Global-E Online Ltd.

Greetings and welcome to the Globally first quarter 2023 earnings call. This call is being simultaneously webcast on the company's website in the investor section under news and events. For opening remarks and introductions, I'll now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Thank you and good morning. With me today from Globally are Amir Shlockett, co-founder and chief executive officer of Ofer Karin, Chief Financial Officer, and Nir Devi, Co-Founder and President. Amir will begin with a review of the business results for the first quarter of 2023. Ofer will then review the financial results for the first quarter of 2023, followed by the company's outlook for the second quarter and full year of 2023. We will then open the call for questions. Certain statements we make today may constitute forward-looking statements and information within the meaning of Section 27 of the Securities Act of 1933, Section 21 of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events. These forward-looking statements are subject to risks and uncertainties and assumptions, some of which are beyond our control. In addition, These forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including those set forth in the section titled Risk Factors in our prospectus filed with the SEC on September 13, 2021, and other documents filed with or furnished to the SEC. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the day of this call. You should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance, and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we make no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Please refer to our press release dated May 22, 2023 for additional information. In addition, certain metrics will be discussed today Excuse me. Certain metrics we will discuss today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operating decision-making and as a means to evaluate period-to-period comparisons. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. For more information on the non-GAAP financial measures, please see the reconciliation tables provided in our press release dated May 22, 2023. Throughout this call, we will provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in our press release dated May 22, 2023. I will now turn the call over to Amir, co-founder and CEO.

Thank you, Erica, and welcome, everyone. With the financial results of Q1, which we are releasing today, we are off to a great start for the year. with 55% year-over-year growth in GMV, which totaled $704 million. Revenues for the quarter were $117.6 million, growing by 54% compared to the same quarter last year. An adjusted gross profit margin was 41.4% for the quarter, up from 39.1% last year. Our adjusted EBITDA came in at $14.5 million, compared to only $3.3 million in Q1 of last year. These strong results, which came in above our guidance, manifest our continued strong execution across the business, our effectiveness in controlling costs, and the fact that macro conditions during the quarter were slightly more favorable than what was initially anticipated going into 2023. Later in this call, Ofo will review in greater detail our Q1 results, and he will provide you with our guidance for Q2, as well as our updated guidance for the full year of 2023, which we are raising today. But before we do that, I would like to share with you some of the exciting developments we have seen across the business during the past quarter. First and foremost, we continue to see great interest in our services coming from brands all around the globe, as more and more merchants turn to the direct-to-consumer channel as their key focus growth channel. To name just a few, in Q1, we saw renowned brands like Carbon38, Doen, Cyclebunny, Maui & Sons, Lulu's, Jigsaw, and Rebecca Minkoff go live, as well as the merchandise store of the Mercedes-AMG Petronas Formula 1 team. We continued our push into APAC, with brands such as Charles & Keith, Porcelain Skin & Bind by Donny going live in Singapore, Unreal 4 going live in Australia, Object IO going live in Japan, and more. In parallel, we launched our first Portuguese merchant called Isto, and continued to onboard celebrity brands and social first brands, such as Kylie Cosmetics by Kylie Jenner, or Maison Francaise Courgeant, part of the LVMH group, whose Baccarat Rouge perfume was the number one perfume shared by influencers on TikTok in 2022. During the quarter, we also continued our efforts to expand our business with existing merchants. Notable examples would be numerous expansions of our engagement within the LVMH group, with two additional brands, Repulsi and Pucci, joining the platform, Kenzo going live, and Bvlgari turning on an additional batch of close to 30 markets, which are now operated by Globally. Another notable example would be Disney Europe, which now utilizes Globally to support sales to the United Kingdom, one of its top global markets. Regarding our partnership with Shopify, On the direct integration side, we continue our work on adding new features to our native integration, as well as providing support for Shopify's new checkout extensibility. In parallel, we continue to migrate merchants from our legacy third-party integration into the new native one and add newly signed merchants directly onto the native plugin as we go. On the white label solution front, We continue to work in close collaboration with Shopify's teams towards the rollout of Shopify Markets Pro, a fully integrated merchant of record solution intended for merchants looking to scale to new markets quickly and easily. Markets Pro is currently in early access mode in the US, and we are seeing a high level of interest from merchants and encouraging initial results from those early access merchants that have been going live since September of last year. Along with Shopify, we believe MarketsPro remains on track to general availability in the US in the summer, to be followed by the UK later in the year. Finally, I would like to mention a different and exciting aspect of our activity, which is the potential of using AI to improve our service levels and potentially increase the efficiency of our operations. We have already been using machine learning and AI models for several years now. helping our teams to automate large-scale recurring tasks, such as the classification of large product catalogs for duties and taxes, for example. More recently, our internal AI task force has conducted several proof-of-concept exercises in various functions of the company, demonstrating some of their potential. We believe that the amazing advancements made in the field of AI lately, resulting in the proliferation of highly sophisticated yet easy-to-use large-scale models, should present over the coming quarters and years many opportunities to incorporate AI-powered tools and capabilities across different parts of the organization. These, in turn, could enable us to drive significant cost efficiencies over the coming years, while further improving the level of service and insights we can give to both merchants and end consumers. There are countless other exciting developments to share from all corners of the business, all contributing to our belief that we can continue to exhibit high growth rates as we capture more and more of the vast greenfield opportunity that lies ahead of us, and do it in a sustainable way, maintaining cost controls and besting cost efficiency. But in the interest of time, and in order to leave ample time for any questions you may have, I will now hand it over to offer our CFO to take us through the quarterly numbers in more depth, as well as present our updated guidance.