The RealReal, Inc.

Good day and thank you for standing by. Welcome to the RealReal fourth quarter and full year 2021 earnings conference 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. Please be advised that today's conference is being recorded. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star and zero. I would now like to hand the conference over to your speaker today, Caitlin Howe, Head of Investor Relations. Please go ahead.

Thank you, Operator. Joining me today to discuss our results for the period ended December 31st, 2021, our founder and CEO, Julie Wainwright, President, Rati Levesque, and Chief Financial Officer, Robert Julian. Before we begin, I would like to remind you that during today's call, we will make forward-looking statements which involve known and unknown risks and uncertainties. Our actual results may differ materially from those suggested in such statements. You can find more information about these risks, uncertainties, and other factors that could affect our operating results in the company's most recent Form 10-K and subsequent quarterly reports on Form 10-Q. Today's presentation will also include certain non-GAAP financial measures, both historical and forward-looking, for which historical financial measures we have provided reconciliation to the most comparable GAAP measures in our earnings press release. In addition to the earnings press release, we issued a stockholder letter earlier today, both of which are available on our investor relations website. I would now like to turn the call over to Julie Wainwright, Chief Executive Officer of The RealReal, for introductory remarks. And then we will go directly into a question and answer session.

Julie? Thank you, Caitlin. And thank you to everyone for joining our earnings call today. We're pleased to announce solid financial results for the fourth quarter and full year 2021 with continued top line growth as well as significant operating expense leverage. We are encouraged by our ability to continue to grow the business at a high rate while also effectively managing operating costs. Throughout 2021, we continue to expand our use of proprietary technology in our operations. Specifically in our authentication centers, we drove operational efficiency to innovative technologies, including our proprietary diamond measurement equipment and machine learning and AI algorithms. Additionally, we continue to drive an increase in our average selling prices through refining our pricing algorithms. Through the expanded use of technology in our operations, we are improving unit economics, enabling scaling of our business, and driving higher ASP. As the impact of COVID recedes, our business is becoming more predictable again. Therefore, today we return to providing forward-looking guidance for Q1 and full year 2022. Importantly, we are now in a position to report our expected timeline for attaining profitability. We project that the RealReal will be profitable on a full-year adjusted EBITDA basis in 2024. This conclusion relies on three main assumptions. Continued annual top-line growth of at least 30%, operational excellence with improved variable cost productivity, and number three, controlling our fixed costs and leveraging our prior investments in technology and stores. At our Investor Day in March, we look forward to providing more details regarding our path to profitability and our long-term financial targets that we refer to as Vision 2025. We have never been more excited about the long-term prospects of our business. The recent growth and heightened interest in luxury resale indicate increased consumer demand and momentum in the space. We believe that RealReal is uniquely positioned to capitalize on these trends And with that, we'll now open it up for our Q&A session. Operator, we're ready for questions.