Please ensure Javascript is enabled for purposes of website accessibility

FIGS, Inc. (FIGS) Q2 2021 Earnings Call Transcript

By Motley Fool Transcribing – Aug 13, 2021 at 1:31AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

FIGS earnings call for the period ending June 30, 2021.

Logo of jester cap with thought bubble.

Image source: The Motley Fool.

FIGS, Inc. (FIGS 10.91%)
Q2 2021 Earnings Call
Aug 12, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good afternoon, and thank you for standing by. Welcome to the FIGS second-quarter 2021 earnings conference call. [Operator instructions] Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from FIGS. And as a reminder, this call is being recorded.

Speaking on today's call will be co-chief executive officers, Heather Hasson and Trina Spear; and chief financial officer, Jeff Lawrence. I would now like to hand the conference over to Jeff Lawrence. Please go ahead.

Jeff Lawrence -- Chief Financial Officer

Thanks, Gino, and good afternoon, everyone. Thank you for joining today's call to discuss our second-quarter results, which we released this afternoon and can be found on our website at ir.wearfigs.com. With me today on the call are the co-chief executive officers of FIGS, Heather Hasson and Trina Spear. I want to remind everyone that management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on current management expectations.

These may include, without limitation, predictions, expectations, targets or estimates, including regarding our anticipated financial performance, and actual results could differ materially from those mentioned. These forward-looking statements also involve substantial risks and uncertainties, some of which may be outside of our control, that could cause actual results to differ materially from those expressed in or implied by such statements. These factors and uncertainties, among others, are discussed in our filings with the SEC. We encourage you to review these filings for a discussion of these factors, including our quarterly report on Form 10-Q filed today and our earnings release furnished today, both of which are also available on the investor portion of our website at ir.wearfigs.com.

10 stocks we like better than FIGS, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* 

They just revealed what they believe are the ten best stocks for investors to buy right now... and FIGS, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of August 9, 2021

You should not place undue reliance on these forward-looking statements, which speak only as of today, and we undertake no obligation to update or revise them for any new information. This call will also contain certain non-GAAP financial measures, including net income as adjusted, diluted EPS as adjusted, adjusted EBITDA and adjusted EBITDA margin, which we believe are useful supplemental measures that assist in evaluating our ability to generate earnings, provide consistency and comparability with our past performance and facilitate period-to-period comparisons of our core operating results and the results of peer companies. This call will also discuss key performance indicators such as active customers and average order value, which we also believe are useful for understanding our business and performance. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and definitions of these indicators are included in our quarterly report on Form 10-Q and in our earnings release.

Lastly, information discussed on this call concerning our industry, competitive position and the markets in which we compete -- in which we operate is based on information from third-party sources and management estimates. Management estimates may also be derived from third-party sources, as well as FIGS' internal research and are based on our knowledge of our industry and assumptions we believe to be reasonable. These assumptions are also subject to uncertainty and risk, which could cause results to differ materially from those expressed in the estimates. Now I would like to turn the call over to Heather Hasson, co-chief executive officer of FIGS.

Heather Hasson -- Co-Chief Executive Officer

Thank you, Jeff, and thank you all for joining our first earnings call. We are extremely pleased to have delivered such strong financial performance in our first quarter as a public company, following a successful IPO. From starting out by selling scrubs out of the back of my car to now reaching quarterly revenue of over $100 million and 1.6 million active customers, I'm so thankful to our incredible community of healthcare professionals and the entire FIGS team. And we feel like we're just getting started.

We begin every day at FIGS with the mission of celebrating, empowering and serving awesome humans. That's the name we use for healthcare professionals because that's what they are. For awesome humans, there are no timeouts, no rematches or better luck next time. They are people who give everything of themselves to curing diseases, saving lives and providing comfort.

And we need more of them because humanity cannot survive without them and because they enable us to live in the world where innovation is truly possible. So our duty at FIGS is to do such a great job at celebrating, empowering and serving healthcare professionals that we inspire the next generation to become them. It's important to remember just how many lives FIGS can impact. The healthcare apparel industry is estimated to be $12 billion in the United States and $79 billion globally.

And the healthcare sector is the largest and fastest-growing job segment in the United States, employing over 20 million healthcare professionals in 2020. So the opportunity for FIGS is massive, and we succeeded by approaching it differently than others. We focus on three primary areas: changing the product, changing the distribution model and creating a community. On the product side, we did away with the typical commoditized and uncomfortable scrubs that healthcare professionals previously had to wear.

No more boxy V-neck tops and drawstring pants. Instead, we've redefined the industry by making exceptional products that are comfortable, technical, functional and stylish. We do this through a combination of material science, fashion and deep knowledge of what healthcare professionals truly need and want. And our products span from head to toe, both on-shift and off-shift.

We're known for making intensely precise colors, and we've created the concept of color drops and generating new color standards for the industry. For example, our signature best-selling color graphite is now a hospital standard color. And our proprietary FIONx fabric embodies our commitment to technical comfort, the concept that healthcare professionals can have access to products that are both technical and comfortable. Product innovation is the lifeblood of FIGS, and that will never change.

We also reimagined the distribution model, so that healthcare professionals working 12 or even 16 hours a day no longer need to go to a retail store to dig through racks of scrubs located right next to bedpans and embracive. What they deserve is a seamless direct-to-consumer experience that is digitally native and specifically cater to their unique needs. That's why we continue to invest to make the experience as customized and convenient as possible. Finally, we've created a community around the profession.

Our 1.6 million active customers form a deep emotional connection with the FIGS brand because we interact with them in an authentic and personalized way and because we are so devoted to the profession. As an example, we launched our Awesome Humans Make History campaign as part of our IPO. This campaign, which we're continuing to run throughout the year, showcases the extraordinary achievements of our awesome humans. Campaigns like this not only help build our brand and accelerate our product launches; they also meet our mission by sharing the world our awesome humans' incredible stories and inspiring the next generation to become them.

Because this is the reason why we wake up every single day. So with that, I'd like to turn the call over to Trina, my co-founder and co-CEO, to provide an overview of Q2 and more about where we're heading.

Trina Spear -- Co-Chief Executive Officer

Thanks, Heather. Before I get started, I just want to reiterate what Heather said about our awesome humans. They are why we show up and do what we do every day. We are so inspired by them, and we hope to make them proud.

In terms of Q2, Jeff will walk you through our financial results in more detail shortly. But I'd like to give you a high-level overview first. As Heather said, Q2 was a very strong quarter for us, reflecting the strength of our brand and the uniqueness of our business model. We had our first-ever $100 million quarter with net revenues totaling $101 million, representing growth of 58%.

We saw strong performance across the board, both in the U.S. and internationally. International grew to 7.9% of total net revenue, compared to 2.9% in Q2 of 2020. Our total active customer base reached 1.6 million deeply loyal awesome humans.

And it's important to remember that we see a compounding effect as new healthcare professionals join the FIGS community. This is a replenishment-driven business with healthcare professionals constantly needing to replace their uniforms. So when we add new customers to our community, they are likely to stay with us year after year throughout their careers. As a data point on that, in 2020, 62% of our net revenues came from repeat purchasers.

And we see that they become increasingly loyal over time with net sales per active customer continuing to grow. But new customers don't only lead to retention and increased loyalty. We also see a multiplier effect from them because of the unique way that healthcare professionals interact with one another. Often in densely packed healthcare institutions, word of mouth makes even more people wanting to purchase FIGS.

This kind of organic customer acquisition is how we've been able to maintain such an efficient marketing spend, even as we've grown so rapidly. While our growth has been rapid, we built a unique model to drive sustainable growth. Unlike other healthcare apparel companies, we don't have to pay fees to license our brand from someone else, and we don't have to give away a share of our revenue to third-party retailers. As a result, we have structurally advantaged gross margin, which reached 73.3% in Q2.

And we grew adjusted EBITDA to $26.8 million in Q2 for an adjusted EBITDA margin of 26.5%. Part of what drove our Q2 performance were the many color and style launches and other campaigns that we rolled out during the quarter, something that is unique to FIGS. Our unique merchandising strategy is anchored by our 13 core scrubwear styles. Health care professionals come back all year around to buy our core products.

And when we launch limited edition colors and styles just about weekly, this newness drives excitement and traffic to our website. In Q2, we launched limited edition colors: top red, chalk pink, slate, jade, hydrogreen, shocking pink, that drove both new and repeat customers to our website. We launched bundled kits, so that our awesome humans can get fully outfitted in one simple purchase rather than having to buy each piece individually. We rolled out our high-waisted Zamora and Yola pants and added those styles to our core because they became our best-selling pants.

And we look to build franchises around our best-selling styles. In line with our commitment to innovation, we launched our FIONlite fabrication, our new ultra lightweight and sustainable fabrication, which is made with recycled poly. We made countless improvements, large and small, to our e-commerce platform to make the experience even better. We added 110,000 new followers across all of our social platforms.

And we celebrated Nurses Week with an integrated and multidimensional campaign that resulted in our best social engagement ever, generated sales that blew away our expectations and that was instrumental to our revenue growth in Q2. Also, Heather talked about the Awesome Humans Make History campaign that we launched as part of our IPO. We're so proud of this campaign because it shares the extraordinary achievements and stories of our awesome humans and hopefully inspires the next generation to become them. Looking forward, we will continue to make investments throughout our business from products, e-commerce, data science, technology, supply chain, people and more to keep growing and scaling sustainably.

Most of our focus is in four key growth areas. First, we're focused on continuing to grow awareness of the FIGS brand as we believe there's a significant opportunity to attract new customers to our community. As we mentioned before, more customers in the FIGS ecosystem has a compounding effect as those customers interact with other healthcare professionals in densely packed environments. So we plan to invest heavily in connecting with the healthcare community to increase our penetration of this large and growing market.

Second, we're continuing to innovate on products and build out our lifestyle product offerings, so that we're truly meeting all of our healthcare professionals' needs to work, at work, from work, on-shift, off-shift, head to toe. This is what our healthcare professionals want. And it also expands our TAM beyond the massive $79 billion global healthcare apparel market that already exists. Third, international remains a big opportunity for us.

As I mentioned earlier, we grew international from 2.9% of net revenue a year ago to 7.9% in Q2, and we're still in only three markets outside of the U.S.: Canada, U.K. and Australia. With the total addressable market expected to grow globally from an estimated $67 billion in 2020 to $86 billion in 2025, the international opportunity is an important one for us. Our mission is to celebrate, empower and serve as many healthcare professionals as we can.

This means making FIGS a truly global brand. Finally, we're going to continue to leverage our unique advantages from a data perspective to bring new healthcare professionals into our community and ensure they stay with us for the entirety of their careers. By having a direct relationship with our customers, we have access to hundreds of data attributes associated with millions of customer accounts. This enables us to improve our business in many ways.

Because we know who our customers are at a granular level, we're able to interact and engage with them in more meaningful and individualized ways. And by understanding their buying patterns, we're able to make increasingly accurate predictions about the products they're likely to buy, how often they're likely to buy them and the quantities they're likely to buy them in. So by continuing to leverage our data capabilities, we can more easily acquire new customers, increase our retention and operate even more effectively. Of course, the best news for FIGS is that despite everything we've achieved so far and how strong our brand has become, we still only have about a 3% market share in the United States.

So the opportunity is massive, and we remain confident that we have the teams and resources in place to achieve over $1 billion in net revenue by 2025, and we're committed to making the investments needed to achieve this goal. With that, I will turn the call over to Jeff to provide additional details on our Q2 results.

Jeff Lawrence -- Chief Financial Officer

Thanks, Trina and Heather, and good afternoon, everyone. I wanted to start by saying how honored I am to be part of such an amazing company and team. We have so much opportunity in front of us, and I know we will continue to do great things. We are truly just getting started.

With that said, we are excited to share with you the results of our second quarter, so let's dive right in. Net revenues for Q2 were up 57.6% to $101.1 million, driven primarily by strong order growth from both new and existing customers. We also saw a 17% year-over-year increase in average order value, or AOV, to $103, and was driven by a favorable shift in product mix and an increase in units per transaction, partially driven by the positive response to our launch of bundled item kits. We also noted a better-than-anticipated response from the healthcare community to our Nurses Week campaign.

Quite simply, the results from this campaign, our largest of the year, were simply outstanding. Gross margin for Q2 increased 280 basis points year over year to 73.3% for the quarter. This improvement was primarily driven by a shift in sales mix away from lower-margin products and a decrease in airfreight expenses as we used more airfreight in Q2 2020 due to the need to bring in extra inventory faster to meet incremental demand. Selling expense for Q2 was $19.2 million or 19% of net revenues, which was a 1.1-percentage-point improvement compared to a year ago.

This improvement was primarily driven by leverage within shipping, driven by the increase in our average order value. Marketing expense for Q2 was $15.5 million or 15.3% of net revenues, up 1.6 percentage points compared to a year ago. Marketing expense increased as a result of greater investment in performance marketing. We are proud of our continued ability to efficiently attract new customers to our brand.

G&A increased to $71.5 million in Q2 compared to a year ago. This increase was primarily driven by higher stock-based compensation in connection with our IPO. We also invested more in personnel and hired key team members to bolster our capabilities as we move forward on our strategic initiatives. Our tax provision was $8.5 million for the quarter and was up from the prior year.

The provision was unfavorably impacted by the increased stock-based compensation expense associated with the IPO. Net income and diluted earnings per share were both down year over year due to the aforementioned stock-based compensation expenses in connection with our IPO and an increase in taxes, offset in part by our outstanding operational results. Diluted EPS as adjusted was $0.08 in Q2, compared to $0.09 in the prior year. Diluted EPS as adjusted includes adjustments for IPO transaction costs, expenses related to non-ordinary course disputes and stock-based compensation expenses in connection with our IPO, as well as income tax impacts.

Finally, our adjusted EBITDA for Q2 was $26.8 million, up 54.5% over the prior year. The adjusted EBITDA margin was 26.5%. We are very proud of our business and financial model and our ability to produce real and substantial cash flows. We believe that these non-GAAP metrics are important supplemental measures for understanding our results, and we, again, refer you to our 10-Q and our earnings release issued earlier today for the required disclosures and reconciliations.

Moving on to the balance sheet. Our cash position at quarter end was strong with total cash and cash equivalents of $164 million. We have the capital to continue to invest and grow this amazing brand the right way. Before we get to guidance, we thought we'd share a bit about our investment philosophy here at FIGS.

We are building this company for the long term and with the healthcare community in mind. We do that by actively building capabilities in the things that matter the most to our brand and our mission. We are also mindful of the way we build those capabilities. For example, we want to own more of what's truly strategic while outsourcing more of other areas.

And maybe most importantly, we will invest responsibly. Appropriate levels of return are the focus of everything that we do here at FIGS, and that discipline will continue into the future. While we acknowledge that we have built market-leading capabilities already, we will invest to stay ahead. With that as a backdrop and again, recognizing the large and growing $79 billion global healthcare apparel market, I highlight the following investment areas going forward.

First, you'll see continued deep investment in innovation, particularly around our products. As mentioned earlier on this call, we launched FIONlite, our new ultra lightweight and sustainable fabrication, which is made with recycled poly. We will continue to bring innovation-first approach to all new development. You'll also see smart investments in marketing, both performance and brand marketing.

We want to continue to drive brand awareness and to bring more of those aware of the FIGS brand into active customers. Once we acquire them and bring them into our funnel, we endeavor to create loyal brand fans who not only replenish their scrubs frequently but also explore our ever-growing set of lifestyle offerings. It is a flywheel we are incredibly proud of and one that we believe will flourish even more with continued investment. Of course, we can't do all this without investment and execution in the data and technology space.

While we have already built some really dynamic and effective tools to help us analyze, act and drive more top-line growth, we know there's so much more we can continue to do over time in this important area. And we are committed to doing just that. Finally, people. Since our founding, we've attracted, retained and motivated a group of leaders and team members who are simply the best.

Human capital will remain a priority for us. We will continue to ensure we have the right folks at the table to help us achieve our long-term goals. We believe we have earned our competitive moat, but we are also big believers in investing to stay ahead, and we will continue to invest to win in the long run. Now let's move on to guidance.

We are long-term focused here at FIGS. As a result, the financial guidance we share with you all will generally be longer term in nature. Of course, dynamic businesses like ours will have some inevitable variability in certain periods, particularly as we ramp investments, but we will remain focused on building the brand the right way and aim to grow both revenues and profits responsibly over the long term. The metrics you will hear us talk about most often are as follows: net revenues, gross margin and adjusted EBITDA.

You will also hear us talk about KPIs such as active customers and average order value. We believe these measures to be very useful in understanding our business and our performance, and that is why you will hear us speak to them often. Having said that, I'll start with reiterating what Trina just spoke about a minute ago. We aim to be $1 billion-plus net revenue global brand in 2025.

We are energized and excited by the challenge and are working hard every day to make it a reality. For full-year 2021, specifically, we expect to earn net revenues of approximately $395 million. We will not be providing quarterly net revenue guidance. We currently anticipate providing 2022 annual net revenue guidance early next year.

Before moving away from revenues, I'd like to remind everyone that we had a $4.2 million related party sale in Q3 of 2020 that we do not anticipate recurring in 2021. This will affect comparability between the back half of '21 and 2020. One more call-out relating to 2021. We currently expect that our effective tax rate for Quarters 3 and 4 will be approximately 33% to 37%.

Let's now transition to our margin expectations going forward. As you saw in the first half of 2021, our financial model is capable of producing outstanding growth. We also note that the first half of 2021 did not have many investments and expenses that we expect to incur in the back half of 2021. For example, the significant cost of being a public company.

Expenses relating to human capital are also expected to be higher in the back half of 2021 as we continue to build our teams and capabilities. Finally, we shifted certain marketing spend from the first half, which we currently plan to accelerate in the back half of 2021. In addition to these call-outs, we remain deeply engaged in ensuring that our supply chain continues to operate efficiently. While our operations team has done a wonderful job of managing the business to date, we acknowledge the dynamics in shifting macro supply chain challenges being experienced by almost all apparel companies as a result of the ongoing COVID-19 pandemic, particularly those who have supply chains in Asia.

As a reminder, we have manufacturing partners across Asia and South America and have exposure in countries such as Vietnam and Sri Lanka, which are experiencing a resurgence in COVID-19 due to the Delta variant. As a result, we currently expect that we would experience downward pressure on gross margin, if, for example, we need to increase the airfreighting of products into the United States to ensure uninterrupted supply of the products we know that our customers love. We are currently unable to predict with certainty how long these pressures may persist or the possible future impact on margins. We do hope that this color both on net revenue comparability and possible expense movements is helpful to the investing community.

Let's now move to longer-term margin guidance. We believe that we can achieve annual gross margins of 70% or more over the next three fiscal years and annual adjusted EBITDA margins of 20% or more over that same time period. Our business and financial models are strong and resilient, and we believe we are capable of achieving these outstanding levels of profitability. We believe that this guidance that we are sharing today should provide the financial community with a very good sense on where we aim to go financially as a brand, and we will share more as appropriate in the future.

Once again, we are very pleased with our financial results in Q2. And with that, we will turn it back to the operator to open it up for questions.

Questions & Answers:


Operator

All right. [Operator instructions] First question comes from the line of Adrienne Yih from Barclays. Your line is now open.

Adrienne Yih -- Barclays -- Analyst

Good afternoon, and congratulations on the IPO and your first quarter out here as a public company and the successes therein. I have a question for each of you. So Heather, I wanted to know kind of how much newness innovation has been put into the system this year versus last year, in particular for the back half of the year, new product launches. Anything else that is on the deck? And then, Trina, can you talk about pricing strategy? Are you expected to kind of take normal price increases on an annual basis? How do you think about that in a world of potential inflation? And then, for Jeff, really focusing on that average unit cost trends.

It sounds like you had net benefits this quarter because more air. Should we expect -- or sorry, less air. Should we expect that less air relative to last year going forward into the third quarter? And is that offset by kind of breakpoint pricing, meaning volumes are going up? Thank you.

Trina Spear -- Co-Chief Executive Officer

Thank you so much, Adrienne. This is Trina. In terms of our pricing strategy, we could start there. We really feel like our products are priced accurately.

We use a lot of our data analytics to ensure that where we price, it really makes sense for our healthcare community. We're not necessarily going to move our pricing because of any inflation that the environment is in. And I think, we're constantly analyzing this from a data perspective to ensure that our pricing makes sense for this community. I would remind you also that our products are extraordinarily accessible and affordable.

I think, it's truly unique. Two-thirds of our customers make less than $100,000. And so it is our goal to ensure that our products are not only the highest-quality products in the industry but also that they are affordable and accessible for our community. And Heather, do you want to talk about our newness strategy?

Heather Hasson -- Co-Chief Executive Officer

Sure. Thanks, Trina. In terms of product innovation, right, so FIGS, we're centered around delivering functional products to the healthcare professionals at all times. We are going to continue to invest in material science.

We're going to continue to invest in innovation around products, probably beyond anything anybody has ever seen. And I'm super excited, everybody on the team's very excited about it.

Jeff Lawrence -- Chief Financial Officer

Hey, Adrienne, it's Jeff. On your third part of your one question, so kudos to you. As far as gross margin, again, we are guiding longer term there, fiscal-year '22 to '24. You, obviously, saw the results we've put up in Q2, well north of that.

When you look at airfreight Q2 to Q2 last year, Q2 last year was right at the beginning of the pandemic. We were growing like crazy as we did again this quarter. And so we did have more airfreight last-year Q2 than we had Q2 this year. So again, we're not guiding specifically back half of this year on margins.

But what I would tell you is we've built a very robust and diversified supply chain network that not only has been able to keep up with our incredible rate of growth but we believe has allowed us to risk manage pretty effectively as well. I think, there are a lot of apparel companies out there that are worried about getting their products made. As we sit here today, we're really not worried about that. We believe we have the right partners in the right countries from a diversification perspective that we don't have the worry that I think a lot of other apparel manufacturers have.

I do think what we're concerned about, and I'll refer you back to my prepared remarks, we want to make sure that we can get them into the United States. Obviously, the COVID-19 pandemic continues to have just a lot of trouble and a lot of challenges being very dynamic. And so as we look to the back half of this year, we don't know for sure, which is why we didn't guide to it specifically, but we could see downward pressure on gross margin, if we choose to air freight in the products that we know our customers love. So the good news for us all is we'll get to talk to you in another 90 days once Q3 shakes out.

But I think, really, from a positive perspective, we believe we have the right supply chain partners in place. We think we are risk diversified enough. It's just about getting into the United States, and that will come potentially with an extra cost that we are more than willing to make for our healthcare community.

Adrienne Yih -- Barclays -- Analyst

Totally makes sense. Best of luck.

Heather Hasson -- Co-Chief Executive Officer

Thank you.

Jeff Lawrence -- Chief Financial Officer

Thanks, Adrienne.

Operator

Next question comes from the line of Bob Drbul from Guggenheim Securities. Your line is now open.

Bob Drbul -- Guggenheim Securities -- Analyst

Hi, congratulations, great quarter. Congratulations on the IPO. I'm going to try to sneak in two, Jeff, I'm sorry. I can't help myself.

But the first one is with the 17% increase in AOV, is that something that you expect to continue in coming quarters and in years? I don't know if you could talk about that longer term. And I guess, the second quick question is, I think you mentioned the shift of marketing spend out of the first half into the second. I was wondering if you can just quantify that for us, please. Thanks.

Jeff Lawrence -- Chief Financial Officer

Yeah, Bob, really appreciate you being on the call today. So AOV first, we're not guiding AOV specifically. As you can see over the last year and a half, it's kind of slowly climb the hill to $150 in Q2 of 2020. Part of that year over year was we did have more masks, which are, obviously, lower price points.

So there's some of that in there. But we've also been able to really use the data and technology investments that we've made over the years to be smart about things like pricing, to be smart about getting our healthcare professionals to maybe add one more thing to the basket that they need for when they go back on shift for a midnight shift. So we're being smart about it. I think, we are building AOV the right way with kind of smart increases to AOV.

I think, as Trina mentioned earlier, we try to remain really disciplined around taking price just for price sake, right? That's not who we are. We want to make sure that the value of the products really shine through, again, to our healthcare community. They deserve it. Our products, as you know, very accessible price points, but outstanding value.

So we look at that. And going forward, again, not guiding specifically, but I'll go back to one of the things Heather said, we have this layering system that we've innovated around. And we continue to add lifestyle products that are just amazing. So I think, there's opportunity there.

We're not guiding specifically, but we're proud of what we've been able to put up so far, and we'll continue to work at it hard. Bob, the second part of your question again was around what?

Bob Drbul -- Guggenheim Securities -- Analyst

I think, you said that you shifted some marketing spend out of the first half into the second half. I'm just wondering if you could quantify what that was, if it's a dollar number.

Jeff Lawrence -- Chief Financial Officer

Yeah, so that was really just brand marketing. We're not putting a dollar amount to it. We got a lot of good and awesome brand exposure as part of our IPO that we didn't largely have to pay for. And we are just really excited about the promotions and the -- not really promotion, but the brand activity with our -- through social and through our community that we have for the back half of the year.

So we're going to lean into that a little bit in the back half of 2021. So you'll see that likely go up a little bit. But again, for competitive reasons, we, obviously, can't talk about what that is. But again, we'll invest that responsibly, and we feel good about where we're going.

Bob Drbul -- Guggenheim Securities -- Analyst

Thanks, Jeff.

Jeff Lawrence -- Chief Financial Officer

Thanks, Bob.

Operator

Next question comes from the line of Ed Yruma from KeyBanc. Your line is now open.

Ed Yruma -- KeyBanc Capital Markets -- Analyst

Hey, guys, thanks for taking the questions, and congrats on the quarter and on the IPO process. Just a quick one for me. I guess, first, it relates to marketing. We've heard a lot of buzz about IDSA and maybe how it's changing, how people market as it relates to some of these privacy issues.

I guess, any changes you're seeing in your marketing effectiveness? And then, as a follow-up, it seems like you've had a lot of compelling product introduction during the quarter, noted like compression stocks, some of the underscrubs. I guess, how would you characterize some of these newer products and how they may be positively impacting the business? Thanks.

Trina Spear -- Co-Chief Executive Officer

Sure. Thanks, Ed. So first, if you look at the full picture of what we're doing in terms of our marketing standpoint, our marketing efficiency is really best-in-class. I think, we are light years ahead of other digitally native direct-to-consumer companies on this front.

FIGS marketing as a percent of sales, that's about 15% for the quarter. If you think back over the past eight years since we started business, no one saw 100% digital e-commerce business could have that level of profitability like ours and spend only 15% on marketing while growing 58% in a quarter. And so why are we able to do that? I think, it's because we had structural advantages built around the word-of-mouth dynamics, the replenishment dynamics in this business where we don't have to rely as much on performance marketing to be successful. And so I think, what you've heard around iOS and privacy issues or Facebook algorithms changing, we are not really impacted like other companies on that front.

If you think about word of mouth, for instance, healthcare professionals, as I discussed, they were in densely populated healthcare institutions. They're interacting with each other all the time, in the break room, in the coffee shop in the lobby, in the hallway, in between patient business. And they were looking at they're wearing, and that's essentially free. It's like a walking billboard.

No marketing is really necessary for that. And on the retention side, it costs far less to retain a customer than to acquire one, and we're a retention business. Over 60% of our business in 2020 was from repeat purchasers. So as we scale, we'll see more of our purchases come from repeat purchasers, and that is something that we are excited to see over time.

And I think that's, I think, kind of how we think about the marketing side and the marketing effectiveness. And to Jeff's point about the brand shift, right, I think where we are focused is on LTV, driving community engagement. What we see from that is that as our LTV -- as we make these investments, our LTV goes up. So you might see some investments on the marketing side that are not going to pay off today.

And that's OK, right? You're going to see that over time as we shift to really not focusing as much on that immediate gratification or that direct response and really make those LTV-focused investments. And on the product introduction front, FIONlite, you saw that was our new fabrication, really focused on sustainability, super lightweight material, yes, we saw an amazing response from that. Colors, we own color in this industry, and you saw a number of color launches that were extraordinarily successful around Nurses Week 2, in particular, with pop red and chalk pink. And you're going to see this strategy around.

We launched new colors. We launched new styles. Our healthcare professionals are waiting to see what we're launching next. It sells out within a matter of hours or days or weeks, and that's a really important part of our business.

Ed Yruma -- KeyBanc Capital Markets -- Analyst

Thanks so much.

Operator

Next question comes from the line of Lorraine Hutchinson from Bank of America. Your line is now open.

Lorraine Hutchinson -- Bank of America Merrill Lynch -- Analyst

Thanks a lot. Good afternoon. Jeff, I just wanted to follow up on the sourcing question from earlier. It sounds like you're comfortable that you will get the product you need.

But is there any way you could just kind of bracket the range of outcomes for the gross margin pressure in the back half?

Jeff Lawrence -- Chief Financial Officer

Yeah, that's a great question. And listen, as much as we'd love to do it, it is just so dynamic and uncertain right now as we look to the back half of this year, as you can imagine, Lorraine. What I do know is that for a very long time, we have been able to produce gross margins that are fundamentally structurally advantaged, right? The right model for this community, a direct-to-consumer model that has just run really, really well and efficiently. And so to impart, obviously, to the robust and sophisticated supply chain that we built among many facilities in many countries.

So we do want to give you a number. We really want to give you a number, but it is just so dynamic in shifting that if we gave you a number, we fear that it'd be wrong. And part of this is it also depends on how this does play out over the next 30, 90, 180 days. So I think, the important part to note here is we are going to remain nimble.

We're going to continue to lean on our best-in-class manufacturing partners and network that we've built. And then, we're confident that, yes, we will get the product as we sit here today. It's really about -- at least, again, as we sit here today and assess it, it's really about just getting it into the United States. And if we need to make that investment again to bring in more air, and obviously, that would have a downward pressure for some period of time on gross margin, we will absolutely do that.

And we will do that gladly because we know that the long-term profile of financials doesn't really change once we get past the other side of this pandemic.

Lorraine Hutchinson -- Bank of America Merrill Lynch -- Analyst

Thank you.

Jeff Lawrence -- Chief Financial Officer

Thank you so much.

Operator

Next question comes from the line of Erinn Murphy from Piper Sandler. Your line is now open.

Erinn Murphy -- Piper Sandler -- Analyst

Great, thanks. Good afternoon, and congratulations on a successful IPO. I guess, Trina, I wanted to follow up with you on the color drop performance for the quarter. Could you just share kind of what -- how many you launched this time last year? And do you think it helped to drive repeat customers? Or did it just kind of add another purchase for existing customers -- or excuse me, new customers or existing? And then, Jeff, just a clarification on the guidance.

So the $395 million for the year would imply a low 20% revenue growth in the back half, so below the mid-30% run rate in the long-term model. So my question is, is the 10-percentage-point delta there, is that just related to lapping the third-party-related sale from last year? And then, if so, like is there one quarter that's more impacted? Is it smooth across the back half? Just help us kind of think about that shift. Thank you.

Trina Spear -- Co-Chief Executive Officer

Sure. So thank you, Erinn. It's great to speak with you again. From a color drop perspective, we launched a similar amount of colors in Q2 2021 as we launched in Q2 2020.

And they were extraordinarily successful this year. We're super excited to see the engagement around our color launches. I think, in terms of repeat versus new, it's a really exciting thing that we see. Yes, when we drop a new color, our FIGS customers that are already in our community are super excited.

They are the ones that know about it. But on those days of launch, we see a significant percent of our net revenue actually being new customers. And I think, that's where you see that word-of-mouth dynamic. Where you're meeting at the break room, oh, FIGS just launched shocking pink and hydrogreen.

Did you see that? Oh, no, I didn't. Go head out to our website, wearfigs.com, and check it out. So we're super encouraged by that. It's very much the flywheel effect that you see in our business where not only do these drops bring excitement and units to our community but also drive new people to try us out.

Jeff Lawrence -- Chief Financial Officer

Hey, Erinn, it's Jeff. On your question on the net revenue guidance for 2021, $395 million net revenue is the number. And again, long term, we have a goal of being $1 billion-plus net revenue brand in 2025. The related party sales that I noted earlier did occur in Q3 of 2020.

So as you think about potentially how you might want to think about that, hopefully, that's helpful. I think also, the guidance that we are giving you, the $395 million is one we're comfortable with today. But it also acknowledges just the challenges generally again in supply chain and generally. Obviously, we always have an opportunity to outperform the guidance that we're comfortable giving you with today, and we will work really hard to try to do all that.

The $395 million net revenue is a number that we are comfortable with today. That's a 50% increase over 2020. And again, you know us, we're not just about revenue growth or about profitable revenue growth. So again, all those things kind of put together gets us real comfortable with that number for today.

Trina Spear -- Co-Chief Executive Officer

Yeah, and the one thing I would add to just -- to what Jeff said. I think, if you look at the full picture, we're experiencing very steep growth. We increased our net revenue 58% year over year. If you look at the first half of the year, there's always gonna be some bumpiness around quarters, but we really look to look at a longer period of time.

If you look at the first half of 2020 versus the first half of 2021, we grew net revenues by almost 100%. And as we mentioned in the prepared remarks, we see ourselves as having at least $1 billion in net revenue by 2025. And so we're super encouraged by the future long-term prospects of this business.

Erinn Murphy -- Piper Sandler -- Analyst

Thank you, both.

Operator

Next question comes from the line of Brian Nagel from Oppenheimer. Your line is now open.

Brian Nagel -- Oppenheimer & Co. Inc. -- Analyst

Hi, good morning -- I'm sorry, good afternoon. I'd like to add my congratulations on a very nice quarter and your successful IPO. So I'll also kind of shove a couple of questions together. First off, so you talked a lot about the new product launches and the colors.

Are there -- does the margin profile change with these product launches? Or is it basically the same as what we are looking at the aggregate of the company? And second, with respect to the supply chain, I guess, Jeff, this is just a point of clarification. You talked about bringing product in via air and recognizing that reflects a lot of the challenges happening in the COVID crisis. But in normal times, how much airfreight do you use? Or is this -- would this really be an extraordinary note?

Jeff Lawrence -- Chief Financial Officer

Yeah, Brian, thanks. I'll take the second part of that first, just around airfreight. We have a very well-healed and sophisticated inventory planning capabilities. And in normal times, airfreight is something that's more of an exception to the rule because normally, you're able to plan effectively, you put it on a boat.

And with the lack of variability that we've seen, you generally get it in time. You don't have to worry about it. Obviously, COVID has upended that entire system. So going forward, on the other side of the pandemic, again, given our inventory plan and capabilities we have today, continued investments that we'll do there, this is largely gonna be ocean in the out-years.

I will also tell you, though, that if we get incremental demand that we didn't forecast, if we're launching an injection color that we're really excited about, those might be decisions where we at least consider airfreighting kind of on the other side of the pandemic. On the product launches and gross margin kind of by product launches, like the short answer is bigger than a breadbasket. They have similar margin profiles. You got to remember, our underlying FIONx fabrication, it makes up the vast majority of both our core and our injection styles.

So we really get the scaling effects there. And that really does kind of bleed through to having a similar margin profile.

Brian Nagel -- Oppenheimer & Co. Inc. -- Analyst

Got it. Appreciate the color, and congrats again. Thank you.

Jeff Lawrence -- Chief Financial Officer

Thanks, Brian.

Operator

Next question comes from the line of John Kernan from Cowen and Company. Your line is now open.

Unknown speaker

Hi, all, this is John Cardoso on for John Kernan. Congrats, again, on a great quarter coming out of the IPO, and thanks for taking the questions. So I guess, the first question I have is, I guess, how has the competitive environment changed from, I guess, when the pandemic started to now as you've seen kind of rising brand awareness and kind of further establish yourselves as a significant player in the market? And then, I'll have a follow-up after that as well.

Trina Spear -- Co-Chief Executive Officer

Sure. So from a competitive standpoint, the environment is very similar actually to what we've seen since we started. I think, there's really two types of competitors, right? There's the old school players that -- well, there's two types. Actually, there's the people that make products, companies that make products and they're really licensing its name from another type of company, and then they sell it to companies that sell the product, retailers across the country that then sell it to the end customer.

And so in that outdated model, the companies that are selling their products to the retailer, they don't really understand the customer. They don't have any data on the customer. They don't even know their names. And then, the retailers then selling it to the consumer, these are stores in strip malls and out-of-way locations that close at 5 p.m.

As a healthcare professional that oftentimes is working 12-hour, 16-hour shift, you get off shift at 7 p.m., it's very difficult to travel to some out-of-the-way store to get your scrub. So that's the way the industry existed for the last 100 years prior to us disrupting it. I think, newer companies have come on since we started after us and have tried to -- they tried to kind of replicate what we've done. And I think, what we've seen is that it's really, really hard to replicate.

We've built a level of customer trust with our community that has taken about a decade to build. And brands are harder and harder to build. I think, over the last 10 years, it was hard to build a brand. Over the next 10 years, it's gonna be even harder.

And customers are smart. Health care professionals are even smarter, and they want that authentic connection with a brand that stands for something that they can stand behind. And so we are going to continue to show up for our healthcare professionals and do things differently and be there as they actually are on the frontlines right now. And our job is to support them in every way we can.

Unknown speaker

Got it. Understood. I guess, just one quick follow-up. Can you comment kind of on current customer trends, the effectiveness of your marketing efforts and kind of how that's flowed through to the customer acquisition cost kind of about the intersection of that?

Trina Spear -- Co-Chief Executive Officer

Yeah. I mean, as I discussed, I think, the -- we've been -- we operate differently, right? I think, word of mouth has driven a lot of our business, and that is something that we don't pay for. We have best-in-class ROAS metrics, we have best-in-class CAC that you don't see in really any digitally native direct-to-consumer company. And it is a function of how our community is interacting with each other.

It's also a function of how strong the replenishment dynamics and retention dynamics are in our business that people come to us and they love our products, and they come back on average every 90 days to replenish their uniform. They're coming back over and over and over again to replenish their uniform. And so we've seen over 60% of our net revenue is coming from repeat purchasers. And we're going to see that continue to increase over time.

I think, that is the -- what is driving that marketing efficiency that is truly unique to us at FIGS.

Unknown speaker

Great, thanks again, Heather, Trina and Jeff. And congrats again.

Jeff Lawrence -- Chief Financial Officer

Thank you.

Operator

Next question comes from the line of Lauren Schenk from Morgan Stanley. Your line is open.

Lauren Schenk -- Morgan Stanley -- Analyst

OK, great, thanks for taking my question. Just to follow up on sort of the implied back-half guidance. Is there anything that you're seeing in July that's causing you to be more cautious? Or is it sort of holistically how you think the back half could play out just given some of the supply dynamics that you talked about? And then, secondly, any color that you can share specifically on the cohort of customers that you acquired in the second quarter last year, sort of the COVID cohort, if you will? How has their retention trended versus previous cohorts, as well as their LTVs? Thanks so much.

Trina Spear -- Co-Chief Executive Officer

Sure. So I think, it's important to be mindful of the macro challenges affecting everyone, and that's really why we're providing the $395 million guidance. I think, our demand is extremely strong. We have structurally advantaged -- we're structurally advantaged in a number of different ways from our supply chain.

But with the current COVID environment, getting products out of Asia into our -- into the U.S. is a risk, I think, definitely in the short term. But we are committed to doing everything we can to solve this and get our products to our healthcare professionals, so they can look good, feel good and perform at their best. I think, it's important to note that we've had such strong growth throughout our history.

I mean, we serve healthcare professionals who need uniforms no matter what's happening in the world. They need to replenish those uniforms regularly, and they have careers that are, on average, 36 years long. So I think, no matter what the environment is, we are going to continue to show up for our community. And we feel really confident in the guidance that we provided.

But we hope that -- and I would point you back to the $1 billion number by 2025. That annual number in 2025 is really where we're focused over the long run. In terms of our cohorts, sorry, the second question, Lauren. In terms of our cohorts, we've seen our retention for Q1 -- I'm sorry, Q2 of 2020 versus Q2 of 2021, we've seen our retention -- the cohort -- the retention of those cohorts be acting in a very similar way.

LTVs are trending positively. And that's really something to keep in mind, right? AOV is an important metric, but what we are really focused on is on the annual spend in LTV because that is where we are focused over the long-term health of our business. Our healthcare professionals are coming back over and over throughout their career. And so that's -- those are the metrics we're focused on.

Lauren Schenk -- Morgan Stanley -- Analyst

Great, thank you.

Operator

Next question comes from the line of Dana Telsey from Telsey Advisory Group. Your line is now open.

Dana Telsey -- Telsey Advisory Group -- Analyst

Good afternoon, and congratulations on the success of the IPO and solid results today. With the tremendous sales growth that you saw this quarter, how did the category mix shift adjust? Did anything move from that 82% core scrubs or 13% lifestyle and other? What do you see there? And is there any update on the penetration of men and women in terms of what you saw?

Trina Spear -- Co-Chief Executive Officer

Sure. I mean, I think, it's generally the same. I think, we've seen our business grow very rapidly over the time period. And for the most part, our overall scrubs business is growing.

Our outerwear business is growing. Our compression socks business is growing. Our underscrubs are growing. So that mix shift is around what you saw previously.

And that's just across the board. I think, women versus men continue to see really -- it's around what it was that what you've seen in the past. I think, we have nothing to note on that as well.

Jeff Lawrence -- Chief Financial Officer

Yeah, the one thing I'd add to that, Dana, that Trina mentioned is lifestyle, approximately $11 million of sales in the quarter, up 60% year over year. And the percent of sales up, even though we are selling a lot less masks than we did last year. So I think, the lifestyle -- I think people should not sleep on the lifestyle aspect of this brand. We put a lot of investment in it.

We're getting a lot of -- out of it, and we'll continue to make sure that we invest there.

Dana Telsey -- Telsey Advisory Group -- Analyst

Got it. And then, just on the marketing side, is there anything in the second half, an event or things that will be new this year that weren't there last year that we should note?

Jeff Lawrence -- Chief Financial Officer

Yeah, I mean, really, for competitive reasons, we really won't speak to specific brand campaigns in the back half. But I'm looking across the table at Heather. She's super excited. She'd love to share a lot of this with you, but we won't today.

But I can tell you that it'll continue to excite the healthcare community. It'll continue to increase awareness of our wonderful brand. And listen, we know that once we get folks aware of our brand and we get them into our funnel, they become loyal fans. You remember from our IPO, if you come and you buy from us, 50% of the time, you come back and buy again within 12 months.

So well, that's a phenomenal stat compared to anybody that we compete with. We also look at that other 50% and use data to figure out how can we get it to 60% or 70%. So we're super excited about it. We've got really cool brand things coming your way, but we're not going to let Heather talk to you about it today.

Dana Telsey -- Telsey Advisory Group -- Analyst

Thank you. Congratulations.

Jeff Lawrence -- Chief Financial Officer

Thanks, Dana.

Operator

Next question comes from the line of Michael Binetti from Credit Suisse. Your line is open.

Mike Binetti -- Credit Suisse -- Analyst

Hey, guys, thanks for taking all our questions here, and I'll add my congrats on the IPO in the quarter. I do have a couple. Jeff, it's hard for us to find companies with EBITDA margins in the low 20s or what you guys call 20-plus that have gross margins of 70-plus. So I know you talked about some of the priorities on the investments.

But can you cross walk us from -- you've been pretty consistently delivering in the mid- to high-20s range in the last few quarters. Can you cross walk us to over whatever next year or two takes you to the lower end of a 20-plus range from here with the grosses that you described? And then, I guess, as we think about the growth algorithm from here, how much do you think comes from selling to higher -- growing numbers of healthcare professionals entering the franchise versus expanding in the closets of the healthcare pros that you have, but more importantly, from non-healthcare workers, you pointed to lifestyle? But that's the real TAM expander, is if you start to break in the closets of non-healthcare. Maybe any financial metrics you could tell us that are some early indicators that you see in making a headway with that customer?

Jeff Lawrence -- Chief Financial Officer

Yeah, thanks, Mike. And I'll let Trina chime in here in a second. But as far as view on TAM, but I'll take the second one first. We think there's multiple ways to expand TAM here.

We have a $12 billion total addressable market in healthcare apparel in the U.S. alone. We know it's $79 billion globally. And obviously, that doesn't include other non-healthcare markets, regardless of what kind of work or where that is.

So that's clearly an opportunity for us. It's clearly a longer-term opportunity. We are really focused on the opportunity right in front of us with, again, only a 3% market share. But we also think about TAM expanding not just in non-healthcare apparel, which, again, is longer term for us now today.

But we look at these lifestyle offerings. The underscrubs, the socks, the sports bras, the leggings, we continue to invest behind all that. And so when we look at TAM expansion, we really view it in both of those ways. And neither of those are in that 12 -- largely in that $12 billion number.

As it relates to the walk kind of from historical EBITDA margin to what we are forecasting annually over the next three fiscal years, it's really a couple of things. First, you got the cost of being a public company, as I mentioned in my prepared remarks. And then, the second thing, I think as you walk down the P&L, it's human capital. It's building the teams and building the capabilities around marketing and supply chain and data analytics.

We have the capital to spend. We know we need to invest there incrementally to achieve our lofty long-term goals, but we're pretty confident about it. And then, there's all those other stuff that you don't anticipate, particularly to your earlier point, if we do ultimately get up into other categories. So that's kind of how the walk works for us.

And I'll ask Trina if she wants to add anything on -- or Heather on TAM.

Trina Spear -- Co-Chief Executive Officer

Yeah, the only thing I would add is that the $12 billion TAM for the United States is $79 billion TAM globally really doesn't include many of the lifestyle offerings that we have for our healthcare community. And so the way we think about our TAM expansion and creating TAM every day here is really about outfitting our healthcare professionals with all the lifestyle offerings from head to toe, to work, off-work, from work, on-shift, off-shift. This is really about the healthcare professionals' entire uniform, this layering system that we referred to. And so that's how we think about that.

In terms of -- and then I would just add on the -- are we growing the -- extending the closet, right? I think, that's what our layering system does and the repeat customers that come back over and over again, but also having more and more of the healthcare community. Once again, we have a 3% market share of that $12 billion, not even including kind of how we think about TAM. But we have a 3% market share in the U.S. of that $12 billion number, so we have a long runway in front of us.

Heather Hasson -- Co-Chief Executive Officer

And yeah, just to add on to both Trina and Jeff. Our layering system is -- that's really how -- that's all our healthcare products, right? That's how we see the uniform. And it's a new way of thinking about it, and that's what FIGS did. We redefined what the uniform is.

So layering system is a full ecosystem of products. It's comprised of really the best products to cover every one of their needs. It's just to reiterate what Trina said, it's on-shifts and off-shifts and everything in between, right, in between them going to work. The assortment consists of underscrubs, scrubs, jackets created specifically for temperatures of hospital environments and all their necessities.

They are built to perform together and in any combination, right? So that's -- they mix and match all these different styles. And they work together, nicely worn infinite combinations, like you can mix and match, and that's the beauty of our business. And it's also the lifeblood of our company.

Operator

OK. Next question comes from the line of Brooke Roach from Goldman Sachs. Your line is open.

Brooke Roach -- Goldman Sachs -- Analyst

Hi, good afternoon, and thanks so much for taking our question. Trina, the brand continues to show very strong international momentum. Can you talk to the geographies where you're seeing the most success and perhaps your plans for driving that growth over time? And for Jeff, a lot of commentary so far on the call today on investing to build that growth momentum of this brand for the long term. Could you perhaps help us understand how you're thinking about the cadence of investing into those four big buckets of investment that you talk to?

Trina Spear -- Co-Chief Executive Officer

Thanks, Brooke. So as we mentioned, we know international is a huge opportunity. The market outside the United States is a $67 billion market, and we wanna be a global brand, so -- and serve healthcare professionals everywhere. I think, we can't break out exactly what's coming from what.

But as you know, we're in three countries right now. We're in -- outside the U.S., we're in Canada, Australia and U.K. We're seeing great progress from all markets. And without even adding any new countries just year over year, we've grown our international from 2.9% of net revenues to 7.9% in just the last year.

So it's really exciting. I think, it's maybe important to understand our strategy on international. Many companies -- apparel companies, e-commerce companies, they kind of flip that button and just opened 100 countries overnight. That is not our strategy.

We really are -- take a very thoughtful and strategic approach to entering new markets. And we really love to customize the experience and localize the currency and the language and find people on the ground are -- we have an incredible ambassador program, as you know. Find ambassadors on the ground, so that we can have to really expand our brand in the right way, in a strategic way. So international will be -- continue to be a really exciting part of the business, and we're excited to see where we go next.

Jeff Lawrence -- Chief Financial Officer

Hey, Brooke, it's Jeff, thanks for the question on the second one, yeah, listen, we're super excited and energized by our goal of being $1 billion-plus net revenue brand in 2025. And as we think about the cadence of those investments, I first, again, anchor you to our long-term margin guidance that we gave just earlier today, 70%-plus gross margins annually over those next three fiscal years and 20%-plus on adjusted EBITDA over that same time period. So part of the answer is, regardless of any variability or bounce around, we still think -- and we are very comfortable with those. So I'd anchor you there.

When we think about the areas of investment, and we talked a lot about this today, so I won't go too deep into it. You've got products. You've got brand. You've got tech.

You've got people. There's probably less variability. Those kind of happen when they happen, and you build them kind of with the rate and pace that makes sense. The one that could be a little bit more of a different cadence could be around supply chain operations, right? As you think about potentially adding additional facilities in the future, obviously, we just talked about international, that's one that could be maybe a little bit more variable in the future.

But again, I think, the punchline here is structurally advantaged margins, we think, what we have, and we'll be able to keep those over the next three fiscal years. And again, we're really confident we get to this $1 billion-plus net revenue goal.

Operator

And there are no further questions at this time. I will now turn the call over back to Trina for closing remarks.

Trina Spear -- Co-Chief Executive Officer

Well, thank you, all, so much for joining us for our first-ever quarter. We really look forward to connecting again in November for our third quarter earnings call. Thank you again.

Operator

[Operator signoff]

Duration: 65 minutes

Call participants:

Jeff Lawrence -- Chief Financial Officer

Heather Hasson -- Co-Chief Executive Officer

Trina Spear -- Co-Chief Executive Officer

Adrienne Yih -- Barclays -- Analyst

Bob Drbul -- Guggenheim Securities -- Analyst

Ed Yruma -- KeyBanc Capital Markets -- Analyst

Lorraine Hutchinson -- Bank of America Merrill Lynch -- Analyst

Erinn Murphy -- Piper Sandler -- Analyst

Brian Nagel -- Oppenheimer & Co. Inc. -- Analyst

Unknown speaker

Lauren Schenk -- Morgan Stanley -- Analyst

Dana Telsey -- Telsey Advisory Group -- Analyst

Mike Binetti -- Credit Suisse -- Analyst

Brooke Roach -- Goldman Sachs -- Analyst

More FIGS analysis

All earnings call transcripts

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

FIGS, Inc. Stock Quote
FIGS, Inc.
FIGS
$7.83 (10.91%) $0.77

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
349%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.