Hello, and welcome to The Vita Coco Company's Q3 2023 earnings conference call. My name is Deedee. I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I'll now hand the call over to Clay Crumbliss with ICR. Thank you, and welcome to The Vita Coco Company Q3 2023 earnings results conference call. Today's call is being recorded. With us are Mr. Mike Kirban, Executive Chairman, Martin Roper, Chief Executive Officer, and Corey Baker, Chief Financial Officer. By now, everyone should have access to the company's Q3 earnings release issued earlier today. This information is available on the investor relations section of The Vita Coco Company's website at investors.thevitacococompany.com. Also, on the website, there is an accompanying presentation of our commercial and financial performance results. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and the filings with the SEC for a more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Also, during the call, we will use some non-GAAP financial measures as we describe business performance. The SEC filings, as well as the earnings press release and supplementary earnings presentation, provide reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures and are all available on our website as well. And with that, it's my pleasure to turn the call over to Mike Kirban, our co-founder and Executive Chairman. Mike? Thanks, Clay, and good morning, everyone. Thank you for joining us today to discuss our Q3 2023 financial results and our current expectations for full year 2023 performance. I want to start by thanking all of our colleagues across the globe for their continued commitment to The Vita Coco Company. We recently received recognition as one of Fast Company's Brands That Matter for 2023. This is a testament to the incredible work by the entire team and their dedication to our mission of creating ethical, sustainable, better for you beverages that uplift our communities and do right by our planet. Before addressing our performance and expectations, I want to reiterate that we believe we have a strong strategic position enabled by our category leadership in coconut water within the better for you functional beverage category, which in America's tracked channels, is in excess of $30 billion, according to Circana. We continue to be very happy with our performance in 2023. We believe that our strategy of delivering coconut water growth through increased usage occasions is working, and I'm excited about the progress we're making with both our commercial initiatives and our marketing efforts. In the Q3, we saw consolidated 11% net sales growth against prior year, bringing our year-to-date net sales growth to 15%. We remain very bullish on the coconut water category in the United States, where, according to Circana, the category is posting one of the healthiest growth trends in beverages, outperforming major categories like energy, CSDs, sport drinks, and bottled water in dollar growth rates, while also being one of the few categories growing in volume and price. For the quarter, our Vita Coco coconut water brand is leading the coconut water category growth, with U.S. retail dollar sales up 23%, with our market share improving to 51% versus the same period last year, while the category is growing 19%. We believe we're benefiting from the success of our multi-pack focus and our marketing initiatives that are supporting coconut water growth. Our brand has never been stronger, and our focus on consumer expansion via occasion-based initiatives has continued throughout the summer. In the quarter, we built on our extremely successful Roblox activation, The Coconut Grove, an immersive experience on Roblox, where consumers can farm and harvest virtual coconuts. Over 26 million people visit us in the Metaverse, driving over 94 million impressions to date and introducing a new generation of consumers to our brand. We also targeted the core hydration occasion this quarter at the US Open, partnering with American tennis superstar Chris Eubanks and other players, generating over 2.5 million targeted impressions at this prestigious event. Our summer cocktail initiative was very successful in continuing to cement Vita Coco's role as a mixer. We saw over 300 million impressions through through PR and social as a result of our outstanding execution with several high-profile Hamptons locations. To capture those that maybe enjoyed too many cocktails, we amplified our hangover occasion over Labor Day with a broad influencer activation, delivering over 14.6 million impressions of authentic content. Finally, we announced our partnership with Mexican-American award-winning singer, songwriter, actress, and activist, Becky G. Becky's community-first approach [audio distorted] aligns perfectly with our brand values. She has a hundred and sixteen million combined followers on social channels and Spotify and recently came off her first national Mi Casa Tu Casa tour. We could not be more excited to partner with this incredible artist to grow our brand. Before handing the call to Martin, I'd like to provide an update on our private label business. As we indicated during our Q2 earnings call, we had expected to cease to supply a major customer on private label coconut water and private label coconut oil. with the transition potentially happening as early as the Q4 of 2023. We also indicated that this customer is important for our branded products, and we expressed our commitment to support a smooth transition. Since our last update, this customer has requested that we continue our partnership, and we now expect to continue supplying a significant portion of their private label coconut water needs, a decision that we believe is reflective of their valuing our supply chain for its outstanding reliability and quality. This is a significant change to our prior expectations for the private label business with this key customer, and we are excited to continue this partnership and explore ways to further expand it over time. [audio distorted] As further evidence that our private label supply chain is one of the best in the world, all of our private label revenue growth in the Q3 versus the same period last year came from accounts outside of this major customer, including the benefits of new retailer relationships around the globe. Finally, I'd like to reiterate my excitement for our accomplishments this year and our momentum for the balance of the year and into 2024. We're stepping up investments in our brands and in the long-term health of the business. We believe that we are uniquely positioned as one of the few fast-growing, profitable beverage companies of our size, with the talent and commercial capabilities to maintain growth, to execute on new opportunities, and to act as an acquirer of complementary beverage brands that could benefit significantly from our relationships, capabilities, and financial resources. Now I'll turn the call over to our Chief Executive Officer, Martin Roper. Thanks, Mike, and good morning, everyone. For the Q3 of 2023, we achieved net sales growth of 11%, driven by strong Vita Coco coconut water growth of 8%. This performance was achieved against a very strong Q3 last year, where Vita Coco coconut water net sales grew 14%. Our strong execution and our consumer engagement efforts continued to produce strong results at retail, with a 23% dollar growth rate of Vita Coco coconut water in Q3 2023 in the U.S. Circana scan data, and a 17% volume growth rate. The strong performance is across all tracked channels, as shown in our investor deck, with strength in underdeveloped regions that we believe is indicative of future growth potential. As shown in our investor deck, the growth is built on a healthy balance of velocity growth, pricing, and distribution gains. Internationally, we are seeing strong growth in private label net revenue and continued Vita Coco net revenue growth, resulting in 14% international net sales growth for the quarter. We continue to see strong Vita Coco coconut water growth at retail, and according to Circana U.K., our retail dollar share of the total coconut water category has risen to over 81% in the most recent four-week period. Turning to margins, in the Q3 of 2023, our gross margin was 41%, which represents a significant improvement over the 26% reported in Q3 last year, and an improvement over the 37% in the Q2 of 2023. This increase over last year was driven primarily by reduced transportation costs and improved Vita Coco branded pricing, offset slightly by private label mix and pricing. The increase over the Q2 was due to lower cost of goods, with current, more normal transportation costs that started earlier this year, now fully reflected in this quarter's reported cost of goods, along with seasonally higher Vita Coco coconut water pricing. After the significant decrease in spot ocean freight rates in the second half of last year and in the Q1 of this year, we have seen a more stable environment for the last six months. At the end of the Q3, spot rates for most lanes were close to historic pre-COVID levels. Turning to our outlook, building on the very strong year-to-date results, we are raising our 2023 full-year guidance for the third time this year. Based on our expectations for the Q4, which includes the retention of the private label coconut water business that Mike mentioned, the retail scans for Vita Coco being very healthy and strong private label trends, we are raising our full-year revenue guidance to growth of 13%-15% over prior year and Adjusted EBITDA to $64 million-$67 million. Corey will provide more details on our outlook. We're really happy with our current performance and excited for our long-term future. With that, I will turn the call over to Corey Baker, our Chief Financial Officer. Thanks, Martin, and good morning, everyone. I will now provide some additional details on the Q3 financial results and the drivers of our improved outlook for the 2023 full year. Starting with revenue, we continue to see strong performance in the Q3, with net sales of $138 million, representing an increase of $14 million or 11% year over year. This was driven by Vita Coco coconut water growth of 8% and private label growth of 18%. Within the Americas segment, Vita Coco coconut water strong retail performance resulted in $90 million of net sales, an increase of $7 million over the prior year period, while private label increased $3 million - $28 million. The growth of Vita Coco Coconut Water on the quarter continued to be volume-led, with 7% volume growth and 2% net price mix benefit. Vita Coco Coconut Water benefited from strong consumer demand, which is reflected in the 23% retail dollar growth for the quarter. Private label experienced a strong quarter, driving 14% net sales growth on volume growth [audio distorted] We saw underlying private label performance at retail that reflected strong consumer demand for the category and normal elasticity of retail price reductions year-on-year for private label. We believe that Americas net sales performance on the quarter was negatively impacted by timing of customer orders and shifts in inventory levels out of our distributors. We believe that year-to-date performance remains a better proxy of our underlying consumer trends for both our branded and private label businesses. Year-to-date net sales of our branded portfolio has grown 16% versus private label growth of 13%. Our international segment continued to perform very well. Reported net sales were up 14%. Growth was led by private label, up 42%, with growth led by new distribution with strategic retailers in Western Europe. Vita Coco Coconut Water also had a strong quarter, growing net sales 7%, led by strength in the U.K., where, as Martin mentioned, we continue to gain share in retail. For the Q3, consolidated gross profit was $56 million, up $24 million versus the prior year quarter, and gross margin was 41%, up from 26% in prior year, as our pricing remained strong and our global supply chain continued to operate at a high level of efficiency and benefit from transportation cost improvements relative to the unusual spike of the last two years. Moving on to operating expenses. Q3 2023 SG&A costs increased by $9 million over the prior year to $33 million, which reflects investments in marketing and increased people costs. As previously indicated, our full year plan includes an expected increase in marketing and sales execution investments as we invest versus the lower spending in 2022, when we were margin pressured. In the Q3, we have begun to see an acceleration of expenses as our initiatives land in the market, with year-to-date SG&A spending now slightly ahead of revenue. We are very pleased with the consumer response to our investments, which we plan to continue through the balance of the year. We expect to see a continued elevated rate of spending relative to our growth in net sales in Q4 as we complete our planned marketing and organizational investments. Net income attributable to shareholders for the Q3 of 2023 was $15 million, or $0.26 per diluted share, compared to $7 million, or $0.13 per diluted share for the prior year period. Net income for the quarter benefited from positive net sales and gross margin improvements discussed previously, partially offset by increased SG&A costs and a net $5 million unrealized loss related to derivative instruments, and an increase in tax of $2 million, reflecting an ETR of 20.9% on the quarter. Non-GAAP adjusted EBITDA in Q3 2023 was $27 million, up from $12 million in Q3 2022. The $15 million increase was primarily due to a year-over-year reduction in the cost of goods per case equivalent and increased volume growth in pricing, partially offset by increased SG&A spending. Turning to our balance sheet and cash flow. As of September 30, 2023, our strong operating performance year-to-date has led to an improvement in cash flow, resulting in total cash on hand of $95 million, compared to $20 million on hand as of December 31, 2022. The increase in net cash was driven by net income and reductions in inventory. Working capital year-to-date in total has provided $19 million of cash as inventory decreases of $34 million and accounts payable increases of $18 million were offset by a $37 million increase in accounts receivable due to timing of customer payments and the normal seasonality of our business. The inventory decrease was the result of sales volume growth, coupled with a normalization of the global supply chain, allowing us to more efficiently manage our days on hand and reduce overall inventory. Our inventory ended Q3 at the low end of our targeted range. We expect inventory days on hand to increase by the end of the year. Looking now to the balance of 2023, despite more difficult multi-year comps, we remain confident in our business, which is allowing us to raise our full-year net sales guidance to growth of +13% to +15%, based on our expectation of continued strong consumer demand for our branded business, leading to full-year mid-teen branded growth and the current expectation of our private label business, which, as we have said, is benefiting from new relationships and the change in plans for the transition that we disclosed last quarter. Our gross margin guidance for the full year remains unchanged at 35%-37%. The retention of the private label relationship and its mixed impact on our business is expected to reduce Q4 margins sequentially from the Q3 peak. Our revised non-GAAP adjusted EBITDA guidance is $64 million-$67 million. This reflects continued prudent investment in SG&A, leading to full-year Adjusted EBITDA growth above our net sales growth. As we look forward to 2024, we remain confident in the strength of our business and remain excited by our business momentum and the growth prospects for our brand. While still very early in our 2024 planning with lots of moving pieces, we want to update the estimated negative net revenue impact of the private label transition that we talked about last quarter. In our preliminary modeling, we now believe that 2024 net revenue should grow low single-digit%, with growth margin percentage expected to be approximately flat versus full year 2023, which collectively should produce mid-teens% growth of Adjusted EBITDA over our current 2023 guidance. As we have done in the past, we will provide our first full year 2024 guidance when we report our full year 2023 numbers. Finally, as noted in our earnings release, on October thirtieth, 2023, the company's board of directors approved a share repurchase program, authorizing the company to repurchase up to $40 million of the company's common stock. The authorization gives us increased flexibility to strategically deploy capital on behalf of our shareholders. I will now turn it over to Martin for his closing remarks. Thank you, Corey. To close, I'd like to reiterate our confidence in the long-term potential of The Vita Coco Company, our ability to build a better beverage platform, and the strength of our Vita Coco brand. Thank you for joining us today, and thank you for your interest in The Vita Coco Company. That concludes our quarter prepared remarks, and we will now take questions. Thank you. Management will now take questions from research analysts. We ask that you please limit yourself to one question and one follow-up. If you have additional questions, please reenter the queue, and we will take them as time allows. To ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. One moment while we compile the Q&A roster. One moment for our first question. Our first question comes from Jon Andersen of William Blair. Hey, good morning, everybody. Morning, Joh. Morning. I wanted to start by asking just about the variance between the consumption growth in measured channels in the 20s and the Americas branded growth of 8%. I think you kind of referenced it in the prepared comments. I was wondering if you could provide a little bit more color around the timing difference there that caused that, and what your expectations are as we look into the Q4 and beyond relative to shipments and consumption. Thanks. Yeah, John. Good morning. We did reference it in the prepared script. We saw, you know, a couple of things, a bit of timing on the consumption and scan channels where we saw shipments slip into Q2 that ultimately scanned out in Q3. And then we do have the non-measured channel performance, which combined impacted the overall performance on the quarter. And then on the full year, we provided the guidance of where we think we'll land on the full year. We expect and we continue to see strong scanner growth through this latest week. We expect to see strong retail consumption through balance of year. Okay. I'm looking at slide 10 in your investor presentation for the quarter, and you continue to make good progress on ACV, for instance, in the multipack offerings, particularly the 330-milliliter was up quite a bit this quarter relative to last year. I'm wondering on the multipack, because it's been, I think, the largest portion of the revenue growth this year. What is the right way to think about the kind of natural or steady-state level of ACV distribution for multipacks? I mean, are those more limited than the one-count, kind of the core flagship item? Or do you expect, you know, further improvement as you move through the balance of this year and 2024? Well, I think if you look at the ACV that's on that same slide, I think you see there's a lot of room for continued distribution growth. You know, that item should be in most places within MULO that have the one count. So, there's opportunity to continue to grow distribution on that item, and that item is continuing to grow per point distribution. So, we think there's quite a bit of room there. Okay. If I could squeeze one more in quickly. The gross margin performance in the quarter, obviously strong. Is 41%, you know, is that a peak for a seasonal perspective? You referred to some pricing impacts, seasonally high pricing, and also mentioned that costs have largely normalized. So, you know, could you update us on your thinking around longer-term gross margin rate, particularly in the context of retaining that private label business with that key customer? Thank you. Yeah, I think we allude that to a little bit when we talk about our modeling for 2024. Certainly, the quarter was very strong, benefiting from a number of elements, including seasonal pricing, timing of pricing across our portfolio, and sort of some very efficient supply chain. I think as we look forward. You know, we've sort of indicated, you know, that we're thinking high thirties is where we'll be. So and I think we've said that Q4 could be below Q3 because of those timing issues. So yeah, I think it's a little of an unusual outlier. Obviously, you know, very happy with how everything flowed through the PNL, but I don't think we think it is reflective of our future business mix. Great, thanks and congrats. Thanks, John Tom. Thank you. One moment for our next question. Our next question comes from Bonnie Herzog of Goldman Sachs. Thank you. Good morning, everyone. Good morning. Hi. I had a question about your private label business. You know, first, congrats on reaching an agreement with the key customer to retain this business, I guess. But I was hoping, I guess, for a little bit more color on this decision and, you know, the cost associated with retaining this business. You know, and then also, I couldn't help but notice your comments about, you know, expanding distribution of private label with new and existing customers. So, you know, trying to understand the magnitude of this, and I guess trying to reconcile this with your strategy to de-emphasize private label. You know, just trying to understand maybe what has changed with your strategy. I think big picture, like we mentioned last time, we love private label when it works within our margin structure and in our business model. And I think this is an example of, you know, you know, I mean, over time, we may have some competition in private label and supply chain in general. We may lose some business, we may gain some new business, and we've continued to gain new business. But I think this decision of this major customer, we believe, shows that we have a significant supply chain advantage, the most scale, reliability, and, and quality. And so again, we, we like private label. We will continue to grow private label. We will continue to bid on and get new business, we believe. But, it has to work within our business model, and I think this is an example of us continuing to just prove our supply chain advantage, which we're excited about. Okay, that's helpful. And then I did wanna ask about your, you know, Vita Coco water sales or branded sales growth, in the quarter. It was, I guess, a little bit more muted than I expected and decelerated sequentially. So hoping for a little more color on this, especially thinking about it, you know, Q3 as a peak summer quarter, but I know you mentioned an impact in inventory shifts. And then thinking about your new top line growth guidance for this year, it does imply, I think, just around 9% sales growth in Q4, and then you're talking about low single digit top line growth next year. So just trying to understand maybe why you're looking for a little bit more of a slowdown, or is this just some level of conservatism? Thanks. So, Bonnie, there's lots of moving pieces. We talked earlier about the current quarter timing. As you see in the scanner growth, our scans remain very healthy, and we expect that to continue. In balance of year, we do still have the impact of the price mix in private label, and that flows into next year, which is what's driving some of the changes. And also we're providing guidance that we believe we can hit in the balance of year. But we expect to continue to see strong branded growth through balance of the year and into next year. So, but in the context of that, if I may, just the expectation for low single-digit sales growth, you know, I, I assume pricing will be more muted, but is there essentially an expectation of a category slowdown? No. In total- We're expecting- Mm-hmm. in a kind of base assumption, expecting the category volumetrically to perform in line with how it has historically. Mm-hmm. And then we have the price mix impact of the private label versus the branded heading into- Sure. - next year. All right. Thank you. Thanks, Bonnie. Thank you. One moment for our next question. Our next question comes from Eric Serotta of Morgan Stanley. Great, thanks. I'm hoping you could just give us some additional color in terms of your long-term Adjusted EBITDA margin target. How has that been impacted by the changed business mix with you now holding on to a greater portion of that customer's private label business and also growing very nicely in private label elsewhere? Last quarter, I think you took up your long-term target from the mid- to high-teens to the high teens because of the expectation that private label would be a smaller piece. This quarter, it looks like you left it at high teens. Just wondering what the moving pieces are below the surface. Yeah, I think we're still comfortable with that sort of long-term outlook. I think, you know, this quarter is an example of what we can achieve right now in, you know, obviously it's a seasonal month and it's a peak month, but it shows that outcome is possible. So we believe, you know, that long-term model is still achievable. The other moving pieces, the branded business remains very strong. As Mike alluded to, we are winning private label, new private label business, and some of the growth in private label is reflective of that, but the business we're winning, we think still supports that long-term financial algorithm. Great. And then, hoping you could give a little color in terms of innovation and particularly the C store channel. It looks like you had some modest sequential improvement in the juice product in convenience store ACV in the quarter. But can you talk a little bit more broadly in terms of your expectations for the C store channel, how the juice product is performing in terms of getting you additional placements and shelf space? Yeah, I think we're pleased with how it's performing. We're spending a fair amount of marketing sales, executional support in Q3 to sort of drive it and produce the velocities that will support additional distribution discussions. So at this point in time, again, we're happy. Obviously, we always would like distribution to go faster, and we tell our sales guys that, and challenge them to go faster, but it's building nicely, and we think it's a good source of long-term growth opportunity for us. Great. Thanks. I'll pass it on. Thanks, Eric. Thank you. One moment for our next question. Our next question comes from Jim Salera of Stephens. Hi. Good morning, everyone. Thanks for taking our question. Hi, Jim. I wanted to, if you'll indulge me, dig back in on the key private label customer, because if my notes serve me correct, in the Q2, you guys had mentioned, basically, that the long-term contract wasn't in line with your kind of long-term margin targets. So I was just wondering if when they came back or if you went back to them, can we assume that the offer is now in line with kind of the long-term margin expectations you had in 2Q, or has your thinking around that changed, or just any color you could provide on there, I think would be helpful. Yeah, our thinking around it has not changed. If we're gonna do private label, it has to fit within our business model, and we continue to believe that. Okay, to answer your question- Yeah. Yeah. No, no, go ahead. No, to answer your question, you know, in the end, this partnership will continue, you know, under terms that work for both of us, but work within our business model. Okay, that's helpful. And maybe to follow on that, can we think about it as you guys mentioned, you know, the strength of your supply chain and your ability to deliver kind of consistently. When this customer went out into the market, is it that they really found that there wasn't another alternative that could deliver kind of the same quality and consistency that you could on this private label offering? And so that's why we, because just candidly, it's a pretty fast turnaround from Q3 to see this revert. Obviously, you know, incrementally positive for you, but just trying to get some context around what caused it to happen so quickly. Yeah, you know, obviously, it's hard to know because the customer does not always tell you exactly what's going on. I think we would conclude, and obviously, we announced, you know, with Q2, that we had reached an understanding that the business was transitioning, you know, both the oil and the water business, and then subsequently, obviously, we're still in a relationship. So our conclusion would be that they concluded that whatever their plans were were not gonna work. But obviously, we don't really know exactly what went on in the background. What we can tell you is we're comfortable with the, you know, continuing to supply a portion of the business and under terms that, as Mike said, meet our models. Obviously, we're happy with the partnership and, you know, as we said in the Q2, this retailer is important to us, and we're here to support them in any way we can under terms that work for us. Mm-hmm. Okay, great. That's all very helpful. And then maybe if I can sneak in one more question on slide seven, if I just look, you guys have the dollar per ounce percentage change, and it looks like you're running ahead of kind of the broader coconut water category year to date. Mm-hmm. Is there a relative price gap that you think you guys can maintain relative to the category, or is there kind of an upper bound that we should think of in terms of your pricing relative to the category? You know, I think we like our current position relative to the category. I think if you look over 2-3 years, most of the rest of beverage has taken very significant pricing increases relative to what coconut water took, partly because of the economics of those businesses relative to how our supply chain has performed, absent the ocean freight increases, right? So we actually like the fact that perhaps today we're more affordable than we were 3 years ago in the relative beverage category. Obviously, we're gonna monitor that. We have, as we stated, one of the few categories in beverage in non-alcoholic beverage that is growing volume and price. So we're gonna, you know, continue to fuel that by, you know, maintaining the current price, price gaps, and obviously, we'll monitor what's going on on the competitive environment basis to see if any changes to that are necessary. Okay, great. Very helpful. Thanks, guys. I'll pass it along. ...Thank you. Thank you. Thank you. One moment for our next question. Our next question comes from Michael Lavery of Piper Sandler. Thank you. Good morning. Good morning, Michael. I just wanted to follow up on Bonnie's question, where you've given us a little peek into 2024, and if I'm catching it all correctly, a bit of the thinking is the mix drag from strong private label growth. Can you just touch on what the branded Vita Coco coconut water segment by itself might look like in terms of how you're thinking about the momentum there on the top line? Yeah. You know, obviously, we're not trying to, you know, provide sort of guidance. We're just trying to think about modeling. If I, you know, had to model this, I'd be modeling, you know, coconut water category, volume growth, you know, pretty similar to what you've seen in the last two, three years, which in the scan data, I think is high single digits, sort of- High single digits. High single digits, plus some gain of share, right? Obviously, you know, when Mike, you know, asks me to set goals for the year, he tells me I've got to grow share. So that's, you know, how I would think about it. I think, you know, as Corey alluded to, you know, there's lots of moving pieces here. We've got, you know, some changes in the private label relationship that we've talked about. There's mix, price changes in the private label business, which obviously provides a headwind in net revenue next year. But we feel very good about, you know, branded growth. Obviously, the scan data continues to be very strong for scan channels. Obviously, we need to grow the other channels as effectively as scan is growing, so that's a challenge for our sales force, but that's the challenge we're signing up for. Okay, that's helpful. And it doesn't get touched on too much, but I actually wanna put it over to the other segment and just, you know, very, very small, obviously. But can you update us? You know, the growth there sequentially and year-over-year, even though tiny in absolute numbers was robust. Just maybe help us understand how to think about, you know, PWR LIFT or some of what else might be going on there. I think there's been, you know, a pretty small, geographically limited test. You know, is that alone moving the needle on this? Or, you know, how do we think about maybe how that segment could evolve if that test is going well? Well, you know, in that segment, you know, obviously there's a variety of items that don't fall into the two main segments. What I would say is we continue, you know, from a business priority perspective, to prioritize coconut water growth and growth of Vita Coco related branded activities, with the innovation, you know, as sort of a secondary priority, and the innovation efforts obviously fall into that other, as well as commodities and some other stuff, so it's a little bit noisy. I think what you're seeing in there is some slight volume growth that reflects our investment in PWR LIFT. I think we're, you know, very happy with it. I think we believe PWR LIFT over-indexes with our investors, which is sort of interesting based on the conversations we have and our analysts, actually. So we know we have something there, and we're trying to work out how to make it work at retail. Obviously, it's a very competitive segment, but we're, you know, happy with the progress, and as we look to next year, we're hoping to add some additional geographies, perhaps where we can influence the distribution a little stronger, to, you know, get it on shelf in a cost-effective way, 'cause obviously that's what's required to make something like this successful, is to drive it to shelf. So, but we have some opportunities, but we're also, you know, pretty pleased with it as a brand initiative, as part of our portfolio of innovation. You know, when I say portfolio of innovation, there are other efforts that we're not ready to talk about yet, that we're doing, that hopefully will help in that other category as well. Okay, great. Thanks so much. Thank you. One moment for our next question. Our next question comes from Chris Carey of Wells Fargo Securities. Hi, good morning. Hi, Chris. One quick follow-up. So you're rolling back pricing on private label, but you don't intend to do that on the branded business. Can I just confirm that? I don't think, Chris, we have said that we're rolling back private label. We've been very careful to just talk about mix and private label effects that affect our business. I see, so- Long term, private label tracks costs, but we've been very careful, so I just don't want to confirm question as a fact. Okay. Yeah, that makes sense. How do you feel about, you know, overall price gaps in the category currently, where you sit and, you know, any, you know, plans to maintain certain levels going forward? Just in general, how you feel about price gaps relative to the strong consumption that you continue to see. So we've sort of talked about how we feel relative to the up, the rest of the beverage category already in reference to a prior question. I think relative to private label, that's obviously retailer-specific. As you know, private label, as we've sort of said, is, you know, concentrated in a few major retailers in the U.S., and, you know, the situations where our brand sits next to private label are, you know, sort of few relative to the total retailer universe, right? So we look at it retailer-specific. Obviously, we'll monitor that if those retailers should reduce their, their shelf price on private label, we will monitor the trends. I think right now, we believe the branded and private label coexist nicely on the shelf. They're complementary. Our brand ascribes value to private label, obviously, by anchoring the category, in most retailers, you know, the velocities are good. And, you know, that's something we'll monitor as it goes on. But right now, I think as we think about plans for 2024, for branded pricing, we're sort of looking to optimize revenue, sort of optimize, I suppose, revenue, I can't think what the word is now, but well, it's revenue optimization, I suppose, across our portfolio of SKUs, is how we're thinking about trying to take, take pricing next year as opposed to, you know, moving price. Okay. One final follow-up. I know you said that the Q3 gross margin was probably atypically high. I'm just trying to understand that comment because, you know, pricing will remain, cost relief seems to remain. So is the key difference mix in Q4? What gets sequentially worse into Q4 and into next year? Thanks so much. Yeah, there's a little bit of kind of mix. Seasonally, the price, the absolute price of coconut water, Vita Coco Coconut Water in the quarter was higher, and then the efficiency of the supply chain as inventory is low, drove advantage COGS. So that, combined with a different price mix on private label, is what makes the quarter seasonally high. Okay, thanks so much. Thank you. One moment for our next question. Our next question comes from Eric Des Lauriers of Craig-Hallum Capital Group. Thank you for taking my questions, and congrats on another strong quarter here. So profitability and cash flow, obviously a big standout this quarter. Presumably, that helped lead to the share repurchase authorization. With that share repurchase, so I'm wondering, should we take this as an indication that perhaps the M&A opportunities have gotten, you know, maybe less attractive over the last, you know, call it 6, 12 months? Maybe just give us an update on the sort of opportunity you see in categories beyond coconut water and, you know, if this is just more of a build versus buy at this point. Thank you. Yeah, I think, you know, the way I would think about the buyback authorization is primarily in the company sort of basically creating optionality and flexibility for use of its cash. Obviously, without a buyback authorization, you know, that wouldn't be an option. I think our cash balance at the end of the quarter is obviously very healthy. Part of that is due to inventory being a little low for the quarter, and as we've indicated, inventory is gonna build. We certainly model out our cash needs over the next twelve months to, you know, look at what's possible and certainly believe we could support a buyback if that was something we wanted to do. But that said, obviously, it's one option for use of capital, and there are other options for use of capital. The M&A environment, I think, continues as we previously talked about. There are some opportunities. They're all interesting in their own right, whether, you know, the valuations make sense or the fit makes sense depend on the specific situation. And we, you know, obviously look at things as they become available and explore them. But there is nothing sort of currently imminent, but obviously, that could change. So again, I... Coming back to the buyback aspect of this, I think it just creates flexibility for us. If you, you know, take the models out and assume no M&A, then you would probably be asking us, why are we, are we sitting on the cash balances you project? This gives us some optionality, and as I think we said in the release, it was approved yesterday, and so obviously, we're early in the process of deciding, you know, what to do. All right, it's very helpful. And then last question for me is on marketing spend. So much of the spend so far has been on driving new use occasions. It certainly makes sense. And we saw a number of examples of that over the summer, you know, various cocktail partnerships and pop-up bars. It seems to me that there might be, you know, some seasonality in that kind of, you know, driving new use occasion spend, but at the same time, you're obviously increasing marketing spend into the winter months. Can you just give us a bit more color on, you know, where those incremental marketing dollars are being spent? Thank you. I think you highlighted a number of those. I think also during the quarter, we announced the Becky G relationship, and for us, that's a great opportunity to increase our brand saliency among a core demographic that we think is a long-term opportunity for us. And so some of the timing of that is affecting the timing of the spend in Q3 and Q4. I do acknowledge that our business has some seasonality to it, that typically most marketing would be driven Q2, Q3, but this year, I think we got a little bit delayed. Obviously, a relationship like the relationship with Becky G takes a little bit of time to put together, and so some of the timing is perhaps off this year. Plus, we have some, you know, catch up that we're doing in terms of sales execution and driving distribution that we had pulled back on, on prior years that we've amplified this year. So this year is a little abnormal to what you might see going forward. That's very helpful. Thank you. Thank you. One moment for our next question. ... Our next question comes from Brian Spillane of Bank of America. Thanks, operator. Hey, good morning, everyone. Hey, Brian. I just have one question related to the 2024 commentary or the call you've given on 2024, and it's just, I think at the midpoint of the ranges, we're adding about $50 million back to revenue in 2024 versus at least kind of where, I guess, where we were. And then if I go back to the... When you originally talked about 2024, I know, I think we took $80 million out, but I'm not entirely sure if that was too much or not. But anyway, my point is, as we look at 2024 now, are we just adding back the business you thought you'd lose? Like, has anything else changed underlying in terms of, you know, the way you're looking at 2024 now versus the way you were looking at 2024 back in August? Yeah, I think, you know, we're adding back a piece of the business that we thought we were losing, and under sort of, you know, terms that are agreeable to us, right? So, I think that's the difference. We still think that the branded business is healthy. You know, certainly with additional private label business, we can fund, you know, more investment in growing the category. And, you know, one of the reasons we like it, growing the category, is we have share of the category, both on the branded and the private label side. So, so just adding back the business is purely margin accretive. Accretive might not be how we sort of, you know, view it, 'cause we just we view, certainly in North America, the investments to grow the category have higher return when we have more of the business. All right. Yeah, so simplistically, if we're just looking at our models, what we're doing is really adding back that portion that now you're gonna retain. It's. And everything, most everything else in the model seems like it had washed out, right? In terms of, again, revenue expectations for 2024 relative to where you were in August. Yeah, well, again, we're trying very hard not to provide guidance for next year while supporting your mo- Yeah. Everyone's modeling, including our own, right? So I don't think that's an unreasonable, you know, way to think about it. But I would, you know, perhaps say that based on where we were in August, you know, with the significant hit that people assumed, you know, based on, you know, what we said, came up with, we probably would have, squeezed SG&A, a little bit, Right. next year. Whereas, now we can go, "Okay, let's go. Got it. Got it. Got it. No, that's really helpful. And then, and then just one, one last follow-up. In terms of having retained or, or, or won, you know, private label business with some additional customers, does that open up the door for more, like, merchandising and shelf space for those customers? I remember Michael talking about previously about, you know, the logic, part of the benefit of having a private label business in Costco is it encourages them to sort of, you know, allocate more shelf space to the category. So I'm just curious if it, you know, as we look forward, does it open the door to actually, you know, have more space dedicated to the category? Yeah, I think not only does it allow us to have more space, but I think, like, like you just mentioned, and we've talked about this before, in several parts of the world, in Western Europe specifically, where we're winning a lot of private label business, we have the benefit of getting in front of these retailers now and having conversations about the category and together building the category and maybe starting with private label and then bringing the branded Vita Coco branded items in next to the private label. Which is a real benefit to obviously not only the category, but also to the Vita Coco brand long term as we build out the brand globally. Cool. All right. Thanks, guys. Appreciate it. Thanks, Brian. Thanks, Brian. I'm showing no further questions at this time. I would now like to turn it back to the CEO, Martin Roper, for closing remarks. Thanks, Dede, for hosting the meeting. Thanks, everybody, and we appreciate your interest, and we look forward to talking to you again when we have full year results, sort of during February or March of next year. Hope everyone has a great Halloween. This concludes today's conference call. Thank you for participating, and you may now disconnect.