1stdibs.com(US:DIBS)2023-11-08 15:47Financial Data and Key Metrics Changes - The company reported GMV of $89 million, down 10% year-over-year due to soft demand for luxury home goods and discretionary items [65] - Net revenue was $20.7 million, down 9%, with transaction revenue making up roughly 70% of total revenue [68] - Adjusted EBITDA loss was $1.8 million, an improvement of $3.7 million from a loss of $5.5 million last year, with adjusted EBITDA margin loss of 9% compared to 24% last year [48][58] Business Line Data and Key Metrics Changes - The supply side of the marketplace remains healthy, with over 9,100 seller accounts, up over 30%, and listings grew 16% to over 1.7 million items [40][46] - Average order value was approximately $2,850, up modestly, while median order value decreased by 3% to approximately $1,200 [66] - Auction orders grew 7%, accounting for 7% of total orders, indicating a focus on improving supply quality and conversion [60] Market Data and Key Metrics Changes - Organic traffic accounted for nearly 80% of total traffic, up from roughly 70% a year ago, while paid traffic growth declined due to a pullback in performance marketing [17] - The luxury housing market was down 25% in Q2 and approximately 10% in Q3, impacting GMV performance [23] - The company noted a pronounced decline in GMV trends following geopolitical events, which moderated expectations for fourth-quarter growth [54][71] Company Strategy and Development Direction - The company is focused on capital-efficient growth, shifting resources from auctions and international projects to seller experience and checkout initiatives [3][61] - Management believes that increasing e-commerce penetration and improving shipping services for sellers will drive future growth [37][39] - The company aims to re-accelerate growth while managing expenses, with a focus on improving conversion rates and enhancing user experience [58][62] Management Comments on Operating Environment and Future Outlook - Management acknowledged a period of soft demand and low visibility for luxury home goods, but expressed confidence in the long-term growth potential of e-commerce and luxury markets [36][59] - The company expects to see a rebound in luxury home goods demand, which would allow for meaningful incremental GMV and revenue without proportionally increasing operating expenses [43] - Management highlighted the importance of monitoring macroeconomic indicators and consumer behavior to guide future marketing and operational strategies [52] Other Important Information - The company has undertaken significant restructuring efforts, resulting in a 20% reduction in total operating expenses year-over-year [48][64] - The company ended the quarter with a strong cash position of $143 million, with interest income increasing to approximately $1.8 million [70] - The company repurchased $1.4 million of shares under its $20 million board-authorized repurchase program [49] Q&A Session Summary Question: Can you provide examples of the increasing testing velocity and its impact? - Management noted that testing velocity has increased over 100% year-over-year, contributing to improved conversion rates, although not all tests succeed [38][74] Question: What factors are influencing the Q4 guidance? - Management indicated that macroeconomic conditions and a pullback in performance marketing spending are significant factors affecting the Q4 guidance [22][71] Question: What needs to happen to re-accelerate the active buyer base? - Management stated that improving macroeconomic conditions, particularly in the luxury housing market, is crucial for re-accelerating active buyer growth [82]