Kits Eyecare Ltd.

Good afternoon and welcome to the KITS-IKR 3rd Quarter 2025 Financial Assault Conference Call. This call is being recorded and available later today for replay. Your hosts today are Roger Hardy, Chief Executive Officer, Joseph Thompson, Chief Operating Officer, and Zhe Chu, Chief Financial Officer. Before we begin, I'm required to provide the following statements 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 similar meaning. This forward-looking information is based on management's opinion, estimates, and assumptions in light of their experience, and perception of historical trends, current conditions, and expected future developments, as well as the 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 a drawing conclusion or making a forecast or projection as reflected in the forward-looking information are contained in 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. Please go ahead. Good afternoon, everyone, and thank you for joining us today.

When we started Kits, it was with deep conviction and enthusiasm. We'd explored several categories and potential ventures, all with intriguing possibilities, but one clearly rose above the rest. We envisioned building a new breed of technology company, one that would serve billions of people around the world who rely on vision correction to function every day. Through countless conversations with vision corrected customers, we uncovered a critical insight. The optical industry had grown complacent. It had forgotten the people it was meant to serve. At its core, the sector relied on a century-old model, overly complex, expensive, and opaque. Duopoly dominating the space had lost sight of its purpose, enabling people to see, work, and live fully. The addressable market was already immense, estimated north of $100 billion globally, but the true potential was even greater. because nearly everyone everywhere will eventually need vision correction of some form. The prospect of transforming such a vital category was profoundly motivating. This was a chance to create something enduring, to build a company that improves people's daily lives in a way that enriches how they live, work, and connect. That ambition inspired our mission to make eye care easy. Today we set out to serve the modern consumer digital first informed and empowered. Someone who grew up with a phone in hand and expected frictionless experiences. We imagined an end-to-end platform controlling every essential component through vertical integration from customer acquisition and retention to manufacturing and fulfillment. It was an ambitious vision, especially starting from zero back in 2018. From time to time, I find it valuable to revisit those original ideals and ask, do they still hold true? Are we executing in line with our mission to reinvent a century-old category? One of the things I love most about leading KITS, a public company, is the rhythm, the relentless 90-day sprint. After more than two decades of running public businesses, it's a cadence I and my family know well and deeply value. At KITS, we operate on a nimble operating system. Every quarter, the metaphorical cannon fires and the sprint begins anew. 90 calendar days, 60 business days to deliver results. Each quarter starts with a clear list of five priorities that our management team aligns on. Of course, there are many other initiatives, but these five are the non-negotiables. Call me traditional, but I like to keep revenue and EBITDA at the top of that list. From there, our focus turns to the customer, how we can strengthen emotional connection, personalize engagement, and listen authentically to feedback. We examine our product to ensure it delights, because our customers have no patience for mediocrity. They want authenticity anchored in quality, selection, and affordability. And finally, we set clear technology objectives to ensure we're operating on a premium stack at the leading edge of innovation. This quarterly cadence gives us a mirror, a moment to reflect, measure, and hold ourselves accountable as we strive to deliver on the bigger, longer-term mission. I'm pleased today to update shareholders and our team on another strong quarter of performance. During our last earnings call, we guided Q3 revenue between $52 and $54 million, with a targeted adjusted EBITDA margin of 5% to 7%. proud to report that we delivered record revenue of $52.4 million, up 25% year-over-year, and 6% sequentially. This marks our 12th consecutive quarter of positive adjusted EBITDA, which rose to $2.9 million, or 5.5% of revenue, up 79% year-over-year, and our net income reached $1.9 million, or 6 cents per share. Gross margins expanded to 34.6% up 170 basis points from last year, a seasonally strong performance. And we welcomed 99,000 new customers in the quarter. This quarter also marked a major milestone, surpassing 1 million active customers, a testament to both our reach and the trust we've earned. It's now our third consecutive quarter averaging 100,000 new customer additions. Here to date, new customer growth is up 37%, reflecting accelerated awareness and adoption. The kit's flywheel is spinning faster. New customers are driving growth today and recurring value tomorrow, returning at higher rates and expanding lifetime values. We have an exceptional product, unmatched selection, a beautiful website powered by state-of-the-art technology, and the fastest fulfillment in optical. all underpinned by a culture committed to purposeful execution. We're now one of the fastest growing eyewear brands or brands in North America. $200 million business with brand awareness concentrated in just one city, Vancouver. Candidly, that underscores the magnitude of the potential ahead. A uniquely attractive growth profile with asymmetric upside. As we begin to replicate our Vancouver success, in other cities across North America. A particular standout this quarter was the strength of our Canadian business, up more than 38% year over year, powered by strong repeat purchases and a robust new customer acquisition, as we tempered our investment in the U.S. this quarter. Our kit's branded contact lenses grew an astounding 380% year over year, with gross margins exceeding 50%. Other segments of our 50-50 club, such as our progressive and designer collections, also posted impressive gains, each with margins near or above 50%. These categories are scaling rapidly and will become increasingly influential contributors to growth and profitability over the coming years. Our glasses segment remains a cornerstone growth engine. Glasses revenue increased 25% year-over-year, driven by both new customer additions and continued premium lens adoption. Our vertically integrated model gives us a structural advantage, controlling quality, speed, and cost to deliver premium products at accessible prices. This translates into higher customer satisfaction and superior margins over the long term. Repeat customers accounted for 62.4% of total revenue, contributing more than $32 million in the quarter, evidence of a deepening loyalty and growing engagement. And premium lenses grew 55% year over year and now represent 44% of revenue, reinforcing the power of our recurring compounding revenue model. We also continued our rhythm of innovation, launching nine new collections and 77 models across 240 colorways, reinforcing our pillars of quality, selection, and affordability. The standout was the oval edit, a strategic expansion capitalizing on the surging oval trend validated by the exceptional performance of our Soarin' frame, our top seller. We responded with agility, introducing 15 new styles across new colors, sunglasses, and shape variations, including rectangular and sport editions. We also showcased the brand through our Gran Fondo activation, a proud moment seeing kits on the podium and across the course. worn by individuals who, like us, are motivated by purpose and progress as they race to Whistler on their bikes along the beautiful Sea to Sky Highway. True to our DNA, we kept testing and learning. As a nimble vertical retailer, we can pilot new ideas with minimal risk and remarkable speed. A small four-frame capsule for children quickly demonstrated strong traction, validating another future expansion path. That speed of iteration powered by real-time customer data is what defines Kits as a forward-thinking brand. These capsules outperform through organic and influencer channels, driving incremental traffic engagement and repeat purchases. Looking ahead to Q4, we expect continued momentum with revenue in the range of $52 to $54 million and adjusted EBITDA margins between 4% and 6%. We also look forward to introducing our new Chief Marketing Officer, early in the new year. With that, I'll hand the call over to Joe and to Zee. Joe?