Earnings Presentation 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 presentation shall not ...

Financial Data and Key Metrics Changes - Net revenues for Q4 increased by 5% year-over-year to $151.8 million, exceeding the implied outlook for the period [52] - Full year net revenue reached a record $555.6 million, an increase of 2% year-over-year [61] - Gross margin for Q4 contracted by 20 basis points to 67.3%, while full year gross margin contracted by 150 basis points to 67.6% [57][61] - Adjusted EBITDA for Q4 was $21.1 million, with an adjusted EBITDA margin of 13.9%, compared to 18.4% in the previous year [60] - The company ended the year with cash, cash equivalents, and short-term investments of $245.1 million, with no debt [62] Business Line Data and Key Metrics Changes - Scrubwear increased by 2%, representing 76% of net revenues for Q4, while non-scrubwear increased by 13%, representing 24% of net revenues [54][55] - The international business grew by 45% for the quarter, accounting for 16% of net revenues, marking an all-time high for the brand [16] Market Data and Key Metrics Changes - The company entered 10 new countries in 2024 and continued to scale in over 20 international markets [14] - The active customer base increased by 3% year-over-year to 2.7 million, while net revenues per active customer decreased by 1% to $208 [53] Company Strategy and Development Direction - The company plans to prioritize and rebase efforts, focusing on long-term brand health and reducing promotional activities [21][23] - There is a strategic shift towards enhancing product offerings, including the introduction of new fabric types and expanding into less developed categories like outerwear and footwear [30][28] - The company aims to deepen connections with healthcare professionals through a more authentic marketing approach and increased customization options [31][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged inconsistencies in performance throughout the year, citing challenges in customer acquisition and gross margin pressure [19][20] - The outlook for 2025 anticipates a decline in net revenues in the low single-digit range, reflecting headwinds from reduced promotions and potential declines in active customers [66] - Management expressed confidence in the long-term growth potential, emphasizing the importance of reinvigorating the U.S. business and expanding international and team channels [98] Other Important Information - The company repurchased $38.2 million worth of shares during the quarter, with approximately $4.6 million remaining under the previously announced share repurchase program [65] - The company has minimal direct exposure to tariffs from China, with indirect exposure from partners like New Balance [124] Q&A Session Summary Question: Plans to maintain and reengage lapsed customers during promotional reset - Management acknowledged headwinds on customer acquisition and plans to readjust promotional outlook while investing in brand awareness and retention efforts [80][81] Question: Insights on supply chain investments and pausing Canadian distribution center - Management indicated a focus on optimizing the current distribution facility and reassessing the roadmap for supply chain improvements [83] Question: Understanding the dynamic between strong Q4 performance and downbeat guidance for 2025 - Management explained that Q4 outperformance was driven by color launches, but headwinds in active customer growth and promotional shifts are expected to impact 2025 [92][93] Question: Building blocks to return to normalized growth - Management emphasized the need to reinvigorate growth in the U.S. business and active customer base while expanding retail and international channels [98] Question: Selling and G&A expense dynamics - Management discussed the normalization of transitory costs related to the new distribution center and the impact of increased fixed costs and international operations on selling expenses [106] Question: Profitability of international and non-scrubwear categories - Management confirmed that international operations are profitable, despite a different cost profile, and expects continued growth in non-scrubwear categories [111][112] Question: Product category opportunities and tariffs - Management highlighted ongoing innovation in product categories and minimal exposure to current tariff plans [124]