1stdibs.com, Inc.

Ladies and gentlemen, thank you for joining us and welcome to the First Dibs Q4 2025 earnings call. After today's prepared remarks, we will host a question and answer session. If you have dialed into today's call and would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Kevin LaBuzz, Head of Investor Relations and Corporate Development. Kevin, please go ahead.

good morning and welcome to the first dibs earnings call for the quarter and year ended december 31st 2025. i'm kevin labuz head of investor relations and corporate development joining me today our chief executive officer david rosenblatt and chief financial officer tom edugino david will provide an update on our business including our strategy and growth opportunities and Tom will review our fourth quarter financial results and first quarter outlook. This call will be available via webcast on our investor relations website at investors.firstdibs.com. Before we begin, please keep in mind that our remarks include forward-looking statements, including, but not limited to, statements regarding guidance and future financial performance, market demand, growth prospects, business plans, strategic initiatives, business and economic trends, and competitive position. Our actual results may differ materially from those expressed or implied in these forward-looking statements as a result of risk and uncertainties, including those described in our SEC filings. Any forward-looking statements that we make on this call are based on our beliefs and assumptions as of today, and we disclaim any obligation to update them except to the extent required by law. additionally during the call we will present gap and non-gap financial measures a reconciliation of gap to non-gap measures is included in today's earnings press release which you can find at our investor relation website along with a replay of this call lastly please note that all growth comparisons are made on a year-over-year basis unless otherwise noted i will now turn the call over to our ceo david rosenblatt david

Thanks, Kevin. Good morning, everyone. 2025 was the year of accountability and focused execution. The hard work and operational rigor we applied across the organization throughout the year culminated in a landmark result. We exited 2025 as an adjusted EBITDA positive company. Looking ahead, our 2026 financial plan focuses on capitalizing on these gains while delivering sustained adjusted EBITDA profitability. In 2026, we expect to deliver a third consecutive year of positive year-over-year revenue growth alongside positive adjusted EBITDA and free cash flow. While we are not providing full-year GMV guidance, we anticipate a return to year-over-year GMV growth by the fourth quarter, driven by the compounding impact of our product roadmap. Our confidence in this trajectory is rooted in the defensibility of the first dibs model. Even in an era of AI-driven content and commerce, we believe the high trust, high complexity world of one-of-a-kind luxury thrives on curation, scarcity, and the human expertise of our dealers. By leveraging AI to enhance discovery while maintaining the strength of our vetted seller network, the trust of our buyers, and our complex transactional infrastructure, We see AI not as a competitor, but as a catalyst that will help unlock the full potential of our unique catalog. In the fourth quarter, GMV was $90.2 million at the low end of our guidance range. However, adjusted EBITDA finished above the high end of our range. This performance marks a major inflection point. Our first quarter of adjusted EBITDA profitability as a public company. It is important to be clear. In the second half of 2025, we made a conscious trade-off to moderate near-term GMV growth in exchange for a significantly improved adjusted EBITDA profile. This shift in the positive adjusted EBITDA is definitive proof that we do what we say. Reaching this milestone is the direct result of three specific commitments we made to you at the start of the year. First, organizational discipline. we exceeded our goal to hold headcount flat while rebalancing our talent base toward product and engineering second operating leverage in our initial 2025 outlook we targeted generating leverage at mid single digit revenue growth despite a housing market at a 30-year low our expense management allowed us to exceed our own leverage targets proving that our asset-light model is now capable of delivering positive adjusted EBITDA even in a low-growth environment. Third, product velocity. By leaning into AI-assisted development, which now accounts for approximately 30% of our new code, we delivered our ninth consecutive quarter of conversion growth. With a profitable foundation now in place, we are turning our energy toward driving growth in 2026 while maintaining our rigorous expense discipline. Having continued to expand our market share in 2025, we entered 2026 from a position of strength. Our roadmap is designed to remove friction and modernize the platform across four pillars, discovery, pricing, shipping, and service. First, discovery. Our 2026 roadmap centers on transforming first dibs into a daily habit for design enthusiasts through a reimagined buyer experience. This plan includes deploying AI-powered semantic and image search to fundamentally change how buyers interact with our catalog. While many potential buyers have a deep appreciation for design, they often lack a collector's specialized nomenclature. We are bridging this gap. Instead of needing an exact match, for example, Hermes Birkin 25 bubblegum pink silver hardware, a buyer can use natural language, such as asking for a Valentine's Day gift for my wife. While that query traditionally would have yielded limited results, our new AI-driven engine will understand the intent behind the request and surface rich curated matches across categories, from jewelry to fine art. We are effectively removing the expert requirement from our search bar, making first dibs more intuitive for a broader audience. We are also initiating a major evolution of our personalization engine centered on a reimagined homepage and feeds that deliver curated recommendations across key buyer touchpoints. By synthesizing brand maker and price propensity data, we are creating a bespoke experience that anticipates intent, surfacing the right inventory at the right moment of inspiration, whether on our platform or through personalized emails. To amplify this work, we are launching First Dibs Tastemakers, our first-ever ambassador program and influencer network. This initiative anchors our transition toward a community-first content strategy. By partnering with a scale network of authentic voices, from prominent collectors and designers to our own sellers, we are creating the emotional connections that drive daily engagement and fuel discovery. This program allows us to move at the speed of the zeitgeist. We have already seen the potential of this approach in early testing. This was the blueprint for our real-time response to Taylor Swift's engagement. Within hours, we mapped a global interest in her vintage watch and unique old-mind diamond ring to similar pieces in our inventory. By matching what the world is talking about with our one-of-a-kind supply, we are making First Dibs more accessible and culturally resonant. Additionally, we are significantly expanding our sponsored listings program, which serves as a high-margin lever for driving revenue growth. We believe there is headroom to scale coverage and increase ad density while maintaining our premium aesthetic. By providing sellers with more sophisticated tools to reach buyers, we are creating a more dynamic ecosystem while driving revenue growth that is independent of GMV fluctuations. In addition to expanding sponsored listings, we are exploring nascent advertising opportunities with external brand partners, both online and offline. Second is pricing. We are focusing our efforts on helping buyers and sellers reach a shared understanding of value. Our goal is to foster faster consensus by providing both sides of the transaction with the data required for confident decision making. Central to this effort is a fundamental investment in our negotiation and offer flows, our highest intent signal. We see significant opportunity to optimize the make offer experience. which is often the primary path to purchase for our highest value items. Our 2026 roadmap focuses on demystifying the negotiation process through better product marketing and more intuitive UI, ensuring that both parties can reach a deal with less friction. By streamlining these interactions, we are increasing marketplace liquidity and creating a more accessible and dynamic platform. Complementing this work is an initiative centered on price contextualization. Because our catalog is defined by rare, one-of-a-kind items, buyers often lack a clear benchmark for value. To address this, we are introducing historical price comps and market data directly into the buyer journey. By making this information more visible, we are providing the transparency required to validate an item's value. Underpinning these initiatives is our expanded enforcement of price parity. In the fourth quarter, we made strides in increasing the volume of listings covered by our parity solutions, ensuring that our buyers find the most competitive prices on first dibs. Looking ahead, we will incorporate AI to further automate and expand this coverage across our catalog. By leveraging technology to scale these protections and promoting our price match guarantee, we are ensuring that First Dibs remains the definitive destination for value in luxury design. Third is shipping. We recognize that our current shipping program is too complex and costly, lacking the modern features such as flexibility, precise tracking, and reliable on-time delivery that our buyers expect. A primary source of friction is the lack of clarity around roles and responsibilities between first dibs, our sellers, and our buyers. This ambiguity can add hidden costs to the transaction. To solve this, we are revamping our shipping experience to provide a clear, standardized framework for every participant in the value chain. We expect this move will allow us to streamline operations and lower shipping prices for buyers. This newfound efficiency will enable our move toward all-in pricing. By presenting a single, transparent, fully landed cost earlier in the funnel, we will remove the primary hurdle to conversion. We are also leveraging our historical data to develop dynamic shipping rates, providing instant and more competitive quotes globally. This is about eliminating sticker shock and elevating our shipping experience to match the premium nature of our inventory. Fourth is service. In 2026, we are evolving our service model through technology. Our plan involves integrating AI support to resolve routine inquiries instantly. By offloading these high-volume basic tasks, we can reallocate our client services team to prioritize more nuanced, high-value resolutions and increase our service levels. This shift ensures that our human expertise is focused where it adds the most value, supporting our most loyal buyers and driving repeat purchases. We are also working to introduce an AI item upload assistant for our sellers. This tool will streamline the listing process and ensure that the most exceptional inventory hits our marketplace faster and with higher quality metadata, allowing us to scale our operations through technology rather than headcount. In summary, the story of First Dibs right now is one of focused transformation. Reaching positive adjusted EBDA this quarter was the culmination of a multi-year journey that began in 2022. We have spent four years reengineering our cost structure and refining our marketplace, and we have emerged with a financial foundation that allows us to focus entirely on driving GMV and revenue growth. As we look toward 2026, we are often asked about the risk of AI disintermediation. We believe that our position is uniquely protected. Our moat is built on a high trust relationship and a physical collection of one-of-a-kind items, elements that cannot be replicated by an algorithm. We are leaning into AI to help our buyers discover the extraordinary rather than replacing the essential human expertise of our dealers. With a compelling roadmap in place, we are positioned for a GMV growth inflection point by the fourth quarter of 2026. We enter this next chapter as a more efficient, more resilient, and more ambitious company than at any time in our history. To discuss how this discipline is reflected in our fourth quarter performance and our expectations for the year ahead, I'll turn the call over to Tom. Thanks, David.