Executive Summary

Q1 2025 revenue grew 8.3% YoY to $271.9M, with GAAP diluted EPS of $0.68 and gross margin of 23.4%; strength in Services and Europe offset domestic product softness tied to Noble House SKU refresh .
Results were above prior Q4-issued guidance ($250–$265M) and ahead of S&P Global consensus on revenue ($259.8M*) and Primary EPS ($0.48*); adjusted EPS-diluted was $0.83 .
Q2 2025 revenue guidance set at $275–$305M; management telegraphed near-term headwinds from Noble House SKU rationalization and a softer U.S. channel, partially offset by strong Europe momentum .
Capital returns increased: buyback authorization raised to $78M on May 8; $61.8M repurchased (~3.7M shares) through May 12; management plans to retire repurchased shares .

Values with asterisk are from S&P Global consensus.

What Went Well and What Went Wrong

What Went Well
- Services led growth: Service revenue +23% YoY to $94.1M; management highlighted services and Europe as Q1’s “shining points” .
- European expansion accelerated: Europe product revenue grew “over 70%” YoY; GMV in Europe up ~80% YoY with incremental fulfillment capacity in Bremen, Germany .
- Buyback momentum and balance sheet: $78M total authorization; $61.8M repurchased as of May 12; liquidity of ~$287.5M (cash, restricted cash, investments) at quarter-end .
What Went Wrong
- Gross margin compression YoY: 23.4% vs 26.5% in Q1 2024, driven by normalized ocean freight (less arbitrage) and more competitive last‑mile pricing; service gross margin fell 3.5 pts sequentially to 15.9% .
- U.S. product softness: Domestic product revenue down 17% YoY due to Noble House SKU refresh, sector headwinds, and softness at downstream partners .
- Limited near-term visibility on margin trajectory: Management could not commit to Q2 margin expansion timing; new SKUs typically take 3–6 months to ramp .

Financial Results

Performance versus prior quarters (GAAP unless noted)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$303.3	$295.8	$271.9
Gross Margin (%)	25.5%	22.0%	23.4%
Operating Income ($M)	$40.7	$27.6	$28.3
Net Income ($M)	$40.7	$31.0	$27.1
Net Income Margin (%)	13.4%	10.5%	10.0%
Diluted EPS (GAAP)	$0.98	$0.76	$0.68
Adjusted EPS – diluted	$1.15	$0.75	$0.83

Q1 2025 Actuals vs S&P Global Consensus

Metric	Consensus	Actual	Delta
Revenue ($M)	$259.8*	$271.9	+$12.1 (+4.7%)
Primary EPS ($)	$0.48*	$0.83	+$0.35

Values with asterisk are from S&P Global.

Segment mix and margins

Segment KPI	Q3 2024	Q4 2024	Q1 2025
Service Revenue ($M)	$100.4	$97.1	$94.1
Product Revenue ($M)	$202.9	$198.7	$177.8
Service Gross Margin (%)	—	19.5%	15.9% (seq −3.5 pts)
Product Gross Margin (%)	—	—	27.4% (seq +4 pts)

Marketplace KPIs (TTM)

KPI	Q3 2024	Q4 2024	Q1 2025
Marketplace GMV ($M)	$1,233.6	$1,341.4	$1,416.7
3P GMV ($M)	$635.5	$693.9	$734.3
3P GMV Mix (%)	51.5%	51.7%	51.8%
Active 3P Sellers	1,051	1,111	1,154
Active Buyers	8,535	9,306	9,966
Spend per Active Buyer ($)	$144,534	$144,142	$142,156

Notes: Company reclassified delivery services for 1P transactions from Product to Service revenue beginning Q1 2025 and restated 2024 comparables for consistency .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($M)	Q1 2025	$250–$265 (3/3/25)	Actual: $271.9	Beat vs guide
Total Revenue ($M)	Q2 2025	N/A	$275–$305	New
Share Repurchase Authorization ($M)	Through Aug 28, 2025	$62 (3/28/25)	$78 (5/8/25)	Raised $16

No explicit guidance provided on margins, OpEx, OI&E or tax rate.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Tariffs / Macro	Q4: Said macro remains challenging; outlined resilience; discussed minimal direct tariff impact expected given value-density and pass-through dynamics .	CEO: tariffs add uncertainty but platform designed for agility; CFO: tariff pause impact limited in Q2; price impact not dollar-for-dollar .	Manageable; monitoring.
Europe growth	Q3–Q4: Europe GMV +150% YoY; opened new German FC in early 2025 .	Europe product revenue up >70% YoY; GMV growth ~80%; “doubling down” on region .	Accelerating.
Noble House integration	Q4: Entered Phase 3 (catalog refresh), Phase 4 to focus on margin expansion late 2025 .	Phased out >400 legacy SKUs; launched >300 new; ~600 in development; 3–6 months to ramp; Q2 seasonally strong historically but reset will weigh .	Transitional; LT margin upside.
Service margins / freight	Q4: Service margin down seq as ocean spot normalized vs Q3 arbitrage; product margin compressed by holiday surcharges and high-cost inventory .	Service GM down 3.5 pts seq to 15.9% on lower ocean and last‑mile pricing; product GM rebounded 4 pts seq to 27.4% as high-cost inventory rolled off .	Mixed: service down, product up.
Tech & B2B enablement	Q4: Wondersign rebranded to Wonder; “GIGA IQ” stack .	Wonder app early traction (closed beta); supports retail sales enablement and supplier visibility .	Building.
Brand program (BaaS)	Q4: —	Added Scott Living to BaaS alongside Christopher Knight Home .	Expanding.

Management Commentary

“Despite persistent industry headwinds, we continue to grow… That is a testament to the efficiency and value created by our Supplier Fulfilled Retailing (SFR) model.” — Larry Wu, CEO .
“We are attracting new Marketplace participants, expanding our European footprint… enhancing our ability to transform and reinvent the way big and bulky merchandise is bought and sold.” — Larry Wu (Q2 release context, reinforcing Q1 themes) .
“Service revenue grew ~23% YoY… service gross margin was 15.9%, a 3.5% decrease sequentially, primarily due to lowered ocean freight rates and lower last-mile delivery pricing.” — Erica Wei, CFO .
“Product margin improved by 4% sequentially to 27.4%… as we had less of [high capitalized cost goods] left to move through during Q1 2025.” — Erica Wei, CFO .
“As of today, we have repurchased approximately 3.7 million shares for $61.8 million… We remain positioned to deploy additional capital through future repurchase authorizations.” — Erica Wei, CFO .

Q&A Highlights

Beat drivers: Outperformance versus prior guidance driven by Services and Europe .
Margin outlook: Management not ready to guide Q2 gross margin given supply chain variability; SKU refresh impact needs 3–6 months to show up meaningfully .
Guidance context: Q2 midpoint implies YoY deceleration due to Noble House’s seasonal strength last year and current SKU rationalization; some softness at U.S. partner channels .
Tariff mechanics: A 100% tariff does not translate to 100% retail price increase; tariffs apply to goods value, not total cost stack (e.g., warehousing, ground shipping) .
Segment reporting change: Delivery for 1P separated into Services beginning Q1 2025; 2024 restated for comparability .

Estimates Context

Q1 2025 comparisons vs S&P Global consensus: Revenue $271.9M vs $259.8M*; Primary EPS $0.83 vs $0.48*; both beat. Adjusted EPS-diluted from company was $0.83, aligning with “Primary EPS” actual in S&P data .
Consensus recommendation and target not cited for Q1; Street coverage appears limited; management’s Q2 outlook ($275–$305M) could prompt estimate adjustments, with near-term trims for U.S. product offset by stronger Europe and product margin normalization .

Values with asterisk are from S&P Global.

Key Takeaways for Investors

Europe is the growth engine while U.S. product is in planned reset; expect mixed near-term revenue with better mix and margins exiting the SKU refresh cycle .
Services growth durable, but ocean freight normalization and competitive last‑mile pricing cap near-term service margins; product margins are improving as high-cost inventory rolls off .
Reclassification increases transparency: 1P delivery now recognized within Services, clarifying drivers of Services growth and margins going forward .
Q2 guide ($275–$305M) frames a digestion quarter given Noble House seasonality and catalog refresh; upside likely tied to Europe strength and SKU ramp cadence .
Capital allocation is shareholder-friendly: Authorization lifted to $78M; $61.8M already repurchased with intent to retire shares; balance sheet remains strong .
Watch tariff evolution: Management sees limited direct impact and an opportunity to leverage platform agility (route/channel flexibility) if supply chains shift .
Stock catalysts: Sustained Europe outperformance, visible product margin expansion as SKUs ramp, and any further capital return actions could re-rate shares on improving quality of earnings .

Appendices

Prior-Quarter Context

Q4 2024: Revenue $295.8M (+20.9% YoY), gross margin 22.0%, net income $31.0M, diluted EPS $0.76; Q1 2025 revenue guidance $250–$265M (beat by Q1 actuals) .
Q3 2024: Revenue $303.3M (+70.2% YoY), gross margin 25.5%, net income $40.7M, diluted EPS $0.98 .

Business Outlook from Q1 release

Q2 2025 revenue guidance: $275–$305M .

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