Rover Group, Inc.

Good day and thank you for standing by. Welcome to the Rover First Quarter 2023 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Walter Reddy of Investor Relations. You may begin.

Good afternoon. Thank you for joining us to discuss Rover's first quarter 2023 earnings results. In this call, we will be discussing the results announced in our press release issued today after the market closed, which is available on our investor relations website at investors.rover.com. As a reminder, this call is being webcast live from our investor relations website, and it's being recorded and will be available for replay from our investor relations website shortly after the call. With me on the call this afternoon is Aaron Easterly, Chief Executive Officer and co-founder, Brent Turner, President and Chief Operating Officer, and Charlie Wickers, Chief Financial Officer, Rover. Before we begin, I'd like to remind everyone that management may make certain forward-looking statements within the safe harbor provisions of the Securities Litigation Reform Act of 1995 on this call, including future GAAP and non-GAAP financial and operating results and targets, business metric performance in 2023 financial guidance, marketing and other strategies, anticipated future growth, prospects, margins, profitability, and liquidity, expected investments and initiatives, macroeconomic public health and travel factors and trends, partnership and expansion opportunities, U.S. and non-U.S. market growth expectations and opportunities, and other future events, industry, and market conditions. Forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results or performance to differ materially from those expressed or implied during the call, including the risks and uncertainties included under risk factors and elsewhere in our Form 10-K filed on March 9th, 2023, and in our upcoming first quarter 2023 Form 10-Q. All forward-looking statements speak only as of today, and are based on current expectations, estimates, forecasts, and projections, and the beliefs and assumptions of management. We undertake no duty to update this information unless required by law. You should not place undue reliance on forward-looking statements as they are not guarantees of future performance. We will also discuss certain non-GAAP financial measures. The most directly comparable GAAP financial measures and historical reconciliations to the most directly comparable GAAP measure can be found in the Non-Gap Reconciliation Supplement posted under News and Events Presentations at investors.rover.com. For the reasons discussed in the Non-Gap Reconciliation Supplement, we have not provided the most directly comparable forward-looking gap measure or a reconciliation of any forward-looking non-gap measures. Non-gap financial measures should not be considered as a substitute for or superior to gap financial measures. Unless otherwise noted, we will compare all Q1 2023 metrics to Q1 2022 in this call. With that, let's get started. I'll now turn the call over to Aaron Easterly, co-founder and CEO. Aaron?

Thanks, Walter, and thank you everyone for joining us today. I will start by outlining our high-level first quarter 2023 earnings results and give a few highlights before turning over the call to Brent to provide additional details on our bookings and investments. Charlie will then wrap the prepared remarks by walking through the financials and our detailed guidance before we take questions. We had an outstanding first quarter, surpassing our expectations. As a result, we are increasing our revenue and adjusted EBITDA guidance for the year. First quarter growth booking value was $209 million, while revenue was $41 million. And adjusted EBITDA was $575,000, or 1% margin. our first ever Q1 with positive adjusted EBITDA. Beyond these top-level results, the quarter was highlighted by the following. First, we had significant flow through incremental revenue to adjusted EBITDA. We officially invested in marketing while remaining focused on managing expenses. This positive adjusted EBITDA margin of 1% is an improvement from the negative 17% margin a year ago. Second, we saw solid new customer bookings of 208,000. a 16% increase year over year. We are pleased with our growth in new customers and believe that our business has continued to scale at a rate that outpaces the natural growth of the category. Third, our customer cohort performance increased. Expected revenue from customers acquired during the quarter outpacing last year's record, driven by higher ABVs and additional bookings per customer. We believe these improvements are partially attributable for ongoing efforts to improve our value proposition and customer experience. Additionally, while the new customers have continued at their record pace, we've also seen that the pre-COVID customers have now recovered to the incremental net revenue trends we would have expected had there been no pandemic. Fourth, we've had sustained strong growth in our non-US markets. Q1 GBV was up 68% year over year. Importantly, the same improvements to our unit economics that led to U.S. market share gains are starting to play out in Europe. We believe this allows us to be even more aggressive in driving growth going forward. And finally, as part of a suite of initiatives intended to drive cost-effective awareness and deepen our day-to-day relationship with pet parents, we launched Rover Gear, a collection of leashes and harnesses. They're designed to meet the needs of pet parents and care providers. incorporating feedback from our customers in addition to our unique expertise. We are proud of the team's accomplishments this quarter, and there is a lot of opportunity that remains. We have helped over 4 million pet parents book loving and trusted care, including nearly a million new pet parents in the past 12 months. With approximately 87 million pet-owning households in the U.S. alone, we have a significant opportunity to further our mission of making it possible for everyone to experience the unconditional love of a pet. Our Q1 performance was strong, and we see an exciting opportunity for further progress towards our long-term operating objectives. With that, I'll turn the call over to Brent to discuss our bookings and operational performance.