SharkNinja, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Shark Ninja fourth quarter 2024 earnings conference call. At this time, all participants have been placed in a listen-only mode. The lines will be open for your questions following the presentation. Please note that this conference is being recorded. I would now like to hand the call over to Arvind Bhatia, Senior Vice President of Investor Relations, to begin the presentation. Thank you. You may begin.

Good morning, and welcome to Shock Ranger's fourth quarter 2023 earnings conference call. Joining me on today's call are Mark Heropis, Shock Ranger's chief executive officer, and Larry Flynn, interim chief financial officer and chief accounting officer. Mark will begin by providing a business update, and Larry will then review our financial results and discuss our 2024 outlook. After that, we will open the call for your questions. By now, everyone should have access to the earnings release for our fourth quarter end of December 31, 2023, issued this morning. The press release is accessible on the company's website at ir.sharkninja.com. Shortly after the conclusion of today's call, a webcast will be archived and available for replay. Before we begin, let me remind everyone that today's discussion contains forward-looking statements based on the environment as you currently see it, and as such, does include risks and uncertainty. If you perform a shortening to the earnings relief, as well as the company's most recent S&P filings, you will see a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements. Please remember the company undertakes no obligation to update or revise these forward-making statements in the future. During the call, we will make a number of references to non-GAAP financial measures. We believe these measures provide investors with useful perspectives on the underlying growth trends of the business and have included in our earnings release a full reconciliation of non-GAAP financial measures to the most comparable GAAP measures. Now, I will turn the call over to Mark.

Thanks, Orvin. It's great to be with everyone this morning. We're thrilled to share with you our excellent top and bottom line results for the fourth quarter and full year 2023. Our momentum in 2024, which makes us even more excited about the coming year, and our positive long-term outlook driven by our proven three-pillar growth strategy. Let's start by reviewing our operational and financial results. We once again delivered industry-leading performance, gaining market share across both the Shark and Ninja brand portfolios. We had a very strong fourth quarter as adjusted net sales increased nearly 20%. Adjusted EBITDA was up more than 70%. Adjusted gross margin improved nearly 1,000 basis points. and adjusted EBITDA margins expanded almost 500 basis points, which is just incredible. Our outperformance and overall strength demonstrate the power of our innovation engine as our growth was broad-based across categories, customers, channels, and geographies. During the critical holiday selling season, consumers responded with excitement and passion around our product offerings. and our retail partners leaned into our brands. I'm thankful for the continued support and trust in our brands by consumers and retailers. Our full-year results underscore our commitment to delivering on our expectations. On a full-year basis, we exceeded the high end of our previously provided guidance across key metrics. We grew adjusted net sales by more than 15%, to nearly $4.2 billion. Adjusted EBITDA increased by nearly 39% to $720 million. We expanded adjusted EBITDA margins by nearly 300 basis points to just above 17%. Four-year adjusted gross margins improved nearly 700 basis points year-over-year to 46.9%. I'm happy to share that this is well ahead of our longer-term goal of getting back to our pre-COVID adjusted gross margin level of 45%. We believe our strong gross margin rate is a real competitive advantage for us. These results reinforce our position as one of the largest and most profitable companies in our industry. The entire Shark Ninja team has done an incredible job. We are delivering strong top and bottom line growth and significant margin expansion at scale. Our performance is even more impressive when considering an uncertain macroeconomic backdrop. The consumer environment remains unpredictable, but we continue to be laser focused on factors within our control. I'm incredibly proud by our team for continuing to deliver these tremendous results. So what makes Shark Ninja uniquely positioned to win in new categories, markets, and geographies? How do we extend our track record of growth, even in challenging business cycles? Our success is directly connected to our unique mindset, culture, and the way we think about the consumer. At each and every layer in our organization, we are maniacally focused on understanding consumers. Shark Ninja has created a moat through the relentless focus on four key areas that will continue to propel future growth. First, our rapid product innovation approach turns proprietary insight into highly desirable products that solve consumer problems. Two, our highly efficient, scaled, and agile global supply chain delivers high-quality products with market leading performance at an extraordinary value. Our global 360 degree marketing plan drives consumer demand through TV, social media, and experiential events. And our omni-channel strategy empowers consumers to shop wherever they choose. I can't think of any other company that is as well set up to succeed moving forward with this flywheel. Looking ahead, The first quarter of 2024 is off to a great start. Because of our strong performance and better than expected trends in the fourth quarter, we exited the year with clean inventories and slightly lower weeks of supply with our retail partners. We are well positioned to continue to drive strong growth and margins as we build on our incredible momentum. Our 2023 performance and our go-forward outlook will continue to be driven by our three-pillar growth strategy. This includes entering new and adjacent categories, growing share in existing categories, and international expansion. We made great progress across all three of our pillars in 2023 and are excited about what we have coming in 2024 and beyond. Let's now dive a bit deeper into all three. Entering new and adjacent categories continues to be a critical growth driver for us. If you look back over the last four years, we added 14 new subcategories. We have a very conscious, deliberate, and purposeful approach to entering new and adjacent categories. We've entered categories like beauty and outdoor cooking that didn't always seem obvious for our brands. but where we have been disruptive and highly successful as consumers have gravitated to our innovative offerings. Entering new categories is something many consumer products companies strive to do, but it's challenging. Shark Ninja has a demonstrated track record of not just entering, but disrupting the new categories that it enters. This expansion allows us to bring new consumers into our brand, including younger demographics we're seeing with beauty and more male consumers through outdoor cooking. In 2023, we added four new subcategories to our portfolio, each with tremendous potential. Ninja Thirsty, our recently launched proprietary in-home carbonation drink system, had a strong start in 2023. and is nicely positioned to expand globally in 2024. As we build household penetration, we're excited about the growth potential, including the opportunity to create a recurring revenue stream with our consumable flavored pods and CO2 canisters. Our new Ninja Woodfire outdoor oven helped us increase our share of outdoor cooking products. Expanding our brands outdoors and particularly in the outdoor cooking space is a key growth area for us. This is a big, definable global category. Carpet shampooing and stain cleaning is a billion-dollar-plus category in North America and the U.K., which we have not participated in previously. Our recently launched Shark Carpet Expert and Shark Stain Striker cleaning products had a very strong holiday season, and we believe are poised well for growth and market share gains in 2024. Finding ways to expand our cleaning business and providing consumers with solutions to real-world problems is something that we're passionate about. The Shark Messmaster, our recent launch into the wet-dry vacuum category, is performing well and has become a recognized product on TikTok, and TV shopping channels. We expect these new subcategories to remain important growth drivers in 2024 and beyond. On February 1st this year, we held our first EMEA product forum, which brought together retailers, press, and influencers from all over Europe and the Middle East to experience Shark Ninjax. At the event, we announced our entry into two new billion-dollar subcategories for the outdoors. We're excited to launch our new Shark Flex Squeeze, the world's first indoor-outdoor cooling system, which will be rolling out in both North America and Europe this spring. Our insights showed us that while consumers love spending time outdoors, They were impacted by heat and bugs, which made it less enjoyable. That nugget of insight focused us on creating a cooling solution for both indoors and outdoors. The FlexBreeze runs both with a cord and cordless, stands on a pedestal, and can be lifted away for tabletop use. And while built for the outdoors, it is stylish, powerful, and quiet enough to be used indoors. A big innovation is a misting accessory that sprays a cool mist of water, bringing down the ambient temperature nearly 10 degrees. The global fan market is a large, definable segment, and we believe we can gain market share and grow the overall size of the market with this innovation. Another product we just announced is the Ninja Frost Vault, our first entry into the premium cooler segment. While coolers have done a great job keeping beverages cold, they failed to keep food from getting damp and soggy. The soggy sandwich insight is what led us to create the world's first cooler with cold, dry storage. So now, in addition to getting days of ice retention, an innovative fridge temp drawer built into the cooler allows consumers to safely store any food they want while also keeping it dry. Consumers are spending more and more time outdoors and are looking for products that offer convenience and solution to their pain points. With our entry into these new subcategories, we are expanding our outdoor portfolio, which already includes outdoor grills and ovens, portable blenders, and drinkware. Consumers love our products inside their homes. And now they're going outdoors with us as well. Expanding our brands and products outside the home is a big growth opportunity for us in the coming years. Looking ahead, there are many more categories, both in the home as well as outside of the home, for the Shark and Ninja brands to be able to expand into. We intend to capitalize on these opportunities by staying focused on identifying and solving consumer problems. that others either don't see or are unable to solve. And what's most exciting is that we're just getting started. Our second growth pillar is growing share in existing categories. We have a long track record of growing market share across our key subcategories. Even in some of our more established subcategories such as vacuum cleaners and blenders, where we have a significant market share, we have demonstrated an ability to increase that share. The success is driven by our relentless focus on innovation in existing categories. Of the approximately 20 to 25 new products that we launch annually, about 80% of them are within existing categories, keeping our offerings fresh and consumers excited. We don't take anything for granted. Led by our 800 cross-functional engineers and designers and driven by global consumer insights and dynamic testing, our 24-7 innovation cycle continues to play a major role in the improvements we observed in 2023 as we introduced 25 new products, including 20 new products within existing categories alone. For example, we launched a new series of robotic and cordless vacuums using our proprietary Detect Pro technology. In the home environment segment, we introduced the Shark Never Change air purifiers, which don't require filter replacement for five years. We expanded our Shark hair care family of styling products with the launch of the Shark Smooth Style, a heated comb straightener and smoother, And Shark Speed Style, the market's lightest leading digital hair dryer. At $99, the smooth style has allowed us to bring in many more consumers into our beauty segment. And over time, we hope to graduate them into other beauty products. Within the Ninja brand, we introduced the Ninja Combi, our next generation of multi-cookers. We also reinvigorated our blenders and kitchen systems with improved features and functionality through the launch of the Ninja Detect Pro. We introduced the XL version of our outdoor grill. This is not just a larger version, but also a connected device that leverages our app IoT expertise and brings our robotic technology to outdoor cooking. This is all testament to our innovation approach, which enables us to continue to gain share in existing categories. During 2023, we continued to grow market share across existing subcategories. While growth was broad-based, subcategories like beauty, air fryers, ice cream makers, and outdoor grills were particularly strong. For example, based on industry data, our U.S. market share of hair dryers and hot air stylers in 2023 increased to nearly 19% compared to 8% in 2022. Now to a segment that I'm very excited about, which is our continued international expansion. During 2023, we continue to deliver very strong performance in international markets, as adjusted net sales reached $1.1 billion, increasing 66% compared to 2022. UK, which is our largest international market, grew nearly 60%, while markets like Germany, France, and Latin America, which are newer, grew at impressive triple-digit rates. We ended the year with presence in 32 countries, up from 26 countries at the end of 2022. We have great momentum, scale, and a strong base to further expand our international business. But what's even more exciting is that in most of these markets, our market share is relatively small, and we have lots of white space to grow. Our tremendous success in the UK market has provided important insights and lessons. We're quickly implementing those lessons to catapult our business in newer markets such as Germany and France, which are key growth markets for us in the next few years. We see these two markets as relatively similar in terms of size and scope to the UK market, with the long-term potential for Germany to be even bigger than the UK market for us. I'm also thrilled with our initial success in Latin America, which looks promising as we introduce new products and open new markets within the region. Our products are resonating with consumers globally, and we believe our international business can be as large as, if not larger than, the U.S. over the long term. Our three pillar growth strategy has driven our record of sustainable, repeatable growth, and we will continue to deploy this proven strategy going forward. With that, let me turn it over to Larry, who will now walk you through our fourth quarter financials and 2024 outlook.