Brilliant Earth Group, Inc.

Sure. So, maybe I can start a little bit with engagement ring trends. While we still believe it's going to be a multi-year normalization, we're happy to have our best year-over-year unit comp in Q4 compared to prior quarters in the year. We also had good year-over-year unit growth in showroom engagement rings in Q4 from units. So, I think we're starting to see that normalization. We continue to see improvement in sequential engagement ring unit trends in Q1 to date with similar performance by price point as we saw in Q4. So I think very promising trends overall. I think as it relates to what's going to drive our growth, we have a lot of conviction in the overall strategy where we are investing in our showroom growth for the future, investing in our fine jewelry growth and the compelling products that we're known for, and continuing to invest in being the premium brand and the most loved jeweler for our consumer base. So all of those are going to drive our growth. And we've seen very strong growth as it relates to non-engagement. And we're going to continue to lean in there and continue to invest in bridal which is really the entry point for our consumer base. Jeff, do you want to talk about AOV? I think that was the last question that Oliver had.

Sure. Thanks, Beth. Hi, Oliver. So with respect to AOV, I think this is something that we do expect to see moderate over time with the success that we're having in fine jewelry in particular. I think that's just a factor that we expect will continue to be a strategic driver success factor for us. We're having the growth in orders in fine jewelry. And as you know, fine jewelry orders tend to have a lower average order value. And so this is something that is expected and it is concurrent with the success that we're having in fine jewelry. So we do expect that AOVs will continue to moderate over time as we're driving that success in fine jewelry.

And the only other thing I would add is as it relates to bridal, we are seeing strongest demand below $5,000. And so that's the customer demand that we're seeing, and that's another contributing factor.

Okay. One quick follow-up. You have a really strong physical showroom experience as well as a digital-first experience. But what are your debates in terms of – different puts and takes on the margin profile of the speed of physical showroom rollouts and what decisions you're making. And finally, this is pretty open-ended, Beth, but what are features you think are less appreciated about the investment story that should be more appreciated?

Great. So as it relates to physical and digital, I think that we continue to believe there's a lot of opportunity as this premium omni-channel provider. And as it relates to how we think about physical rollout, we're being very strategic about the locations that we are investing in. We've always been very data-driven, but continuing to focus on delivering that exceptional customer experience, and that's something I'm really excited about this year particularly is innovating with the customer experience in the big install base that we have with the over 40 showrooms. So I think we're just trying to be very deliberate about our decision-making, but continue to see really nice opportunity in both physical and digital and think that it's really the combination of both that makes us so special. In terms of what's not appreciated in the investment story, you know, I think that, you know, We continue to deliver profitability. It's the 14th consecutive quarter. The cash balance that we have is the highest it's been, as we mentioned, since really early days of going public. So I think perhaps the investments that we're making coupled with the profitability is something that not everyone is completely appreciating and just the brand resonance that we have. So I think the opportunity we have in fine jewelry is something we're really excited about. And the experience that we have that's so differentiated from our peers is also very compelling. But those are a few of the, I think, what makes us very special and perhaps isn't quite as appreciated in the investment community.

Thank you for that. Best regards.

Thanks.

Thank you. Our next question. comes from Dylan Cardin of William Blair. Please go ahead, Dylan.

Thank you. Really impressive marketing leverage here. And I'm kind of curious, it sounds like it kind of came in or did come in even ahead of some of your own expectations there. Can you just kind of unpack that, if there's been a shift in strategy or cost? And I'm curious if it plays a part in some of the better retention metrics that you're citing and have been citing. Has there been sort of a shift more for retention versus acquisition? I'll leave it there.

Thanks. I wouldn't say it's necessarily a shift. I think that we're constantly optimizing as it relates to the marketing efficiency. I think the fact that we have a very data-driven approach, the fact that we have diversified channels within our marketing mix, and the fact that we have invested in our social media platforms All of that has, I think, provided us with nice efficiencies. In addition to that, the showrooms themselves are nice drivers to improve the marketing efficiency. So I think it's everything combined, the strong repeat rate, the brand resonance is creating nice leverage. And it's something we watch very closely. We're very nimble, but we're really proud of the fact that we've been able to achieve that, continuing to invest in quality revenue. not chasing unprofitable growth. That's been kind of the behind the scenes in terms of what's driving that.

And would you expect, I guess, I don't know, similar levels of leverage, but how should we think about this year? You mentioned you're investing behind growth, but you do have showrooms kind of ramping back up. Any color you can give us sort of how that line item might trend this year?

Yeah, so we... as you correctly stated, are looking at this year as optimizing that mix between making near and long term investments that we think we have compelling ROI as well as still being cognizant of driving profitability. I think marketing is one of the levers that we have there, and we are looking to continue to build upon the success that we had in 2024 and continue that into 2025. And so we are guiding to continuing to expect to drive leverage in marketing for 2025 by some of the factors that Beth was just talking about. And then still that's balanced with making investments and growing awareness of the brand. And so really continuing the playbook that we've had of profitability as one of our key guiding principles, but also making the investments that we think are the right things to do both for the near and the long term.

Great. And then last one for me, the shift in here about, you know, I think historically or in the last year or so, it was strength and kind of the 10,000 and above sort of engagement ring categories. And now you're seeing strength below five. Is that actually just indication that you're seeing a broader recovery in engagement because it's not just a certain income cohort that's coming into the category or what's the best way to interpret that shift? Thanks.

I think that that's one potential hypothesis. Overall, the demand that we're seeing under 5,000 is kind of a result of just the, I think, changing consumer behavior. And we continue to see puts and takes quarter to quarter regarding consumer behavior. What I think is helpful for us is we have a very broad assortment and compelling assortment across different price points. So we were happy to see that under 5,000 be comparatively stronger.

Great. Thanks a lot, guys. Nice work.

Thanks, Dylan.

Thank you. Our next question comes from Dana Telsey of Telsey Advisory Group. Please go ahead, Dana.

Good afternoon, everyone. As you think about for the year and for the fourth quarter, Your repeat orders in the fourth quarter up 18%, your total orders up 10% compared to 17% repeat orders for the year and 7% for total orders for the year. What are you seeing with the attachment rate of fine jewelry going to engagement or engagement going to fine jewelry with the repeat orders? And is there any shifts in demographics going on given the shift to fine jewelry in terms of whether it's income level or guys versus women, men versus women? anything on that demographic profile and how that informs you for planning for AOV and AOV and total orders for the upcoming quarter and the year. Thank you.

Great. Well, maybe I can start with the shift in terms of fine jewelry. I think that we haven't necessarily seen a shift. We remain relatively small in a very big category here. And I think a lot of the efforts that we're making resonate well with the customer base that we have as it relates to both gifting and self-purchase and i think we've been leaning in to that assortment under a thousand dollars having a really compelling trend forward assortment certainly i think diamonds are highly coveted for every day as as well as those special occasions um and you know i think that we're continuing to see you know nice aovs within our fine jewelry category as we've been investing in the assortment. I'm not sure we have anything specific as it relates to attach with fine jewelry and engagement or vice versa. One of the things that we're really pleased to see is strong repeat from fine jewelry to just buying additional fine jewelry and seeing people come back there, which I think will be a big driver in terms of the overall repeat.

Got it. And then the cadence of this year, Any shifts in cadence, what you're seeing either or what you expect, whether it's with Mother's Day timing or even Easter timing, anything in terms of how you're planning with any changes or read-acrosses from last year with sales growth and adjusted EBITDA profiles?

I think one, maybe Jeff, you can talk through some of the just different cadences with the quarters. But, you know, I think one thing to note is obviously the fine jewelry tends to be more concentrated around the holidays. And we've been performing really nicely across key holiday moments, like the Christmas holiday, for example. So that's part of what's informing how we're thinking about the year. But Jeff, I don't know if you have additional commentary there.

Yeah, I think with respect to cadence for the year, kind of as I discussed during some of the remarks about how we're thinking about, for example, H1 versus H2, I think we do expect that on the top line side, the growth will be more back half-weighted. And that's really driven by the investments that we're making driving returns starting in H2. annualization and growth of showrooms, and also kind of keeping in mind just some of the factors such as more favorable comp if you're looking at Q3 specifically and that Q4 is a big fine jewelry quarter. And so I think that those are some of the considerations as we're thinking about the shape of the year and how we're planning.

Thank you. Thanks, Dana.

Thank you. I would now like to turn the conference back to Beth for closing remarks. Madam?

Thank you, everyone, for your thoughtful questions. We look forward to talking to you in our next quarterly earnings call.

This concludes today's conference call. Thank you for participating. You may now disconnect.