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Operator: Good day and thank you for standing by. Welcome to the RealReal First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Caitlin Howe, Senior Vice President of Finance. Please go ahead.

Caitlin Howe: Thank you, operator. Joining me today to discuss our results for the period ended March 31st, 2025, our Chief Executive Officer and President, Rati Levesque; and Chief Financial Officer, Ajay Gopal. Before we begin, I would like to remind you that during today’s call, we will make forward-looking statements, which involve known and unknown risks and uncertainties. Our actual results may differ materially from those suggested in such statements. You can find more information about these risks, uncertainties and other factors that could affect our operating results in the company’s most recent Form 10-K and subsequent quarterly reports on Form 10-Q. Today’s presentation will also include certain non-GAAP financial measures, both historical and forward-looking.

We have provided reconciliations for historical non-GAAP financial measures to the most comparable GAAP measures in our earnings press release, which is available on our Investor Relations website. I would now like to turn the call over to Rati Levesque, Chief Executive Officer of the RealReal.

Rati Sahi Levesque: Thank you, Caitlin. Good afternoon, everyone, and welcome to the RealReal’s first quarter earnings conference call. Today, I’m pleased to report strong Q1 results and reaffirm our full year 2025 outlook. The RealReal, founded on trust and authenticity, is leading the evolution of luxury resale. Our commitment to expertise and a frictionless experience is changing the way people shop for the better. Before getting into results, I’d like to address what we’re seeing in the overall environment. Despite the uncertainties from tariffs and a less predictable backdrop, our performance has been strong and our focus remains steadfast. We occupy a unique position at the intersection of luxury and value. And we source our supply primarily from domestic closets.

So there is a potential to realize benefits in the current environment. Our strategy is working. Our brand is strong and we have built flexibility into our operations that enables us to effectively navigate a range of conditions. We continue to build on the foundational changes we made to reshape our business. In 2024, we delivered our first-ever full year of positive adjusted EBITDA and we continued this momentum in 2025. Through our growth playbook, we’re generating strong and importantly, consistent supply growth. We’re also driving operational efficiency throughout the organization, building true win-win capabilities that harness the power of AI and automation. For instance, Athena, our AI-enabled product intake process, reduces costs and improves the experience for our buyers and consignors.

We are driving results that compound and expand our profitability. We believe the RealReal has a stronger, more profitable, and more sustainable business model today than ever before. We are driving top-line growth by unlocking profitable supply through our multichannel frictionless approach to confinement. The elements of our growth playbook, sales, marketing, and stores came together in the first quarter to drive healthy supply trends. Ajay will review our financial results later in the call, but I’d like to note a few key highlights from the quarter. Looking at growth, GMV increased 9% and revenue increased 11% year-over-year, which aligns with our goal of high-single-digit to low-double-digit growth. Active buyers also increased, up 7% on a trailing 12-month basis.

In Q1, average order value was $564, up 5% year-over-year. Turning to margins and profitability, gross margin improved 40 basis points year-over-year after an improvement of 1,100 basis points in Q1 of 2024. Adjusted EBITDA increased to positive $4 million, an increase of $6 million versus Q1 of last year. And we delivered our highest number of new consignors in over two years. Today, I’ll discuss how our three strategic pillars, unlocking supply through our growth playbook, driving operational efficiencies, and obsessing over service, are fueling our strong results and progress. Let’s start with the growth playbook. We often mention that we are a supply-focused business, as our lifetime sell-through rate is over 90%. Success in executing against our growth playbook relies on driving supply through three key areas.

Sales, marketing, and our retail stores. Our sales team works alongside our merchandising department to curate our platform’s unique assortment. We leverage search and trend data, as well as historical purchase information to identify in-demand brands and categories. Then we mobilize our sales team to proactively pursue it. These capabilities allow the RealReal to quickly pivot and influence our diverse product mix as we aim to successfully address changes in customer tastes and behaviors. Notably, our sales team drove strong consignor growth this past quarter as a result of our revamped incentive structure and a focused approach on consignor acquisition. Turning to marketing. Our teams are constantly working to reinforce our position as the leader in luxury resale, known for authenticity and expertise.

We’ve worked to drive effectiveness in our marketing investments and through increased focus on social media and influencer partnership. Our brand awareness increased versus last year. In addition to awareness, marketing efforts directly drive consignor and buyer engagement and generate leads for our sales and retail team. For us, stores offer a curated experience and provide consignors with access to our experts for valuations for fine jewelry and watches. Similar to our approach with the sales team, we measure success in our retail locations through the lens of supply generation and new consignor acquisition. In Q1, stores contributed a quarter of all new consignors. Our stores and sales team are highly integrated, working together on in-store and off-site events, consignor referrals and expert appointments, which drive high-value supply.

In the first quarter, the elements of our growth playbook combined to unlock supply through enhanced service and new consignment offerings. First, we reduced friction on the consignment process by offering a walk-in on-demand valuation experience in stores. This provides sellers with flexibility, convenience and access to our experts, resulting in an increase in consignment appointments and higher customer satisfaction. Another area that is driving results is our Real Partners program. Our referral program focus on building relationships with key partners like stylists, closet organizers and real estate agents to expand our reach and supply network. These partnerships are crucial for our sourcing high-value items and expanding our access to desirable inventory.

Our referral programs are now driving over 1 million of incremental supply per month. The next highlight within supply is our Get Paid Now program. Get Paid Now is an offering for consignors on the select list of high-end in-demand brands in just three categories. Watches, handbags and fine jewelry. Through Get Paid Now, we purchase inventory and these sales flow into our direct revenue, which to be clear is an entirely different and significantly more profitable business than it was a year ago. Today, we’ve reimagined the direct business, and this revenue is driven by high-value supply from consignors and select vendors. Average selling prices for this merchandise we acquired through Get Paid Now is more than 10 times higher than our average selling price.

And the final growth playbook initiative I’ll highlight today is drop ship. Drop ship continued to evolve throughout the first quarter. Building on our success in watches, we expanded drop ship into handbags and we are seeing good traction so far. This is an important next step in building new and innovative capabilities to unlock supply. Moving to our next strategic pillar, operational efficiencies. We continue to leverage our robust proprietary data and AI capabilities to build trust and improve the customer experience. For years, the RealReal has been a leader in authentication with proprietary tools like Vision and Shield helping build customer trust. Last year, through increased automation, we reduced processing time by over 10% while keeping headcount steady and supporting top-line growth.

On our last call, I reviewed in detail our new AI-enabled product intake process, Athena. This initiative was launched in Q1 of this year, and now more than 10% of items are processed via Athena. Units managed by Athena are processed faster. Early indications are that we can reduce launch-to-site times significantly, and in this initial phase, we cut processing times by an estimated 20%. Athena is currently focused on ready-to-wear units, and we plan to expand to shoes and handbags later this year. A key differentiator for the RealReal is our expertise in item pricing. Our well-developed approach leverages both human expertise, along with data and AI to find optimal market prices for our consignors. The algorithms are dynamic and incorporate near real-time signals from internal and external sources.

Like page views, obsession count, primary market pricing, and search trends. As of the end of last year, the majority of our units are launched with algorithmic pricing. The next step in our development is applying our AI expertise and increased precision into our discounting cadence. The current rules based approach to discounting is largely manual and so we see significant opportunity to apply our powerful pricing algorithms to this use case. Early test results indicate that we can drive better balance between price and sell-through using algorithmic discounting. We are leveraging AI and technology to improve speed, reduce human intervention and drive operational efficiency. Turning to our third strategic pillar, obsess over service. We provide best-in-class service to our buyers and consignors.

Our modern luxury experience enabled by technology is grounded in expertise, trust and authenticity. We obsess over service by understanding what type of user experience and feature set our buyers and consignors want from our platform. Our members spend a lot of time with us, many clocking more than 40 hours per year on our app. Here are just a few examples of how we’re enhancing engagement and fostering a sense of community. In Q1, we added obsession counts similar to the count of likes or hearts on other platforms. To our product listings, allowing buyers to easily see which items are trending, this creates deeper engagement with the platform and because each item is unique on our site, creates more urgency and gamification. We are also building community through initiatives like our successful Substack Strategy, which provides valuable fashion content and fosters connection among our users and fans.

We regularly implement user experience updates to improve navigation and search on our platform, making it easier for buyers to find what they are looking for. And we are enhancing buyer personalization to show the most relevant items, driving faster sell-through and lower discounting. In closing, our Q1 was a solid start to the year and we’re encouraged by the momentum we’re seeing in supply. The RealReal is positioned as the leader in a market with lots of room to scale. I’m excited about the future and right now we are heads down focused on execution for 2025. I’d like to thank the team for their hard work throughout the first quarter. Our unrelenting focus on our strategic pillars are working and we remain confident in our ability to deliver on our 2025 objectives.

With that, I’ll turn the call over to Ajay to discuss our operational results and our financial outlook.

Ajay Gopal: Thank you, Rati. In the first quarter, we made further progress executing on our strategic pillars. Our focus on unlocking supply through our growth playbook, driving operational efficiencies, and obsessing over service resulted in strong top-line growth and margin expansion. For the third consecutive quarter, we delivered positive adjusted EBITDA, demonstrating our ability to drive profitable growth. We are laying the foundation for consistent execution and delivering on our 2025 goals. Now turning to our detailed Q1 results, beginning with top-line. Q1 GMV of $490 million increased 9% compared to last year. Our growth playbook initiatives drove strong top-line growth and we also recorded our highest new consignor growth in over two years.

In Q1, active buyers increased 7% on a trailing 12-month basis to 985,000 demonstrating our reach and leadership position within luxury resale. Q1 revenue of $160 million increased 11% year-over-year. Consignment revenue increased 7% and direct revenue increased 61% compared to Q1 of 2024. We expect direct revenue to remain in the range of 10% to 15% of total revenues going forward. I’d like to take a moment to discuss the trajectory and enhance unit economics of our reimagined overall direct business. As we’ve highlighted in the past, our direct revenue consists of out-of-policy returns and select vendor supply. In addition, as Rati mentioned, we launched an offering for consignors aimed at unlocking incremental supply through Get Paid Now.

We offer this option on a selective basis on marquee brands in high-value categories and we are enthusiastic about the program’s potential to contribute to market share gains over time. The profitability profile of our direct revenue has improved dramatically. First quarter 2025, direct gross margins were 25.5% compared to 3.3% in the first quarter of last year, a substantial improvement. We’re committed to maintaining a disciplined inventory strategy focused on sell-through and margins. Continuing with our first quarter results. First quarter gross profit of $120 million increased 12% year-over-year, resulting in gross margin of 75%, an increase of 40 basis points compared to the prior year, driven by operational efficiencies in our fulfillment centers and customer support functions.

First quarter operating expenses of $133 million increased 6% year-over-year. As a percent of total revenue, operating expenses improved by 410 basis points. Excluding stock-based compensation, operating expenses improved by 370 basis points, driven by AI-led efficiency efforts like Athena and SmartSales, improvements in marketing ROI and increased automation. First quarter adjusted EBITDA of $4.1 million or 2.6% of total revenue increased $6.4 million versus prior year. Adjusted EBITDA margins increased over 400 basis points year-over-year. Operating cash flow for the first quarter was negative $28 million. Due to the timing of incentive payments and working capital seasonality, we expect operating cash flow and free cash flow to be back-half weighted.

As a reminder, the remaining $27 million stub of our 2025 convertible note will mature in June of this year. We ended the quarter with $154 million in cash, cash equivalents and restricted cash. Turning to guidance. Today, we are reaffirming our full year guidance, which we provided earlier this year. We expect full year GMV in the range of $1.96 billion to $1.99 billion for the year, up 8% year-over-year at the midpoint of our guidance range. We expect revenue in the range of $645 million to $660 million, up 9% year-over-year at the midpoint of our guidance. We continue to expect adjusted EBITDA in the range of $20 million to $30 million, with adjusted EBITDA margin expansion driven by strong top-line growth and operating expense leverage.

In the current environment, our ability to reaffirm our guidance stems from our consistent execution and the inherent flexibility in our marketplace business model. As a resale platform, our supply primarily comes from domestic closets and is therefore unaffected by tariffs. Furthermore, we believe we are well-positioned to realize benefits from consumers seeking value in the face of price increases or from customers being more motivated to monetize their closets. We acknowledge the potential for challenges arising from a more uncertain macroeconomic environment and maintain a balanced perspective in our expectations for the rest of the year. Moving to our outlook for the second quarter. GMV is expected in the range of $476 million to $486 million, which represents 9% growth compared to prior year at the midpoint of our guidance range.

Second quarter revenue is expected in the range of $157 million to $161 million. This reflects 10% growth compared to last year at the midpoint of our guidance range. We continue to expect the direct channel to contribute between 10% and 15% of total revenue. Second quarter adjusted EBITDA is expected to be between $3 million and $4 million, which represents 350 basis points of margin expansion year-over-year at the midpoint of our range. To be helpful, I will provide some additional detail regarding the quarterly cadence of 2025. Last year, we were still making changes to the business and saw significant quarterly variation in adjusted EBITDA margin from Q1 through Q3. This year, we expect a more consistent rate across the first three quarters of the year and a typical seasonal step-up in both top-line volume and adjusted EBITDA margin in Q4.

In closing, I am pleased to see the progress our teams made in the first quarter. Our success in unlocking supply and acquiring new consignors gives us confidence that the RealReal is well-positioned to deliver on our 2025 objectives. With that, I will turn the call back over to the operator to begin Q&A. Operator?

Operator: Thank you. [Operator Instructions] Please stand by while we compile the Q&A roster. And our first question comes from Ashley Owens of KeyBanc Capital Markets. Your line is open.

Ashley Owens: Great. Thanks so much. So maybe if we could just start on direct. I know you mentioned the meaningful improvements to gross margin there. Could you just provide some context around some of the key drivers and how sustainable the levels are we saw in the quarter? Are the mid-20s kind of a reasonable range for that area of the business, or what other levels can you pull to further optimize it? Thank you.

Ajay Gopal: Ashley, thanks for the question. Like we’ve said in the past, our direct revenues are made up of out-of-policy returns. So these are items that we take back from customers. We agree to take them back and we in effect end up taking title to them. We also have had vendor purchases, so select vendor purchases of particular items. And you heard Rati talk about Get Paid Now, which is an offering that we are — that we started scaling last quarter. This is essentially when a consignor chooses to get paid up front for an item as opposed to wanting to consign it. These elements really go to the heart of how we’ve reimagined our direct business and therefore made it a lot more profitable than it used to be. We just reported 25.5% margin on that revenue stream, up significantly from last year when it was about 3%.

So we feel good about the changes we’ve made and we’re comfortable that it will continue to be in that about 20% margin range is how I would ask you to think about it. There’s an element of mix that comes into play depending on which element of direct gets sold that might vary it slightly.

Ashley Owens: Okay, great. I appreciate the color there. And then additionally given the ongoing macro uncertainty and some of the potential strain we’re hearing about discretionary spending, what signals if any, are you observing in the consumer behavior quarter-to-date, both on buying and selling? And then, additionally, just how much visibility would you say you have into future supply as it stands today?

Rati Sahi Levesque: Yes. Hi, Ashley. Thanks for the question. As far as consumer health goes, it’s been pretty consistent, I would say, if not resilient on the buyer side. We’re seeing strength in top of the funnel all the way to conversion, and that’s been consistent since Q4, especially and going into Q2, hence the guide that we gave for Q2. The supply side as well, we talk a lot about our growth playbook. The strategy is working. It’s all about creating less friction with the consignor, that $200 billion in people’s closet, things like reconsign, our new stores, on-demand appointments. Again, that trifecta of sales, marketing, and retail were really working together. So that strategy, like I said, causes is less friction, builds trust with the consumer. And I think we’ve never seen a more consistent growth pattern in new consignors. So really excited about the results and the highest number of new sellers growth that we’ve seen in over two years, actually.

Ashley Owens: Okay, great. I’ll pass it along. Best of luck for the rest of the year.

Operator: Thank you. And our next question comes from Ike Boruchow of Wells Fargo. Your line is open.

Ike Boruchow: Hey, good afternoon. I’ll go into the direct bucket as well. Just curious, Ajay, should there be seasonality in terms of the direct as a percent of total revenue? I think I’m looking at like 12.5% in 1Q. Is there reasons that should go up or down over the next several quarters? So that should kind of be consistent. And then if it looks like you’ve got a more profitable channel there, obviously it’s not nearly as profitable as consignment. But if you’ve got like a lever there that maybe wasn’t there before, how does that impact your ability to kind of sustain the — last year was 74.5% gross margin. Like, in terms of total gross margin, should we think about that flattening out here based on the channel? So curious, your comments on some of that — those moving pieces.

Ajay Gopal: Yes, absolutely. Thank you for the question, Ike. There’s a fair bit to unpack there. So let me try and get to all those points. Starting at the top, right, direct — we’ve said that we expect direct to be between 10% to 15% of our total revenues and really that represents somewhere in the realm of 5% to 6% of total GMV. So a pretty small chunk of our business. There isn’t any reason for there to be inherent seasonality in that percentage. It’s going to stay within that range and it really just ends up depending on the mix of what gets purchased by our buyers. Because when you look at it from a buyer’s perspective, they don’t really see the difference nor do they care, right? It’s just great supply that they’re going to pick from our shelves. So that’s how I would ask you to think about it going forward. I think you had a second part of the question around margin impact.

Ike Boruchow: Yes. Does it impact your ability to keep expanding the consolidated gross margin based on pushing a little bit further on direct now that you’ve got like a little bit more special sauce there versus what you had the past couple of years?

Ajay Gopal: Yes, no, I wouldn’t say. I mean, it’s too small and we expect it to be consistent in the 10% to 15% range. So where we are today is where I expected to be in terms of proportion of the total. The other thing I would point out is we are being very selective with our Get Paid Now offering. We were excited about how it represents our ability to capture incremental supply and through that gain market share in the luxury resale space. But we offer it on a — to select consignors, marquee list of brands, and even though the margin, when you look at it through the lens of how it gets accounted for on our financial statements is different. On a like-to-like basis, we are positioned to make more money, more contribution dollars when we have an item going through this channel versus consignment. So I wouldn’t expect it to be dilutive or put any pressure on our gross margin rate. It’s at the right level and we expect it to stay at this level going forward.

Ike Boruchow: Thanks, Ajay.

Ajay Gopal: Thanks.

Operator: Thank you. And our next question comes from Marvin Fong of BTIG. Your line is open.

Marvin Fong: Great. Thanks for taking my questions. Maybe I’ll just ask about AOV and the components of that. Any — it looks like AOV is doing just fine here, but anything to call out in terms of what you’re seeing between UPT and ASP. Then I have a follow-up.

Rati Sahi Levesque: Yes. Hi, Marvin. AOV is up. It’s up about 5% year-over-year and this goes back to what I was saying earlier around the resiliency of the buyer and that trust we built with that side of the marketplace. Sometimes we’ll see this inverse reaction between UPT units per transaction, AOV, but it stayed pretty consistent sequentially. I will say that we are seeing higher levels of fine jewelry sales, especially, actually branded and unbranded. And so that’s the kind of great thing about having a diverse or the advantage of having a diverse marketplace as far as categories go. And if something is out of favor, other things are very much in favor. So we are seeing that with fine jewelry. Handbags are doing especially well right now. So we’re excited to see both average selling price and average order value consistently up.

Marvin Fong: Great. And I guess I’ll have a question also about direct margins. Just between those three channels, out-of-policy, direct from vendor, and Get Paid Now, is there a difference in margins between those three channels? I would imagine maybe Get Paid Now is a higher margin just by virtue of the motivation of the consignor or the seller, but we just love a little granularity there.

Ajay Gopal: Yes. Thanks for that. Thanks for that question. Yes, Get Paid Now is the way we’ve built it. If you look at a comparable sort of handbag, I’ll give you an example here to illustrate the point for a bag between $1,500 to $5,000 somebody choosing that alternative would effectively be getting paid about 55% of the expected resale price. A consignor would make closer to $70. So think about it as a 15 point differential between the two offerings. With that inherent structure, it will yield better margins on a like-to-like basis. It is still the — by no means is the biggest part of direct. The biggest part of direct really still continues to be our out-of-policy returns. And when you think about out-of-policy returns, for us, returns are no different from the original sale because the items — all our items are being resold.

So if a consumer returns something, it’s fairly easy for us to just recreate that listing and sell it for more or less the same price. So the margin structure does not vary that much.

Marvin Fong: Okay. That’s great color. Thanks a lot.

Ajay Gopal: Thanks.

Operator: Thank you. And our next question comes from Bobby Brooks of Northland Capital Markets. Your line is open.

Bobby Brooks: Hey, good afternoon, guys. Thanks for taking the question. So you talked a couple of different, you touched on it a couple of different times, seeing the biggest growth in new consignors in over two years. So kind of two questions on that. First, could you maybe give us some context around that to help frame it? Did you add 2,000 new consignors? When — last year, you were only doing 500 new consignors of a quarter, something to that extent? And then secondly, what drove this — what’s really the primary reason for the new consignors coming on? I know you mentioned a quarter of them came through the retail space. So what else is kind of driving that strength?

Rati Sahi Levesque: Yes, I can take that. Hi, Bobby. So a couple of different things. So, yes, new sellers very happy with the growth there on a number basis and even the retail value coming through new sellers. We’re doing a better job targeting consignors with even higher value items, and better products, that mid-to-high value product that we want. And this again goes back to that trifecta of sales, marketing and retail really coming together, meeting the seller, where they are, building that trust, that community with the seller. So we’ve talked about aligning, for example, the sales comp plans better with the product that we need or better with the consignor acquisition strategy. New retail stores, like you mentioned, is a big chunk or percentage of that.

Real partners or real friends, our referral program is working better than ever. We had one in the past, but we really changed some of the framework around that to really juice that program. Another big initiative has been reconsigned. We made that way easier for the consignor. So now consignor coming through the funnel. We know if you bought a handbag six, eight months ago and we know, Bobby, that you’ll be ready to consign it in eight months, right, or whatever your kind of pattern or behavior has looked like in the past. So we’ll target you at that time to reconsign that item. So we’re seeing many more opportunities come through that channel. And I’m really excited about that. So there’s things like that. SmartSales is the last piece I will say, because think about tech tools that we’re getting better with.

So making the sales team able to get more consignors. So they’re working on the relationships and the consignor growth versus the administrative tools, right, getting them to get more appointments in per day and back to meeting the consignor where they are on-demand appointments. So being able to come into a store and be able to drop off or need a gemologist same day versus two weeks later. So that on-demand kind of nature has really helped as well. And remember, the TAM is very big. There’s lots of opportunity for us and we still have a lot of room to grow, which really gets the team and I very excited.

Bobby Brooks: Fair enough. Really helpful there. And then you touched on it a little bit there as well as in the prepared remarks, but it’s been specifically called out that partnership programs is helping increase supply. I wanted to just double-click on that. And how does that — kind of how does that look in real life? Is this partnering with brands or is this partnering with consignors? And maybe it would help to just like compare contrast it from how it differs from drop shipping?

Rati Sahi Levesque: Yes. So, you do it, yes, two different programs. I’ll talk about partnership or we’re calling it the Real Partners program. And so think about these — we’re always taking a more product-first approach. So this is product that has really great market fit. And we’re looking at aggregators of that supply. So think closet organizers, stylists, people that are working on a national level with consignors that change their closet. They change over their closet every season, for example. And so that program, we’re really partnering with the stylists, closet organizers, they get a percentage of the sale, they’re earning a good amount of money, and this becomes sustainable for them. And so again, that’s that flywheel effect, right?

So they take that product, they get their clients to consign with us, and then they’re selling them new goods as a stylist in the primary market. So that’s been really great. We’re excited about the potential. They’re just getting started. We launched that in Q4 and quite happy with the progress. Drop ship is different, right? This is a new channel for us. We tested that late last year. I want to say really got off the ground in October, November of last year. And we’re seeing this program have legs. I think I talked about it in the past, as we’re optimistic about the performance there. We’re more than optimistic now, right? We’re starting to see it actually work. We want to scale it. That’s going into this year and actually being another channel for us to bring in supply over the next few years.

And what this is for those that are unfamiliar, it’s a high-value product, really focused on, again, more high-value products, think jewelry, watches, handbags, higher-end ready-to-wear. But a person will be a vendor. It’s more of a B2B play is able to upload the product directly to the site. We’ll authenticate it post-purchase and then send it out to the consumer. So it means, again, really great, more great supply for us on the site. We tested it with watches late last year saw really great progress. Again, it’s about product — having the right product on the site. When we have the right product on the site and that’s more curated, one of a kind, we see the buyers follow.

Bobby Brooks: That makes perfect sense. Thank you, guys. I’ll return to the queue.

Operator: Thank you. And our next question comes from Mark Altschwager of Baird. Your line is open.

Mark Altschwager: Thank you for taking my question. Good afternoon. First for Ajay, wanted to ask on Q1 revenue, how did the mix, the revenue mix in terms of consignment versus direct versus services play out relative to your expectations? And then looking ahead, you’re reiterating the revenue guide for the year, but wondering if there’s been any changes to the underlying assumptions on the contribution from those pieces, given that this Get Paid Now initiative was just beginning to ramp, and now you’re seeing some positive signals there. So curious how that’s kind of changing again, your underlying view of the year?

Ajay Gopal: Thanks for the question, Mark. Maybe starting with Q1 revenue, we reported growth of 11% in revenue against GMV being up 9%. The mix of how — what comprised that was pretty consistent with what we — where we expected it to be. We’ve always maintained that direct will be about 10% to 15% of our revenue mix. And we saw that land pretty much in the middle of that range. The Get Paid Now program is not that significant. It’s a way for us to get incremental supply. I wouldn’t expect it to create any fundamental change in sort of the mix of our revenues going forward.

Mark Altschwager: Very helpful. Thank you. And then, Rati, just kind of bigger picture here. In the prepared remarks, you expressed some optimism regarding how the model has the potential to benefit from the current environment. I tend to agree with that sentiment. But curious if you view this as largely theoretical at this stage or are you beginning to see some shifts in buyer, seller behavior or even conversations your sales team is having with some high-value consignors that would support your confidence in that point?

Rati Sahi Levesque: Yes. Thanks, Mark, for the question. As far as the sentiment and we talk a lot about tariffs and how that could impact our business or any kind of unpredictable backdrop. Most of our supply — all of our supply is brought in from their core business from domestic closets. So we don’t see much of an impact there. On the demand side, what we have seen in the past is if prices go up, we see our pricing also go up. Our algorithms pick that up pretty quickly based on what’s happening in the primary market. And those kind of tend to follow. Remember, the market sets the price. So can it be a tailwind? Maybe. We do believe that we could be a tariff beneficiary actually. But that said, again, just bigger picture.

We built a flexible business model and we’ve made foundational changes to our business to really help weather many conditions. And so with these kinds of uncertainties, from potential tariffs or whatever that may be, less predictable backdrop, our focus really just remains steadfast on our strategic pillars. So we’re optimistic about that.

Ajay Gopal: Yes. And just to sort of add to that, clearly we think we can benefit from, if we end up in an environment where prices start to go up in the primary market, we think that potentially monetizes people to want, sorry, motivates people to want to monetize their closets. So more supply for us. And we also think our value proposition at the intersection of value and luxury is even more powerful in those circumstances. So we would expect to see more buyers coming to our platform. We’re keeping a close eye on these trends and I think we feel really good about how we’re positioned to capitalize on them if and when they develop.

Mark Altschwager: Thank you.

Operator: Thank you. Our next question comes from Jay Sole of UBS. Your line is open.

Jay Sole: Great. Thank you so much. Ajay, I guess, I’m just wondering about the second quarter revenue guidance. I think you talked about 9% at the midpoint. I think it was 11% in Q1 and 14% in Q4. I guess what does the guidance assume in terms of sort of macro and the impact of tariffs and all this noise that’s out there in the marketplace?

Ajay Gopal: Yes, thanks for the question, Jay. I would say on tariffs just building on what Rati said earlier, we’re a US based business. Our supply is already in consignors’ closets. So we really don’t have any direct impact from tariffs. The points I made earlier are we consider those to be like second order effects. And I think in that sense we are positioned to benefit from any price escalation if were there to happen from tariffs. And just to take it back to your question on revenue guidance, we’ve — even if you go back last year, you’ve seen revenue growth outpacing GMV growth and this was really from lapping the changes we made and getting to a more stable take rate. We expect those two to be a lot closer going forward. So when you look at our Q2 guidance with GMV at the midpoint being up 9%, revenue at the midpoint being up 9%, that really speaks to the consistency and how we expect those two metrics to track for going forward.

Jay Sole: Understood. All right. Thank you so much.

Operator: Thank you. This concludes our question-and-answer session and today’s conference call. Thank you for participating, and you may now disconnect.