Hello, and welcome back to the Brilliant Earth webcast. My name is Adam Lowensteiner, Vice President at Lithium Partners, and today I'll be moderating this fireside chat with Mr. Jeff Kuo, Chief Financial Officer of Brilliant Earth, which trades under the ticker symbol BRLT on the Nasdaq. Let's get started. Jeff, welcome to the discussion. Thanks for having me. Appreciate it. Maybe to kick things off, can you tell us a little bit about yourself and Brilliant Earth? Sure. Brilliant Earth was founded in 2005, so we're celebrating our 20th anniversary this year, with a mission to create a more transparent, sustainable, and compassionate jewelry industry. We've really been able to transform the industry with a combination of a number of things. One is an authentic mission-driven brand that really resonates with our customers: beautifully designed, trend-leading proprietary products, a seamless integrated omnichannel experience across our now 42 showrooms, as well as our digital platform, and an asset-light and data and technology-enabled business model. This has all translated into our ability to profitably grow and gain share in the large and fragmented jewelry industry. In terms of my own background, I'm the CFO of Brilliant Earth, and I've been with the company since 2015. Recently reported economic data reveal a strong consumer. What is Brilliant Earth seeing in the current environment, and what type of consumer are you typically dealing with? I'll answer your second question first. Our typical consumer is in the 25-4 4-year-old age range, with about $100,000- $200,000 annual household income. We have customers that are shopping together as a couple, gift givers, as well as people that are purchasing for themselves. I think our consumers are really prioritizing meaningful brand connections with the brands that they purchase from and are looking for a seamless experience as they shop and engage with companies across different touch points. In terms of a bit about the current environment and consumers, I think customers in our space do tend to shop with a budget in mind, and we offer a curated selection of products that help them meet their needs within that budget. One other thing that's helpful to point out is that bridal jewelry tends to be a resilient category over time. I think that we're demonstrating strong resonance and traction with that customer base. Our recent results were some of the highlights included growing total orders 18% year- over- year and raising our annual net sales guidance. I think really reflect how we're connecting with consumers, how our brand is really resonating, and how we're outperforming versus the jewelry industry overall. You mentioned the company has an omnichannel model. Can you explain to our listeners what that means? Jewelry is a considered bigger ticket purchase, and customers may engage with us multiple times through different touch points as they come to their decision. We help guide them towards the right decision for them. We really try to offer that seamless experience across touch points, whether that means you're coming to our showrooms to see the collection in person, experiencing our website, or engaging with us through social channels. I think we really want to create that integrated seamless experience so that we can meet our consumers where they want to shop, how they want to shop, and when they want to shop. As part of the omnichannel model, the company has a retail strategy. Can you explain how your outlets are performing, what their benefits are, and what markets are you targeting, if any? There are a number of different benefits to our showrooms. One important one is that they drive incremental top-line revenue when we open in new metros. We are looking really to drive incrementality in the metro as we open the showroom. One figure that we recently shared is that most of our showrooms drive strong double-digit metro bookings uplift in the year after we open. I think that's one meaningful stat that just shows the traction that we're able to get and driving uplift across an entire metro in the year after we open. Some other benefits include driving brand awareness and accretion to the customer acquisition economics. These are really powerful tools for us as a company to engage with our customer base. One other thing to point out is that we've also had success as we've expanded the model beyond kind of appointment-driven heritage from the showrooms to also allow for more walk-in discovery and conversion. One figure that we shared recently was that in Q2, we saw an 81% year-over-year order uplift for retail customers without a scheduled appointment. That's something that I think shows some of the success that we're having in having the showroom model also cater to walk-in discovery and walk-in purchases. How do you compete? What are some of your company's differentiators? This probably goes back to some of the points that I opened up with, but it's worth reemphasizing them. The first, it all comes down to our authentic and mission-driven brand and really just connecting with customers in how we're transparent with our sourcing and have been focused on driving transparency and sustainability in the jewelry industry from our founding. I think that just really is connecting with our consumers. Another is just our products, which are many of our proprietary to us, beautifully designed. We've won industry awards, and that could include, our collection includes just a variety of different really trend-leading designs ranging from things like our Jane Goodall Collection, which we introduced last year, our Sol Collection, to just everyday jewelry essentials. We really offer a curated assortment across our product collection. That's another thing that we're really known for is just these beautifully designed trend-leading products. Another is what I was just talking about, the seamless omnichannel experience across the physical showroom experience, the digital experience, or if you're engaging with us on the phone or in a chat. I think really providing that experience to meet consumers where they are. I think one other enabler that underpins everything else that we're doing is just a really strong data technology AI-enabled model that allows us to improve the customer experience, capture operational efficiencies, and make smarter and faster decisions throughout the organization. How do consumers typically find Brilliant Earth? Are you able to obtain recurring purchases from your customers as well? Our customers find us through a variety of different ways. One is organically through our strong brand awareness, and this is amplified in moments that we've had, such as a custom bolo tie that we made for Beyoncé, Selena Gomez wearing one of our one-of-a-kind creations, which was a 20-carat diamond necklace from our Jane Goodall Collection, or things like our first professional sports ambassador, Madison Keys. These are some of the moments that really build awareness and connection with our consumers and showcase our brand. Another way is through word of mouth from other customers or social media or other engagement with us. We also do run diversified ranges of marketing campaigns to continue to grow awareness of our brand, or they may discover us through coming to one of our showrooms or walking by one of our showrooms. There is a variety of different ways that people come to get to know us. Regarding your question on repeat or recurring purchases, yes, we have been able to drive repeat purchasers. One of our recent figures was we, in Q2, drove 11% year-over-year growth in repeat orders in Q2. I think things like the growth of our fine jewelry collection is a contributor that really allows us to touch more purchase occasions, including self-purchase with our consumers. That's a contributor to the success that we're having in terms of driving repeat. With the emergence of lab-grown diamonds in recent years, is that a tailwind for Brilliant Earth? How are consumers accepting lab-grown diamonds? We have actually been selling natural and lab-grown diamonds alongside each other for more than a decade, and we're one of the first to do so at scale. We've had a lot of success in doing so. We see this as one of the dimensions of choice for our consumers, and we have a large curated assortment of both natural and lab diamonds and jewelry to meet our consumers' needs. As lab awareness grows, I think that this continues to open up the market to more consumers. As I'm speaking with the company's CFO, I'd be remiss not to discuss the company's financials, which are very impressive. I mean, solid gross margins, several consecutive quarters of positive EBITDA, and a strong balance sheet. Are there any financial highlights that you'd like to share with the listeners? I'd like to highlight a few different things. One is that we have been able to profitably grow and gain share over time. From 2019- 2024, we grew at a 16% five-year CAGR, and we also expanded our gross margins during the same time from 42% to 60%. We've had a strong gross margin profile. As you mentioned, we've also had 16 consecutive quarters of positive adjusted EBITDA. That's all the quarters that we've reported as a public company. We also have a strong balance sheet and ability to generate cash. We ended Q2 with about $99 million in net cash, and that represented a growth of about 5% year-over-year. I think the ability to drive the top line that we have while being profitable and also generating cash is a real differentiator for the company. One highlight from our recent announcements is also that we declared a one-time dividend and distribution of approximately $25.3 million. That reflects our strong balance sheet, our cash generation capability, and also how we think about providing returns to our shareholders both in the near and the longer term. We're able to do this while still being able to make the right long-term investments in building the company, building the brand, and continuing to gain share in the large jewelry industry. Can you talk about seasonality in your business and how investors should look at that? People do purchase from us throughout the year, and that includes holidays like Valentine's Day, Mother's Day, weddings, and engagements that occur throughout the year. Q4 does tend to be seasonally our biggest quarter, including gifting and being the biggest quarter for fine jewelry. We really do have many purchase occasions that occur throughout the year. Is there anything else you'd like to add before we conclude the discussion? I'd probably just like to go back and summarize some of the key strategic levers that have allowed us to be successful, including our premium brand, our differentiated business model that includes data-driven tech enablement throughout the organization to support strong and good decision-making, a seamless omnichannel platform that really meets customers where they want to shop, how they want to shop, and when they want to shop, and an asset-light structure. I think these all support our ability to deliver profitability and achieve our strategic and financial objectives and grow and gain share in a variety of different environments. If listeners want to reach out to you, how can they do so? They can reach out to Colin Bourland, who's our Vice President of Strategy, Business Development, and Investor Relations, and they can reach him at investorrelations@brilliantearth.com. Thank you, Jeff, and thank you for everyone for watching. If you have any questions or would like to schedule a meeting with Brilliant Earth, please email me at lowensteiner@lithiumpartners.com. We have more presentations and fireside chats coming up next, so don't go anywhere yet. Thank you and have a great rest of your day. Jeff, Adam, thank you very much for that discussion on Brilliant Earth. All right, over.