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spk06: Ladies and gentlemen, thank you for standing by and welcome to the Poshmark First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ms. Christine Chen, Head of Investor Relations. Thank you. Please go ahead.
spk00: Welcome to Poshmark's first quarter 2021 conference call. Joining me today are Manish Chandra, our founder, chairman, and CEO, and Anand Keshav, our chief financial officer. Please keep in mind that our remarks today include forward-looking statements, such as statements related to our financial guidance and key drivers, the impact of COVID-19 on our communities, business, and strategy, the potential benefits of our marketing and product initiatives, and the anticipated return on our investments and their ability to drive growth. Our actual results may differ materially than those expressed or implied in our forward-looking statements. Forward-looking statements involve substantial risks and uncertainty Our annual report on 10-K for the year ended December 31st, 2020, and our subsequent filings with the SEC, including our 10-Q for the quarter, ended March 31st, 2021. Any forward-looking statements we make on this call are based on our beliefs and assumptions as of today, and we don't have any obligation to update them. Also, during the call, we'll present GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings release, which you can find on our IR website, along with the replay of this call. And with that, I'll turn it over to Manish.
spk04: Thanks, Christine. Hello and welcome, everyone. Thank you for joining us for our second earnings call as a public company. Before I get into my main remarks, I want to take a moment to acknowledge the crisis in India as the second wave of COVID-19 continues to devastate communities across the country. Our hearts go out to everyone in India, especially our own Poshmark team, who's thankfully staying safe and whose health and safety remains our top priority. Now I'll transition to my main remarks. Our mission is to put people at the heart of commerce, empowering everyone to thrive. By pairing technology with people's inherent desires to socialize, we have built a vibrant social marketplace that makes the buying and selling experience incredibly seamless, easy, and social. We remain focused on supporting our community innovating for a fantastic user experience and expanding the reach and offerings of our social marketplace. Because our community of millions of sellers are constantly adding new products to the marketplace, our model is incredibly responsive to demand, and we are generally not impacted by supply chain disruptions. Our asset-light model holds no inventory, leading to consistent high gross margins, resulting in a scalable and profitable business. We're the leader at the intersection of three key trends shaping the future of shopping. The shift to online, the shift to social, and the shift to second hand. We're unique from other marketplaces as we focus on growing our overall community of users to create hyper engagement and loyalty. These users activate as buyers and sellers, creating a virtual of growth, monetization, and strong cohort retention. The beauty of our social marketplace is that our users, who spend an average 27 minutes a day on our app, continue to engage and re-engage over time, both as buyers and as sellers, fueling a high-velocity flywheel of organic growth. We reported a strong first quarter and grew our GMV and revenue by 43% and 42% respectively to $441 million and $81 million, a testament to the strength of our cohorts, even when faced with near-term disruptions. We delivered our fourth consecutive quarter of adjusted EBITDA profitability with $4.2 million in adjusted EBITDA and 5.2% in adjusted EBITDA margin. Our business model is built on the long-term retention of our cohorts. Despite mid-quarter challenges due to weather and COVID, our cohorts remain resilient as growth rates across states began to normalize and converge once again in the second half of March, as our community expressed increased optimism about economic conditions and reopenings. In March, shoppers bought aspirational items that they looked forward to showing off once the weather improved and restrictions started to lift. Top performing secondhand categories by sales were crop tops up 101%, bikinis up 86%, jean shorts up 85%, and hats up 71% year over year. In March, we announced a TV and marketing campaign with Marie Kondo, the master of tidying up, decluttering, and organization. The campaign focused on the emotional connection we have with clothing and the value of resale and secondhand. It featured Marie Kondo encouraging consumers to give new life to items they've loved from their closet by listing them on Poshmark, allowing the items to spark joy for someone new. We're optimistic that as consumers begin to leave their homes and engage in social activities once again, there will be demand for a different wardrobe from the stay-at-home outfits that prevailed in 2020. pent-up demand for apparel could drive more frequent and a wider range of apparel and accessory purchases benefiting our marketplace. We entered 2021 as a public company with a business that is stronger than ever, driven in large part by great execution of our four growth strategies. Our first strategy is to focus on product innovation to continue driving user engagement, which is fundamental to the retention of our user cohorts and GMV growth. In March, we completed the full rollout of video listings, which allowed sellers to add videos directly into their listings, providing new ways to market their products, drive traffic to their closets, and engage with potential buyers. we see video commerce as the next generation of e-commerce in our marketplace video drives increased engagement both views and likes and conversion particularly with younger customers who've been the first to adopt video as a form of self-expression in april we started highlighting listing videos in the user feed to help sellers increase the visibility of their listings our sellers are excited about this feature and they're starting to update their listings to include video So far, the most popular categories for videos are dresses, bags, jewelry, makeup, and toys. Though still early, we're excited about this feature and will share more details as we continue to evolve and grow adoption of video commerce. Growing our international footprint is a second key strategic focus, and we plan to invest ahead of revenue. We're excited about the opportunity ahead in Australia and have just begun investing in marketing to grow the user base. Our market research indicates that Australians have $5 billion worth of unused clothes, shoes, and accessories in their wardrobes. Our study found 79% of shoppers bought from online stores in 2020. However, nearly 60% of the items they bought went unworn. In fact, we found that there were at least $500 worth of unused fashion items in the average Australian's wardrobe. And 54% of those surveyed felt guilty throwing those pieces out. Poshmark provides Australians with a simple, social and sustainable way to keep those items circulating. Our top priority in Australia is building the Poshmark community. And one of our first major activations was launching a celebrity charity closet with Serena William in March. It proceeds going to Black Dog Institute to support mental health research and suicide prevention for Australia's First Nations people. While it is still too early to provide much detail, Australia has seen great user buyer and seller growth since our February launch. Our third strategy is to grow through category expansion. We launched Pets in February to address the style needs of the entire family. We have seen Pets attract new sellers and buyers to the platform, demonstrating the scalability of our model. As expected, supply and demand is dominated by dog and cat style items, from clothing to collars and leashes, and the majority of these are non-branded, some of which are even handmade. Though still early, we're excited for the growth potential of the Pets category and our excitement is shared by our community with positive feedback and high volumes of user-generated Pets content. Our fourth strategy is to deliver robust, easy-to-use, and effective seller services to help sellers market and sell their product offerings. Our social marketplace makes it very easy for anyone to sell, and we provide incredible demand generation services to attract shoppers to sellers' listings. In mid-March, we completed the rollout of seller shipping discounts, a new feature which gives sellers the ability to list items with discounted shipping that we began testing in January. Previously, shipping discounts were only available through private negotiations and offers. We now have four shipping tiers, No discount, a first level of discount, a second level of discount and free shipping. All tiers provide expedited priority USPS shipping one to three days. Currently about 7% of listings offer discounted shipping. Adoption rate has been highest for the highest price point items. Since the introduction of seller shipping discounts, we have seen increased engagement as repeat listers and Bosch ambassadors, both of whom have adopted this feature at a higher rate, revisit existing listings to add shipping discounts. In mid-April, we introduced icons in GridView and listing details to indicate items that have discounted or free shipping, which has begun to positively impact conversion and order rates. In April, we introduced two new seller tools, Style Tags and Price Suggester, in the listing process. Style Tags give sellers the option to use three relevant phases to describe the item's design, aesthetic, material, and more, enhancing the ability for buyers to search for relevant products. These include things like handmade, tie-dyed, cotton, boho products, We also launched Price Suggester to help sellers, especially new listers, list items more efficiently by providing a suggested price range for their listings. As these tools have just launched, we'll share more details on our next earnings call. Our community is the heart and soul of Poshmark. Together, we make buying and selling simple, social, and sustainable. We're committed to helping our sellers succeed and have begun accepting applications for our Heart & Hustle Community Fund. Everyday Poshmark sellers turn their passion into profit by creating new brands, sharing their style, and connecting with shoppers. To help them get closer to their goals, whether that's making extra money, scaling their business, supporting the circular economy, or turning a side hustle into something bigger, we want to recognize and empower them. Our new fund is one of the ways we'll do that. In conclusion, we had a strong first quarter and start to 2021, where the Poshmark team once again executed well for the benefit of our entire community. We believe that Poshmark has an incredibly compelling growth potential for years and decades to come. We have high conviction around making the investments that are going to allow us to achieve that full potential. Poshmark will continue to be a place where you can save money, make money, and find human connection. And with that, I'll turn it over to Anand. Thank you, everyone, for joining us.
spk08: Our first quarter was another great quarter as we delivered strong GMB revenue in our fourth consecutive quarter of operating profitability. Our business model is built on the long-term retention of our cohorts, which we demonstrated in 2020 during an extraordinary year due to COVID. During the first quarter of 2021, even when faced with near-term disruptions, our cohorts have remained resilient as growth rates began to normalize in the second half of March as economic conditions and weather improved. Our robust cohorts helped us generate $441 million in GMV in the first quarter of 2021, which was 43% growth from $309 million in the first quarter of 2020. Commensurately, net revenues were $81 million in the first quarter of 2021, which was 42% growth from $57 million in the first quarter of 2020. This was driven by an increase in GMB in the first quarter of 2021 and overall growth of our community, including 18% growth in active buyers to $6.7 million from $5.7 million in the first quarter of 2020. our take rate was 18.4%, which is down slightly from last year's 18.5%, a result of higher than expected delayed or canceled orders, resulting partially from severe weather conditions in February. Cost of revenues was $13 million in the first quarter of 2021, an increase of 31% from the first quarter of 2020, and decreased to 16.1% of revenues due to some leverage in hosting expenses. Therefore, Adjusted gross margin, which is net revenue, less cost of net revenue, improved 1.2% to 83.9% of revenues in the current period as compared to the first quarter of 2020. Marketing expenditure, excluding stock-based compensation, was $32 million in the first quarter of 2021, a decrease of 6% from the first quarter of 2020. marketing was 40 of net revenue in the first quarter of 2021 down significantly from 60 of net revenue in the first quarter of 2020 due to rationalizing our marketing spend to focus on strong roi user acquisition channels we invested in upper funnel strategies such as more targeted tv as well as influencer marketing In March, we launched a unique partnership with tidying master Marie Kondo with two new TV ads to drive more listing activity and build brand visibility. Moving to operating expenses, operations and support, excluding stock-based compensation, was $13 million in the first quarter of 2021, an increase of 15.7% of revenues, up from 14.7% last year. We experienced an increase in credits as a result of shipping delays from the holidays and severe weather conditions during the quarter. During this unprecedented time, we had to increase hiring across the team to support customer needs and maintain our excellence in customer service. Research and development excluding stock-based compensation was $8 million in the first quarter and decreased to 10.1% of revenues from 11.5% last year, mainly due to slower hiring than planned. hiring accelerated throughout the back half of the quarter, so we do not expect the first quarter leverage to persist. In fact, we expect to double down and invest additional resources across a number of key initiatives, including international expansion. G&A, excluding stock-based compensation, was $11 million in the first quarter and increased to $13.3 mainly due to the additional ongoing costs of being a public company, including annual audit costs, which were primarily incurred during the first quarter, as well as greater than expected premiums for D&O insurance that we discussed in our last earnings call. Stock-based compensation was $24.1 million in the first quarter of 2021, an increase from $1.8 million last year. First quarter 2021 stock-based compensation included $22.3 million from restricted stock units, of which $15.6 million was a one-time cumulative expense due to the accelerated vesting of our restricted stock units upon the IPO in January. We delivered adjusted EBITDA, which excludes stock-based compensation of $4 million with adjusted EBITDA margins of 5.2% compared to the loss of $9 million and negative 15.2% margins in the first quarter of 2020. The majority of the profitability improvement was driven by strong revenue growth and our decision to lower our marketing investment as compared to the prior year. As we have discussed before, the remainder of 2021, we will prudently invest in marketing in the future as we did in the first quarter, but with a continued focus on growth and margins. Operating income, excluding stock-based competition, was $3 million in the first quarter of 2021, with operating margins of 4.2%, which is a meaningful change as compared to the loss of $9 million with negative 16.4% margins in the first quarter of 2020. Similar to the improvement in adjusted EBITDA, the increase in income from operations was driven primarily by strong revenue growth and a decrease in marketing expense. Due to the transition from a private company to a public company, we incurred GAAP non-cash other expenses due to the higher share price impact on changes in fair values of our convertible warrants and a loss on extinguishing of our convertible notes. Thus, we believe that excluding all non-cash one-time capital structure expenses resulting from our IPO in January from our net income is a better indicator of our operating performance. First quarter 2021 non-GAAP net loss to common stockholders was $21 million. That excludes non-cash expenses of $54 million. This was due to the loss on conversion of our convertible notes into common stock upon the completion of the IPO and change in fair value of preferred stock warrants. The $50 million convertible notes were converted into 1.4 million shares at a price of $35.70. a 15% discount to our IPO price of $42. However, due to the timing of the settlement of shares, which occurred at the closing of the IPO, three business days after pricing, we had to record a non-cash accounting loss of $51 million, of which $49.5 million was due to the increase in the fair market value of the stock to $74.90, the closing price on January 19th. as well as the loss on extinguishment of the debt of $1.6 million. In addition, we had a $3 million loss due to the change in fair value of convertible preferred stock warrants, also due to the increase in the fair market value of our common stock share price. Excluding the combined impact of these non-cash expenses, non-GAAP loss per share to common stockholders was $0.33. Beginning in the second quarter, we no longer have these non-cash capital structure expenses as all of our convertible securities were converted into common stock at the closing of our IPO in January. Cash equivalents and marketable securities were $575 million as of March 31, 2021. During the first quarter of 2021, we completed our IPO, raising $297 million net of underwriting discounts and commissions. In addition, all 52 million shares of our convertible preferred stock were converted into Class B common shares at the IPO. As we look ahead and think about capital allocation and use of cash, our number one priority is using our strong balance sheet to position us to invest in growth and strategic investments to drive long-term growth internationally. Moving to the cash flow statement for the three months ended March 31, 2021, Free cash flow was $19 million compared to $1 million for the first three months ended in 2020. Our strong cash flow generation significantly strengthened our balance sheet and liquidity. Looking ahead, we think that customers' inherent desire to socialize and resume normal activities combined with their interest in retail should drive demand for apparel going forward, which should benefit our marketplace. We expect second quarter revenues of $79 to $81 million. resulting in a growth rate of 18% to 21%, taking into consideration difficult comparisons against 41% year-over-year growth last year. Our revenue guidance reflects 59% to 61% growth on a two-year stacked basis, an acceleration from the two-year stacked growth of 50% in the first quarter. We expect our second quarter take rate to be similar to the first quarter due to slightly higher cancellation rates. We expect to remain profitable with the second quarter EBITDA of $1.5 million to $2.5 million as we continue to focus on balancing growth and profitability when investing in marketing. Adjusted gross margin performance during the first quarter of 2021 was ahead of our initial expectations, benefiting from lower transaction processing costs and leveraging of hosting costs. The remainder of 2021, we expect adjusted gross margin to be similar to 2020 levels due to normalization of hosting expenses. We expect operations and support in the second quarter to be a little higher as percentage of revenue than the first quarter due to the higher cost of managing shipping and logistics. We expect R&D expenses in the second quarter to increase as percentage of revenues from the first quarter as we increase the pace of hiring to support our continued product innovation and international expansion. We expect G&A expenses as percentage of revenue for the remainder of the year to be similar to the first quarter due to public company expenses. We will remain disciplined with our ROI-based approach and expect marketing at the percentage of revenues in the low 40s in 2021 to grow users and support the launch of geographic expansion and categories. We believe there is still a large opportunity before us, and so we plan to invest in building the brand, grow our user community, and international and category expansion. We continue to see very strong GMB retention due to our social model, which drives engagement and repeat transactions. These cohorts have been both resilient and have high residual value after the initial year of acquisition. Thus, we're confident that the growing engagement of our user cohorts will enable us to deliver consistent growth over the long term. Overall, we believe we have executed very well during a challenging environment with a focus on the safety for our employees, supporting our community, and driving efficiency in our operations. Thank you, and I will now turn the call over to the operator so we can take your questions.
spk06: Thank you. As a reminder, to ask a question, you will need to press star one in your telephone. To withdraw your question, press the pound key. And your first question comes from the line of Ross Sandler from Barclays. Your line is open.
spk01: Hey, one for Manish, one for Anand. Manish, the first one is a question about retention and frequency right now for these most recent cohorts compared to what you were seeing last year during COVID-19. The 2Q guide is kind of flat as Q&Q. I know there was some stimulus benefit in March, and then you had the Texas and New York issues that you flagged last quarter. So just how do we think about, if we strip all that noise out, the underlying kind of sequential cadence and how retention is trending? And then on Australia, I know it's early, but just any color on how we should think about the cadence of that region ramping up compared to maybe how Canada ramped up in the early quarters, like any reasons why that would be a little faster or a little slower. That's it, guys. Thanks a lot.
spk04: Sure. So in terms of the overall retention of our cohorts, it's actually pretty stable and continues to be very stable when you measure it across the quarter, even though there were some variations within the quarter. And we see very, very stable retention across all of our cohorts, as well as growth on all of the cohorts. So I think the predictability and sort of the convergence, as we pointed out in the call, is back. So we expect to see pretty healthy sort of movement of the cohorts as we go into Q2 and beyond. And certainly remain optimistic as the economy opens up. It could provide a positive sort of uplift as people go out and engage with fashion and engage with sort of the outdoor activities. Australia is early shaping up well. despite sort of having to launch the country in a very remote way from here, and we haven't seen the team or the community in the early days, it's shaping up sort of in the normal healthy development of the buyer-sellers and the users.
spk08: Yeah, and just one additional point I want to make, Ross, is that, you know, we typically don't see outsized quarter-to-quarter growth from Q1 to Q2. So when we talk about the, you know, guiding towards the $79 to $81 million, it's a 59% to 62% growth on a two-year stack basis. which is an acceleration of 50% from the first quarter. So, you know, and we're still obviously extremely optimistic about how the quarter is going to go, but it's also important to remember we're remaining profitable throughout all this as well. So that dynamic is obviously great for us long-term.
spk06: Your next question comes from the line of Lauren Schenck from Morgan Stanley. Your line is open.
spk05: Hi, this is Nathan Feather. I'm from Lauren. Just two quick ones from me. Can you talk about how average order value trend in the quarter given some of the early success of seller shipping discounts, particularly on higher value items? And then also, you noted hiring came in a bit below your expectations in R&D. Can you just talk to you why that was? And I know you mentioned hiring was accelerating. Has that caught back up to your point? Thank you.
spk08: Yeah, so on average order value, we actually see it basically remain relatively stable throughout the last few months. You know, the seller shipping, I think, has been a positive impact for conversion in general. And how we think about it is, you know, sellers ultimately dictate their pricing both on the item as well as the shipping. And so we think this is just another tool for them over the long term. You know, as far as R&D hiring, Two things I think are sort of interesting. We actually started the quarter with very sort of positive momentum, but when it came down to actually the timing of when people were hired, it ended up being more back-end loaded towards the end of the quarter. And so we started cashing up towards the end, and as you can imagine, just the dynamics of the ramp from the beginning to the end of the quarter was what caused the numbers to be a little bit lower. But for us, you know, R&D is a very critical investment, especially in terms of product innovation. So as you can see from the pace of features that we're launching, it's a major area of investment for us and will be something that will continue for the remainder of the year.
spk06: Your next question comes from the line of Ralph Shackert from William Blair. Your line is open.
spk07: Good afternoon. Thanks for taking the question. On the strong trend that you saw in GMB, and you talked about kind of reacceleration in Q2 onto your stack basis, just curious how much of that was just underpinning strength in the business. I know there's some stimulus in there and maybe some tough compares or some comparability issues with COVID starting last year, but just love your overall thoughts on that. That's the first question. you know if i could add on as you think about you know your non apparel verticals such as beauty home and pet manisha i think you talked about pet uh bringing buyers the platform but we just love your thoughts in terms of uh you know are these new categories also adding to uh gmd at this point thanks so much yeah just maybe we'll talk about the um
spk08: the overarching dynamics of stimulus last year and this year. As you can imagine, last year, the first quarter was weak for us right around when COVID hit, around the end of February to the beginning of March. And if you look at the second quarter, we actually had a great quarter of reacceleration of the business to 40% growth. And so that was part of the reason why the comp is actually a little bit harder for us this year. As far as stimulus and how we think about it, Look, it's a positive uplift for consumers, the economy, and numerous businesses. We think it's really a true testament to the strength of our cohorts, which overcame some mid-quarter challenges due to weather and COVID and remained resilient. And we actually saw the states actually begin to normalize and converge once again in the second half of March. Now, it's impossible to separate the exact impact of stimulus. The timing also coincided with arrival of spring and optimism about reopenings. The second is also we introduced a number of great seller tools in March, the video listing, seller discounted shipping, which have also positively impacted business. So we think that innovation is one of the key drivers of growth, is why we continue to invest there. So we think long-term, the consumer's desire to socialize and resume normal activities to drive demand for apparel going forward, which should benefit the marketplace. And I'll let Manish talk about.
spk04: Sure, yeah. I think all of the categories are already starting to drive GMV growth as well as listing scope. The expansion in categories both in direct apparel and beyond apparel for us brings in growth from two different perspectives. One is it activates new buyers and sellers on the platform. And second is it gives existing buyers and sellers new ways to sell and shop on the platform. So it sort of drives in on both dimensions and we've seen positive impacts of these categories on both of those funds in terms of driving growth and ultimately GMV per buyer.
spk07: Great. Thanks, Manish. Thanks, Adam.
spk06: Your next question comes from the line of Aaron Kessler from Raymond James. Your line is open.
spk03: Great. Thanks, guys. One, can you talk about maybe from the advertising side, any expected impact from IDFA? Another retailer mentioned that recently. And second, just maybe are you seeing kind of increased interest from brands or vendors as well? Thank you.
spk04: Sure. So IDFA is, of course, going to have a shift in spend and channel mix for the short term. Over the long term, you know, it's a little bit unknown how it sort of shifts the overall mix. For us, because we have focused on a very diverse set of marketing channels, it allows us to rebalance the spend and continue to focus on growth despite the short-term shift in the advertising landscape overall. Again, if you would like to ask. Can you repeat the second question again?
spk06: If you can please press star 1 again to re-cue up. And he has not re-cued. I'm sorry, he just re-cued up now. Your line is open.
spk03: Great. Thank you. Sorry, the second question was just on brands and kind of vendors. Are you seeing kind of increased interest from them as well or just any update there? Thank you.
spk04: Absolutely. So, yeah, we continue to experiment pretty aggressively with brands. We believe that the size and scale of our community, the interest from brand on both resale and social commerce makes a partnership with brand inevitable for Poshmark. And we continue to do pretty aggressive experimentation there. Nothing specific to announce right now, but a lot of good work going on there.
spk03: Great. Thank you.
spk06: And again, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes to the line of Oliver Chen from Cowan. Your line is open.
spk08: Hi, thank you. As we look ahead to the active buyer growth, should we expect it to be in the high teens or may it accelerate as some of the growth comparisons ease? And as you think about the marketing spend for the balance of the year, how are you thinking about the composition
spk02: as you referred to upper funnel and also the global opportunities that you're addressing as well.
spk08: Yeah, so I'll start with the kind of upper funnel dynamics and sort of marketing in general for the year. The main thing I would say is, you know, as Manish mentioned, one of the important strategies for us is to actually be very diversified, both from an upper funnel as well as kind of purely transactional basis. And what we found is that by allowing that flexibility, we can shift depending on what we see with IDFA or any other sort of disruption in the marketing ecosystem. So how we think about it is we've got a tremendous ROI-based approach which is focused on a payback of about two years. And that continues to be our modus operandi. And the only time that that shifts, as you think about kind of international expansion opportunities around Canada, and we've launched Australia, obviously, where those payback periods are usually extended as we are essentially investing in those markets. Hopefully that answers your question. Yeah, it's very helpful. And active buyers, what are your thoughts on how that may proceed through the year? Yes. I think we haven't really guided towards active buyers in our commentary. I think, you know, we would normally expect that to be relatively in line with, you know, overall growth of the business. You know, there may be some differentiations when it comes to certain markets, but, you know, today that dynamic is very consistent as compared to overarching GMB and revenue growth.
spk02: Thank you.
spk08: And lastly, a bigger picture, as the competition does get more competitive in resale, why would a customer choose to list on Poshmark versus others? And could you speak to the defensibility of your take rate? Thank you.
spk04: Sure. First of all, I think as the market for resale is growing, we're sort of seeing resale getting adopted in every single dimension, whether brands are adopting it, marketplaces are adopting it, which is exciting. So we think of resale as a massive expanding opportunity, which paves the way for our own sort of scaling and expansion. And for us, from day one, we have been the simplest retailer. and the most social and the most engaging way for people to buy and sell uh fashion and fashion related style related products and that continues to be our core focus our take rate has also been consistent since we started the company we've partnered with our sellers since day one haven't taken it up and haven't taken it down it's been a very consistent partnership and we continue to maintain that partnership as we build out the product What we have done is, in that same partnership, added tremendous level of services for our seller and buyers over that time, whether it is adding things like PoshPost, PoshAuthenticate, or adding listing videos, seller discounts, power seller tools, et cetera. So we continue to serve our core community of buyers and sellers on all different dimensions bringing the best engaging online experience the best social experience and that we believe is ultimately the key to our growth a long-term growth but also key to a successful partnership with our seller community thank you very helpful best regards thank you and your next question comes from a line of ron josie from jmp securities your line is open
spk02: Great. Thanks for taking the question. I had two. You talked about seller shipping discounts now live and the four shipping tiers. Can you give us some updates or talk to us about just conversion rates you're seeing across these four tiers, the use cases that a seller might use when they offer discounts from zero to call it fully discounted, and what that means to conversion rates? And I asked this in reference to, I guess, the question just asked now from Oliver around sales. just the seller tools and newer services that you're offering. So asking about conversion rates on shipping. And then lastly, another question on just category expansion. It's a key focus for Posh, and great to hear Pets is bringing new users and sellers to the platform. Please talk a little bit more about what we might look forward to for categories this year and next. Thank you.
spk04: So seller shipping discounts, when you think of the different layers and tiers we offer, it's really a tool for sellers to decide how they want to price their product. Do they want to build more of the margin in the core price and then offer shipping discount or sort of use those two knobs continuously? And sellers are still paying with it. We're seeing increased adoption. but I feel that there is significant potential for much more adoption in the marketplace. And typically you'll see, you know, free shipping being added to place where the pricing can sustain a free shipping margin and then lower shipping discounts available for a couple of different tiers. A lot of sellers are starting to experiment with at least the basic tier of discounting to offer a value to their shoppers as shoppers are used to different kinds of shipping out there. So we see that happening. Really the place where shipping discounts ultimately have a positive impact for the sellers is the speed with which they clear that item. So it cuts down sort of their sell-through rate and the speed of timing. And that's been very positive to measure there. We'll continue to build more and more seller tools to both help them promote and market that. So for example, one of the things we recently launched is the ability for shoppers to filters by different seller discounts over time. The second question that you asked about categories, if you think about focus for categories, it has been categories that are really pertinent to your style and your taste and categories that particularly foster discovery more than just sort of straight search. So you start to see us expanding from our original focus was women, then we expanded to men's, kids, home, beauty, and most recently pets. So you should see it just in categories that express an individual style and ultimately lead to more discovery-oriented architecture. And that's sort of going to be our core mantra in terms of helping build out a full category portfolio on Poshmark.
spk02: Great, thank you.
spk06: And there are no further questions at this time. Mr. Mini, Chandra, I turn the call back over to you for some closing remarks.
spk04: Thank you everyone for joining our call and for your questions. We look forward to speaking to you again next quarter. Thank you.
spk06: This concludes today's conference call. Thank you for participating. You may now disconnect.
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