• GMV (Gross Merchandise Value): $94.5 million, up 9% year over year.
• Net Revenue: $22.8 million, up 9% year over year.
• Gross Profit: $16.5 million, up 10% year over year.
• Gross Margin: 72%, up approximately 1 percentage point.
• Adjusted EBITDA Loss: $1.6 million, a 1 percentage point improvement year over year.
• Average Order Value: Approximately $2,600, up 2% year over year.
• Median Order Value: Approximately $1,200, up 4% year over year.
• Active Buyers: Approximately 64,300, up 6% year over year.
• Unique Sellers: Approximately 5,900, down 24% year over year.
• Listings: Over 1.8 million, up 5% year over year.
• Cash and Equivalents: $104 million at the end of the quarter.
• Share Repurchases: Approximately 5.6 million shares for $28.1 million in 2024.

• Warning! GuruFocus has detected 3 Warning Signs with DIBS.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• 1stdibs.com Inc (NASDAQ:DIBS) exceeded its guidance and achieved its highest GMV growth since 2021, with a 9% increase in the fourth quarter.
• The company successfully reduced operating expenses for the second consecutive year, leading to improved adjusted EBITDA margins.
• 1stdibs.com Inc (NASDAQ:DIBS) saw a rebound in average order value, which increased by 2%, and median order value, which increased by 4%.
• The company made significant progress in conversion rates, which have increased year over year for five straight quarters.
• 1stdibs.com Inc (NASDAQ:DIBS) repurchased approximately 5.6 million shares in 2024, indicating confidence in the company's intrinsic value and future prospects.

Negative Points

• The luxury home furnishings market remains weak, with US home sales nearing a 30-year low, impacting overall demand.
• Seller churn was elevated due to the retirement of the essential seller program, resulting in a 24% decrease in unique sellers.
• Despite improvements, the company still faces challenges in achieving positive adjusted EBITDA, with a loss of $1.6 million in the fourth quarter.
• Traffic declines continued, although they moderated, with 70% of traffic coming from organic sources and 30% from paid sources.
• The company anticipates continued softness in the luxury housing and high-end discretionary markets, affecting future growth prospects.

Q & A Highlights

Q: As you think about your marketing strategy, especially with depressed home transactions, what are some key channels or investments you're making? A: David Rosenblatt, CEO: Our marketing strategy focuses on customer acquisition. We achieved higher volumes in Q4 without relaxing return criteria. We've seen success on Facebook and continue to improve our primary channels, especially Google.

Q: Can you discuss any efforts with agentic AI or dive deeper into AI more broadly? A: David Rosenblatt, CEO: AI and ML are important focuses for us, impacting both revenue and cost. We built a team in Q4 2023, focusing initially on pricing. We've rolled out ML models for optimal pricing in furniture and jewelry, and we're also applying ML to shipping pricing.

Q: Outside of the macro environment, what are the main levers to bring adjusted EBITDA closer to positive territory? A: Thomas Etergino, CFO: Our key to achieving break-even and adjusted EBITDA positive is centered around revenue growth. We remain disciplined on expenses and aim to deliver operating margin leverage at mid-single digit revenue growth in 2025.

Q: Can you give an update on churn normalization expected in the first half of 2025? A: David Rosenblatt, CEO: We focus on listings rather than the number of sellers. We saw a spike in churn due to retiring our essential seller program, but over 1,200 out of 2,200 affected sellers upgraded to a paid plan. We expect churn to normalize in the first half of 2025 with continued listings growth.

Q: You mentioned mid-single digit revenue growth for 2025. Is that what you're contemplating for 2025, or is it the condition needed to show leverage in the model? A: David Rosenblatt, CEO: We don't provide full-year guidance but aim to grow GMV this year. Our expense base is set up to deliver operating margin leverage at mid-single digit revenue growth, which is what we referred to.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.