Global-E Online Ltd.

Welcome to the GlobalE third quarter 2025 earnings conference call. This call is being simultaneously webcast on the company's website in the investor section under news and events. For opening remarks and introduction, I will now turn the call over to Alan Katz, GlobalE's head of investor relations. Please go ahead.

Thank you and good morning, everyone. With me on the call today are Miroslav Katz, co-founder and chief executive officer of Ofer Koren, Chief Financial Officer, and Nir Devi, Co-Founder and President. Amir will begin with a review of the business results for the third quarter of 2025. Ofer will then review the financial results for the third quarter, followed by the company's outlook for the remainder of 2025. We will then open the call for questions. Certain statements we make today may constitute forward-looking statements and information within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding our future results of operations and financial position, growth strategy and plans, and objectives of management for future operations, including onboarding new merchants, expanding our offerings, and introducing and integrating new solutions are forward-looking statements. These forward-looking statements reflect our current views with respect to the future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statement as a result of a number of factors, including those set forth in the section titled Risk Factors in our annual report on Form 20F filed with the SEC on March 27, 2025, and other documents filed with or furnished to the SEC. These statements may reflect management's current expectations regarding future events and operating performance and speak only as of the date of this call. you should not put undue reliance on any forward-looking statements. Except as required by applicable law, we undertake 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 issue today, November 19, 2025, for additional information. In addition, certain metrics we discussed today are non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation 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 operational 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 these non-GAAP financial measures, please see the reconciliation tables provided in our press release today. 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 issued today. I will now turn the call over to Amir, our co-founder and CEO. Amir, please go ahead.

Thanks, Alan, and welcome everyone to our third quarter earnings call. We achieved another quarter of very strong results, coming in above the midpoint of our guidance for revenue and adjusted EBITDA, and even exceeding the top end of our guidance range on GMB. This strong performance was a result of the entire Global E team around the world continuing their relentless execution throughout the quarter, developing and providing best-in-class solutions and services to our merchants and our shoppers. Before we dive into the quarter, in terms of our forward-looking outlook, given what we see in the market today and the overall robustness of trading volumes we have witnessed in Q3 and Q4 to date, we are once again raising our midpoint outlook across all of our guidance metrics for the remainder of the year. As such, for the full year of 2025, we now expect GMV to be roughly $6.46 billion at the midpoint. representing just over a 33% annual growth rate. We're also raising our revenue and adjusted EBITDA guidance for the full year to $952.1 million and $192.8 million at the respective midpoints, representing 26.5% and 37% growth for the year, respectively. As in previous years, in 2025, we once again expect to surpass the full-year guidance ranges that we shared with you in the beginning of the year, a testament to the durability of our growth algorithm. We believe this strong performance for 2025 keeps us on track to deliver the multi-year growth and bottom-line profitability targets we shared with you during our investor day earlier this year. Back to our quality results. We finished Q3 with GMV of $1.51 billion, up 33% year-over-year, and revenue of $221 million, up 25.5% year-over-year. In terms of profit, our adjusted gross profit for Q3 was $102 million, up 24% from last year, and quarterly adjusted EBITDA was $41.3 million, up 33% compared to the same quarter of last year. resulting in an 18.7% margin, a 100 basis point improvement compared with Q3 of 2024. Our gap net profit for the quarter was $13.2 million, and we generated $73.6 million in free cash flow, an increase of almost 250% compared to last year. Before I go through the current trading patterns and our Q3 new merchant launches, I want to provide a few broader business updates. First, on several previous calls, we had mentioned our duty drawback offering, a value-added service that we have provided in certain non-US markets for some time now. By use of this value-added service, and depending on the sale parameters, merchants can potentially reclaim import duties and goods that are exported outside of their home base, as well as on return goods. Given the recent suspension, of the de minimis exemption, we have seen increased interest in this offering also for the U.S. In parallel to other offerings, such as 3B2C, all aimed at helping our brands to navigate the stormy waters of international D2C trade. Within the quarter, we also got the permit to offer import duty drawbacks to our U.S.-based merchants for their exports out of the U.S., further supporting them in optimizing their cost of trade in times of change. Second, a quick update on our managed market solution. We've been working in close collaboration with our partners at Shopify, according to our joint plans. Over the past six months, most of the development has been completed for a rollout in 2026, and we are currently in beta testing for the new flow. As a matter of fact, new merchants that apply now to managed markets are already going through the new flow. We still have some tweaking to do on the back of what we will learn from the better merchants, but remain on track for the next phase of managed markets, moving to full commercialization. Third, we continue to make good progress on our BuyerFree.com offering. During Q3, we added a Buy Now capability as well as advanced search functionality, enabling a more streamlined shopper experience and improving sales conversion rates. We also continue to see further growth in shopper sign-ups, as well as an increase to the share of merchant sales attributable to the borderfree.com channel, which now stands at over 4.5%, representing an increasingly valuable demand generation channel for merchants on the program. Lastly, during the quarter, we announced the authorization of a $200 million share repurchase program by our board. Globally, it's a highly cash-generative business, and given our strong balance sheet, and our track record of generating sustainable cash flows, we see a share buyback plan as a logical use of cash, especially at the current market valuation. Given the blackout periods that we are subject to in Q3, we have not yet begun buying back shares, but we expect to do so starting in the coming days. We will employ a thoughtful approach here to take advantage of any disconnect we see between our performance and outlook and the market valuation of our shares. I also want to spend a few minutes on how we are strategically approaching AI in general and agentic e-commerce in particular, and what we are doing to make sure we are well positioned to capitalize on this upcoming market opportunity. Throughout this year, we've already been seeing some traffic to our merchant sites being initiated from ChatGPT and resulting in successful transactions processed by GlobalE. as well as agent-assisted in-chat checkout transactions. While both still represent a very small share of sales for our merchants, we believe these are exciting potential new sales channels for them. As brands focus more on selling within these third-party channels, we will continue to provide the same best-in-class support and service that we provide across all our sales channels. Irrespective of the sales channel, the value of our expertise and capabilities do not change. We meet our brands wherever they sell online and provide support for them to transact internationally, regardless of the source of traffic. Furthermore, we have deployed AI-powered use cases throughout the buying journey, from demand generation, utilizing AI, both for brands using our agency services and for our own B2B marketing, through to different aspects of trade and post-purchase support. from classification down to customer care. In parallel, we also have an internal team focused on making sure that our solutions will be positioned to work seamlessly across agentic commerce platforms for instant checkout from both a merchant and a consumer perspective when such platforms are introduced to the market. As our partners look to work with agentic technologies to provide instant checkout capabilities, we will be there to provide a seamless, effective, and compliant end-to-end international experience. This is all obviously very early in the lifecycle, but as always, we will keep doing what it takes to remain at the forefront of global e-commerce, and we utilize the advantages of our scale, know-how, and sophistication to emerge a share gainer. By focusing on this early and engaging with key players in the space, we are aiming to maintain our pole position for the enablement of seamless cross-border commerce within AI-led transactions in the future. Now let's move on to the broader business performance in the third quarter and what we're currently seeing in Q4. As I already mentioned, we saw consumer discretionary spending holding up during Q3 and Q4 to date. and we continue to see strong market traction with our largest merchants across different destination markets. The trading patterns we have seen in Q3 and the first half of Q4 give us confidence that we will end the year strong. In terms of new merchant launches within Q3, we continue to grow across geographies and within our cohort of merchants. We experience continued strong demand for our services across different markets. as a large number of brands went live with Globally during the quarter. This included multiple brands that went live with us in the U.S., such as Everlane, the renowned high street online U.S. clothing retailer that recently moved to Shopify, chose Globally to accelerate its international growth, and Ashford, the luxury U.S. watch brand. In Canada, we launched with the online shop of Drake's fashion brand, October's Very Own. as well as with Aritzia, the fast-growing clothing company, which has shown a quick ramp-up of their conversion rates and international sales post-launch with Globally, as they mentioned in their recent quarterly earnings goal. In the UK, we launched with renowned luxury brand Coach, which is part of the Tapestry group of brands, with Brown's Fashion, formerly part of Farfetch, and with the jewelry brand Regal Rose. I'm also pleased to say that UK's Marks & Spencers is back online as of October, and their trading is back to normal patterns. In France, we launched with Chloé, the renowned luxury fashion brand, thereby extending our partnership with the Richemont Group. We also launched with Lecoq Sportif, the classic French sportwear brand, and with the fashion brand Hotfoot. Across other European markets, we launched with sleepwear brand Kalida and dog-year brand Cloud7 in Germany, and we've deal-won Milano watches in Italy, among others. In Asia-Pacific, we launched Bandai Spirits, the famous Japanese toy and collectible company, as well as Japanese designer fashion brand Mihara Yosuhu, and Pozzi, the high-end Australian fashion brand. We also launched Beauty of Joseon, a Korean skincare company, and Paper Shoot, a consumer electronics brand, which was also the first Taiwanese brand to sign with us. Another exciting launch in the region during Q3 was that of BlackBoo Swimwear, our first brand out of the Philippines. Within the sporting goods vertical, golfers around the world can now buy their iron sets from Takomo Golf, the Finnish D2C golf brand, which went live with us during Q3. During the quarter, we also went live with Fly Sports, a UK-based sports equipment brand, and with Loop Tackle, a Scandinavian fly fishing gear company, which is also the first to integrate our services on a headless WooCommerce instance. Besides many new merchant launches, during Q3, we also expanded our scope of business with quite a few existing merchants, such as FIGS, where we expanded into South Korea and a number of Latin American markets, Helmuth Lang, the New York-based fashion brand, and the merchandise division of JYP Entertainment, one of the largest K-pop labels and production companies, which both expanded into Japan. Bang & Olufsen and Tom Ford, which both opened a number of new European markets with us in the quarter. Australian fashion brand Zimmerman, which went live with us with its Hong Kong site serving the APAC region. And fashion brand Theory, which added support for several GCC countries out of its new UK site integration. Both Burberry and Pair Eyewear, who we worked with to expand into Mexico. Bash, who expanded with us into Norway. and VIUI, which added more than 10 new countries, including Japan, Italy, Spain, and several Nordic countries. Furthermore, as I mentioned earlier, in the face of higher tariffs and the suspension of the de minimis exemption in the U.S., we have seen heightened interest in our 3B2C and multi-local solutions, as well as our duty drawback value-added services. More and more merchants, both existing and new, continue to pivot to utilizing these advanced capabilities in order to mitigate, as much as possible, the effects of the new duty regimes on their business. The launch of new merchants and the continued expansion with existing merchants, as well as our current pipeline, give us confidence that we are well positioned in terms of both our near-term and our long-term targets. We have good visibility to durable, profitable growth. and a strong pipeline of cash flows into the future. Our results here to date would be impressive in any environment, but considering the uncertainty that the global e-commerce market faced at the start of 2025, I believe these results really showcase the resiliency of our business model and the value that we create for our merchants. I will now hand it over to Ofer to take us through the quarterly numbers in more depth and our increased 2025 guidance Thank you for our time.