Financial Data and Key Metrics Changes - Net sales for Q2 fiscal 2026 were $124.7 million, a decrease of $5 million or 3.9% compared to the prior year [14] - EBITDA for the quarter was $15 million, indicating solid profitability despite lower sales [5] - Gross margin decreased to 24.3%, down 2.3% year-over-year, primarily due to lower production absorption and tariffs [15] - Net income was $1.9 million, compared to $4.5 million in the prior year, with earnings per share at $0.04 versus $0.10 a year ago [15] Business Line Data and Key Metrics Changes - Handgun unit shipments into the sporting goods channel were down 1.9%, while adjusted sell-through at retail was up 7.7%, indicating market share growth [6] - Long gun shipments into the sporting goods channel declined 5.1%, with NICS down 8.3%, reflecting typical seasonal demand patterns [7] - Overall firearm unit shipments into the sporting goods category were up 3.3%, outperforming the market which was down 2.7% [7] Market Data and Key Metrics Changes - The market for firearms remains healthy and stable, with the company gaining market share during the quarter [6] - Average selling prices (ASPs) increased by 3.5% year-over-year, with handguns at $418 and long guns at $602 [8] - Distributor inventory declined over 5% sequentially and 15% year-over-year, indicating strong sell-through and positioning for future demand [14] Company Strategy and Development Direction - The company continues to focus on innovation-driven growth, disciplined cost management, and maintaining a strong balance sheet [12] - The grand opening of the Smith & Wesson Academy aims to enhance training offerings for law enforcement and consumers, contributing to brand strength [10][11] - The capital allocation strategy remains unchanged, focusing on business investment, financial flexibility, and returning value to stockholders [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and product assortment, expecting Q3 sales to be 8%-10% higher than Q3 fiscal 2025 [17] - Despite uncertainties regarding macroeconomic conditions, the company anticipates continued healthy cash generation and improved gross margins in Q3 [17][18] - The company expects operating expenses in Q3 to be about 15% higher than in Q2 due to events like the SHOT Show and new product development costs [18] Other Important Information - The company ended the quarter with $27.3 million in cash and investments, and $90 million in borrowings on its line of credit [16] - A quarterly dividend of $0.13 has been authorized, to be paid to stockholders of record on December 18 [17] Q&A Session Summary Question: Input costs and gross margins outlook - Management indicated that tariff impacts may increase in the back half of the year but should not materially affect profitability [20] - Absorption is expected to improve due to increased operating days and reduced inventory levels [22] Question: Operating expenses outlook - Operating expenses are generally consistent year-to-year, with expected increases for the SHOT Show and other activities [23] Question: Q4 outlook - Management is optimistic about Q4, expecting high single-digit to low double-digit growth compared to Q3 [25]

Financial Data and Key Metrics Changes - Third quarter net sales reached $239.1 million, up 7.5% from $222.5 million in the same quarter last year [10] - Comparable sales grew 7.6%, marking the sixth consecutive quarter of positive growth [2][11] - Earnings per share for the quarter was $0.55, significantly above the guidance of $0.29 [3][13] - Gross profit increased to $89.8 million, a 14.7% rise compared to $78.3 million last year, with gross margin improving to 37.6% from 35.2% [11][12] Business Line Data and Key Metrics Changes - North America net sales were $202.8 million, an increase of 8.6% year-over-year, with comparable sales up 10% [10][11] - Women's and hard goods categories saw strong double-digit growth, while men's and accessories experienced low to mid-single digit gains [3][11] - Footwear was the only category with negative comparable sales [11] Market Data and Key Metrics Changes - International net sales, including Europe and Australia, were $36.3 million, up 1.7% year-over-year, with European comparable sales down low single digits but showing improvement [10][12] - North America comparable sales for the 31-day period ended December 2, 2025, increased 7.8%, while international comparable sales increased 2.6% [16] Company Strategy and Development Direction - The company focuses on three strategic priorities: driving revenue growth through customer-focused initiatives, optimizing profitability, and managing volatility while funding strategic expansion [4][8] - The introduction of over 100 new and emerging brands annually has become a significant part of the sales mix, validating the merchandising strategy [5] - The company remains committed to premium pricing and disciplined expense management in international markets, particularly in Europe [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in closing the year with strong holiday results, despite macroeconomic uncertainties [4][8] - The company anticipates total sales growth of 4% to 6% for the fourth quarter, with comparable sales expected to be in the 2.5% to 4% range [19][20] - Management noted that while North America shows strong momentum, international operations face challenges [21] Other Important Information - The company ended the quarter with $104.5 million in cash and no debt, reflecting a strong financial position [14] - Inventory levels decreased by 3.5% year-over-year, indicating effective inventory management [15] Q&A Session Summary Question: What is driving the strong performance in hard goods? - Management indicated that the strong performance is primarily driven by the Skate category, with improvements seen in North America, Europe, and Australia, marking a reversal of a multi-year negative trend [25][27] Question: What are the comparable sales assumptions for the fourth quarter? - Management expects a slight deceleration in North America compared to November, while anticipating a negative comp in Europe due to anniversary promotional trends [29][32] Question: What is the current penetration of private label products? - Private label penetration is currently just under 31% of total product sales, up approximately 200 basis points year-over-year [42][43] Question: Who is the company taking market share from in North America? - Management believes they are primarily focused on their core customer base, with gains driven by executing on trend and increasing average unit retail [52][56]

Financial Data and Key Metrics Changes - Q3 gross transaction volume (GTV) was $21.7 billion, representing a 22% year-over-year growth [18] - Total revenue for Q3 was $249.2 million, growing 25% year-over-year [19] - Subscription revenue reached $182.8 million, a 26% year-over-year increase [19] - Usage revenue grew 24% year-over-year to $56.8 million, exceeding expectations [19] - Q3 platform gross margin was 80.2%, an improvement of 310 basis points year-over-year [19] - Free cash flow for Q3 was a record $38 million, up from $11 million in the prior year [20] Business Line Data and Key Metrics Changes - Pro products continued to be the largest driver of subscription revenue growth [12] - The introduction of Field Pro and virtual agents across the pro portfolio contributed to growth [13] - The commercial segment saw strong results with the introduction of commercial CRM and construction management capabilities [14] Market Data and Key Metrics Changes - GTV growth was led by the commercial sector, with consistent growth in HVAC and other trades within residential [18] - The customer base is diverse, with GTV insulated from supplier inventory cycles due to its focus on break/fix services [18][71] Company Strategy and Development Direction - The company aims to build the operating system for the trades, focusing on delivering real ROI to customers [5][27] - The MAX program is a key initiative aimed at automating workflows and optimizing revenue for customers [28] - The strategy includes leveraging AI to enhance customer operations and improve profitability [10][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and the opportunity to democratize AI for the trades [6] - The company is focused on delivering sustainable high ROI to customers in resilient trades [21] - Management noted that the current economic environment remains stable, with job growth and average ticket sizes consistent [50] Other Important Information - The company paid approximately $20 million in cash for the acquisition of Conduit, which is expected to enhance cross-sell opportunities [20] - The company is experiencing strong momentum from private equity customers, who are significant adopters of pro products [36] Q&A Session Summary Question: What are the plans for achieving multi-billion-dollar revenue? - Management emphasized the importance of building the operating system for the trades and leveraging AI as a critical opportunity for growth [27] Question: How is the MAX program progressing? - The MAX program is in early stages, with a focus on ensuring success for initial participants before broader rollout [35] Question: What is the current technician to back office staff ratio? - The ratio varies by trade, with some contractors achieving over two technicians per back office staff [40] Question: Why is GTV in residential HVAC insulated from OEM volume declines? - GTV is driven by break/fix services rather than new home construction, making it less susceptible to OEM cycles [71] Question: What are the learnings from the commercial side? - There is a trend towards consolidation in the commercial space, with a focus on providing capabilities that allow for synergies similar to the residential side [60] Question: How does the company view the impact of AI on product strategy? - The rise of AI presents opportunities for new products and services, with a focus on ensuring the best market solutions for customers [90]

Financial Data and Key Metrics Changes - In Q3, the company generated positive adjusted free cash flow of $2.1 million, a $15.8 million improvement year-over-year, and is on track to achieve positive adjusted free cash flow for the full year for the first time in company history [4][20] - The operating margin for Q3 was 6.8%, exceeding guidance and positioning the company for its highest full-year operating margin ever [4][21] - Positive EPS was reported for the second consecutive quarter, marking only the second time in company history [4][22] - Total revenue reached $79.4 million, near the high end of guidance, with a gross margin of 75.4%, down 90 basis points year-over-year [25] Business Line Data and Key Metrics Changes - The company has transitioned to a consumption model, with 80% of annual recurring revenue (ARR) now on consumption contracts, a significant increase from single digits two years ago [8][9] - Monthly active users across the customer base increased over 10% year-over-year, reflecting growing momentum in user engagement [9][10] - Current subscription RPO grew 3% year-over-year to $214.1 million, while total subscription RPO grew 15% to $405.9 million, indicating strong customer relationships [23] Market Data and Key Metrics Changes - Leads from strategic partners increased over 25% compared to Q2 and more than doubled from Q1, demonstrating rapid expansion of partner relationships [7] - The company expects billings for Q4 to be between $107.5 million and $109.5 million, representing a 6% year-over-year growth, which would be the highest billings growth in over three years [26] Company Strategy and Development Direction - The company is focused on deepening its partner ecosystem, accelerating consumption, and leveraging AI capabilities [4][18] - A composable approach to selling platform components is being embraced, allowing customers to engage with the platform in a modular fashion [10] - The company is seeing strong adoption of AI features, with unique accounts using AI increasing over 60% year-over-year [11][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the pipeline for Q4, despite longer sales cycles for partner-related deals, emphasizing the strength of relationships built with CIO-level engagement [32][70] - The company anticipates continued improvement in gross retention rates, projecting an increase to approximately 87% in Q4, with potential to approach 90% in future quarters [24][80] - Management highlighted the importance of governance in AI usage, ensuring customers can leverage AI while maintaining control over their data [57] Other Important Information - The company received multiple industry recognitions for its leadership in AI and data products, including being named a leader in agentic AI and receiving awards for best business intelligence technology [17] - The CEO publicly addressed personal challenges related to alcohol use and emphasized a commitment to recovery while maintaining responsibilities as CEO [84][85] Q&A Session Summary Question: What caused the negative billing surprise in Q3? - Management indicated that the longer sales cycles associated with the ecosystem business contributed to the billing shortfall, but expressed confidence in the pipeline for Q4 [30][32] Question: How are things looking for Q4? - Management reported that Q4 started well, with some deals that had slipped already closing, and expressed optimism about the pipeline [33][34] Question: Can you elaborate on opportunities with CDWs? - Management noted that partners are considering OEM deals, indicating strong interest in deeper collaborations [36][39] Question: What is the outlook for net revenue retention? - Management expects improvements in net revenue retention as gross retention increases and as the company capitalizes on the consumption model [40][41] Question: How is the conversation around AI evolving? - Management emphasized a proactive approach to AI, focusing on improving customer delivery and developing an agentic platform [53][54]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $342.1 million, representing a 7.3% year-over-year increase, exceeding expectations [5][15] - Adjusted EBITDA was $13.4 million, or 3.9% of revenue, outperforming expectations [5][16] - Average order value (AOV) rose 9.6% year-over-year, marking the ninth consecutive quarter of AOV growth [15][16] - Revenue per active client reached $559, up 5.3% year-over-year, indicating the seventh consecutive quarter of growth [15][16] - Gross margin was 43.6%, consistent with the FY26 range of 43%-44% [16][18] Business Line Data and Key Metrics Changes - Women's business saw a 19% year-over-year growth in key seasonal categories such as sweaters and coats [7] - Men's business delivered double-digit revenue growth, with fleece and outerwear growing 57% combined [8] - Sneakers grew 63% year-over-year, driven by brands like New Balance and Adidas [8] - The company is expanding into non-apparel categories, which is further accelerating growth [7] Market Data and Key Metrics Changes - The company's 7.3% revenue growth significantly outpaced Circana's estimated 1% growth for the broader U.S. apparel market [7] - Active clients reached 2.3 million, at the high end of expectations, marking the sixth consecutive quarter of improvement in active client growth rates [9][15] Company Strategy and Development Direction - The company is focused on enhancing client engagement, cultivating client-stylist relationships, and offering a best-in-class assortment [6] - Strategic expansion into non-apparel categories aims to capture a greater share of clients' spending [7] - The company is leveraging generative AI technology to enhance the client experience and drive engagement [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of client demand and the positive trends observed in Q1 and early Q2 [17][19] - The company anticipates some headwinds in the latter half of the year due to inflation and tougher AOV comparisons [18] - Full-year revenue guidance has been raised to between $1.32 and $1.35 billion, reflecting strong performance [17] Other Important Information - The company ended Q1 with $244.2 million in cash and short-term investments, with no debt [16] - Inventory was $141.5 million, up 18.8% year-over-year, reflecting investments in larger Fix offerings [16] Q&A Session Summary Question: Insights on new customer behavior and stickiness - Management noted nine consecutive quarters of improving lifetime value (LTV) for new client acquisition and a decrease in dormant clients [21][22] Question: Market share gains and gifting performance - Market share gains are attributed to delivering a personalized shopping experience, with gifting becoming a stronger use case due to family accounts [25][30] Question: Consumer-facing AI and visualization tools - Early adoption of Stitch Fix Vision has exceeded expectations, with clients engaging in various ways, including sharing images on social media [35][36] Question: Gross margin performance - The decline in gross margin is attributed to transportation expenses, investments in lower-margin categories, and minor tariff impacts [38][39] Question: Opportunities with different brands - The company provides a unique value proposition for third-party brands, leading to improved partnerships and brand engagement [43][46]

Financial Data and Key Metrics Changes - The company reported third quarter revenues of $251 million, a slight decrease from $257 million in the same quarter of fiscal 2025, primarily due to the completion of significant projects [6][16] - Gross profit for the third quarter was approximately $46.9 million, with a gross margin of 18.7%, up from 17.2% in the prior year [17] - Net income for the third quarter was $30.7 million, or $2.17 per diluted share, compared to $28 million, or $2 per diluted share, for the same quarter last year [18] - Year-to-date revenues increased by 6% to $682.6 million compared to $641.7 million for the prior year period [19] Business Line Data and Key Metrics Changes - Power Industry Services segment revenues decreased by 8% to $196 million, representing 78% of total revenues [9] - Industrial Construction Services segment revenues increased by 19% to $49 million, contributing 20% of consolidated revenues [10] - Telecommunications Infrastructure Services segment revenues grew by 76% to $6.3 million, contributing 2% of total revenues [10] Market Data and Key Metrics Changes - The current backlog stands at approximately $3 billion, reflecting strong demand for new power resources [4][13] - The backlog is comprised of approximately 79% natural gas projects and 16% renewable projects, indicating a significant focus on natural gas facilities [12] Company Strategy and Development Direction - The company aims to leverage its capabilities in building complex combined cycle facilities to meet the growing demand for reliable energy [11][23] - There is a commitment to maintaining a disciplined approach to capital allocation and pursuing strategic M&A opportunities [22][24] - The company is focused on organic growth while being alert to acquisition opportunities that enhance its capabilities [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the project pipeline and expects to add several new projects in the coming years [5][25] - The company highlighted the urgent need for new power resources due to aging infrastructure and increasing energy demand [11][23] - Management remains committed to executing diverse projects in the backlog and maintaining operational excellence [15][26] Other Important Information - The company has a strong balance sheet with $727 million in cash and investments, net liquidity of $377 million, and no debt [8][20] - A quarterly dividend of $0.50 was announced, marking the third consecutive increase in the past three years [8][22] Q&A Session Summary Question: Insights on margins moving forward - Management indicated that pricing models remain consistent, and while gross margins have exceeded expectations, it is too early to predict future margins [28][29] Question: Manpower challenges with multiple projects - Management acknowledged labor challenges but emphasized that they are at their largest headcount in history to manage the workload [30][31] Question: Pipeline activity expectations - Management expects to add a handful of jobs over the next 12 to 24 months but noted that timing is uncertain due to project start dates being controlled by developers [32][33] Question: Competitive environment changes - Management noted that competition for large complex projects has decreased, with only a few companies capable of executing such projects [35] Question: Project size and opportunities - Management stated that current projects average over one gigawatt, with no size limitations on future projects [40][41]

Financial Data and Key Metrics Changes - Third quarter net sales reached $239.1 million, up 7.5% from $222.5 million in the same quarter last year [10] - Comparable sales grew 7.6%, marking the sixth consecutive quarter of positive growth [2][3] - Earnings per share for the quarter was $0.55, significantly above the guidance of $0.29 [3][14] - Gross profit increased to $89.8 million, a 14.7% rise compared to $78.3 million last year, with gross margin improving to 37.6% from 35.2% [11][12] Business Line Data and Key Metrics Changes - North America net sales were $202.8 million, an increase of 8.6% year-over-year, with comparable sales up 10% [10][11] - Women's and hard goods categories saw strong double-digit growth, while men's and accessories experienced low to mid-single-digit gains [3][11] - Footwear was the only category with negative comparable sales [11] Market Data and Key Metrics Changes - International net sales, primarily from Europe and Australia, were $36.3 million, up 1.7% year-over-year, but comparable sales in Europe declined by 3.9% [10][11][17] - North America comparable sales for the 31-day period ended December 2, 2025, increased by 7.8% [17] Company Strategy and Development Direction - The company is focused on three strategic priorities: driving revenue growth through customer-focused initiatives, optimizing profitability, and managing volatility while funding strategic expansion [4][8] - The introduction of over 100 new and emerging brands annually is a key component of the sales mix, alongside a strong performance in private label products [5][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in closing the year with strong holiday results, despite macroeconomic uncertainties [3][19] - The company anticipates total sales growth of 4% to 6% for the fourth quarter, with comparable sales expected to be in the 2.5% to 4% range [19][20] - Management noted that while North America shows strength, international operations face challenges, particularly in Europe [7][22] Other Important Information - The company ended the quarter with $104.5 million in cash and no debt, indicating a strong financial position [15] - Inventory levels decreased by 3.5% year-over-year, reflecting effective inventory management [16] Q&A Session Summary Question: What is driving the strong performance in hard goods? - Management indicated that the strong performance is primarily driven by the Skate category, with improvements noted in North America and Europe [25][26] Question: What are the comparable sales assumptions for the balance of the quarter? - Management expects a slight deceleration in North America sales after a strong November, while anticipating a negative comp in Europe due to anniversary promotional trends [28][30] Question: What is the current penetration of private label products? - Private label penetration is currently just under 31% of total product sales, up from 11% five years ago [35][36] Question: Who is the company taking market share from in North America? - Management believes they are primarily gaining market share from competitors through effective execution and trend alignment, focusing on their core consumer [41][44]

Financial Data and Key Metrics Changes - In Q3, the company generated positive adjusted free cash flow of $2.1 million, a $15.8 million improvement year-over-year, and is on track to finish the year with positive adjusted free cash flow for the first time ever [4][19] - The operating margin was 6.8%, exceeding guidance and positioning the company for its highest full-year operating margin ever [4][20] - Positive EPS was reported for the second consecutive quarter, marking the second time in company history [4][20] - Total revenue reached $79.4 million, near the high end of guidance, with a gross margin of 75.4%, down 90 basis points year-over-year [23] Business Line Data and Key Metrics Changes - The company has transitioned to a consumption model, with 80% of annual recurring revenue (ARR) now on consumption contracts, a significant increase from single digits two years ago [8][9] - Monthly active users across the customer base increased over 10% year-over-year, reflecting growing engagement and adoption [9][10] - Current subscription RPO grew 3% year-over-year to $214.1 million, while total subscription RPO grew 15% to $405.9 million [21] Market Data and Key Metrics Changes - Leads from strategic partners increased over 25% compared to Q2 and more than doubled from Q1, indicating rapid expansion of partner relationships [7] - The company expects billings of $107.5-$109.5 million in Q4, representing 6% year-over-year growth, which would be the highest billings growth in over three years [24] Company Strategy and Development Direction - The company is focused on deepening its partner ecosystem, accelerating consumption, and leveraging AI capabilities [4][12] - A composable approach to selling platform components is being embraced, allowing customers to engage with Domo in a way that meets their immediate needs [10] - The company is seeing strong adoption of AI features, with unique accounts using AI increasing over 60% year-over-year [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term model's durability, citing strong adoption trends as leading indicators of future financial performance [12] - The company anticipates that the work done over the past few years is paying off, positioning it for meaningful, profitable growth in the future [18] - Management acknowledged the challenges of longer sales cycles due to the complexity of partner-related deals but emphasized the strength of relationships built through CIO-level engagement [20][27] Other Important Information - The company received strong industry recognition, being named a leader in various categories related to AI and data products [17] - Management highlighted the importance of governance in AI usage, ensuring customers can leverage AI while maintaining control over their data [47] Q&A Session Summary Question: What caused the negative billing surprise in Q3? - Management noted that the ecosystem business has grown larger, leading to longer sales cycles for complex deals involving multiple stakeholders, particularly CIOs [27][30] Question: How is the company addressing the longer sales cycles? - Management indicated that while the sales cycles are longer, they result in stronger, more durable customer relationships, which ultimately benefits the company [20][27] Question: What is the outlook for net revenue retention? - Management expects improvements in net revenue retention as gross retention increases and as the company better realizes the potential of the consumption model [35][56] Question: How is the company leveraging learnings from the Snowflake partnership? - The company is applying insights gained from the Snowflake partnership to build stronger relationships with new partners, enhancing both technology integration and go-to-market strategies [48] Question: What are the expectations for future investments? - Management indicated that while there are areas for potential investment, they are also focused on maintaining efficiency and leveraging AI to enhance operations [54][55]

Financial Data and Key Metrics Changes - The company reported net sales of $331.3 million for Q3 2025, an increase of 2.2% compared to the prior year [12] - Gross margin improved to 32.8%, a 100 basis point increase year-over-year, driven by better product margins and lower freight expenses [13][14] - Adjusted net income for Q3 was $3 million, or $0.08 per diluted share, compared to $1.4 million, or $0.04 per diluted share in the same quarter last year [15] - Adjusted EBITDA grew 13% to $18.6 million, improving by 50 basis points as a percentage of net sales [15] Business Line Data and Key Metrics Changes - Same-store sales grew 2.2% year-over-year, marking the third consecutive quarter of positive growth [12] - Hunting and shooting sports increased by 5%, while fishing saw exceptional growth of 14% [12][6] - Apparel sales grew by 1.5%, but camping sales declined due to its discretionary nature [6][12] Market Data and Key Metrics Changes - E-commerce sales grew by 8% in the quarter, with strong performance in ship-to-home and buy online pick up in store [6] - The company experienced a slowdown in sales trends starting mid-October, attributed to external disruptions from a prolonged government shutdown [10][11] Company Strategy and Development Direction - The company is focused on a transformation strategy that emphasizes inventory precision, local relevance, and personal protection [7][8] - Plans to open only one new store in 2025 and 2026, reflecting a disciplined growth approach [9] - The company aims to enhance customer acquisition strategies and reduce reliance on promotions for sustainable growth [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding Q4 due to macroeconomic headwinds and a pressured U.S. consumer [10][11] - The company anticipates modest sales growth for the full year despite challenges, with a focus on maintaining lower inventory and positive free cash flow [11][19] - Full-year guidance for net sales has been adjusted to be flat to slightly up, reflecting a tough Q4 environment [19] Other Important Information - Total inventory at the end of Q3 was $424 million, a decrease of 3.2% year-over-year [16] - The company paid down $13.2 million of debt during the quarter, ending with a total debt balance of $181.9 million [17] Q&A Session Summary Question: Recent sales trends during Black Friday and Cyber Monday - Management noted that negative sales trends persisted through November, with no significant improvement post-government shutdown [23] Question: Margin management strategies for Q4 - The company plans to use existing inventory to drive sales while managing working capital, aiming to avoid carrying aged inventory into 2026 [24] Question: Impact of Florida Second Amendment Sales Tax Holiday - Management indicated that the holiday did not significantly impact their business as it is not a major market for them [26] Question: Marketing spend in a challenging consumer environment - The company believes increased marketing is necessary to remain competitive, focusing on digital marketing and promotions [30] Question: Performance of the camping department - Camping sales were down high single digits, with inventory trends below sales trends, indicating an area for improvement [32][33] Question: Promotional environment during Black Friday - Management confirmed they were promotional but did not implement traditional doorbusters, adjusting strategy for December to drive foot traffic [38][39] Question: Inventory management by category - The company is focusing on driving sales in the hunting and shooting category, which is a significant traffic driver [42] Question: Margin profile of personal protection products - Personal protection products are performing well and are accretive to margins, attracting a different customer base [44]

Financial Data and Key Metrics Changes - Q3 total revenue reached $249.2 million, growing 25% year-over-year [17] - Subscription revenue was $182.8 million, reflecting a 26% year-over-year increase [18] - Free cash flow for Q3 was a record $38 million, up from $11 million in the prior year [19] - Q3 platform gross margin improved to 80.2%, an increase of 310 basis points year-over-year [18] - Operating income for Q3 was $21.5 million, resulting in an operating margin of 8.6%, an improvement of 780 basis points year-over-year [18] Business Line Data and Key Metrics Changes - Pro products continued to be the largest driver of subscription revenue growth [12] - The introduction of Field Pro and virtual agents across the pro portfolio indicates a shift towards AI-driven solutions [13] - Professional services revenue for Q3 was $9.6 million, contributing to overall revenue growth [18] Market Data and Key Metrics Changes - Q3 gross transaction volume (GTV) was $21.7 billion, representing a 22% year-over-year growth [17] - GTV growth was primarily driven by commercial sectors, with consistent growth in HVAC and other residential trades [17] - Net dollar retention exceeded 110% for the quarter, indicating strong customer loyalty and expansion [18] Company Strategy and Development Direction - The company aims to build the operating system for the trades, focusing on delivering real ROI to customers [4] - The MAX program is a key initiative aimed at automating workflows and optimizing revenue for contractors [30] - The strategy includes leveraging AI to enhance customer experience and operational efficiency [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, emphasizing the importance of AI in the trades [27] - The company anticipates continued strong performance in the fourth quarter, despite a one-day reduction in business days compared to the previous year [20] - Management highlighted the resilience of the markets served, particularly in essential services [17] Other Important Information - The company completed the acquisition of Conduit for approximately $20 million, which is expected to enhance cross-sell opportunities [19] - The partnership with Verisk aims to streamline claims management for contractors, particularly in the roofing sector [15] Q&A Session Summary Question: What are the plans for scaling to a multi-billion-dollar revenue company? - Management emphasized the focus on building the operating system for trades and leveraging AI as a critical opportunity for growth [27] Question: How is the MAX program progressing? - The MAX program is in early stages, with a focus on ensuring success for initial participants before broader rollout [36] Question: What is the contribution of private equity customers to growth? - Private equity customers are significant utilizers of the product, growing faster than non-sponsored customers [37] Question: What is the average technician to back office staff ratio? - The ratio varies by trade, with efficient contractors achieving higher ratios, indicating potential for increased automation and profitability [40] Question: What are the dynamics affecting Q4 guidance? - The guidance reflects typical seasonal moderation and prudent GTV forecasts, with no unusual factors impacting expectations [44] Question: How is the roofing initiative progressing? - The roofing sector is seeing strong traction, particularly with insurance-based workflows and partnerships [49] Question: What is the outlook for GTV and consumer health? - Job growth and average ticket sizes remain consistent, indicating a stable economic environment [51] Question: How does the company plan to invest in the commercial opportunity? - The focus will remain on enhancing construction capabilities and AI-driven value creation [55] Question: What are the learnings from the commercial side? - There is a trend towards consolidation, with a desire for more centralized operations among commercial contractors [60] Question: How is fintech utilization impacting usage growth? - Increased adoption of fintech products has driven higher usage rates among customers [105]