Brilliant Future AB

Thank you for standing by. Welcome to the Brilliant Earth second quarter 2025 earnings 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. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference Over to Colin. Please go ahead.

Thank you and good morning, everyone. Welcome to the Brilliant Earth second quarter 2025 earnings conference call. My name is Colin Borland, Vice President of Strategy, Business Development, and Investor Relations. Joining me today are Beth Gerstein, our Chief Executive Officer, and Jeff Kuo, our Chief Financial Officer. During the call today, management will make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a description of the risks that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. These forward-looking statements reflect our opinion only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events unless required by law. Also, during this call, management will refer to certain non-GAAP financial measures. A reconciliation of Brilliant Earth's non-GAAP measures to the comparable GAAP measures is available in today's earnings release, which can be found on the Brilliant Earth Investor Relations website. I'll now turn the call over to Beth.

Good morning, everyone, and thank you for joining us. We are excited to report a strong quarter where we drove positive year-over-year net sales growth and far exceeded the high end of our guidance for both net sales and profitability. Our ability to gain share and outperform the industry reflects the successful execution of our strategic vision and the significant progress we're making toward both our near and long-term goals. Furthermore, I am happy to report that we are seeing an acceleration in the business Q3 to date, and we are raising our annual net sales guidance. Of course, we're also evaluating yesterday's announcement on new tariffs on India, which Jeff will discuss in more detail. Most importantly, we remain confident in our ability to navigate in this environment. Our aim since day one has been to build Brilliant Earth into the world's most loved and trusted jewelry brand. We've consistently communicated our strategy to increase brand awareness, provide a seamless omnichannel experience, establish ourselves as the fine jewelry leader for the next generation, and invest in our people, data analytics, and technology as the digital leader in the jewelry space, all to drive profitable long-term growth. Our Q2 results proved that our discipline strategy is working. We delivered our best year-over-year top-line growth in the past 18 months with net sales growth of 3.3% and adjusted EBITDA of $3.2 million, both significantly exceeding our guidance. And not only do we continue to drive positive adjusted EBITDA, but we continue to generate net cash, which increased 5% year-over-year to $99 million as of the end of Q2. Given this momentum and our confidence in what lies ahead, I'm proud to announce that our board of directors has approved a one-time dividend and distribution of approximately $25.3 million in the aggregate. This reflects our commitment to rewarding shareholders. our strong balance sheet, and our confidence in our ability to generate cash while funding future growth initiatives. Quarter after quarter, we're delivering on our near and long-term strategy and building momentum. We're rapidly expanding Fine Jewelry, growing bookings 38% year-over-year in Q2. We're accelerating brand momentum with standout moments like designing custom jewelry for the iconic Beyonce, and forging our first professional sports partnership with tennis star Madison Keys. We're optimizing our showroom strategy and generating strong paybacks with compelling metro uplifts. We're leveraging technology and innovation to drive marketing leverage, while continuously expanding our capabilities using the power of AI and machine learning to drive growth and efficiency throughout the business. Let me take you through additional highlights for the quarter. Customer demand for Brilliant Earth jewelry remains encouragingly strong. In Q2, we had our strongest year-over-year total order growth in the last two years, with total orders growing 18% year-over-year and repeat orders of 11% year-over-year. We are encouraged as we continue to see an increase in new customers discovering Brilliant Earth, including a notable rebound in engagement ring customers. For the quarter, average order value declined 13% year-over-year. This continues to be driven by two factors. One, our fine jewelry business growth, which tends to be a lower price point than our bridal assortment, is continuing to outpace the business. And two, as we've stated before, we are continuing to see comparatively strong customer demand in engagement rings under $5,000, with an overall stabilization in engagement ring ASP over the last few quarters. Finally, we're excited to report year-over-year unit growth across our assortment, including high single-digit year-over-year unit growth in both engagement rings and wedding and anniversary bands. As mentioned, Fine Jewelry continues to be an exciting growth driver for the business. In Q2, Fine Jewelry bookings grew 38% year-over-year, with a similar percentage of bookings mix as last quarter. Mother's Day, a key gifting holiday, proved to be an exceptionally strong holiday for us and a prime example of the growing awareness of Brilliant Earth as the fine jewelry destination. In our Mother's Day campaign for Mom, the Forever Influencer, we collaborated with leading tastemakers to create a limited number of special edition medallions, and we saw resounding success across everything from our signature styles to our classic diamond essentials. Turning to showrooms, we continue to expand our fleet with our latest opening in Alpharetta, Georgia. Beyond opening new locations, we are constantly innovating how we deliver the seamless omnichannel experience for which we are known, including different formats such as Main Street and outdoor centers, new in-store enhancements like our try-on bars, and optimization of our visual merchandising and showroom inventory strategy. As a result, we've seen increased walk-in traction in our showrooms and orders from retail customers without scheduled appointments grew 81% year-over-year in Q2, with fine jewelry experiencing the fastest growth. Overall, we're encouraged by our continued success in showrooms, with most showrooms delivering strong double-digit Metro bookings uplift in the 12 months after we open. On the digital front, we have been focused As always, on optimizing our marketing spend efficiency, including through the use of AI. As a result, Q2 marketing spend decreased approximately 4% year-over-year, even as we drove year-over-year sales growth, resulting in 180 basis points of year-over-year leverage as a percent of net sales. This quarter was filled with groundbreaking bursts for the brand. We were privileged to craft a one-of-a-kind diamond bolo tie for none other than the queen herself, Beyonce, marking a watershed moment in the growth and evolution of the Brilliant Earth brand as a leader and innovator in today's culture. We then seized on this iconic brand moment by launching a limited edition bee pendant for our customers that sold out in days. In addition, we announced our first professional sports ambassador, tennis superstar Madison Keyes. You'll see Madison in many Brilliant Earth bestsellers this U.S. Open, along with the launch of a special piece we designed with her. We are thrilled to have Madison on our team and look forward to cheering her on at the upcoming U.S. Open. And most recently, we were thrilled to be able to help actor, musician, and all-around icon Selena Gomez celebrate her birthday with one of our kind creations, a 20-carat diamond necklace from our Jane Goodall collection. These partnerships represent more than just celebrity moments. They demonstrate how Brilliant Earth continues to be known as the jeweler of choice for today's most influential cultural icons, reinforcing our position as the premium brand for the next generation. As you can tell, it has been an exciting quarter, and we look forward to driving increased momentum and executing through the end of this year and beyond. Q3 to date, we have seen an improvement in trends compared to Q2 with strong overall bookings growth, unit growth in engagement rings and wedding and anniversary bands, continued outperformance in fine jewelry, and growth of both new and repeat orders. While we continue to monitor the macro environment, including tariffs and metal prices, we believe we are exceptionally well-positioned to deliver against our annual goals and are confident to raise our annual top-line guidance. I want to thank our amazing team and their contributions that allowed us to deliver these strong results. With that, I will turn it over to Jeff, who will walk through the financials and discuss our outlook for the coming quarter and year in detail.