Financial Data and Key Metrics Changes - Net revenue grew 15.2% year over year to $221.7 million, driven by a 20% increase in retail revenue [4][24] - Adjusted gross margin was 54.2%, slightly down from 54.6% in the previous year [29] - Adjusted EBITDA increased approximately 50% to $25.7 million, representing an adjusted EBITDA margin of 11.6% [4][32] Business Line Data and Key Metrics Changes - Glasses revenue grew 13% year over year, while contact lenses increased by 21% and eye exams surged by 41% [25][26] - Retail revenue accounted for 73% of total revenue, with a 20% year-over-year growth driven by new store openings [24][26] - The average revenue per customer rose 4.8% year over year to $320 [11][25] Market Data and Key Metrics Changes - Active customers reached 2.7 million, reflecting a 9.3% increase on a trailing 12-month basis [11][25] - The retail channel remains the primary growth engine, with strong customer acquisition through stores [11][12] - Contacts represented 11.5% of revenue, consistent with the prior quarter but below the industry average [21][26] Company Strategy and Development Direction - The company is entering its "third act," focusing on innovation through AI, including the development of AI glasses and enhanced customer experiences [6][8] - Plans to leverage partnerships with Google and Samsung to create intelligent eyewear [6][7] - The strategy includes expanding the retail footprint and enhancing the omnichannel experience while maintaining operational discipline [8][20] Management's Comments on Operating Environment and Future Outlook - Management noted a mixed shift in consumer behavior, particularly among younger customers, impacting average selling prices [4][40] - The company is taking a more conservative view on revenue for the remainder of the year due to current macroeconomic conditions [33][63] - Confidence remains in the long-term growth algorithm, with expectations for continued customer growth and EBITDA expansion [41][43] Other Important Information - The company completed a major system upgrade in its optical labs to support future growth and faster delivery times [9] - The decision to retire the Scout brand and Home Try-On program reflects a focus on aligning with customer preferences and simplifying operations [21][70] - The Pupils Project continues to provide free eyeglasses to students in need, expanding its reach significantly [22][23] Q&A Session Summary Question: Can you provide more details on the mix shift between single vision and progressives? - Management noted that younger consumers are more impacted by economic uncertainty, leading to a shift towards lower-priced frames, while progressive customers remain resilient [40] Question: How should we think about the growth algorithm moving forward? - The company maintains confidence in its long-term growth algorithm, expecting continued high growth and EBITDA expansion [41][43] Question: What is the early performance of the Target shop-in-shops? - Early performance is in line with expectations, and the company plans to continue expanding this initiative [53] Question: How is optometrist retention and recruitment tracking? - The company reports improved retention and recruitment of optometrists, aided by a strong employer reputation and supportive culture [58] Question: What impact has the sunset of the Home Try-On program had on e-commerce? - The company has seen strong growth in direct e-commerce purchases, offsetting the decline from the Home Try-On program [70]

Core Insights - Lenskart is preparing for an IPO, aiming for a valuation of $9 billion, which could position its founder, Peyush Bansal, to join the billionaire club with a stake valued at approximately $800 million [2][3]. Company Overview - Founded by Peyush Bansal and partners met on LinkedIn, Lenskart has evolved into a multi-billion dollar eyewear startup over 15 years [1]. - The company has achieved its first full-year profit for the fiscal year ending March 31, indicating a shift towards profitability [5]. - Lenskart operates 2,723 stores across India and international markets, with nearly 40% of its revenue generated from outside India [14]. Market Position and Strategy - Lenskart utilizes robotic production technology imported from Germany, allowing for efficient manufacturing of eyewear [4]. - The company is expanding into Southeast Asia, with demand patterns in countries like Indonesia and Vietnam reflecting those in India a decade ago [5]. - Lenskart's business model includes controlling nearly every aspect of its value chain, from lens design to last-mile delivery, and employing ophthalmologists for remote consultations [13]. Financial Aspects - The IPO proceeds are intended for opening new stores, investing in technology and AI, making acquisitions, and general corporate purposes [14]. - Earlier valuations by Fidelity Management & Research pegged Lenskart at $6.1 billion, highlighting investor interest in the company [8]. Industry Context - The Indian startup ecosystem has faced challenges, with many companies experiencing valuation declines, but Lenskart's upcoming IPO is seen as a test of renewed investor confidence in the sector [7][9]. - Lenskart's reliance on China for over one-third of its purchases poses potential risks related to supply chain disruptions [10]. Future Prospects - The company is developing a new manufacturing facility in Hyderabad, expected to be the world's largest, with a capacity for hundreds of thousands of glasses daily [11]. - Lenskart is also investing in smart eyewear technology, integrating features like AI tools and cameras [15].

Core Viewpoint - The discussion highlights recent downgrades of major companies like PayPal, Instacart, and Apple, emphasizing skepticism about consumer spending and the challenges of trading strategies in the current market environment [1][2][4]. Company Analysis - Apple has experienced multiple rating changes, with a downgrade from "hold" to "sell" occurring on October 1 at a price of 257 [2]. - The analyst Edison Lee has adjusted his unit growth forecast for Apple for FY25, FY26, and FY27 from 5% to a range of 7% to 7.7%, indicating a potential shift in demand perception [7]. - Despite concerns about pricing and competition, Apple continues to perform well in markets like Japan and China, particularly with its Pro models [10]. Industry Insights - The consumer sentiment appears to be cautious, with analysts suggesting that betting against consumer spending has historically not yielded positive results [1]. - The introduction of new products, such as the Vision Pro, has not significantly impacted customer satisfaction or market share against competitors like Samsung [15]. - The lack of significant price increases for new iPhone models has contributed to their strong sales performance, countering expectations that tariffs would drive prices higher [9].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached $214.5 million, reflecting a year-over-year increase of 13.9% [29] - Adjusted EBITDA for Q2 was $25 million, with an adjusted EBITDA margin of 11.7%, up from 10.4% in the previous year [37] - Active customers increased by 9% year-over-year, totaling 2.6 million [10][29] - Average revenue per customer rose by 4.6% to $316 [29] Business Line Data and Key Metrics Changes - Glasses revenue grew approximately 11% year-over-year, with progressive lenses accounting for 23% of prescription units sold [13][30] - Contact lenses saw a significant increase of 28% year-over-year, now representing 11.5% of total revenue [20][30] - Eye exams grew 44% year-over-year, contributing 6% to total revenue [22][30] Market Data and Key Metrics Changes - Retail revenue increased by 19.3% year-over-year, driven by new store openings and growth in established stores [29][30] - The company opened 11 new stores in Q2, bringing the total to 298 stores [31] - Retail productivity was reported at 101.7, indicating strong performance in existing stores [32] Company Strategy and Development Direction - The company aims to expand its store footprint to over 900 locations across North America, highlighting significant growth potential [7] - A partnership with Google was announced to develop AI-powered intelligent eyewear, expanding the company's total addressable market [8][9] - The company is transitioning away from the Home Try-On program to focus on in-store experiences and AI-driven digital tools [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the eye care consumer market, despite challenges in April [49] - The company raised its full-year guidance, expecting net revenue between $880 million and $888 million, representing 14-15% growth year-over-year [42] - Management noted that the gross impact of tariffs has moderated, contributing positively to EBITDA flow-through [39] Other Important Information - The CFO announced plans to step down after 14 years, with the co-CEO taking on interim financial responsibilities [24][25] - The company reported a strong cash position of $286 million and generated $24 million in free cash flow during Q2 [38] Q&A Session Summary Question: Insights on the health of the eye care consumer and future growth - Management noted stability in the customer base and confidence in continued growth, citing the ability to adapt quickly to market changes [49][50] Question: Progress on the Google partnership and its importance - The partnership is expected to unlock new levels of utility in eyewear, with a focus on AI integration [59][60] Question: Impact of selective price increases on consumer behavior - Price increases were well received, with minimal impact on conversion rates and a stronger uptake on higher-value lens upgrades [64] Question: Drivers of revenue growth acceleration into July - Growth was observed across both retail and e-commerce channels, supported by pricing changes implemented earlier in the year [70][71] Question: Details on the Warby Advisor tool - The AI-driven tool provides personalized frame recommendations, enhancing the online shopping experience [73][74] Question: Future opportunities in the insurance market - The company sees significant growth potential in its insurance business, with ongoing efforts to enhance customer awareness and utilization [83][84] Question: Long-term outlook for contacts and progressives - Both segments are viewed as long-term growth drivers, with significant market share opportunities remaining [85][88]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached $214.5 million, reflecting a year-over-year increase of 13.9% [29] - Adjusted EBITDA for Q2 was $25 million, with an adjusted EBITDA margin of 11.7%, up from 10.4% in the previous year [36] - Active customers increased by 9% year-over-year, totaling 2.6 million, with average revenue per customer rising 4.6% to $316 [10][29] Business Line Data and Key Metrics Changes - Glasses revenue grew approximately 11% year-over-year, with progressive lenses accounting for 23% of prescription units sold [13][30] - Contact lenses saw a significant increase of 28% year-over-year, now representing 11.5% of total revenue [20][30] - Eye exams grew 44% year-over-year, contributing 6% to total revenue [21][30] Market Data and Key Metrics Changes - Retail revenue increased by 19.3% year-over-year, driven by the opening of new stores and growth in existing locations [29][15] - The company opened 11 new stores in Q2, bringing the total to 298 stores, with a focus on underpenetrated suburban markets [15][30] Company Strategy and Development Direction - The company aims to expand its store footprint to over 900 locations across North America, highlighting significant growth potential [6] - A partnership with Google was announced to develop AI-powered intelligent eyewear, expanding the company's total addressable market beyond traditional glasses [7][9] - The company is transitioning away from the Home Try On program to focus on in-store experiences and AI-driven digital tools [18][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the eye care consumer and the ability to maintain growth despite macroeconomic challenges [48] - The company raised its full-year guidance, expecting net revenue between $880 million and $888 million, representing 14-15% growth year-over-year [41] - Management noted that tariff-related impacts have moderated, allowing for improved financial performance [38] Other Important Information - Steve Miller, the Chief Financial Officer, announced his departure after 14 years, with Dave Gilboa assuming interim financial responsibilities [23][25] - The company is focusing on leveraging AI technology to enhance customer experience and operational efficiency [51][72] Q&A Session Summary Question: Thoughts on the health of the eye care consumer and future growth - Management noted stability in the customer base and confidence in continued growth, citing the ability to adapt quickly to market changes [48][49] Question: Progress on the Google partnership and its importance - The partnership is expected to unlock new levels of utility for consumers, with glasses becoming a primary interface for engaging with AI [57][60] Question: Drivers of revenue growth acceleration into July - Growth has been observed across both retail and e-commerce channels, supported by recent pricing changes [70] Question: Details on the Warby Advisor feature - The AI-driven tool provides personalized frame recommendations based on user preferences, showing strong engagement and sales [72] Question: Impact of sunsetting the Home Try On program - The program's sunset allows for resource reallocation towards marketing and higher-margin initiatives, reflecting a shift in the company's business model [90]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $223.8 million, reflecting an 11.9% year-over-year increase [26] - Adjusted EBITDA margin improved to 13.1%, up nearly 200 basis points year-over-year [6][34] - The company achieved its first quarter of positive GAAP net income as a public company [6] Business Line Data and Key Metrics Changes - Retail revenue increased by 14.8% year-over-year, while e-commerce revenue grew by 5.5%, marking its highest quarterly growth since 2021 [26] - Glasses revenue grew by 9.1%, contact lens revenue surged by 25.1%, and eye care revenue increased by approximately 40% year-over-year [28] - Active customers reached 2.57 million, representing an 8.7% year-over-year growth [27] Market Data and Key Metrics Changes - The company opened 11 new stores in Q1, the highest number for that quarter, bringing the total to 287 stores [28] - Retail productivity was reported at 99.8% compared to the same period last year [29] - The penetration of contact lenses increased from 9.2% of revenue in Q1 2024 to 10.3% in Q1 2025 [28] Company Strategy and Development Direction - The company plans to invest in marketing at a rate in the low teens as a percentage of revenue while optimizing media spend [8] - Continued focus on product innovation with the launch of seven new collections, including a premium light-responsive lens [9] - The company aims to open 45 new stores in 2025, including shop-in-shops with Target [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current dynamic macro environment, emphasizing the resilience of their omnichannel model [11][23] - The company is taking a cautious approach to guidance due to potential consumer sentiment volatility [45][47] - Management believes that their value proposition positions them well to gain market share during economic uncertainty [23][58] Other Important Information - The company has reduced its exposure to China in its cost of goods sold from approximately 20% to less than 10% by year-end [13][39] - Adjusted SG&A expenses were reported at $110.3 million, or 49.3% of revenue, showing a decrease from the previous year [32] Q&A Session Summary Question: Change in revenue outlook for the year - Management noted a more cautious approach to guidance due to consumer sentiment volatility and potential elongation in purchase cycles [45][46] Question: Impact of tariffs on gross margin and EBITDA margin - Management indicated that they expect to mitigate the majority of the potential tariff impact through strategic pricing and supply chain adjustments [50][79] Question: Customer traffic and consumer confidence - Management observed pockets of strength and volatility in customer behavior, with confidence in their competitive positioning during market disruptions [56][58] Question: Marketing spend efficiency - Management reported consistent efficiency in marketing investments, leveraging a diversified media mix to optimize spend [66][67] Question: Insurance customer behavior - Management highlighted positive trends in insurance customer utilization and ongoing efforts to improve access to benefits [71][72] Question: Sources of leverage in EBITDA - Management outlined plans for significant leverage from non-marketing SG&A and strategic pricing adjustments to offset tariff impacts [77][79] Question: Consumer behavior of new cohorts - Management reported consistent consumer behavior across new and existing cohorts, with significant opportunities in the optical market [96][97]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $223.8 million, reflecting an 11.9% year-over-year increase [24] - Adjusted EBITDA margin improved to 13.1%, up nearly 200 basis points year-over-year [5][33] - The company achieved its first quarter of positive GAAP net income as a public company [5] Business Line Data and Key Metrics Changes - Retail revenue increased by 14.8% year-over-year, while e-commerce revenue grew by 5.5%, marking its highest quarterly growth since 2021 [25] - Glasses revenue grew by 9.1%, contact lens revenue surged by 25.1%, and eye care revenue increased by approximately 40% year-over-year [26] - Active customers reached 2.57 million, representing an 8.7% year-over-year growth [25] Market Data and Key Metrics Changes - The share of contact lenses in total revenue increased from 9.2% in Q1 2024 to 10.3% in Q1 2025, while eye care's share rose from 4.7% to 5.8% [27] - The company opened 11 new stores in Q1, the highest number for that quarter, bringing the total to 287 stores [27] Company Strategy and Development Direction - The company plans to open 45 new stores in 2025, including shop-in-shops with Target [9][38] - Continued investment in marketing is planned at low teens as a percentage of revenue, leveraging analytics to optimize media spend [6][20] - The company is focused on product innovation, having launched seven collections in 2025, including a new premium light-responsive lens [7] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook due to macroeconomic uncertainties and potential impacts on consumer sentiment [46][48] - The company is confident in its ability to adapt to changing environments, citing past experiences with tariffs and the COVID-19 pandemic [10][22] - The updated revenue guidance for 2025 is between $869 million and $886 million, reflecting a 13% to 15% growth year-over-year [38] Other Important Information - The company has significantly reduced its sourcing from China, estimating that it will decrease from approximately 20% to less than 10% of COGS by year-end [12][37] - Adjusted SG&A expenses were $110.3 million, or 49.3% of revenue, showing a decrease from 51.7% in the previous year [31] Q&A Session Summary Question: Change in revenue outlook for the year - Management noted a more cautious approach to guidance due to consumer sentiment and market volatility, adjusting the growth projection from 14%-16% to 13%-15% [45][48] Question: Impact of tariffs on gross margin and EBITDA margin - Management indicated that the shape of the year for EBITDA would likely follow a similar pattern to previous years, with Q1 being the highest margin quarter [50][51] Question: Customer traffic and consumer confidence - Management observed pockets of strength and volatility in customer behavior, with confidence that the company will benefit from its value proposition during economic uncertainty [56][57] Question: Marketing spend efficiency - The company reported consistent efficiency in marketing investments, with a diversified media mix helping to optimize spend [66] Question: Insurance customer behavior - Management highlighted positive progress in integrating insurance benefits, with insurance customers spending more and showing higher repeat purchase rates [72][73] Question: Consumer behavior of new cohorts - Management noted consistent consumer behavior across new and existing cohorts, with strong market opportunities remaining [95]

Financial Data and Key Metrics Changes - In Q4 2024, revenue reached $190.6 million, up 17.8% year-over-year, with retail revenue increasing 23.9% and e-commerce revenue increasing 5.3% [49] - For the full year 2024, revenue was $771.3 million, up 15.2% year-over-year, with retail revenue increasing 21.4% and e-commerce increasing 3% [49] - Active customers increased to 2.51 million, representing a 7.8% increase on a trailing 12-month basis [50] - Average revenue per customer rose to $307, up 6.8% year-over-year [50] - Adjusted EBITDA for Q4 was $13.8 million, with a margin of 7.3%, compared to $9.4 million or 5.8% in the prior year [65] - Full year adjusted EBITDA was $73.1 million, representing a margin of 9.5%, up from $52.4 million or 7.8% in 2023 [65] Business Line Data and Key Metrics Changes - Glasses revenue grew approximately 15% year-over-year in Q4 2024, up from 7% in Q4 2023, and 12% for the full year, up from 8% in 2023 [51][24] - Contacts and exams saw significant growth, with contacts increasing 36% year-over-year and exams growing 41% [51] - The insurance business expanded to cover over 30 million lives, enhancing customer acquisition and driving higher value purchases [21] Market Data and Key Metrics Changes - The U.S. optical market is estimated at $68 billion, with a significant portion of customers underserved due to structural barriers [13] - The incidence of myopia is rising, with projections indicating that over half of the world's population will need corrective vision by 2050 [12] Company Strategy and Development Direction - The company plans to open 45 new stores in 2025, focusing on existing markets to drive brand awareness [17][34] - Marketing spend is expected to remain in the low teens as a percentage of revenue, with a focus on customer-led growth [15][71] - The company aims to enhance its omnichannel model and customer experience, with a significant emphasis on retail growth [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining revenue growth and adjusted EBITDA margins, despite a conservative outlook due to macroeconomic conditions [68] - The integration of insurance partnerships is expected to drive long-term customer acquisition and revenue growth [84] Other Important Information - The company generated $35 million in free cash flow in 2024, up from $7 million in 2023, and ended with approximately $254 million in cash [66] - The company plans to maintain a disciplined approach to operating expenses, with expectations for adjusted SG&A to decrease as a percentage of revenue [71] Q&A Session Summary Question: Customer acquisition initiatives and revenue growth balance - Management noted that customer acquisition efforts have led to six consecutive quarters of accelerating active customer growth, with expectations for continued strong growth in 2025 [78] Question: Impact of insurance partnership on customer acquisition - Management indicated that previous integrations have shown increasing contributions over time, and early trends from the Versant integration are positive [82] Question: Traffic expectations and new store contributions - Management expects moderate improvement in store productivity and has not embedded a specific guide for traffic but remains optimistic about overall trends [90] Question: Non-marketing SG&A expense leverage - Management believes that 100 to 200 basis points of margin expansion is sustainable, with opportunities for future leverage in staffing and corporate expenses [109] Question: Strategy regarding smart glasses - Management is monitoring developments in the smart glasses market and believes they are well-positioned to enter this space if they choose to do so [112]