided during the meeting [12] Company Strategy and Development Direction and Industry Competition - The company did not provide detailed comments on strategy or competitive positioning during the meeting [12] Management's Comments on Operating Environment and Future Outlook - Management did not offer specific insights into the operating environment or future outlook during the meeting [12] Other Important Information - The meeting was conducted virtually to enhance stockholder attendance and participation [4] - Forward-looking statements were made with a caution regarding risks and uncertainties [6] Q&A Session All Questions and Answers - There were no questions submitted during the Q&A session [12]

Group 1 - The investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective [1] - The approach does not prioritize market-driven dynamics or future price action, instead emphasizing long-term earnings power and competitive dynamics [1] - Most recommendations will be holds, indicating a cautious approach to market conditions, with only a small fraction of companies deemed suitable for purchase at any time [1] Group 2 - The articles aim to provide important information for future investors and introduce skepticism in a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, emphasizing the need for readers to conduct their own due diligence [2][3]

Core Insights - Figs (FIGS) reported $124.9 million in revenue for Q1 2025, a year-over-year increase of 4.7% and a surprise of +4.71% over the Zacks Consensus Estimate of $119.28 million [1] - The EPS for the same period was $0.00, compared to $0.01 a year ago, with a surprise of +100.00% against the consensus estimate of -$0.01 [1] Financial Performance Metrics - Active customers reached 2,700, exceeding the five-analyst average estimate of 2,640 [4] - Average order value was $119, higher than the estimated $115.85 [4] - Net revenues per active customer were $208, slightly below the estimated $210.11 [4] - Geographic revenues from the Rest of the World were $18.90 million, compared to the three-analyst average estimate of $19.99 million, reflecting a year-over-year change of +16.5% [4] - Geographic revenues from the United States totaled $106 million, surpassing the three-analyst average estimate of $99.44 million, with a year-over-year change of +2.8% [4] - Revenues from Non-Scrubwear were $25.30 million, slightly above the average estimate of $25.04 million, representing a year-over-year change of +3.7% [4] - Revenues from Scrubwear reached $99.60 million, exceeding the two-analyst average estimate of $94.45 million, with a year-over-year change of +5% [4] Stock Performance - Shares of Figs have returned +21% over the past month, outperforming the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Figs reported break-even quarterly earnings per share, matching the Zacks Consensus Estimate of a loss of $0.01, and compared to earnings of $0.01 per share a year ago, resulting in an earnings surprise of 100% [1] - The company posted revenues of $124.9 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.71%, and compared to year-ago revenues of $119.29 million [2] - Over the last four quarters, Figs has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Outlook - Figs shares have lost about 21% since the beginning of the year, while the S&P 500 has declined by 4.3% [3] - The current consensus EPS estimate for the coming quarter is $0.01 on $141.06 million in revenues, and $0.04 on $543.68 million in revenues for the current fiscal year [7] - The estimate revisions trend for Figs is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Retail - Apparel and Shoes industry, to which Figs belongs, is currently in the bottom 37% of over 250 Zacks industries, suggesting that the outlook for the industry can materially impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Q1 revenues increased by 5% year over year, reaching $124.9 million, outperforming expectations of flat performance [5][30] - Adjusted EBITDA margin was 7.2%, exceeding the target range of 5.5% to 6% [7][36] - Net loss for the quarter was $100,000, compared to a net income of $1.4 million in the previous year [36] Business Line Data and Key Metrics Changes - Scrub wear revenue increased by 5%, representing 80% of net revenues, while non-scrub wear grew by 4%, accounting for 20% of net revenues [31][32] - Average Order Value (AOV) rose by 3% to $119, a new high for the brand, driven by a higher rate of full-price sales [30][31] Market Data and Key Metrics Changes - U.S. sales increased by 3% to $106 million, marking the best domestic performance in the past six quarters [32] - International sales grew by 16%, although this was a step down from the previous quarter due to a favorable duty reclassification in Q4 [32][72] Company Strategy and Development Direction - The company is focusing on international expansion, with plans to enter the Japanese market and South Korea later in the year [19][20] - Emphasis on community engagement and brand differentiation through initiatives like the "scrubs that don't suck" campaign [14][16] - The company aims to leverage technology for regional market expansion while investing in localized efforts [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthcare industry's resilience, with expectations for job growth in the sector [8][9] - The company is navigating uncertainties related to tariffs and supply chain issues but remains committed to maintaining product quality [25][27] - Full-year revenue outlook remains unchanged, projecting low single-digit declines, with adjusted EBITDA margin expectations revised to 7.5% to 8.5% [40][41] Other Important Information - The company reported a cash balance of $251.2 million, reflecting a strong financial position despite a slight year-over-year decrease [36] - Inventory increased by 1% year over year, with a focus on optimizing inventory levels as the year progresses [37][93] Q&A Session Questions and Answers Question: Can you elaborate on tariff mitigation strategies? - Management highlighted opportunities for cost mitigation through supply chain efficiencies and vendor negotiations, emphasizing internal strategies before considering price increases [50][52][56] Question: How is demand normalization progressing? - Management noted strong underlying demand with active customers up 4% year over year, indicating a positive trajectory despite some softening in Canadian demand due to tariffs [58][61][62] Question: What is the outlook for international performance? - International business grew by 16% in Q1, with strong performance in Mexico, Europe, and the Middle East, although promotional changes may impact growth in the second half of the year [71][72][76]

Financial Data and Key Metrics Changes - Company reported Q1 revenues of $124.9 million, a 5% increase year over year, exceeding expectations of flat performance [31][5] - Adjusted EBITDA margin was 7.2%, surpassing the target range of 5.5% to 6% [7][38] - Net loss for the quarter was $100,000, compared to a net income of $1.4 million in the previous year [38] Business Line Data and Key Metrics Changes - Scrub wear revenue increased by 5%, accounting for 80% of net revenues, while non-scrub wear grew by 4%, representing 20% of net revenues [32][34] - Average Order Value (AOV) reached a record high of $119, up 3% year over year, driven by a higher rate of full-price sales [31][32] Market Data and Key Metrics Changes - U.S. sales increased by 3% to $106 million, marking the best domestic performance in the past six quarters [34] - International sales grew by 16%, although this was a step down from the previous quarter due to a favorable duty reclassification in Q4 [34][74] Company Strategy and Development Direction - Company plans to expand internationally, with a focus on Japan and South Korea, where over 80% of global healthcare professionals are located [18][19] - The company aims to enhance its B2B business, which currently represents under 10% of total business, by targeting institutions and modern healthcare providers [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and emphasized the importance of maintaining product quality [28][30] - The company remains cautious about future consumer demand and has adjusted its full-year revenue outlook to reflect potential challenges [46][40] Other Important Information - The company is actively working on mitigating tariff impacts through supply chain efficiencies and vendor negotiations [52][55] - The company has a strong balance sheet with $251.2 million in cash and equivalents, allowing for strategic investments despite uncertainties [38][39] Q&A Session Summary Question: Impact of tariffs on pricing strategy - Management acknowledged the potential for cost mitigation through supply chain efficiencies but emphasized that pricing adjustments would be a last resort [53][58] Question: Demand normalization and consumer behavior - Management reported strong underlying demand and positive growth entering Q2, with no notable shifts in consumer behavior except for some softening in Canada due to tariffs [60][62] Question: International performance and growth outlook - International business grew by 16% in Q1, with strong performance in Mexico, Europe, and the Middle East, although promotional shifts may impact growth in the second half [74][77]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o 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 001-40448 FIGS, Inc. (Exact Name of Registrant as Specified in its Charter) (State or ...

Revenue Performance - Net revenues for Q1 2025 were $124.9 million, representing a year-over-year increase of 4.7% driven by higher orders from existing customers and an increase in average order value (AOV) to $119, up 2.6% year over year[4]. - Scrubwear net revenues reached $99.6 million, a 4.9% increase year over year, while non-scrubwear net revenues were $25.3 million, up 3.8% year over year[4]. - U.S. net revenues were $106.0 million, reflecting a 2.9% increase year over year, and international net revenues were $18.9 million, a significant increase of 16.4% year over year[4]. - Total net revenues for Q1 2025 were $124.9 million, a 4.7% increase from $119.3 million in Q1 2024[16]. - Revenue from the United States was $106.0 million, a 2.9% increase from $103.1 million in Q1 2024[25]. Profitability and Margins - Gross margin decreased to 67.6%, down 130 basis points year over year, primarily due to product mix shifts and higher freight expenses[4]. - Operating expenses increased to $84.7 million, a 3.6% rise year over year, but as a percentage of net revenues, they decreased to 67.8% from 68.5% in the same period last year[4]. - The company reported a net loss of $0.1 million, compared to a net income of $1.4 million in the same period last year, resulting in a net income margin of (0.1)%[4]. - Adjusted EBITDA was $9.0 million, down $4.0 million year over year, with an adjusted EBITDA margin of 7.2%, compared to 10.9% in the same period last year[4]. - Gross profit for Q1 2025 was $84.5 million, compared to $82.1 million in Q1 2024, reflecting a gross margin improvement[16]. - Adjusted EBITDA for Q1 2025 was $9.0 million, down from $13.0 million in Q1 2024, reflecting a margin of 7.2%[21]. Customer Metrics - Active customers as of March 31, 2025, increased by 3.8% year over year to 2.7 million, while net revenues per active customer decreased by 1.0% year over year to $208[4]. - Active customers increased to 2,696 as of March 31, 2025, up from 2,597 in the same period last year, representing a growth of 3.8%[23]. - Average order value rose to $119 in Q1 2025, compared to $116 in Q1 2024, indicating a positive trend in customer spending[23]. Cash Flow and Assets - Free cash flow for Q1 2025 was $7.9 million, down from $11.1 million in Q1 2024[21]. - Total current assets increased to $399.7 million as of March 31, 2025, compared to $382.8 million at the end of 2024[14]. - Total liabilities rose to $140.8 million as of March 31, 2025, up from $132.7 million at the end of 2024[14]. Future Outlook - The full year 2025 outlook projects net revenue growth to be down in low single digits, with an adjusted EBITDA margin expected to be between 7.5% and 8.5%[5]. - The company aims to navigate economic uncertainties and adapt to changes in U.S. trade policies while maintaining a focus on serving its community and investing in growth opportunities[3].

Q1 2025 Earnings Presentation EUGENE B., DDS DISCLAIMER Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by FIGS, Inc. (the "Company") or any officer, director, employee, agent or advisor of the Company. This presentation does not purport to be all inclusive or to contain all of the information you may desire in connection with your investigation of the Company. Information provided in this presentation speaks only as of the date hereof. This ...