Core Viewpoint - Revolve Group (RVLV) shows a significantly improving earnings outlook, making it a solid choice for investors as analysts continue to raise their earnings estimates for the company [1][2] Earnings Estimate Revisions - The upward trend in earnings estimate revisions reflects growing optimism among analysts regarding Revolve Group's earnings prospects, which is expected to positively impact its stock price [2] - The Zacks Rank system indicates a strong correlation between earnings estimate revisions and near-term stock price movements [2] - The current-quarter earnings estimate is $0.16 per share, representing a -5.9% change from the previous year, but the Zacks Consensus Estimate has increased by 45.46% over the last 30 days with no negative revisions [6] - For the full year, the earnings estimate is projected at $0.73 per share, a +5.8% change from the prior year, with a 32.76% increase in the consensus estimate over the same timeframe [7][8] Zacks Rank and Performance - Revolve Group has achieved a Zacks Rank 2 (Buy) due to favorable estimate revisions, which is a reliable indicator for investors [9] - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [9] Stock Performance - The stock has gained 6.8% over the past four weeks, driven by solid estimate revisions, indicating strong earnings growth prospects [10]

Core Viewpoint - Revolve Renewable Power Corp. successfully closed a brokered private placement, raising gross proceeds of $3,039,973 through the issuance of 15,999,857 units at a price of $0.19 per unit, which includes common shares and warrants [1][2][3] Financing Details - The offering was conducted on a "best efforts" basis by Beacon Securities Limited, with a cash commission of 7.0% of gross proceeds and compensation options equal to 7.0% of units sold [4] - The net proceeds will be utilized for advancing late-stage projects and for working capital [3] Insider Participation - Certain insiders participated in the offering, which is classified as a "related party transaction" under Multilateral Instrument 61-101, with exemptions from formal valuation and minority shareholder approval requirements due to the transaction's value being less than 25% of the company's market capitalization [5] Ownership Changes - Director Roger Norwich acquired 100,000 units, reducing his ownership to approximately 8.78% on a non-diluted basis [6][7] - Director Joseph O'Farrell acquired 263,157 units, reducing his ownership to approximately 9.77% on a non-diluted basis [8] Company Overview - Revolve was established in 2012 to meet the growing demand for renewable energy, focusing on utility-scale wind, solar, hydro, and battery storage projects across North America [10] - The company has developed and sold over 1,550 MW of projects and is targeting 5,000 MW of utility-scale projects under development [11]

Core Insights - Revolve Group, Inc. is a fashion retailer focused on online sales, targeting millennial and Gen Z consumers, known for trendy apparel and influencer collaborations [1] - Evercore ISI has assigned a "Mixed" grade to Revolve Group, raising the price target from $19 to $21, indicating cautious optimism about the company's future [2][6] - The stock price of RVLV has increased significantly by 16.57%, currently priced at $23.29, reflecting market volatility [4][6] Company Performance - Revolve Group held its Q3 2025 earnings call on November 4, 2025, attended by key executives and analysts from major financial institutions [3] - The current market capitalization of Revolve Group is approximately $1.66 billion, highlighting its size within the online fashion retail industry [5][6] - Today's trading volume for RVLV is 437,587 shares, indicating active investor interest following the recent earnings call and updated assessment [5]

Core Insights - Investors in the Textile - Apparel sector may consider Superior Group (SGC) and Revolve Group (RVLV) as potential undervalued stocks [1] Valuation Metrics - Both SGC and RVLV have a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and improving earnings outlooks [3] - SGC has a forward P/E ratio of 21.08, while RVLV has a forward P/E of 38.70 [5] - SGC's PEG ratio is 2.11, compared to RVLV's PEG ratio of 2.17, suggesting SGC may offer better value relative to its expected earnings growth [5] - SGC's P/B ratio is 0.76, indicating a lower market value compared to its book value, while RVLV has a P/B of 3.04 [6] - Based on these valuation metrics, SGC is rated as a superior value option with a Value grade of A, while RVLV has a Value grade of C [6]

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Core Insights - Revolve Group (RVLV) reported revenue of $295.63 million for Q3 2025, a year-over-year increase of 4.4%, with an EPS of $0.24 compared to $0.15 a year ago, indicating strong earnings performance despite a slight revenue miss against estimates [1] Financial Performance - Revenue of $295.63 million compared to Zacks Consensus Estimate of $298.79 million, resulting in a surprise of -1.06% [1] - EPS of $0.24 exceeded the consensus estimate of $0.11, delivering a surprise of +118.18% [1] - Total orders placed were 2.3 million, matching the average estimate [4] - Average order value was $306.00, slightly above the average estimate of $303.45 [4] - Active customers totaled 2.75 million, slightly below the average estimate of 2.77 million [4] Geographic Sales Performance - Geographic Net Sales in the Rest of the World reached $64.21 million, compared to an average estimate of $66.74 million, representing a year-over-year change of +6.1% [4] - Geographic Net Sales in the United States were $231.42 million, slightly below the average estimate of $232.06 million, with a year-over-year change of +3.9% [4] Segment Performance - Net Sales for FWRD were $40.99 million, below the average estimate of $42.66 million, with a year-over-year change of +3.2% [4] - Net Sales for REVOLVE were $254.65 million, compared to the average estimate of $257.52 million, reflecting a year-over-year change of +4.6% [4] - Gross profit for FWRD was $18.41 million, exceeding the average estimate of $15.9 million [4] - Gross profit for REVOLVE was $143.11 million, surpassing the average estimate of $138.65 million [4] Stock Performance - Shares of Revolve Group have returned -4.5% over the past month, contrasting with the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - The company reported a 4% year-over-year increase in net sales, reaching $296 million, with Adjusted EBITDA rising 45% to $25 million, marking the highest ever for a third quarter [6][30] - Consolidated gross margin improved to 54.6%, an increase of 347 basis points year-over-year, significantly exceeding guidance [9][31] - Free cash flow more than tripled year-over-year, increasing by $43 million, or 265%, for the nine months ended September 30 [10][34] Business Line Data and Key Metrics Changes - Revolve segment net sales increased by 5%, while Forward segment net sales grew by 3% year-over-year [8][30] - Sales of beauty, men's, and home products saw a healthy double-digit percentage increase year-over-year [12] - The owned brand penetration of Revolve segment net sales increased year-over-year for the third consecutive quarter, contributing to higher gross margins [23][70] Market Data and Key Metrics Changes - Domestic net sales increased by 4%, while international net sales rose by 6% year-over-year [30] - The Middle East and Europe showed strong performance, with Mainland China net sales increasing over 50% year-over-year [12] - Active customers increased by 5% year-over-year, with total orders placed reaching 2.3 million, also a 5% increase [30] Company Strategy and Development Direction - The company is focusing on brand investments, expanding owned brands, and physical retail development as key growth drivers [18][26] - The competitive environment in luxury retail is viewed as an opportunity, with the company planning to capture market share amid challenges faced by competitors [20][21] - The company is leveraging AI technology to enhance operational efficiency and drive growth across various functions [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties, supported by a strong financial foundation and operational excellence [16][40] - The outlook for gross margin in Q4 2025 is expected to be between 53.1% and 53.6%, indicating a year-over-year increase [37] - Management remains optimistic about the potential for international growth and the impact of new owned brand launches [12][70] Other Important Information - The company has no debt and reported cash and cash equivalents of $315 million, a 25% year-over-year increase [34] - The tariff landscape remains fluid, but the company has made significant progress in mitigating tariff exposure [35][80] Q&A Session Summary Question: Can you size the benefit from the improved markdown algorithm? - Management noted that the markdown margin optimization was the largest driver of gross margin improvement, with positive impacts from promotional strategy shifts and an increase in full-price sales [42][43] Question: What are the trends in October compared to Q3? - October showed mid-single-digit growth, which is encouraging given tougher comparisons, and management is optimistic about the holiday season [46][47] Question: What is the outlook for average order value (AOV)? - AOV is expected to continue increasing slightly due to price increases, with a mix shift impacting overall results [50][51] Question: How is the company addressing higher return rates? - Higher return rates were attributed to mix shifts and higher average unit retail prices, with ongoing efforts to improve return rates in the future [73][74] Question: What is the contribution margin from international sales compared to the U.S.? - The contribution margin gap is closing, with ongoing optimization efforts in last-mile shipping and localized customer experiences [67] Question: What is the expected impact of tariffs going forward? - Management does not anticipate incremental headwinds from tariffs, with potential net benefits from mitigation efforts [79][80]

Financial Performance - Gross margin for Q3 2025 was 54.6%, up from 51.2% in Q3 2024, while the nine-month gross margin increased to 53.6% from 52.5%[96] - Adjusted EBITDA for Q3 2025 reached $25,347,000, compared to $17,503,000 in Q3 2024, with a nine-month total of $67,533,000 versus $51,244,000[96] - Free cash flow for the nine months ended September 30, 2025, was $59,038,000, significantly higher than $16,174,000 for the same period in 2024, indicating a strong improvement in liquidity[111] - Net income for the three months ended September 30, 2025, was $21.2 million, compared to $10.8 million for the same period in 2024[146] - For the nine months ended September 30, 2025, net sales rose by $65.1 million, or 7.8%, to $901.3 million compared to $836.2 million in 2024[156] Customer Metrics - Active customers increased to 2,747,000 in Q3 2025, up from 2,628,000 in Q3 2024, with total orders placed rising to 2,300,000 from 2,200,000[96] - Active customers increased during the period ended September 30, 2025, compared to the same period in 2024, driven by enhanced engagement and new customer acquisition[113] - Total orders placed increased in the three and nine months ended September 30, 2025, compared to the same periods in 2024, reflecting successful sales and marketing efforts[115] Sales and Marketing - REVOLVE segment net sales increased by 4.6% to $254.6 million for the three months ended September 30, 2025, and by 8.2% to $777.5 million for the nine months ended September 30, 2025[131] - FWRD segment net sales increased by 3.2% to $41.0 million for the three months ended September 30, 2025, and by 5.3% to $123.8 million for the nine months ended September 30, 2025[132] - Net sales to customers in the United States increased by 3.9% to $231.4 million for the three months ended September 30, 2025, and by 6.8% to $712.3 million for the nine months ended September 30, 2025[133] - Net sales to customers outside of the United States increased by 6.1% to $64.2 million for the three months ended September 30, 2025, and by 11.6% to $189.0 million for the nine months ended September 30, 2025[134] - Total net sales for the three months ended September 30, 2025, were $295.6 million, compared to $283.1 million for the same period in 2024[146] Cost and Expenses - Operating expenses for the three months ended September 30, 2025, totaled $140.5 million, an increase from $130.6 million in the same period in 2024[146] - Marketing expenses increased to $40.4 million for the three months ended September 30, 2025, from $39.5 million in the same period in 2024[146] - General and administrative expenses for the three months ended September 30, 2025, rose by $4.6 million, or 13.7%, to $38.6 million, increasing as a percentage of net sales from 12.0% to 13.0%[154] Economic and Market Conditions - The company faced a total tariff rate of 37.5% on goods imported from China, which may adversely impact gross margins and customer demand if sustained[118] - The overall economic environment, including tariffs and inflation, significantly affects consumer behavior and spending patterns, which may impact future sales[117] - The company is monitoring inflation impacts and may adjust pricing strategies to mitigate effects, which could influence demand for products[181] Strategic Initiatives - The company has successfully expanded internationally with limited investment, offering products on platforms like Tmall Global and Nykaa Fashion[94] - The logistics infrastructure supports free shipping and returns in the U.S., optimized by proprietary algorithms to reduce costs and improve efficiency[93] - The company plans to continue investing in international markets while maintaining a focus on the core U.S. market[94] - The company emphasizes the importance of customer acquisition and retention, with a focus on cost-effective marketing strategies to drive growth[121] - The company is implementing strategies to mitigate the impact of heightened tariffs, including diversifying manufacturing sources and optimizing supply chains[120] Cash Flow and Financing - Cash and cash equivalents increased to $315.427 million as of September 30, 2025, from $256.600 million as of December 31, 2024, reflecting a growth of 23%[166] - Net cash provided by operating activities surged to $69.583 million for the nine months ended September 30, 2025, compared to $22.774 million in 2024, marking an increase of 206%[173] - The company has a line of credit providing up to $75 million in revolver borrowings, with no borrowings outstanding as of September 30, 2025[169] - A stock repurchase program of up to $100 million was authorized in August 2023, with repurchases based on market conditions[172] Taxation - The effective tax rate for the three months ended September 30, 2025, decreased to 25.2% from 25.6% in the same period in 2024[155] - The effective tax rate rose to 27.8% for the nine months ended September 30, 2025, up from 25.7% in 2024, primarily due to an increase in valuation allowance against deferred income tax assets[165]

Q3 2025 Financial Highlights November 4, 2025 PAGE 2 Note on Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of U.S. federal securities laws. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would," or similar expres ...