Kits Eyecare Ltd.

Good morning and welcome to the Kids Eye Care 4th Quarter 2024 Earnings Resolved Conference Call. This call is being recorded and available later today for replay. Your hosts today are Roger Hardy, Chief Executive Officer and Co-Founder of Kids Eye Care, Joseph Thompson, Chief Operating Officer, and Zee Choo, Chief Financial Officer. Before we begin, I'm required to provide the following statement respecting forward-looking information which is made on behalf of KITS and all of its representatives on this call. Certain statements made on this call will contain forward-looking information. These forward-looking statements generally can be identified by the use of words such as intend, believe, could, expect, estimate, forecast, may, would, and other words of similar meaning. This forward-looking information is based on management's opinions, estimates, and assumptions in the light of their experience and perception of historical trends, current conditions, and expected future developments, as well as factors that they currently believe are appropriate and reasonable in the circumstances. Actual results could differ materially from a conclusion, forecast, expectation, belief, or projection in the forward-looking information, and certain material factors and assumptions were applied in drawing a conclusion, or making a forecast or projection as reflected in the forward-looking information. Management cautions investors not to rely on forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the conclusion, forecast, or projection in the forward-looking information and material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information are contained in the KITS filings with the Canadian Provincial Security Regulators. During today's call, all figures are in Canadian dollars, unless otherwise stated. And with that, I'd like to turn the call over to Mr. Roger Hardy. Thank you. Please go ahead.

Thanks, Operator. Good morning, everyone, and thank you for joining us today. As we close out another phenomenal quarter and year at KISS, I want to take a moment to reflect on the journey we've been on together. Our vision from the very beginning has been to revolutionize the way people access high-quality eyewear, making it easier, faster, and more affordable. Over the years, we've built a model that not only resonates with customers, but also continues to gain considerable momentum, driving record-breaking results quarter after quarter. This past year, we pushed the bar higher than ever before, whether it was sharing numerous record-breaking revenue weeks, launching new innovations and partnerships, or expanding our offerings in both glasses and contact lenses. Every milestone we've achieved has been a direct result of our team's relentless dedication, creativity, and execution. I want to take a moment to extend my deepest gratitude to the entire KITS team. Your passion and commitment are what drives this company forward, and our success is a reflection of your hard work. This strong foundation base combined with the team's continued execution has resulted in reaching nine consecutive quarters a positive adjusted EBITDA. Now, turning to our financial performance, during our last earnings call, we set expectations for Q4 revenue to be between $43 million and $45 million, with a target adjusted EBITDA margin of 3% to 5%. I'm pleased to share that we delivered $44.8 million in revenue, representing 42% organic year-over-year growth. For the full year, revenue reached $159.3 million, up 32% from the prior year. We also exceeded our Q4 adjusted EBITDA goal, achieving 6.5% or $2.9 million, with full year 2024 adjusted EBITDA reaching $6.4 million, an increase of 182% compared to 2023. We closed the quarter with net income of $2.7 million, and earnings per share of $0.09. Additionally, we generate $3.8 million in positive cash flow from operations and ended the year with approximately $19.3 million in cash, providing us with significant financial flexibility as we move into 2025. Our momentum has been driven by several key factors, including the growing awareness and strength of the Kits brand, a commitment to continuous innovation, and strong customer demand. In 2024, we significantly expanded our Kits branded eyewear lineup, providing our customers access to over 7,500 eyewear styles. Highlights through the year included introducing smart glasses and launching tailored collections like Kits Pixa and the Kits Classic Sport line, enhancing both style and functionality for our customers. These strategic moves resulted in over 60% year-over-year growth in our glasses segment. We also saw continued strength in our contact lens business, led by innovations like Kits Dailies and Kits Colored Dailies. Our auto-ship subscription program played a key role in driving category-leading repeat revenue and further cementing our relationships with customers. Customer loyalty remains one of our most powerful growth drivers, with 63% of our Q4 revenue coming from our existing core customer base, demonstrating the stickiness of our brand. At the same time, we welcome 79,000 new customers in the quarter, contributing a record $16.6 million in revenue, a $6.1 million increase year over year. This reflects not only the strength of our value proposition, but also the trust our customers place in kits as their preferred eye care providers. Beyond product innovation and customer growth, we're also leveraging technology to enhance every aspect of our business. AI-driven efficiencies are now embedded in our marketing, customer service, and fulfillment operations, allowing us to better anticipate customer needs, streamline the purchase journey, and improve satisfaction. Early results are highly encouraging. We've seen higher customer engagement, improved conversion rates, and a noticeable boost in our Net Promoter Score, which remains our North Star for customer satisfaction. Looking ahead, we remain focused on executing against our long-term vision. For Q1 2025, we expect our momentum to continue with revenue projections between $46 million and $48 million, and an adjusted EBITDA margin of target between 4% and 6%. Once again, I want to thank our customers, our partners, and most importantly, our incredible team of kits for another record-setting year. We are more excited than ever about what's ahead for kits. With that, I'd like to hand the call over to Joe, who will provide further details on our operations performance. Joe?

Thanks, Roger. At KITS, we are building a culture of growth. With the guidance for Q1 that Roger just shared, we are on track for a 10th consecutive quarter of greater than 30% organic revenue growth on average. And alongside this revenue growth, we've added growth in other critical parts of our operations. We focused on building a strong working capital mindset and have grown at industry-leading rates while generating $13 million in cash flow from operations in 2024. On top of this consistently improving platform, Kit saw a number of operational milestones in Q4. We passed the $1 million mark in glasses shipped since inception in Q4, only a few years after the launch of our glasses business. And in a competitive Black Friday and Cyber Monday period, we celebrated a record-breaking week with $4.3 million in revenue ordered, highlighted by a $1 million day of revenue ordered on Black Friday. But having a growth culture doesn't just mean delivering the year or the quarter. It means investing now for the growth to come in 2025, 2026, and beyond. In 2024, we planted a number of seeds that we believe will bear fruit for years to come. For instance, in Q1, we expanded our digital progressives offering, extending our range of industry-disrupted selection at the $28 to $38 price point, which includes a prescription lens, And we saw breakthrough in influencer marketing, which drove word-of-mouth-led revenue growth while keeping marketing costs low. In Q2, our refreshed virtual try-on tool saw another record with over 1 million sessions. We launched our Kit's daily contact lens full lineup, and we announced our breakthrough API-led partnership with Teleself. In Q3, we launched our smart glasses category, including the Kit's Pangolin smart glasses. We expanded Kit's contact lenses to color. And we introduced a membership program for glasses called Kits Plus. And in Q4, we expanded our selection of designer frames. And we launched a customizable line of frames with the Kits Pixel lineup featuring Kits Bits. We continue to be driven by the mission to make eye care easy. And for us, that means having a deep understanding of what it is that customers love about the Kits experience, making sure customers get that experience every time, ensuring that the experience will scale as we grow. At KITS, this means making it possible to find and buy a fabulous pair of prescription glasses or contact lenses in under five minutes. It means having access to almost any prescription lens and frame for under $50. And it means getting your order in one to two days and loving them on first sight. There's a magic here when we do this. We take an experience that has traditionally put all your shortcomings on display and has cost a lot of money and taken a lot of time, and we've made it simple. With consistent execution at this level, we believe we will continue to earn the trust of customers for life. I'll now turn the call over to our CFO, Zee, for further details on our fourth quarter financial results.