Revolve Group, Inc. (RVLV) Earnings Call Transcript & Summary

Okay. Great. We'll kick it off. Good afternoon, everyone. Thanks so much for joining us. My name is Nathan Feather. I'm Morgan Stanley's small and mid-cap Internet analyst. Pleased to be joined today by Jesse Timmermans, Revolve's CFO. Thanks so much for joining us.

Yes. Thanks for having us.

Now before we begin, a few quick housekeeping items. For important disclosures, please see the Morgan Stanley's research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

And let's kick it off. For those in the audience that may be newer to the Revolve story, can you give us a quick overview of the business model, market opportunity and strategy and the tech differentiation versus peers?

Yes, absolutely. So Revolve started over 20 years ago by Mike and Michael, who are our co-founders and still co-CEOs today, still very active in the business. And to get to your data and technology point, they were not fashion guys when they started the business. Mike is an engineer by trade; Michael is a business analyst. So they, from day 1, relied on data and technology to make the decisions, which still is a big piece of our business today and a key differentiator. Our inventory management is homegrown, everything, warehouse, customer service is 1P. We leverage technology throughout the business. Merchandising is very data-driven. And most recently, a lot of initiatives around implementing AI in the business. So other differentiators, I think, very focused on this next-generation consumer. Right now, it's predominantly female. We do have a small men's business that we're excited to grow, especially for me and Erik personally. But still right now, predominantly female, next generation, younger consumer. And over time, we've really found a way to connect with her through our strong brand and marketing message via Instagram, TikTok, social media and really speaking to her in a very authentic way and really connecting the merchandising with the marketing in a very, again, authentic way that resonates with her.

Okay. Great. Well, maybe just touch on macro for a little bit. We've seen some divergent signals around consumer discretionary spend over the past few months. Interested to get your latest take on consumer health and behavior across both REVOLVE and FWRD. And how has that moved over the holidays and into 1Q?

Yes. Yes, it has been really tricky out there. I would say, in our view, the consumer is still not 100% back. There's still a lot of pressure out there, still a lot of headlines. But we've been able to execute through that with our growth rate in 2024, sequentially increasing every quarter throughout 2024, both in growth rate and absolute dollars. So even with the consumer not 100% back, we think we're executing in a very good way and really driving sales through a combination of things, AI, reducing the return rate, et cetera, that I'm sure we'll talk about. And then as we got into 2025, started very soft. January was a tough month for a number of reasons. One, probably the biggest one in being in L.A. very close to home was the L.A. wildfires. So a very direct impact on the local L.A. region and then, even more broadly, we paused our social media marketing for a period of 2 to 3 weeks and just kind of the content on Instagram and social media, even outside of our direct platform throughout the influencer community was not focused on fashion. It was all about the wildfires and supporting those who are impacted by the wildfires. So you had that plus weather, plus administration change. So very soft January. But we saw things pick back up in the first couple of weeks of February back in closer to the zone that we exited 2024 in. So I think, again, I'm not sure the consumer is back yet, but able to continue to execute and operate through that.

Okay. Well, you're certainly coming off a strong 2024, as you mentioned, return of double-digit growth in 4Q, sequential improvement every quarter. And importantly, the composition of that growth is really well rounded, improvements in active customers, order per customer and return rate. Can you help us think through what can further drive revenue growth in '25, [ due to what ] are some of those KPIs?

Yes, yes. No, thanks. And I think the other piece, not just AOV, the activity on the orders, but also double-digit growth across domestic, international REVOLVE and FWRD, which we are really pleased with. It's not often that you see all kind of cuts of the business hitting on all cylinders. So kind of where do we go from here? We think there's still a lot of opportunity to grow all cuts of those businesses. FWRD is still a smaller piece of the business, 15% to 20% of the business. We think there's a lot of opportunity there, especially with the demise and kind of some of the challenges in the luxury industry. We have a very active customer base. About 54% of our active customers are existing customers. They place more orders and at higher average order values over time. So as that customer base, our existing customers, continues to grow, you see more activity. We also see a lot of opportunity in expanding into adjacent categories, whether it's men's beauty or even within the female categories of foundational items, essentials, active wear that then further increases that activity for the existing customer. AOV, we think some very slight increases over time in AOV, but not a huge driver of the business. The biggest one will be new customers. Still very low penetration in this core demographic of that young next-generation consumer in the U.S. And then internationally, that market is several times larger than the U.S., still a long ways to go and still a lot of customers to acquire.

Okay. Great. Well, there's a lot of threads I want to take out there. But maybe let's start off with your 1Q kind of quarter-to-date commentary. You called out that's been growing high single digits. Given the strong 2024, comps do get progressively more difficult as we go through the year. To the extent you're able to maintain or accelerate net revenue growth from here, what would need to happen? Or just help us think through what that path might look like.

Yes. Yes, I think it's continued execution. Comps do get tougher, but our goal is to continue to grow in the kind of, we call it, solid double-digit range. To get back into 20%, we need something else. And that something else could be physical stores, which I'm sure we'll talk about. But right now, the goal is to go at double-digit. Even with comps getting tougher, we think with the merchandising improvements we made, site improvements, personalization on the sites, these adjacent product categories, opening a store later this year at The Grove, a couple of own brand launches. So a lot of just internal execution by the teams to continue to drive that growth despite consumer being challenged and tougher comps.

Okay. Great. Now you mentioned a little bit earlier on AI, certainly Revolve has been a pioneer of integrating tech and fashion. I want to touch on generative AI and GPU-enabled technology. What are the biggest opportunities you see that are enabled by this on both the revenue and cost side? And as an early GenAI adopter, what areas have changed the most in how the company is investing in GenAI features and integrating those into the website?

Yes, great question, and there's a lot there. So maybe I'll start with kind of maybe more back office. So I think -- and this isn't necessarily GenAI, but using our data technology and machine learning to put the inventory in the right place around the world so that it's accessible by the customer, reducing logistics costs. The second one is intelligently routing customer service inquiries to the right agent and grouping by topics so that we're more efficient on the customer service front. And then the more exciting things, we have a great business intelligence, data science and engineering team. We have on-prem hardware that enable us to do some of these things. I think what's changed over the last, call it, couple of years is one, the speed and our ability to test various applications, whether it's utilizing a third party or building it on our own. Some of the things we've done more recently, we developed our own in-house AI search algorithm on the site that outperformed the incumbent third parties. So not only do we save on the fees we're paying to a third party, we control it ourselves, and it performs better, leading to conversion gains, click-through rates increasing and therefore, revenue. So that was a big win for us. Also using AI in one of our largest marketing channels to expand the reach within that channel. A lot in general on the site related to personalization and product recommendations, some really great gains that came from post-purchase product recommendations for the customers, and this kind of taps into showing her some of those adjacent categories and maybe some areas she didn't know that we carried before. And I'm sure I'm missing a few, but those are a couple of the big ones.

Okay. Great. And with a lot of those AI features also comes associated investment and certainly some of the products that have been announced by the hyperscalers are relatively expensive. Do you feel you have the right engineering capabilities internally? Are you hiring additional talent here? And on some of those early features you mentioned that have launched, how is the ROI compared to traditional product development?

Yes. Yes, always hiring great people. So if anybody is out there on the business intelligence engineering side. But we do have a solid team, a sizable team of engineers and again, business intelligence analysts and data scientists. So we're well staffed there and very, very capable and they've driven a lot of gains this year. Like I mentioned, we have some on-prem hardware that allows us to test very quickly, AB test on our own data and then also across our different segments of the business and also against third parties and choosing the one that performs best. And then, I guess, further investments, there's no real significant investments. It's -- we're not recreating the wheel. We're kind of testing and kind of managing on that application layer. Yes. I think more to come, a lot of testing, and again, very good speed to market. Oh on the ROI, that was your second piece of the question, yes, I think there's 2 pieces. One is the costs that we're saving from not paying a third party and doing it ourselves. So that's one, and that's a very quick -- very -- kind of very easy to read ROI. The second is on the revenue side and conversion gains, and this is where we've been able to see some very meaningful gains where typically and kind of historical kind of V1 technology, if we'd AB test something, you might see a 0.1%, 0.2% lift, which is incredible. On the AI front, we're seeing 5% to 10% lift. So very significant. And again, very quick speed to market on that as well, which plays into the ROI equation.

Switching gears a little bit. We've seen you expand into physical retail. First store opening in Aspen last year for permanent stores. And then you have an upcoming launch in L.A. What have been your early learnings from that Aspen location? And then, thinking more long term, what place does physical retail have within the business mix?

Yes. We've been very excited about the activity in Aspen and our temporary soon to be permanent store at The Grove. I think the -- a couple of the biggest learnings is maybe learnings and proof point in that we still have a long ways to go in this market. I think I mentioned our low penetration in this core demographic, call it, 3% which is just a number. But when you go to the store and you talk to the customer, we've seen customers come in that were completely new to REVOLVE and FWRD that you would think were REVOLVE and FWRD customers from day one. Over 1/3 of our customers that came through at The Grove were new to file customers, a lot of new customer activity in that Aspen store. So that was one learning. It's just kind of a proof point in the learning that there's still a lot of customers to be acquired out there, especially in L.A. at The Grove, which is in our backyard, and we think that everybody in L.A. should know about Revolve, but there's still opportunity there. I think the other learning and kind of encouraging point is that own brands are performing better in the store than on the site. So a lot of opportunity there. So the mix of own brand sales is higher in the stores. The ratio of own brand sales to inventory or kind of merchandise assortment in the stores, having sales outpace the inventory. So a lot of opportunity there should play out nicely into gross margin over time. And it's also a great way, back to the new customer acquisition, a great way for customers to be exposed to both REVOLVE and FWRD and increasing that overlap between the 2 segments, where REVOLVE and FWRD are in the same destination. She can look at Hermès bag and a $20 beauty item at the same time in the same store and see kind of all parts of the business.

Let's focus a little bit more on FWRD. Return to double-digit growth in 4Q along with the other segments of the business as you mentioned. Really encouraging to see that business back to positive territory, especially after a past kind of choppy few years for the luxury macro. How do you see the U.S. luxury landscape changing in 2025? Where does FWRD fit into that? And with a couple of large peers facing some idiosyncratic struggles, where do you see opportunities to take share and the plan to address those?

Yes. We think there's a lot of opportunity for FWRD within the luxury segment, both in the U.S. and internationally from a couple of different perspectives. One, to your point, there's been a lot of challenges out there in the competitive landscape from competitors completely going away, getting acquired, combining, being distracted or some large payers not paying bills or not paying bills on time, which accrues to us in that we build brand relationships, we get the assortment. And we've been able to acquire a couple of new brands that we've been chasing for a long time as a result of some of this. That's from the brand perspective. And then also from the consumer perspective, the other destinations may not have the quality merchandise, the assortment that the customer is looking for. So she needs a place to go and that place is FWRD. And we've also made a lot of investments on the FWRD side into that high net worth customer over the past year and that started to really take effect in Q4. And we think there's a lot of opportunity there. We're still in the early innings of tapping into that customer. So a lot of opportunity there, both domestically and internationally. And then the REVOLVE/FWRD crossover shopping. Luxury has been more challenging so that crossover between REVOLVE and FWRD hasn't increased over the last 18 months to a couple of years. But we still do see a lot of opportunity there with our 2.7 million active customers, most of which are on REVOLVE. And we know if she's buying a $200, $300 pair of jeans or a dress, she's looking for that handbag or that nice pair of shoes that she could find on FWRD.

Now moving over to the cost side. EBITDA margins have compressed around 9% in 2019 to 16% last year. What have been the main impediments to sustaining a high single-digit to low double-digit margin? And looking across the expense lines, where do you see the ability to drive leverage or potentially return to that margin profile?

Yes. Yes. Yes, there's been a lot of challenges over the last few years from increased freight rates to a much higher return rate coming out of COVID. The team has been able to work on a lot of initiatives that even outside of the return rate have been able to balance that selling and distribution line item and bring that back in line. And then return rate is a big one. We put a lot of focus on return rate this past year, and we're able to bring that down meaningfully. That has a significant impact on the P&L in a positive way. For every point we can reduce return rate, we see costs go down 30 to 50 basis points as a percentage of net sales. So a lot of good progress there, still more to go. So as we look ahead, I think kind of working down the P&L opportunities. One is gross margin coming from 52.5% today. We see opportunity on the FWRD side, which has been more depressed the last couple of years, bringing that back up consistently in the 40s. We ended 2024, starting with a 4. Encouraged by that, but need to do that for several quarters in a row to get confidence there, but we think in the 40s is a good zone for FWRD. On the REVOLVE side, own brand expansion. We're at 18% today. We were at 36% back in 2019, but that 18% of today is much healthier than the 2019 era. So we've seen the own brand margin itself several points higher today than it was back in 2019. And the underlying fundamental metrics that we're looking at are stronger than ever, which gives us confidence now to start investing again back into expanding on brands with a few key launches coming in the back half of this year. So at least a couple of points coming out of margin -- gross margin over time. And then fulfillment, a smaller line item, but there's tens of basis points just through scale efficiencies, technology, AI and getting more efficient there. Selling and distribution is a big one. It's a big line item. The team is working on, at any given time, a dozen initiatives of different size and scale. And then there's a return rate. So continuing to reduce return rate. And we made good progress in 2024, still more to do there, and we think there's still more benefit to come. And then over the longer term, with category diversification into lower return rate categories like men's and beauty, there's some natural benefit and then expanding physically, stores have a much lower return rate than online. So again, over the long term, that should play out to a benefit on that selling and distribution line item. Marketing is not one we're guiding to gain leverage on back to the large market and the low penetration. We think there's still a lot of customers out there to acquire, and we're still in the early days. We want to continue to invest in the brand and acquiring customers. And then finally, G&A. G&A has been a deleverage point the last year to 18 months as we've been in investment mode despite the sales growth not being where we want it. We continue to invest whether that's in physical, AI, technology, et cetera. So kind of investing ahead of the growth there. But over time, we see a couple of points of efficiency coming out of G&A.

Let's double-click on return rates. After 3 years of those increasing post-COVID, you're able to reverse the trend last year and push those down materially. What's led those lower return rates? And what are the additional levers you have to pull to help those continue to decline as we go through '25?

Yes. The great thing is that it didn't come from any 1 or even 2 things. It was really across the board. Some of the things we did around midyear last year in 2024, around June, May/June, we reduced the return period from 60 days to 30 days for credit. This was back to our pre-COVID policy, still very healthy and really best-in-class out there. So that had an impact. Really focused on the high return rate customers and starting to put additional policies in place to turn that customer from an unprofitable customer to a profitable customer. Suppressing marketing to high return rate customers, which has the double impact of reducing return rate and then also making the performance marketing more efficient. And then there's a number of things on the website that we're doing from personalization to product recommendations to size and fit. Size and fit is a big one. And we've made a lot of improvements there on the website. And then before a few quarters ago, size and fit, the same technology wasn't available on mobile as it was on the website and 70% of our orders come through the mobile device. So that's had a nice impact to the return rate. So I think the policy changes, you do those once and they continue to benefit. So there will be some lapping taking place there. But a lot of the product recommendations, the site improvements, the surge, et cetera, and the merchandising will continue to build over time. And we expect to see more benefits coming out of that. And then there's new initiatives that the team has in the works already this year. And then back to my point on stores and category diversification, that will have a natural benefit to return rate over time. That's a longer-term benefit. But over time, that will help reduce return rate.

Yes. So thinking of that longer-term return rate, given some of the category mix you talked about, given a lot of these initiatives that have been in the works, do you feel you can bring return rates back to pre-COVID levels? Or is that a little bit of a hard-to-hit target?

Business, as it stands today, will be a difficult target. The reason being is that international, over time, we've layered in localization, better customer service, free shipping, free returns, which increases the return rate internationally, also increases gross sales, net sales, contribution and everything else. But if you look at that specific return rate line item, it does have a significant negative impact. And we're more localized today than we were back in 2019. So that that's a headwind. It's a good headwind but not necessarily on that specific line item. So difficult to get back to where we were pre-COVID business as it stands today. But again, with product diversification and storage, we think we can, again, longer term, over time, be lower than we were pre-COVID.

Okay. Great. Moving over to inventory, inventory growth, uphill sales growth a little bit in 2024 and temporarily led to deeper-than-anticipated discounts on markdown inventory. How comfortable are you with the current spread between sales growth and inventory growth? Where are you still carrying pockets of excess inventory? And when might you expect to be back to normalized levels?

Yes. Yes. Yes. Happy with the progress we've made, exiting the year with 13% inventory growth versus the 14% sales growth. That said, still work to do. We're in a comfortable zone, but we'd like to be a little bit better. The spread on FWRD is much tighter than it is on REVOLVE. So that's where if we have some excess, it's sitting in REVOLVE. And it's more broad-based. It's not that we're over-inventoried in any one trend or style or segment. It's really a broad-based inventory situation and REVOLVE is easier and quicker to work through than the FWRD side. So much rather have too much inventory on REVOLVE than FWRD. I think in the next -- whether it's in Q1 or around that time frame, in the next couple of months, being in a good place.

Okay. Now looking at gross margin, a lot of moving pieces here, evolving portionality, delta between REVOLVE and FWRD, own brands versus 3P, potential tariff exposure, et cetera, et cetera. A lot of things to sort through. Can you help us understand where the puts and takes are in gross margin, both near term and long term?

Yes. Yes. Yes, this is a complicated one, as you mentioned. So maybe if you break it down by segment first. We see a lot of opportunity on the FWRD side. Again, FWRD has been more depressed over the last couple of years given the luxury challenges and over inventory and having more markdown merchandise there. So near term, most of the increase, especially in 2025, coming from a more healthy FWRD margin. Longer term, we think FWRD can be consistently in the 40s with strong full price a key contributor to that. If we look at REVOLVE, not as much of an increase in 2025. We expect some own brand mix expansion, not significant because most of the several own brand launches we have are coming in the second half of the year. So it accrues mostly to 2026 versus 2025. But some slight increase in the own brand mix, supported by strong full price mix, but then we have the offset of potential, well, tariffs that we've factored into the guidance. So that takes out some of the gains that we'd see on the REVOLVE side. Longer term, getting FWRD consistently in the 40s and then REVOLVE own brand mix continuing to expand and own brands carry a significantly higher gross margin than the third-party brands. So that's the biggest driver on the REVOLVE side, all supported by strong full price mix. We're at 82% in 2024, and we think we can be higher than that going FWRD.

Let's spend a minute on tariffs here. Certainly, a quickly evolving landscape. First off, can you remind us what impact you felt from the last round of tariffs in '18 and '19? And jumping forward to today, what's your exposure to the currently proposed tariffs, especially in relation to China? And how should we think about the mitigation strategies that are available to you?

Yes. Yes. I guess the good news is, if there is good news, we've lived through this before. We were faced with the 2018 era tariffs. And we're able to manage through that. And I think if you look at our historical margin, especially on the REVOLVE segment, you can see that we managed through that very well. Not to say that it isn't painful and won't be painful going forward, but I think we can manage through it. And how do we do that? Number one, maybe first, we isolate it. Canada and Mexico doesn't have a significant impact, at least on the direct inbound tariffs. And then we can remove FWRD from the equation. Most of that is European- or American-sourced goods, so not a significant impact on FWRD. So we're kind of isolated to the REVOLVE segment and then further to the 18% of REVOLVE that is own brands. That 18% is still majority sourced from China. And mitigating factors there: one, working with factories; factories relocating to neighboring countries, regions, which will take some time, but we are optimistic that there will be diversification opportunities there. Second is working through the supply chain and managing the ways in which we're shipping the products and saving money there to offset the impact of tariffs. And that's a more near-term impact that we can leverage over the coming months. And then third, I think having a premium price point that sells majority at full price and carries a really rich margin relative to others. We think we can manage through it through a combination of absorbing some of the tariffs and/or passing it along to the consumer. And maybe it's a mix of both. But we do think we have pricing power and can manage through that, again, relative to others in a better way.

In 2024, you leveraged marketing expense by around 130 basis points, getting to a similar range in total over the course of 2025. Less expensive, higher impact activations were a key piece of that. Are you able to expand that strategy? What might be the gating factors to doing so? Then I also want to touch on Revolve Festival coming up soon. How do the early plans for that event look relative to the past few years, especially given the changes you made last year?

Yes. I think the great thing on the marketing front is that we saw efficiencies on both the digital performance marketing side and the brand marketing side. On the digital performance side, the team continues to test new channels, new ways of marketing, continuing to manage ROAs. The market has also been favorable the last year with CPMs and CPCs decreasing. Also, again, back to the AI point, leveraging AI to make that digital performance marketing more efficient. So a lot of good stuff there that we expect to continue into 2025. On the brand marketing side, really meaningful efficiencies gained in 2024. Revolve Festival is probably the best example of that, where we cut the budget by 40%, cut it from a 2-day event to a 1-day event, and yet got more social media impressions and more press impressions out of that event. So very efficient and very impactful. Planning for a similar size scale festival this year. I'm really excited about that coming up here in already a few weeks. And then to your point on more smaller- and higher-impact events. A good example of that was the New Year's Eve event we had at the Aspen store which for every post, we had over 400,000 views, which outperformed some of our largest activations. So we're seeing a lot of good activity from both influencers, our physical locations, and then just being kind of more diverse in the playbook there.

Before we go, I want to touch on some of the longer-term opportunities in the business. And given you're in the early innings of new categories like beauty, men's, work active and home, in which of these categories do you see the most upside in terms of customer growth or frequence AOV? And how should we think about the long-term outlook and the mix of the business as it evolves?

Yes. D, all of the above. No, maybe back to the marketing point quick before I go to that. I think the other component there that we haven't talked about as much is that the merchandising and the marketing are very integrated and continue to get better and better. So a lot of the site improvements and the merchandising gains that we've made are accruing to marketing as well. So then on some of the newer categories, I think really excited about those categories. They approached $100 million this year, the combination of men's, beauty and home, which was our goal as we entered the year. Beauty at 4% of the business, we think, can be double digits into the mid-teens if you look at comparables in the department store area. Men's, we think, can be 40% of the business. We have a very captive female audience and up to 1/2 of the men's purchases out there come from a female. So very encouraged by that. Home is a smaller piece, and that's trailing, but I'm really excited about beauty and men's. And then just the adjacent categories within that core female segment. We launched Foundations Shop in January which is a way for her to purchase things she would wear to an investor conference or to the office and getting her to think about REVOLVE in more ways than just festival and just going out dresses. Yes, excited about all those.

Okay. Very exciting. And when considering the portfolio of REVOLVE and FWRD, how are you thinking about cross-marketing, cross-shopping opportunities? You mentioned it a couple of times here, but especially thinking about that if the aspirational luxury market recovers?

Yes, yes. Really excited about that as well. Again, with that very active customer file that we have, we know that if she's buying that nice pair of jeans, dress, she's also buying up for a handbag, for a pair of shoes. So making FWRD more known to her. The store is also helping in that having REVOLVE and FWRD under the same roof and giving her exposure there. The loyalty program, integrating the loyalty programs between REVOLVE and FWRD. And then just site navigation and recently making FWRD more pronounced on the REVOLVE website and vice versa.

Okay. Great. I also want to touch a little bit on the international side of the business. How should we think about the relative profitability and return rates for international markets versus the U.S.? And is there any major product differences? Obviously, heavy dress exposure in the U.S. Is that a little bit lower internationally? How do we think about the delta?

Yes. Overall, for international, a similar profitability profile to that of the U.S. When you get down to contribution margin, it is certainly higher cost to ship internationally but a much lower return rate relative to domestic. So there's some puts and takes. And by the time you get down to contribution margin, it's in the same zone, a little bit lighter on the international side, but not significantly. No significant product differences. Really depends region by region. Some regions we see men's growing phenomenally well in excess of U.S. and other regions. Shoes in some regions performed very well, but very region-by-region specific. I think one of the really exciting and encouraging things is the traction that REVOLVE has made in China over the last several quarters. Historically, if you rewind a couple of years ago, China was predominantly a FWRD business, and it was very much about the brand and getting those brand names, not as much about the emerging brands that we have on REVOLVE. But REVOLVE has been really performing well in China as of recent. So excited about that and just the progress we've made there in the marketing in China.

Okay. Well, a few minutes left here. I want to wrap it up with a little more of a high-level question. What are the 1 or 2 things, do you think investors most underappreciate or misunderstand about the Revolve story?

Yes. Great question. I think it's the founder-led mindset of Mike and Michael. I mean, again, being founder-led, still owning 45% of the business, they operate like owners because they are owners. Still very scrappy, entrepreneurial, very data-driven, in the office every day grinding and that permeates throughout the organization. It really creates a culture of innovation and kind of a data-minded DNA. So I think we probably don't talk about that enough, or maybe that's underappreciated, but I think it makes a difference in a lot of both quantitative and qualitative ways.

Okay. Great. Jesse, thanks so much for being here.

Yes. Thank you.