Warby Parker Fourth Quarter and Full Year 2023 Results

Operator: Ladies and gentlemen, welcome to the Warby Parker Fourth Quarter and Full Year 2023 Results. My name is Neil and I will be coordinating your call today. [Operator Instructions] I will now hand over to Jaclyn Berkley, Head of the Investor Relations, to begin. Jaclyn, please go ahead.

Jaclyn Berkley: Thank you and good morning, everyone. Here with me today are Neil Blumenthal and Dave Gilboa, our Co-Founders and Co-CEOs, alongside Steve Miller, Senior Vice President and Chief Financial Officer. Before we begin, we have a couple of reminders. Our earnings release and slide presentation are available on our website at investor.warbyparker.com. During this call and in our presentation, we will be making comments of a forward-looking nature. Actual results may differ materially from those expressed or implied as a result of various risks and uncertainties. For more information about some of these risks, please review the company's SEC filings, including the section titled Risk Factors in the company's latest annual report on Form 10-K. These forward-looking statements are based on information as of February 28, 2024 and except as required by law, we assume no obligation to publicly update or revise our forward-looking statements. Additionally, we will be discussing certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of our non-GAAP measures to the most directly comparable U.S. GAAP measures can be found in this morning's press release and our slide deck available on our IR website. And with that, I'll pass it over to Dave to kick us off.

Dave Gilboa: Welcome, everyone, and thank you for joining us this morning. We'll spend the majority of today's call speaking to our 2024 plan and looking forward. But first, I want to take a moment to reflect on 2023. It's a year that we have a lot to be proud of, and I'd like to start by recognizing our team's hard work and dedication to delivering the best eyecare products and experiences for our customers while improving our financial results and making progress against our mission to provide vision for all. Last year we delivered consistent double-digit revenue growth each quarter closing the year up 12% year-over-year while growing adjusted EBITDA more than 90% and expanding adjusted EBITDA margin nearly 330 basis points. We are pleased to have achieved a full year of positive free cash flow while we continue to make significant investments in our long-term strategic initiatives; including opening 40 new stores, scaling contacts and eye exams to approximately 9% and 4% of revenue respectively and introducing new innovative products like precision progressives. We are also proud to have surpassed a major milestone of distributing more than 15 million pairs of glasses to people in need through our Buy a Pair, Give a Pair program. But what we hope you'll take away from today's call is that we're not content. We have higher ambitions, in particular for top-line growth and preserving more customers, all while maintaining operational discipline and expanding profitability. A focus for 2024 and beyond will be to improve our top-line growth rate, and we are pleased with the positive momentum we have seen so far year-to-date. Turning to our plan. You'll hear a lot of consistency in our priorities from last year, but we also want to make it clear where we are leaning into opportunities or making adjustments in response to recent learnings. There are 3 key areas in 2024 that we expect will be meaningfully different from the last 2 years. One, we plan to increase our marketing and brand spend on a full-year basis for the first time since 2021. Two, we expect to drive positive sustained e-com growth also for the first time since 2021. And three, we will take a leap forward in our ability to serve insurance customers. Alongside these 3 areas, we plan to continue driving best-in-class retail economics and outsized growth in product categories like progressives, contacts, and exams. We believe these actions will reaccelerate active customer growth and overall glasses growth in 2024 and beyond.