Casper Sleep Inc.

Today's call is being recorded. I would like to turn the conference over to Norberto Aja, investor relations for Casper. Mr. Aja, you may begin.

Thank you, operator, and good morning, everyone. Thanks for joining the Casper State 2021 first quarter conference call. We'll get started in just a minute with management's comments and your questions. But before doing so, let me take a minute to read the safe hardware language. This call taking place on May 13th, 2021 will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding management's plans, strategies, goals, and objectives, anticipated financial performance, and the expected impact of COVID-19 on our business. These statements are neither promises nor guarantees, but involve known and unknown risk, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the form of the statements. Factors discussed in our annual report on Form 10-K for the year ended December 31, 2020, and other filings with the Securities and Exchange Commission, could cause actual results to differ materially from those indicated by the four looking statements made on this call today. Any such four looking statements represent management estimates as of the date of this call. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so even if subsequent events cause reviews to change. In addition, we may also reference certain non-GAAP metrics, which are reconciled to the nearest GAAP metric in the company's earnings release, which can be found on our investor relations website at ir.casper.com. With me on the call today is Philip Prim, co-founder and chief executive officer of Casper, Emily Arell, President and Chief Commercial Officer, and Mike Monahan, our Chief Financial Officer. Following their prepared remarks, we will open the call for your questions. With that, I would now like to turn the call over to Philip Crimp, CASPER's Chief Executive Officer. Philip, please go ahead.

Thank you, Roberto, and good morning, everyone. Welcome to CASPER's first quarter conference call. Casper's first quarter financial performance exceeded our expectations, marking an exceptionally strong start to the year. The team has been executing well and the results reflect that. Our first quarter results demonstrate our ability to drive strong, strong top line growth, deliver robust margins, bring additional innovative products to market, drive additional leverage in our marketing spend, grow our retail partnership business, and improve foot traffic across Casper stores. Together, this paves a clear path to accelerating revenue in the coming quarters, as well as achieving adjusted EBITDA profitability in the second half of 2021. Our plan is working well, and we continue to prove our ability to execute on that plan successfully. During the first quarter, we saw industry-wide shortages and raw materials needed to produce mattresses. Despite this, our inventory management strategies and third-party manufacturing model enabled us to effectively navigate these supply chain challenges. We reallocated production and worked with our partners to remain largely in stock. As these shortages subside, we expect to capture more of the increased demand we are seeing in the market. North America revenue increased 20% year over year to a first quarter record, including 54% growth in retail partnership revenue. Our gross margin of 52.2% expanded 540 basis points year over year, resulting in improved bottom line performance that surpassed the high end of our guidance range for the quarter. Our first quarter results reflect strong momentum across product categories and sales channels. Our growth continues to meaningfully outperform the broader mattress industry, and we continue to gain real market share. With the strong demand signals we are seeing across our business, we expect top-line growth to accelerate in the coming quarters, reinforcing our expectation that Casper will reach adjusted EBITDA profitability in the second half of 2021. As a result, we are raising our full-year 2021 financial outlook to reflect these favorable trends. Mike will take you through those numbers in a moment. Before that, though, I would like to briefly touch on the progress we are making across our three core strategic priorities, which we previously outlined as one, expanding our product offerings, two, increasing our brand awareness, and three, growing our points of distribution. With the sleep economy's total addressable market estimated to be nearly $80 billion in the US alone, we see tremendous runway across each of these strategies, which is why I continue to believe that Casper is still in the early days of building a very large company and brand. Starting with our product offerings, innovation, quality design, and customer service continue to be consistent hallmarks and true differentiators of our products and services. All of our products are developed by our Casper Labs team, of researchers designers and engineers in addition to our lineup of award-winning mattresses we continue to broaden our product offerings across the sleep arc and diversify our revenue streams with the successful introduction of products such as pillows sheets weighted blankets and other accessories In late April, we unveiled the Casper Cooling Collection, a new premium line of innovative cooling mattresses and sleep products with the brand's most technologically advanced temperature solutions for nighttime overheating, one of the leading concerns among consumers shopping for a mattress. The Cooling Collection features our proprietary snow technology, the result of 18 months of rigorous research, testing, and strategic design that we are confident will help people achieve a more comfortable and restful sleep. We initially launched the new lineup exclusively through our DTC channel, and while early, the results are encouraging. For example, in just the first week of our launch, nearly one-third of all of our Wave mattress customers upgraded to the Snow technology, and our line of Hyperlite sheets were the number one seller for us in that category. To further leverage our success, we plan to begin offering our Nova Snow and Wave Snow mattresses through our retail partnership channel later this quarter. As we've talked about in the past, expanding our mattress offerings to include an assortment of premium products at premium price points is a strategic step in driving higher average order values across our sales channels and further elevating the visibility and appeal of Casper's brand, particularly in our trial doors. The initial response to the launch has been overwhelmingly positive, and we look forward to updating you on the success of our new cooling product line in the coming quarters. Moving on to brand awareness. In conjunction with the Cooling Collection launch, we introduced our new Love Your Tomorrow brand platform. The new campaign utilizes humor and unique product storytelling to drive awareness of our brand and our new suite of cooling mattresses and sleep accessories. We developed an integrated marketing strategy around the campaign with focused placements across multiple media channels to maximize consumer reach and engagement. The launch of the Love Your Tomorrow platform was even featured prominently on the Today Show, a claim few brands can make and another example of how Casper is becoming a truly leading consumer brand, even outside of the sleep economy. Finally, we have made significant progress in growing our multi-channel distribution network through the new retail partnerships. We are very focused on expanding our trial presence. bringing more trial opportunities to consumers is a key factor in our ability to capture more market share and to drive customer conversion within the mattress segment, in particular for high end premium price products. In 2021, you'll see us continue to focus on bringing more partners online with an emphasis on trial opportunities where consumers can experience and compare our products. Emily will provide you some additional color in a moment, but we expect to have more exciting announcements on this front in the coming months. Looking ahead, we expect 2021 to be a pivotal year in Casper's growth story. While much of the world has changed in the past year, so much of what makes Casper exceptional has remained the same. We leverage cutting edge technology, data, and consumer insights to develop best in class products and experiences that improve the way people sleep. To deliver on that, we have assembled a world class team at Casper. including an extremely talented and experienced group of senior executives who are working together with the shared goal of developing best-in-class sleep solutions for our customers while creating value for our shareholders. In closing, Casper recently celebrated its seventh anniversary, and I could not be more pleased with and proud of what we have achieved to date. And I am excited about our future and the many growth opportunities in front of us. We're in the early stages of capturing market share, and we are working harder than ever to reinforce and grow our leadership position in the sleep category by capitalizing on our R&D capabilities and strong brand recognition, broadening product lines, and growing our distribution footprint. As we build on our recent progress to best position capture for the future, we are confident in our ability to achieve our growth and profitability goals while creating significant shareholder value. I will now turn the call over to Emily. Emily?