Brilliant Earth Group, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Brilliant Earth fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Colin Borland, Vice President of Strategy, Business Development, and Investor Relations. Please go ahead.

Thank you and good morning, everyone. Welcome to the Brilliant Earth Fourth Quarter 2025 Earnings Conference Call. My name is Colin Borland, Vice President of Strategy, Business Development, and Investor Relations. Joining me today are Beth Gerstein, our Chief Executive Officer, and Jeff Kuo, our Chief Financial Officer. During the call today, management will make certain forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a description of the risks that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. These forward-looking statements reflect our opinion only as of the date of this call, and we undertake no obligation to revise or publicly release the result of any revision to these forward-looking statements in light of new information or future events unless required by law. During this call, management will refer to certain non-GAAP financial measures. A reconciliation of Brilliant Earth's non-GAAP measures to the comparable GAAP measures is available in today's earnings release, which can be found on the Brilliant Earth Investor Relations website. I'll now turn the call over to Beth.

Good morning, everyone, and thank you for joining us. I'm pleased to share strong Q4 results today. We delivered our largest quarter ever of net sales in Q4. driving 4% year-over-year growth in net sales with particularly strong performance in fine jewelry. We also delivered positive adjusted EBITDA above the midpoint of our stated guidance, highlighting the agility of our business model. Our results reflect the success of the investments we've been making across product, brand, and experience. 2025 was a banner year for Brilliant Earth. We celebrated our 20th anniversary and achieved major accomplishments across each of the strategic priorities that drive our growth. Before we dive into the results, I want to remind you of that growth strategy and how it guides our execution in this highly competitive and dynamic industry. We believe that these four things are key to realizing the growth opportunity ahead of us. First, Our aim is to build Brilliant Earth into the most loved and trusted jewelry brand. 2025 was a year of incredible brand momentum and successes. Our brand was at the center of many high visibility moments this year as stars like Beyonce, Sabrina Carpenter, and Selena Gomez chose our product for major events in their lives. And we expanded our brand reach through unique partnerships ranging from Jane Goodall to Ring Pop. Second, create great product that is distinctive and ownable and builds affinity for the Brilliant Earth brand. We have particular focus on expanding beyond our core bridal business into fine jewelry. And 2025 was a breakthrough year in which we grew fine jewelry mix to 17% of bookings with many iconic product releases, including our signature Pacific green colored lab diamond collection. our medallions with meaning, and our love-decoded collection. Our success in fine jewelry has turned what was a nascent portion of sales just five years ago into a business on a path to $100 million annually. Third, deliver joyful and personalized shopping experiences that delight customers, foster lasting relationships, and set new standards for modern luxury retail. Last year, we continued to deliver industry-leading digital experiences and opened two new showrooms, reaching 42 in total. And our physical retail strategy continues to evolve with the opening of our first flagship showroom in Beverly Hills earlier this year, which showcases our new approach to experiential retail. And fourth, continue to develop our industry-leading asset-light business model, utilizing cutting-edge technology and processes to drive long-term profitable growth. The results we shared today demonstrate the power of our model and this team's ability to deliver. Now, let me walk you through some performance highlights of Q4. For the fourth quarter, net sales were $124.4 million, representing 4.1% growth year over year. and the highest quarter of net sales in our history. ASPs in Q4 were up year over year across the assortment. Much of the growth in ASP was driven by changes in mix to higher priced items within each assortment as we're seeing particular strength with the higher end consumer combined with strong total and repeat order growth. For the full year, net sales reached $437.5 million, up 3.6% year over year. We delivered a fantastic holiday performance, including another record-breaking cyber weekend. Throughout the holiday selling period, our seamless omnichannel model drove strong traffic and conversion, both online and in our showrooms. From our joyful Delight in the Details holiday campaign to showroom executions, including new experiences like trunk shows and deeper inventory investments, we saw strong performance during the quarter, especially in the 10 days leading up to Christmas, where we drove 15% year-over-year bookings growth as customers sought Brilliant Earth as their go-to gifting destination. Our gross margin was 55.9% in Q4 and 57.5% for the full year, approximately in line with what we had communicated during our Q3 earnings call. highlighting our ability to drive strong margins despite significant metal and tariff headwinds. You all know that the challenges presented by record metal prices and fluctuating tariff conditions are unprecedented. Our ability to manage through these conditions has been a testament to the strength of our business model and our team. this is an industry-wide impact but our ability to optimize the performance drivers within our control has allowed us to navigate these challenges and still deliver profitability within our expectations jeff will talk more about the impacts but as we are now into the new year you can expect that we will continue to focus on optimizing our business in the ways that we can control to mitigate as much of the external cost pressures as possible our strong gross margin Another quarter and year of year-over-year marketing leverage and overall operating expense discipline enabled us to drive a Q4 adjusted EBITDA of $4.2 million or a 3.3% margin and full-year adjusted EBITDA of $12 million or a 2.7% margin, illustrating the agility of our business model and our continued discipline in cost management. Turning to some additional highlights for the quarter, Fine Jewelry was a clear standout. In Q4, for the first time, we had multiple days where we hit $1 million in Fine Jewelry bookings. We're seeing strong demand for both self-purchase and gifting with almost half of new customers discovering Brilliant Earth through Fine Jewelry in Q4, resulting in another record quarter in Fine Jewelry. Fine Jewelry bookings grew 34% year-over-year in Q4 with strong unit, and ASB growth, reaching 23% of total bookings mixed for the quarter and 17% for the full year. As you know, fine jewelry has been one of our top strategic priorities for several years as we diversify beyond our bridal heritage, and we have driven extraordinary results. Our full year 2025 fine jewelry bookings are more than three times bigger than they were just four years ago at the time of our IPO. Our iconic and signature fine jewelry collections, like Jane Goodall, Sol, and Love Decoded, and collaborations like Ring Pop, continued to significantly outpace overall fine jewelry bookings growth, as customers are increasingly drawn to Brilliant Earth's one-of-a-kind styles through campaigns that capture consumers' imagination. We've also had great success driving growth in lab-grown diamond fine jewelry. As you know, we're early leaders in the lab diamond space, and we have immense opportunities as lab diamonds continue to increase in popularity amongst consumers. In Q4, bookings from fine jewelry made with lab diamonds grew 61% year-over-year, and we continue to see significant opportunities for lab diamonds to increase the addressable market of consumers looking to buy diamond jewelry for everyday wear. In wedding and anniversary bands, we set another record, delivering our largest fourth quarter of bookings ever with double digit year over year growth. And we continue to see success across both our men's and women's collections without performance in giftable and higher price point diamond rings in Q4. And in engagement rings, we continue to drive bookings growth of approximately 1% year over year in the second half of the year. Our signature collections, the exclusive designs we are known for, continue to drive strong results, growing double digits year over year in Q4. Turning to our seamless omnichannel experience, we continue to innovate across our digital and in-person customer experience. In digital, we made many enhancements from online imagery and merchandising to overall up-leveling of our online shopping experience. In showrooms, we opened two new locations in 2025, one in South Lake, Texas, and another in Alpharetta, Georgia, ending the year with 42. And as our showroom format strategy continues to evolve to more ground floor and mall locations, we've had increasing success with retail customers who walk into the showroom without a prior appointment. In fact, orders from these retail customers grew 61% year-over-year in Q4. In January, we open our first flagship showroom in Beverly Hills. This showroom is a new and evolved concept that celebrates the artistry, craftsmanship, and quality that we are known for, while immersing customers in the fullest physical expression of our brand to date. In addition to elevating our hallmark appointment experience, we've introduced several new features, including an eternity bar, featuring the widest breadth of our engagement and wedding assortment and our unique design your own experience, a fine jewelry personalization station, a dedicated VIP showroom, and an exclusive new date night appointment offering that is an exceptional personalized experience for couples. The date night appointment is a simple idea that takes what can be a stressful process for couples, and makes it genuinely fun and celebratory. The Beverly Hills flagship is both an evolution and elevation of our retail strategy. In fact, Forbes called our concept a blueprint for the future of luxury jewelry retail. And we agree. Beyond the opening of our flagship, we expect to open another two showrooms in 2026. For Q1 to date, I'm pleased to report that we have seen a continuation of strong performance with strong year-over-year bookings growth, year-over-year new and repeat order growth, as well as an encouraging Valentine's Day start to the year. ASPs are also up year-over-year across engagement rings, wedding and anniversary bands, and fine jewelry, consistent with what we observed in Q4, demonstrating strength among our higher income consumers. We also recognize that the industry is facing historically high metal costs. We believe we are well positioned to navigate this environment with our agile and sophisticated merchandising, pricing, and sourcing strategies. Before I hand the call over, I also want to share that today we released our 2025 mission report, which marks our two decades of impact and charts our progress toward our four mission pillars, transparency, sustainability, compassion, and inclusion. I invite you to read the report in which we also introduced the next generation of initiatives designed to expand our impact even further. And finally, I want to thank our incredible team for their commitment and tireless efforts this past year. Their passion and execution are the reason we can stand here today, 20 years in, and say with confidence that the best is still ahead for Brilliant Earth. I'll now turn the call over to Jeff.