Image source: The Motley Fool.

DATE

Friday, May 8, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — David Rosenblatt
• Chief Financial Officer — Thomas Etergino
• Head of Investor Relations and Corporate Development — Kevin LaBuz

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

• GMV -- $89.7 million, down 5%, driven by lower order volume and reduced sales and marketing spend, landing above the midpoint of guidance.
• Revenue -- $22.4 million, down 1%, primarily reflecting effects of deliberate reductions in paid marketing and challenging demand conditions.
• Adjusted EBITDA -- $600,000, positive for the second consecutive quarter, representing a margin of approximately 2.5%, and exceeding the midpoint of internal guidance.
• Operating Expenses -- $20 million, down 11%, including $6.3 million in sales and marketing (down 31%) and $6.2 million in technology development (up 10%).
• Gross Margin -- 74%, up 2 percentage points, attributed to cost decreases in hosting and software as a percentage of revenue.
• Active Buyers -- Approximately 58,300, down 10%, explained as a result of the late-2025 decrease in sales and marketing spend.
• Average Order Value -- ~$2,750, up 7%, with trade-driven transactions contributing to higher values.
• Median Order Value -- ~$1,400, up 12%, continuing a mix shift toward larger transaction sizes.
• Listings -- Grew 2% to around 1.9 million, with unique seller count modestly increasing sequentially.
• Sales and Marketing as % of Revenue -- 28%, reduced from 40% year over year.
• Technology Development as % of Revenue -- 28%, increased from 25% a year ago, reflecting resource reallocation.
• Cash, Cash Equivalents, and Short-term Investments -- $85.3 million at quarter end, including a $9.8 million sequential reduction primarily due to $9.1 million of share repurchases.
• Share Repurchases -- 1.7 million shares bought back during the quarter, with $1 million of remaining authorization.
• Free Cash Flow -- $800,000 generated during the quarter, supported by $1.1 million in cash from operations.
• Take Rate -- Increased by approximately 120 basis points year over year, reaching the 2026 expected range of 25%-26%.
• AI-Assisted Code Development -- Over 50% of new code produced with AI, up from 30% last quarter, enabling more rapid product deployment.
• Conversion Rate -- 10th consecutive quarter of improvement, attributed to product investment and platform enhancements.
• Search Performance -- Search success rate improved nearly 4%, and null results down over 25% sequentially, directly linked to AI-driven metadata enrichment.
• Shipping Enhancement -- USPS carrier integration provided parcel rates 30%-50% lower for packages under 20 pounds.
• Price Parity Coverage -- 44% improvement in listed product price parity across resale channels, supporting higher conversion rates.
• Seller Sentiment -- Annual survey confirmed 1stDibs as the primary sales channel for sellers for a second consecutive year.
• Provision for Transaction Losses -- $700,000, representing 3% of revenue, down from 4% a year ago and within historical range.
• Second Quarter 2026 Guidance -- GMV between $86 million and $91 million (down 4% to up 1%), revenue of $21.6-$22.6 million (down 2% to up 2%), and adjusted EBITDA margin of negative 2% to positive 2%.
• 2026 Financial Framework -- Targets reconfirmed: positive full-year adjusted EBITDA, positive free cash flow, third consecutive year of revenue growth, and projected GMV growth resumption by Q4.

SUMMARY

1stdibs.Com (DIBS 0.22%) reported stable financial and operational execution despite ongoing macroeconomic headwinds, emphasizing the effectiveness of strategic cost reductions and disciplined capital allocation. Management highlighted platform improvements—especially in discovery, personalization, shipping, and price transparency—that contributed to improved buyer conversion, higher order values, and strengthened seller reliance. Investment remains concentrated on product and engineering with further efficiency expected as resource rebalancing concludes, while early signals from product enhancements, including AI-driven search, support optimism for a return to GMV growth in the fourth quarter.

• Management reiterated that achieving a return to GMV growth in the fourth quarter does not require improved market conditions but will benefit primarily from product road map initiatives and lapping reduced marketing spend.
• CEO Rosenblatt stated, "Adjusted EBITDA of $600,000 above the midpoint of guidance is proof that our financial model is now capable of generating adjusted EBITDA profitability even in a challenging external environment."
• Share repurchases during the quarter were substantial, representing more than 1% of the company’s market capitalization at period-end.
• Sponsored event advertising was cited as a new revenue component, with initial contributions expected in the second quarter.
• The CFO noted that cash outflow for share repurchases was the principal driver of the sequential decline in liquidity, not operational performance.

INDUSTRY GLOSSARY

• GMV: Gross Merchandise Value; the total value of merchandise sold over a specific period via the online platform.
• Take Rate: The percentage of GMV captured by the platform as revenue, including transaction fees and commissions.
• Null Results: Search queries that return no item listings, typically reflecting gaps in catalog data or search optimization.
• AI-Assisted Code Development: Generation or modification of product software code leveraging artificial intelligence tools or techniques to increase developer efficiency.

Full Conference Call Transcript

Operator: Good morning, everyone. Thank you for joining us, and welcome to the 1stdibs' Q1 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Kevin LaBuz, Head of Investor Relations and Corporate Development. Kevin, please go ahead.

Kevin LaBuz: Good morning and welcome to the 1stDibs earnings call for the quarter ended March 31, 2026. I'm Kevin LaBuz, Head of Investor Relations and Corporate Development. Joining me today are Chief Executive Officer, David Rosenblatt; and Chief Financial Officer, Tom Etergino. David will provide an update on our business, including our strategy and growth opportunities, and Tom will review our first quarter financial results and second quarter outlook. This call will be available via webcast on our Investor Relations website at investors.1stDibs.com.

Before we begin, please keep in mind that our remarks include forward-looking statements, including, but not limited to, statements regarding guidance and future financial performance, market demand, growth prospects, business plans, strategic initiatives, business and economic trends and competitive position. Our actual results may differ materially from those expressed or implied in these forward-looking statements as a result of risks and uncertainties, including those described in our SEC filings. Any forward-looking statements that we make on this call are based on our beliefs and assumptions as of today, and we disclaim any obligation to update them, except to the extent required by law. Additionally, during the call, we will present GAAP and non-GAAP financial measures.

A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release, which you can find on our Investor Relations website, along with the replay of this call. Lastly, please note that all growth comparisons are made on a year-over-year basis, unless otherwise noted. I will now turn the call over to our CEO, David Rosenblatt. David?

David Rosenblatt: Thanks, Kevin. Good morning, everyone. A quarter ago, we shared our expectations for our performance in 2026, disciplined execution, durable profitability and steady road map progress. The first quarter delivered on all 3. Our top line results reflect the deliberate sales and marketing reductions we enacted late last year, and our bottom line results reflect the structural cost work we have been executing since 2022. We are on track across revenue, cost and product development, and our 2026 financial framework remains unchanged. The demand environment remains challenging. The U.S. housing market continues to hover near a 30-year low, weighing on consumer appetite for luxury home goods. While the near-term backdrop is soft, the long-term opportunity is significant.

For example, there are approximately 5 million U.S. households worth at least $5 million, and our active buyer base of approximately 58,300 represents a fraction of that addressable market. Our goal, however, is to generate growth irrespective of the timing of a market recovery. Once conditions normalize, we will be in a strong position to accelerate growth. Turning to the financials. Our performance reflects both market conditions and the decisions we made last year to optimize our cost structure.

GMV and revenue were $89.7 million and $22.4 million, down 5% and 1%, respectively, which is a result not only of market conditions, but also of our decision to reduce performance marketing spending by nearly 50% in the fourth quarter of 2025. Adjusted EBITDA of $600,000 above the midpoint of guidance is proof that our financial model is now capable of generating adjusted EBITDA profitability even in a challenging external environment. We have fundamentally reengineered our business, lowering expenses and headcount since late 2022 to ensure future revenue recovery flows disproportionately to the bottom line. With that context, let me walk you through the quarter's performance. Funnel trends remained consistent.

Traffic declines driven primarily by our pullback in performance marketing and substantial sales and marketing headcount reductions were partially offset by our 10th consecutive quarter of conversion growth and higher average order values. This conversion growth is the direct result of sustained product investment, and it gives us confidence that our road map is working. Underpinning these results is a deliberate shift in how we are allocating resources. While total operating expenses declined 11%, technology development spending grew 10%, a reflection of our conviction that product and engineering is our highest ROI investment. The returns are compounding.

AI-assisted development now accounts for over 50% of our new code, up from approximately 30% last quarter, enabling our team to ship faster than ever. Our 2026 road map is where those resources are being deployed, organized around 4 pillars: discovery, pricing, shipping and service. It is designed to remove friction, modernize the platform and drive our anticipated return to GMV growth by the fourth quarter. Before walking through our road map progress, it is worth stepping back to explain how we think about product development. Our road map is not organized around market conditions or macro assumptions. It is organized around solving specific customer problems.

The barriers that prevent a design enthusiast from finding the perfect item, trusting its price, receiving it seamlessly and getting help when they need exist regardless of where the housing market is or what consumer sentiment looks like. Solving them makes 1stDibs a better marketplace in any environment. At the heart of our road map is a transformation in how buyers find and engage with our marketplace. Our goal is to make 1stDibs a daily destination for design enthusiasts by meeting the buyer where she is and by removing the barriers to discovery. Today, finding the right item still requires too much expertise, the right terminology, the right category knowledge and the right search keyword string.

Our discovery road map is designed to change that, and the first quarter was a period of foundational progress in that regard. We begin by investing in content and community. In February, we launched 1stDibs Tastemakers, our brand ambassador program built around authentic voices from within and around our community. Early results are promising with measurable increases in reach and engagement on Instagram. We also debuted Objects of Desire, a podcast hosted by our Editorial Director, Anthony Barzilay Freund and interior designer, Noz Nozawa, which explores the emotional and cultural stories behind the objects people love. These initiatives are designed to build the daily engagement and brand affinity that drives organic traffic and buyer acquisition over time.

Once buyers arrive in our environment, we are making it easier for them to navigate our catalog. Using AI, we significantly enriched the metadata underpinning our inventory, giving our search engine more signal to work with. The results were immediate. Our search success rate improved by nearly 4% and the number of null results decreased by over 25%, meaning more buyers are finding items to engage with on every visit. We also redesigned our search bar experience, resulting in higher search activity. These improvements are the foundation for what comes next.

Over the course of 2026, we are building toward AI-powered semantic and natural language search, the ability for a buyer to describe what they want in plain language and receive tailored results in return. A buyer shouldn't need to know the difference between a Chesterfield and a Knoll sofa to find the perfect piece. They should be able to tell us what they want in the manner they naturally think about it and trust that 1stDibs will understand. We are building that capability progressively throughout the year. And in the second quarter, we plan to launch visual search, allowing buyers to upload an image and find similar items in our catalog. On personalization, the first quarter marked an important shift.

We moved our homepage from an editorial first to a recommendation-first experience. For recognized users, the platform now surfaces personalized items based on their behavior and preferences from the moment they arrive, a step toward making 1stDibs a daily habit. We also deepened our work on favorites, driving an increase in the percentage of users who favorited an item sequentially, building the behavioral data that will help power personalization over time. Our progress in discovery highlights our belief that AI is a catalyst for our marketplace. While our moat remains firmly built on high-trust relationships and a physical catalog of one-of-a-kind items, AI is the tool that makes those items discoverable to a broader audience.

Discovery brings buyers to the listing. Pricing gives them the confidence to buy it. Buyer trust is the foundation of every transaction on 1stDibs. Our pricing road map is designed to reinforce that trust by ensuring that every listing is priced transparently, competitively and consistently. In the first quarter, we made progress on price parity, our initiative to ensure that items on 1stDibs are priced consistently across sales channels. By expanding to 2 additional resale platforms and by deepening our reach on existing ones, we increased the price parity coverage for listings by 44%.

Early data suggests that items priced at parity with other sites convert at higher rates than those that are not, validating our thesis that pricing transparency directly drives buyer trust and confidence. In the second quarter, we will invest in the offer and product detail page experience to help buyers and sellers reach agreement faster, reducing friction at one of the most critical moments in the transaction. We will also more prominently surface our price match guarantee and the pricing of comparable historical transactions, giving buyers greater confidence and context at the point of purchase. Together, these initiatives are building a pricing environment where buyers can act with conviction. Once a buyer trusts the price, the next question is simple.

What will it cost to get it delivered? Our vision for shipping is straightforward: reduce costs, increase transparency and eliminate the uncertainty that causes buyers to abandon a purchase. Cost competitiveness and transparency at checkout are conversion drivers, and we made progress on both. During the quarter, we integrated USPS into our shipping infrastructure, giving buyers access to a broader range of carrier options at meaningfully lower parcel rates, approximately 30% to 50% cheaper for packages under 20 pounds. In the second quarter, we plan to launch an ML-powered quoting tool that will deliver more competitive real-time pricing on our largest items; categories where shipping costs have traditionally been opaque and expensive.

Also on deck for the second quarter is a significant upgrade to our shipment tracking capabilities. Today, approximately 25% of orders lack real-time tracking, a source of buyer uncertainty that we are committed to eliminating. By expanding our tracking infrastructure from 10 to over 70 supported carriers, we will increase tracking coverage, ensuring that buyers can follow their purchase from seller to doorstep. Together, these initiatives are the building blocks of our multiyear vision, a shipping program that is cost competitive, fully transparent and anchored by all-in pricing so that every buyer knows the total cost of their purchase before they commit. Competitive pricing and seamless shipping earn a transaction, exceptional service earns the relationship.

Elevating the level of service we provide to both buyers and sellers is the fourth pillar of our road map. On the seller side, we are rolling out improved listing tools that leverage AI to make it easier and faster to bring inventory to market. These tools reduce friction from generating optimized item titles to streamlining the image upload process, ultimately building toward a more robust AI-assisted listing experience. Early adoption has been encouraging, and we expect these tools to deepen seller engagement and improve listing quality over time. We are also building an AI-powered client service chatbot for buyers and sellers set to launch in the second quarter.

Our expectation is that this will allow us to provide faster, more responsive service at scale. The cumulative impact of these road map investments is reflected in a simple data point. For the second consecutive year, our annual seller sentiment survey confirmed that 1stDibs is the primary sales channel for our sellers, surpassing their own showrooms. What was a meaningful shift last year is now a confirmed trend. Our sellers are not simply listing on 1stDibs, they are depending on us. That is a powerful foundation as we continue to invest in tools and technology designed to deepen that relationship and drive their success.

A quarter ago, we laid out our 2026 financial framework, positive full year adjusted EBITDA, positive free cash flow, a third consecutive year of revenue growth and a return to GMV growth by the fourth quarter. One quarter in, we are on track against all 4. Our conviction in the durability of our marketplace has never been stronger. Curation, scarcity and human expertise are the foundation of 1stDibs. And in an era of AI-generated content, these qualities are becoming more valuable, not less. Thank you for your continued support. I'll now turn it over to Tom to review our first quarter financial results and second quarter outlook.

Thomas Etergino: Thanks, David. Good morning, everyone. First quarter results were in line with our expectations across the board. For the second consecutive quarter, we generated positive adjusted EBITDA, validating the structural changes we made to our cost base and confirming that our 2026 plan is developing as anticipated. Let me walk you through the numbers. GMV was $89.7 million, down 5%, above the midpoint of guidance. The underlying dynamics played out largely as we expected. Traffic declined across paid and organic channels, a direct and expected consequence of the sales and marketing reductions we enacted in late 2025 as well as the soft demand environment. Order volume declined 12% as a result.

However, our product investments continue to partially offset these headwinds with conversion growing for the 10th consecutive quarter. Average order value reached approximately $2,750, up 7% and median order value reached approximately $1,400, up 12%, both reflecting a continued mix shift towards higher-value transactions, especially from trade. Together, these factors led to GMV down 5%, consistent with the fourth quarter. We ended the quarter with approximately 75% of traffic from organic sources, a continued reflection of the enduring strength of the 1stDibs brand. Trade was a bright spot, growing year-over-year, driven by meaningful AOV expansion, while consumer GMV declined. On a vertical basis, vintage and antique furniture grew year-over-year, while all other categories declined.

We ended the quarter with approximately 58,300 active buyers, down 10%, reflecting the deliberate reduction in sales and marketing spend enacted in late 2025. Unique seller count grew modestly on a sequential basis, and we expect to return to growth for the full year as the impact of our 2024-2025 pricing actions continues to normalize. Listings grew 2% to nearly 1.9 million. Health of our supply base is further supported by our annual seller sentiment survey, which confirmed for the second consecutive year that 1stDibs is the primary sales channel for our sellers, underscoring the platform's growing importance to their businesses. Turning to the income statement. Net revenue was $22.4 million, down 1%.

Transaction revenue, which is tied directly to GMV, was approximately 74% of total revenue with subscriptions making up most of the remainder. Take rates increased approximately 120 basis points, reflecting our 2025 pricing actions, sponsored listings growth and a favorable prior year comparison due to high-value transactions. Gross profit was $16.7 million, up 2%. Gross profit margins were approximately 74%, up 2 percentage points year-over-year and at the high end of our target range, driven by a decrease in hosting and software costs as a percentage of revenue. Turning to operating expenses. Total OpEx declined 11%, the direct continuation of the multiyear cost reset we began in 2022. Within that, the story is one of deliberate reallocation.

Sales and marketing expenses were $6.3 million, down 31%. This reduction was a result of the strategic realignment implemented in 2025, which fundamentally reset our marketing organization and rationalized our performance marketing spend. We made the decision to prioritize unit economics over volume, and these numbers reflect that decision. Sales and marketing as a percentage of revenue was 28%, down from 40% a year ago. Technology development expenses were $6.2 million, up 10%, reflecting the impact of our annual merit cycle in March and higher headcount-related costs as we rebalanced our talent towards high-impact product and engineering roles. As a percentage of revenue, technology development was 28%, up from 25% a year ago.

We are systematically reallocating resources away from sales and marketing and towards product and engineering. Within our flat headcount framework, we are onboarding the final planned roles in support of our 2026 road map and expect this talent rebalancing to conclude by the end of the second quarter, leaving us with a leaner team with more concentrated on platform innovation. General and administrative expenses were $6.8 million, down 2%. As a percentage of revenue, general and administrative expenses were 30% versus 31% a year ago. Lastly, provision for transaction losses was approximately $700,000, 3% of revenue, down from 4% a year ago and at the midpoint of our historical range of 2% to 4%.

As I mentioned previously, total operating expenses were $20 million, down 11%. Total operating expenses also reflect approximately $500,000 in severance charges, predominantly in sales and marketing as we refined our organizational structure to most effectively support our 2026 priorities. Our commitment to expense discipline remains unchanged. Adjusted EBITDA was approximately $600,000, representing a margin of approximately 2.5%. The last 2 quarters have been adjusted EBITDA positive, both delivering against a challenging demand backdrop. This is the direct result of the cost structure we rebuilt starting in 2022, and it underpins our confidence in positive full year adjusted EBITDA. The first quarter was an encouraging start against our full year free cash flow commitment.

We generated $800,000, a positive early indicator that our 2026 target is within reach. We also generated $1.1 million of cash flow from operations. Cash, cash equivalents and short-term investments ended the quarter at $85.3 million, down $9.8 million sequentially, primarily reflecting $9.1 million in share repurchases. During the quarter, we repurchased approximately 1.7 million shares, leaving approximately $1 million of remaining authorization at quarter end. Since inception, we have repurchased approximately 9 million shares for approximately $44.4 million. Turning to the outlook. Our guidance reflects quarter-to-date results and our forecast for the remainder of the period. We forecast second quarter GMV between $86 million and $91 million or down 4% to up 1%.

Net revenue of $21.6 million to $22.6 million or down 2% to up 2% and adjusted EBITDA margin between negative 2% and positive 2%. Our GMV guidance reflects a deliberate strategic trade-off, the intentional impact of our sales and marketing reductions as we prioritize a structurally higher margin profile over short-term volume. Quality-driven performance, while traffic remains a headwind, we expect continued growth in conversion and AOV and sequential improvement in our year-over-year growth rate, helped by progress on our product road map.

Our revenue guidance reflects the continued growth in sponsored listings as well as a modest contribution from our first sponsored event, an initiative we are beginning to test in the second quarter as part of our advertising program. Our adjusted EBITDA margin guidance reflects structural efficiency, realized gains from operating expenses following our September realignment, strategic reinvestment, a sequential increase in personnel expenses driven by the annual merit increases effective in March and targeted hiring in product and engineering as part of our strategic realignment and gross margin expansion. We continue to expect gross margins of 72% to 74%. While we are not providing full year guidance at this time, we are confirming our 2026 financial framework.

We expect to deliver a third consecutive year of revenue growth, reflecting the resilience of our marketplace. We anticipate a return to positive year-over-year GMV growth by the fourth quarter, driven by the compounding impact of our product road map. We expect gross margins of 72% to 74%, up from 71% to 73% in 2025. We expect revenue take rates of 25% to 26%, up from 24% to 25% in 2025. We remain focused on high-quality efficient growth with a full year 2026 outlook of positive adjusted EBITDA and positive free cash flow. Underpinning this plan is the assumption that macroeconomic conditions, particularly those impacting the housing market and consumer discretionary spending remain stable.

Our 2026 financial framework is unchanged, and the first quarter gives us confidence that we are on the right path. Gross margins came in at the high end of our target range. Adjusted EBITDA was positive for the second consecutive quarter. We generated free cash flow and our product road map is advancing on schedule. Our plan is working. We appreciate your continued support and look forward to updating you on our progress in the coming quarters. Thank you. I will now turn the call over to the operator to take your questions.

Operator: [Operator Instructions] Your first question comes from the line of Bobby Brooks with Northland Capital Markets.

Robert Brooks: First, I wanted to ask, last quarter, we discussed a handful of kind of internal levers you can pull to really reignite growth. And I think it would be helpful for investors to hear that discussion as well. So can you talk about those levers and maybe those levers are being pulled today? And if not, maybe the time line of that being pulled?

David Rosenblatt: Sure, of course. So I think you're referring to our product road map. Our road map is organized around 4 of the highest potential areas that we believe we have in the business. And those are discovery, pricing, shipping and service covering the full purchase funnel. And in Q1, we made progress in each of them. So just calling out a couple of the big ones. I would say the highest impact wins in the quarter were around discovery, shipping and service. And maybe just a couple of quick examples. So in search, we implemented AI-driven metadata improvements, which drove a 4% higher search success rate and importantly, reduced null search results by more than 25%.

Reducing null search results is especially important in the long-tail marketplace like ours. And we're going to keep on charging on search because we do view it as potentially one of our highest leverage areas. So we've got a visual search release lined up for Q2 and then after that, our first natural language search release targeted for Q3. Another example would be shipping, which obviously is a big source of friction, particularly given that furniture is the majority of our GMV. In the quarter, we integrated USPS into our shipping infrastructure, which had the impact of reducing parcel rates on packages under 20 pounds by 30% to 50%.

So we feel like in each of the 4 tracks, we're in a good place, and we're making progress, but we also feel like it's early in that regard and that there's a lot more opportunity ahead of us than there is behind us. And as with all product road maps, we also expect the impact of these improvements to compound over time.

Robert Brooks: That's super helpful. And then maybe shifting gears to more -- sticking with the AI search, I think that's interesting, maybe you just explain like what is like 4% search success rate like improvement? Like what does that look like when someone is using the website? And then like the 25% null search rate down, does that just mean if someone searching something like there's 25% less of the time someone searches for something, nothing comes back. Could you just help?

David Rosenblatt: Yes. I mean you can imagine starting with null search success rate. I mean you can imagine the impact on a buyer of having -- searching for something and getting 0 results, right? So that manifests itself in at worst, a bounce, right? So you leave the experience. And at best, a much more a much higher friction discovery process. And then the opposite is true as well, right? I mean when you find what you're looking for, you're that much more likely to proceed to the next step in the funnel. So again, we've got 1.9 million items. Almost all of them are one of a kind, which means that we drive a disproportionate amount of activity around search.

And so that's why I say it's a super high leverage kind of entry point and part of the discovery experience. I think probably a little more so in our business than in a less long-tail oriented marketplace or retail experience.

Operator: Your next question comes from the line of Ralph Schackart with William Blair.

Ralph Schackart: First question, just on GMV growth that you noted that should return by the fourth quarter. Can you just remind us, do you need a change in the macro conditions? Or can you deliver that growth in the current market environment? And David, you've listed a lot of great product improvements and some new innovations and you mentioned, obviously, that they build on each other. But any way you could isolate maybe a couple that you think are having the biggest near-term impact? And then maybe on a longer-term basis, some of those products that you are really excited about that could drive longer and more sustained growth?

David Rosenblatt: Sure. Ralph, so in terms of GMV growth, we do -- first of all, we do remain confident in a return to growth by Q4, and we do not think that, that is dependent on a market recovery. So 2 reasons really. One is in Q4, we'll begin lapping a full quarter's worth of the over 40% reduction in sales and marketing spend that we initiated in late '25. So until then, obviously, that remains a headwind on GMV growth. Although that said, we're already seeing a trajectory shift, I think. And then second is we do have strong conviction in our product road map.

Product road maps for us, as is the case with almost all consumer Internet companies, compound over time. And as I mentioned in my answer to Bobby's question, we're seeing early success there, and we do expect that to compound over time. And again, just to come back to the point I just made, I think it is worth pointing out that at the midpoint of Q2 guidance, we do expect GMV growth rates to improve sequentially from the negative 5% in Q1 to negative 2% again at the midpoint in Q2. And from there, we do see a clear and straightforward path to a return to year-over-year growth by Q4 this year.

In terms of the product road map, I mean, we do -- we think pretty hard about where we allocate our capital and our scarce human resources. And those 4 areas that I highlighted; discovery, price, service and shipping; we do think are the highest impact areas. And all of them are important. I mean, again, I think as we look at other -- the experience of other marketplaces, Certainly, in the case of one-of-a-kind marketplaces, search is extraordinarily important. If you don't find what you're looking to buy, then there's no reason to come back and you're certainly less likely for a visit to consummate in an order. Logistics, again, I don't think we're reinventing the wheel here.

Logistics is extraordinarily important on the other side of the funnel. And we were super pleased that we were able to reduce costs by as much as we were for parcel. And we've got a lot ahead of us in terms of logistics. Tracking is something where we're not at table stakes yet in terms of meeting baseline consumer expectations, I think, for e-commerce experiences. We will be there. We're going to use ML quite heavily to increase our pre-close coverage on freight. So there are lots of levers within shipping, lots of levers within search. I mentioned semantic search and natural language search, which is on the come. Pricing is an area we've talked about in the past.

In Q1, we were able to expand our price parity coverage by 44%, and we have some other improvements planned for the consumer experience there. And then lastly, service, we feel like there's an opportunity to substantially increase both our service levels and the efficiency with which we deliver those. So again, I would just close by saying we're super happy with our progress in Q1, but we have an ambitious slate in front of us and much more to come than we've already achieved, which is part of the reason why I'm very optimistic about Q4.

Operator: We have reached the end of the Q&A session, and this concludes today's call. Thank you for attending. You may now disconnect.