Revolve Group, Inc.

Ladies and gentlemen, good afternoon. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the Revolve Group first quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. And I would now like to turn the conference over to Eric Randerson, Senior Vice President of Investor Relations. You may begin.

Good afternoon, everyone, and thanks for joining us to discuss Revolve's first quarter of 2026 results. Before we begin, I'd like to mention that we have posted a presentation containing Q1 2026 financial highlights to our Investor Relations website located at investors.revolve.com. I would also like to remind you that this conference call will include forward-looking statements, including statements related to our future growth, our inventory balance, our key priorities and business initiatives, industry trends, our marketing events and their expected impact, our physical retail stores, our own brand expansion, our use of AI, our partnerships, and our outlook for net sales, gross margin, operating expenses, and effective tax rates. These statements are subject to various risks, uncertainties, and assumptions that could cause our action results to differ materially from these statements, including the risks mentioned in this afternoon's press release, as well as other risks and uncertainties disclosed under the caption, Risk Factors and Elsewhere, in our filings with the Securities Exchange Commission, including without limitation our annual report on Form 10-K for the year ended December 31, 2025, and our subsequent quarterly reports on Form 10-Q, all of which can be found on our website at investors.revolve.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we'll also reference certain non-GAAP financial information, including adjusted EBITDA and free cash flow. We use non-GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information presented and prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures as well as the definitions of each measure, their limitations, and our rationale for using them can be found in this afternoon's press release and in our SEC filings. Joining me on the call today are our co-founders and co-CEOs, Mike Karanikoulis and Michael Mente, as well as Jesse Timmermans, our CFO. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn it over to Mike.

Hello, everyone, and thanks for joining us today. Outstanding execution by our team within a dynamic operating environment led to strong first quarter results and continued market share gains, highlighted by our net sales increasing 16% year-over-year, our highest growth rate in nearly four years. This growth acceleration, particularly in the current environment, is evidence that our investments in brand, technology, and AI, site experience, and category diversification are paying off. In addition to our strong top line growth, diluted earnings per share increased 25% year over year, despite a several million dollar increase in marketing investments year over year to support our growth initiatives, including the launch of Revolve Los Angeles, our first ever namesake label that we are incredibly excited about. And we generated $49 million in operating cash flow, significantly strengthening our pristine balance sheet with cash and cash equivalents increasing to $336 million at quarter end. Our core underlying business metrics illustrate our increased engagement and deepening connection with next-generation consumers. Year-over-year growth in active customers accelerated in Q1, and we are generating increased revenue per active customer, fueled by our success in capturing a greater share of the consumer's wallet and a lower product return rate year-over-year. Beyond the numbers, I am most excited about our visible progress in longer-term initiatives, such as international expansion and advancing our use of AI technology that have become key contributors to our momentum and reinforce my confidence that we will continue to drive profitable growth in the future. Continuing with our longer term initiatives, Michael will talk about the exciting new chapter for our own brands assortment with Revolve Los Angeles, as well as an important new milestone in our physical retail expansion. We view each of these initiatives as potential game changers for our business over the long term. Our ability to invest in and execute on many exciting initiatives simultaneously underscores that our strong cash flow and balance sheet are key competitive advantages, particularly at a time when many industry peers with weaker financials are stuck playing defense. With that as an introduction, I will step back and provide a brief recap of our Q1 results before reviewing the progress on our longer term initiatives. Net sales for the quarter were $343 million, an increase of 16% year over year, a more than five-point sequential improvement from our 10% year-over-year growth rate in the fourth quarter of 2025. Gains were broad-based as year-over-year growth rates improved across Revolve, Forward, Domestic, and International compared to the year-over-year growth rates in the fourth quarter, with double-digit growth across the board. Also notable is that our dresses category net sales accelerated by 13 points compared to the fourth quarter of 2025 performance, and we delivered even stronger growth in fashion apparel, validating the momentum behind our category diversification strategy. The strong start to the year puts us on a good path to achieving our goal of double-digit revenue growth in 2026. By segment, revolve net sales increased 15% and forward net sales increased 17% year-over-year. These were our highest growth rates since 2022. By territory, domestic net sales increased 15% and international net sales grew 20% year-over-year in the first quarter. We achieved these outstanding international results despite a meaningful slowdown in the Middle East that has continued into the second quarter amidst significant geopolitical uncertainty. Shifting to our bottom line results, net income was $14 million and diluted earnings per share was 20 cents, an increase of 25% year-over-year. Adjusted EBITDA was $21 million, an increase of 9% year-over-year. all while investing in a number of meaningful growth initiatives, including investments to position the new Revolve Los Angeles assortment for long-term success. Most exciting is that our profitable growth once again converted very strongly to cash flow. Our business generated a $33 million increase in cash and cash equivalents in the first quarter alone, even while investing $11 million in January for a synergistic minority investment. Now, I'll conclude by recapping our progress against our longer-term strategic priorities and growth vectors. We have many exciting initiatives underway and the team has done a great job executing to position us to deliver meaningful value for shareholders over the long term. First, we continue to efficiently invest to expand our brand awareness, grow our customer base, and strengthen our connection with the next generation consumer. I could not be more excited about our recent brand team that Michael will talk about in his remarks, ranging from the impactful and well-received launch of Revolve Los Angeles to an incredible and efficient Revolve Festival held last month attended by countless A-listers. The recent launch of Grow Good Beauty, developed in partnership with Cardi B, also serves as a powerful demonstration of our brand building capabilities, one that exceeded our highest expectations, amassing several billion impressions and 640,000 Instagram followers within days of the official launch. Second, we continue to successfully expand our international penetration, highlighted by 20% growth outside of the US in the first quarter. It was the 13th straight quarter that international growth has outpaced the US, and we are still very early in our journey. I'm particularly excited about a strong growth resurgence in Mexico, following our launch of elevated service levels and an impactful new marketing playbook in recent months. In fact, new customers in Mexico increased more than 80% year-over-year in the first quarter, contributing to our improved growth in active customers. Third, our first quarter results provide further confirmation that our investments to capture market share in the luxury segment are paying off. Ford net sales grew 17% year-over-year, our highest growth rate in four years, and Ford gross profit increased 36% year-over-year. Notably, at a time when the world's largest multi brand luxury retailer is closing most of its store locations, we are rapidly expanding our customer base, attracting coveted new brand partners, and having particular success in generating increased sales from high value customers. Finally, we continue to leverage AI to drive growth and efficiency across the company, including to further elevate the shopping experience and drive higher conversion. I am pleased to report that we have successfully tested and recently launched into production our internally developed generative AI feature discussed last quarter that surfaces contextually relevant questions and answers about our products. This new feature is now live on our Revolve mobile channel for our vast assortment of dresses and delivering meaningful gains. The conversion lift was so compelling that our team is already hard at work to expand our A-B testing to include additional channels and product categories consistent with our efforts to continuously raise the bar on the customer experience. Also notable, we use generative AI to significantly assist in the creation of marketing collateral for the incredibly successful launch of Grow Good Beauty that Michael will talk about in his remarks. It's another great example of how we are able to leverage our data-driven culture and AI technology innovations to drive revenue and efficiency throughout the company. To wrap up, I'd like to thank our passionate and innovative Revolve colleagues for their incredible efforts in driving strong results in the first quarter, while also advancing our exciting longer-term initiatives that further strengthen our foundation for future profitable growth. It is gratifying to see our team so energized by these growth opportunities, such as physical retail, international, and AI expansion, which we believe give us the opportunity to accelerate our market share gains. The current momentum in the business and the great progress on our initiatives reinforces my confidence and our ability to drive profitable growth in 2026 and beyond. Now, over to Michael.