Good afternoon, and thank you for standing by. Welcome to the FIGS Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session, and instructions will follow at that time. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from FIGS. As a reminder, this call is being recorded. Speaking on today's call will be Co-Chief Executive Officers, Heather Hasson and Trina Spear, and Chief Financial Officer, Jeff Lawrence. I would now like to hand the conference over to Jeff Lawrence. Please go ahead. Thanks, Gino. Good afternoon, everyone. Thank you for joining today's call to discuss our second quarter results, which we released this afternoon and can be found on our website at ir.wearfigs.com. With me today on the call are the Co-Chief Executive Officers of FIGS, Heather Hasson and Trina Spear. I wanna remind everyone that management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on current management expectations. These may include, without limitation, predictions, expectations, targets, or estimates, including regarding our anticipated financial performance, and actual results could differ materially from those mentioned. These forward-looking statements also involve substantial risks and uncertainties, some of which may be outside of our control, that could cause actual results to differ materially from those expressed in or implied by such statements. These factors and uncertainties, among others, are discussed in our filings with the SEC. We encourage you to review these filings for a discussion of these factors, including our quarterly report on Form 10-Q filed today, and our earnings release furnished today, both of which are also available on the investor portion of our website at ir.wearfigs.com. You should not place undue reliance on these forward-looking statements, who speak only as of today, and we undertake no obligation to update or revise them for any new information. This call will also contain certain non-GAAP financial measures, including net income as adjusted, diluted EPS as adjusted, adjusted EBITDA, and adjusted EBITDA margin, which we believe are useful supplemental measures that assist in evaluating our ability to generate earnings, provide consistency and comparability with our past performance, and facilitate period-to-period comparisons of our core operating results and the results of peer companies. This call will also discuss key performance indicators, such as active customers and average order value, which we also believe are useful for understanding our business and performance. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and definitions of these indicators are included in our quarterly report on Form 10-Q and in our earnings release. Lastly, information discussed on this call concerning our industry, competitive position, and the markets in which we operate, is based on information from third-party sources and management estimates. Management estimates may also be derived from third-party sources as well as FIGS' internal research and are based on our knowledge of our industry and assumptions we believe to be reasonable. These assumptions are also subject to uncertainty and risk, which could cause results to differ materially from those expressed in the estimates. I would like to turn the call over to Heather Hasson, Co-Chief Executive Officer of FIGS. Thank you, Jeff, and thank you all for joining our first earnings call. We are extremely pleased to have delivered such strong financial performance in our first quarter as a public company following a successful IPO. From starting out by selling scrubs out of the back of my car to now reaching quarterly revenue of over $100 million and 1.6 million active customers, I'm so thankful to our incredible community of healthcare professionals and the entire FIGS team, we feel like we're just getting started. We begin every day at FIGS with the mission of celebrating, empowering, and serving Awesome Humans. That's the name we use for healthcare professionals because that's what they are. For Awesome Humans, there are no timeouts, no rematches, or better luck next times. They are people who give everything of themselves to curing diseases, saving lives, and providing comfort, and we need more of them because humanity cannot survive without them, and because they enable us to live in a world where innovation is truly possible. Our duty at FIGS is to do such a great job at celebrating, empowering, and serving healthcare professionals that we inspire the next generation to become them. It's important to remember just how many lives FIGS can impact. The healthcare apparel industry is estimated to be $12 billion in the United States and $79 billion globally. The healthcare sector is the largest and fastest growing job segment in the United States, employing over 20 million healthcare professionals in 2020. The opportunity for FIGS is massive, and we've succeeded by approaching it differently than others. We focus on three primary areas: changing the product, changing the distribution model, and creating a community. On the product side, we did away with the typical commoditized and uncomfortable scrubs that healthcare professionals previously had to wear. No more boxy V-neck tops and drawstring pants. Instead, we've redefined the industry by making exceptional products that are comfortable, technical, functional, and stylish. We do this through a combination of material science, fashion, and deep knowledge of what healthcare professionals truly need and want. Our products span from head to toe, both On-S hift and Off-S hift. We're known for making intensely precise colors, and we've created the concept of color drops and generating new color standards for the industry. For example, our signature best-selling color, graphite, is now a hospital standard color. Our proprietary FIONx fabric embodies our commitment to technical comfort. The concept that healthcare professionals can have access to products that are both technical and comfortable. Product innovation is the lifeblood of FIGS, and that will never change. We also reimagined the distribution model so that healthcare professionals working 12 or even 16 hours a day no longer need to go to a retail store to dig through racks of scrubs located right next to bed pans and knee braces. What they deserve is a seamless direct-to-consumer experience that is digitally native and specifically catered to their unique needs. That's why we continue to invest to make the experience as customized and convenient as possible. Finally, we've created a community around the profession. Our 1.6 million active customers form a deep emotional connection with the FIGS brand because we interact with them in an authentic and personalized way, and because we are so devoted to the profession. As an example, we launched our Awesome Humans Make History campaign as part of our IPO. This campaign, which we're continuing to run throughout the year, showcases the extraordinary achievements of our Awesome H umans. Campaigns like this not only help build our brand and accelerate our product launches, they also meet our mission by sharing the world our Awesome Humans' incredible stories and inspiring the next generation to become them. Because this is the reason why we wake up every single day. With that, I'd like to turn the call over to Trina, my co-founder and co-CEO, to provide an overview of Q2 and more about where we're heading. Thanks, Heather. Before I get started, I just want to reiterate what Heather said about our Awesome Humans. They are why we show up and do what we do every day. We are so inspired by them, and we hope to make them proud. In terms of Q2, Jeff will walk you through our financial results in more detail shortly. I'd like to give you a high-level overview first. As Heather said, Q2 was a very strong quarter for us, reflecting the strength of our brand and the uniqueness of our business model. We had our first ever $100 million quarter, with net revenues totaling $101 million, representing growth of 58%. We saw strong performance across the board, both in the U.S. and internationally. International grew to 7.9% of total net revenue, compared to 2.9% in Q2 of 2020. Our total active customer base reached 1.6 million deeply loyal, Awesome Humans. It's important to remember that we see a compounding effect as new healthcare professionals join the FIGS community. This is a replenishment-driven business, with healthcare professionals constantly needing to replace their uniforms. When we add new customers to our community, they're likely to stay with us year after year throughout their careers. As a data point on that, in 2020, 62% of our net revenues came from repeat purchasers, and we see that they become increasingly loyal over time, with net sales per active customer continuing to grow. New customers don't only lead to retention and increased loyalty. We also see a multiplier effect from them. Because of the unique way that healthcare professionals interact with one another, often in densely packed healthcare institutions, word of mouth leads to even more people wanting to purchase FIGS. This kind of organic customer acquisition is how we've been able to maintain such an efficient marketing spend, even as we've grown so rapidly. While our growth has been rapid, we built a unique model to derive sustainable growth. Unlike other healthcare apparel companies, we don't have to pay fees to license our brand from someone else, and we don't have to give away a share of our revenue to third-party retailers. As a result, we have structurally advantaged gross margins, which reached 73.3% in Q2. We grew adjusted EBITDA to $26.8 million in Q2 for an adjusted EBITDA margin of 26.5%. Part of what drove our Q2 performance were the many color and style launches and other campaigns that we rolled out during the quarter, something that is unique to FIGS. Our unique merchandising strategy is anchored by our 13 core scrub wear styles. Healthcare professionals come back all year round to buy our core products. When we launch limited edition colors and styles just about weekly, this newness drives excitement and traffic to our website. In Q2, we launched limited edition colors, Pop Red, Chalk Pink, Slate, Jade, Hydrog reen, Shocking Pink, that drove both new and repeat customers to our website. We launched bundled kits so that our Awesome Humans can get fully outfitted in one simple purchase rather than having to buy each piece individually. We rolled out our high-waisted Zamora and Yola pants and added those styles to our core because they became our best-selling pants. We look to build franchises around our best-selling styles. In line with our commitment to innovation, we launched our FIONlite fabrication, our new ultra-lightweight and sustainable fabrication, which is made with recycled poly. We made countless improvements, large and small, to our e-commerce platform to make the experience even better. We added 110,000 new followers across all of our social platforms. We celebrated Nurses Week with an integrated and multidimensional campaign that resulted in our best social engagement ever, generated sales that blew away our expectations, and that was instrumental to our revenue growth in Q2. Also, Heather talked about the Awesome Humans Make History campaign that we launched as part of our IPO. We're so proud of this campaign because it shares the extraordinary achievements and stories of our Awesome Humans and hopefully inspires the next generation to become them. Looking forward, we will continue to make investments throughout our business from product, e-commerce, data science, technology, supply chain, people, and more to keep growing and scaling sustainably. Most of our focus is in four key growth areas. First, we're focused on continuing to grow awareness of the FIGS brand, as we believe there's a significant opportunity to attract new customers to our community. As we mentioned before, more customers in the FIGS ecosystem has a compounding effect as those customers interact with other healthcare professionals in densely packed environments. We plan to invest heavily in connecting with the healthcare community to increase our penetration of this large and growing market. Second, we're continuing to innovate on product and build out our lifestyle product offerings so that we're truly meeting all of our healthcare professionals' needs to work, at work, from work, on shift, off shift, head to toe. This is what our healthcare professionals want, and it also expands our TAM beyond the massive $79 billion global healthcare apparel market that already exists. Third, international remains a big opportunity for us. As I mentioned earlier, we grew international from 2.9% of net revenue a year ago to 7.9% in Q2, and we're still in only three markets outside of the U.S. Canada, U.K., and Australia. With the total addressable market expected to grow globally from an estimated $67 billion in 2020 to $86 billion in 2025, the international opportunity is an important one for us. Our mission is to celebrate, empower, and serve as many healthcare professionals as we can. This means making FIGS a truly global brand. Finally, we're going to continue to leverage our unique advantages from a data perspective to bring new healthcare professionals into our community and ensure they stay with us for the entirety of their careers. By having a direct relationship with our customers, we have access to hundreds of data attributes associated with millions of customer accounts. This enables us to improve our business in many ways. Because we know who our customers are at a granular level, we're able to interact and engage with them in more meaningful and individualized ways. By understanding their buying patterns, we're able to make increasingly accurate predictions about the products they're likely to buy, how often they're likely to buy them, and the quantities they're likely to buy them in. By continuing to leverage our data capabilities, we can more easily acquire new customers, increase our retention, and operate even more effectively. Of course, the best news for FIGS is that despite everything we've achieved so far and how strong our brand has become, we still only have about a 3% market share in the United States. The opportunity is massive, and we remain confident that we have the teams and resources in place to achieve over $1 billion in net revenue by 2025, and we're committed to making the investments needed to achieve this goal. With that, I will turn the call over to Jeff to provide additional detail on our Q2 results. Thanks, Trina and Heather, and good afternoon, everyone. I wanted to start by saying how honored I am to be part of such an amazing company and team. We have so much opportunity in front of us, and I know we will continue to do great things. We are truly just getting started. With that said, we are excited to share with you the results of our second quarter, let's dive right in. Net revenues for Q2 were up 57.6% to $101.1 million, driven primarily by strong order growth from both new and existing customers. We also saw a 17% year-over-year increase in average order value, or AOV, to $103, which was driven by a favorable shift in product mix and an increase in units per transaction, partially driven by the positive response to our launch of bundled item kits. We also noted a better than anticipated response from the healthcare community to our Nurses Week campaign. Quite simply, the results from this campaign, our largest of the year, were simply outstanding. Gross margin for Q2 increased 280 basis points year-over-year to 73.3% for the quarter. This improvement was primarily driven by a shift in sales mix away from lower margin products and a decrease in air freight expenses as we used more air freight in Q2 2020 due to the need to bring in extra inventory faster to meet incremental demand. Selling expense for Q2 was $19.2 million, or 19% of net revenues, which was a 1.1 percentage point improvement compared to a year ago. This improvement was primarily driven by leverage within shipping, driven by the increase in our average order value. Marketing expense for Q2 was $15.5 million, or 15.3% of net revenues, up 1.6 percentage points compared to a year ago. Marketing expense increased as a result of greater investment in performance marketing. We are proud of our continued ability to efficiently attract new customers to our brand. G&A increased to $71.5 million in Q2 compared to a year ago. This increase was primarily driven by higher stock-based compensation in connection with our IPO. We also invested more in personnel and hired key team members to bolster our capabilities as we move forward on our strategic initiatives. Our tax provision was $8.5 million for the quarter and was up from the prior year. The provision was unfavorably impacted by the increased stock-based compensation expense associated with the IPO. Net income and diluted earnings per share were both down year-over-year due to the aforementioned stock-based compensation expenses in connection with our IPO and an increase in taxes, offset in part by our outstanding operational results. Diluted EPS as adjusted was $0.08 in Q2, compared to $0.09 in the prior year. Diluted EPS as adjusted includes adjustment for IPO transaction costs, expenses related to non-ordinary course disputes, and stock-based compensation expenses in connection with our IPO, as well as income tax impacts. Our adjusted EBITDA for Q2 was $26.8 million, up 54.5% over the prior year. The adjusted EBITDA margin was 26.5%. We are very proud of our business and financial model and our ability to produce real and substantial cash flows. We believe that these non-GAAP metrics are important supplemental measures for understanding our results. We again refer you to our 10-Q and our earnings release issued earlier today for the required disclosures and reconciliations. Moving on to the balance sheet. Our cash position at quarter end was strong, with total cash and cash equivalents of $164 million. We have the capital to continue to invest and grow this amazing brand the right way. Before we get to guidance, we thought we'd share a bit about our investment philosophy here at FIGS. We are building this company for the long term and with the healthcare community in mind. We do that by actively building capabilities in the things that matter the most to our brand and our mission. We're also mindful of the way we build those capabilities. For example, we wanna own more of what's truly strategic while outsourcing more of other areas. Maybe most importantly, we will invest responsibly. Appropriate levels of return are the focus of everything that we do here at FIGS, and that discipline will continue into the future. While we acknowledge that we have built market-leading capabilities already, we will invest to stay ahead. With that as a backdrop, again, recognizing the large and growing $79 billion global healthcare apparel market, I'll highlight the following investment areas going forward. First, you'll see continued deep investment in innovation, particularly around our products. As mentioned earlier on this call, we launched FIONlite, our new ultra-lightweight and sustainable fabrication, which is made with recycled poly. We will continue to bring innovation first approach to all new development. You'll also see smart investments in marketing, both performance and brand marketing. We wanna continue to drive brand awareness and convert more of those aware of the FIGS brand into active customers. Once we acquire them and bring them into our funnel, we endeavor to create loyal brand fans who not only replenish their scrubs frequently, but also explore our ever-growing set of lifestyle offerings. It is a flywheel we are incredibly proud of, and one that we believe will flourish even more with continued investment. Of course, you can't do all this without investment and execution in the data and technology space. While we have already built some really dynamic and effective tools to help us analyze, act, and drive more top-line growth, we know there's so much more we can continue to do over time in this important area, and we are committed to doing just that. Finally, people. Since our founding, we've attracted, retained, and motivated a group of leaders and team members who are simply the best. Human capital will remain a priority for us. We will continue to ensure we have the right folks at the table to help us achieve our long-term goals. We believe we have earned our competitive moat, but we are also big believers in investing to stay ahead, and we will continue to invest to win in the long run. Now let's move on to guidance. We are long-term focused here at FIGS. As a result, the financial guidance we share with you all will generally be longer-term in nature. Of course, dynamic businesses like ours will have some inevitable variability in certain periods, particularly as we ramp investments. We will remain focused on building the brand the right way and aim to grow both revenues and profits responsibly over the long term. The metrics you will hear us talk about most often are as follows. Net revenues, gross margin, and adjusted EBITDA. You will also hear us talk about KPIs such as active customers and average order value. We believe these measures to be very useful in understanding our business and our performance, and that is why you will hear us speak to them often. Having said that, I'll start with reiterating what Trina just spoke about a minute ago. We aim to be a $1 billion+ net revenue global brand in 2025. We are energized and excited by the challenge and are working hard every day to make it a reality. For full year 2021 specifically, we expect to earn net revenues of approximately $395 million. We will not be providing quarterly net revenue guidance. We currently anticipate providing 2022 annual net revenue guidance early next year. Before moving away from revenues, I'd like to remind everyone that we had a $4.2 million related party sale in Q3 of 2020 that we do not anticipate recurring in 2021. This will affect comparability between the back half of 2021 and 2020. One more call out relating to 2021. We currently expect that our effective tax rate for quarters three and four will be approximately 33%-37%. Let's now transition to our margin expectations going forward. As you saw in the first half of 2021, our financial model is capable of producing outstanding growth. We also note that the first half of 2021 did not have many investments and expenses that we expect to incur in the back half of 2021. For example, the significant cost of being a public company. Expenses relating to human capital are also expected to be higher in the back half of 2021 as we continue to build our teams and capabilities. Finally, we shifted certain marketing spend from the first half, which we currently plan to accelerate in the back half of 2021. In addition to these call-outs, we remain deeply engaged in ensuring that our supply chain continues to operate efficiently. While our operations team has done a wonderful job of managing the business to date, we acknowledge the dynamic and shifting macro supply chain challenges being experienced by almost all apparel companies as a result of the ongoing COVID-19 pandemic, particularly those who have supply chains in Asia. As a reminder, we have manufacturing partners across Asia and South America, and have exposure in countries such as Vietnam and Sri Lanka, which are experiencing a resurgence in COVID-19 due to the Delta variant. As a result, we currently expect that we would experience downward pressure on gross margin if, for example, we need to increase the air freighting of products into the United States to ensure uninterrupted supply of the products we know that our customers love. We are currently unable to predict with certainty how long these pressures may persist or the possible future impact on margins. We do hope that this color, both on net revenues comparability and possible expense movements, is helpful to the investing community. Let's now move to longer term margin guidance. We believe that we can achieve annual gross margins of 70% or more over the next three fiscal years, and annual adjusted EBITDA margins of 20% or more over that same time period. Our business and financial models are strong and resilient, and we believe we are capable of achieving these outstanding levels of profitability. We believe that this guidance that we are sharing today should provide the financial community with a very good sense on where we aim to go financially as a brand, and we will share more as appropriate in the future. Once again, we are very pleased with our financial results in Q2, and with that, we will turn it back to the operator to open it up for questions. All right. As a reminder, to ask a question, you will need to press star one on your telephone. Please limit yourself to one question. If you have additional questions, you can jump back in the queue. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. First question comes from the line of Adrienne Yih from Barclays. Your line is now open. Good afternoon, congratulations on the IPO and your first quarter out here as a public company and the successes therein. Heather, I have a question for each of you. Heather, I wanted to know kind of, how much newness innovation has been put into the system this year versus last year, in particular for the back half of the year, new product launches, anything else that is on the deck. Trina, can you talk about pricing strategy? You know, are you expected to kind of take normal, you know, price increases on an annual basis? How do you think about that in a world of potential inflation? For Jeff, really focusing on that average unit cost trends, it sounds like you had net benefits this quarter because more air. Sorry, less air. Should we expect that less air relative to last year going forward into the third quarter? Is that offset by kind of breakpoint pricing, meaning volumes are going up? Thank you. Thank you so much, Adrienne. This is Trina. In terms of our pricing strategy, we can start there. You know, we really feel like our products are priced accurately. We use a lot of our data analytics to ensure that, where we price it really makes sense for our healthcare community. You know, we're not necessarily gonna move our pricing because of any inflation that the environment is in. I think, you know, we're constantly analyzing this from a data perspective to ensure that our pricing makes sense for this community. I would remind you also that our products are extraordinarily accessible and affordable. You know, I think it's truly unique. Two-thirds of our customers make less than $100,000. It is our goal to ensure that our products are not only the highest quality products in the industry, but also that they are affordable and accessible for our community. Heather, do you wanna talk about our newness strategy? Sure. Thanks, Trina. In terms of product innovation, right, so FIGS, we're centered around delivering functional For the healthcare professionals at all times. We are going to continue to invest in material science. We're going to continue to invest in innovation around product, probably beyond anything anybody's ever seen. I'm super excited about it, and the team's very excited about it. Hey, Adrienne, it's Jeff. On your third part of your one question, kudos to you. You know, as far as gross margin, again, we're guiding longer term there, you know, fiscal years 2022-2024. You obviously saw the results we put up in Q2, you know, well north of that. When you look at air freight Q2 to Q2 last year, you know, Q2 last year was right at the beginning of the pandemic. We were growing like crazy, as we did again this quarter. We did have more air freight last year Q2 than we, than we had Q2 this year. Again, we're not guiding specifically, back half of this year on margins. What I would tell you is, you know, we've built a very robust and diversified supply chain network that not only has been able to keep up with our incredible rate of growth, but we believe has allowed us to risk manage pretty effectively as well. I think there are a lot of apparel companies out there that are worried about getting their products made. As we sit here today, we're really not worried about that. We believe we have the right partners in the right countries, from a diversification perspective, that we don't have the worry that I think a lot of other apparel manufacturers have. I do think what we're concerned about, and I'll refer you back to my prepared remarks, we wanna make sure that we can get them into the United States. Obviously the COVID-19 pandemic continues to have, you know, just a lot of trouble and a lot of challenges, being very dynamic. As we look to the back half of this year, we don't know for sure, which is why we didn't guide to it specifically, but we could see downward pressure on gross margin if we choose to air freight in, the products that we know our customers love. The good news for us all is, we'll get to talk to you in another 90 days once Q3 shakes out. I think really from a positive perspective, we believe we have the right supply chain partners in place. We think we're risk diversified enough. It's just about getting it into the United States, and that will come potentially with an extra cost that we are more than willing to make for our healthcare community. Totally makes sense. Best of luck. Thank you. Thanks, Adrienne. Next question comes from the line of Bob Drbul from Guggenheim Securities. Your line's now open. Hey. Hi. Congratulations. You know, great quarter. Congratulations on the IPO. I'm gonna try and sneak in two, Jeff. I'm sorry. I can't help myself. The first one is, with the 17% increase in AOV, is that something that you expect to continue, you know, in coming quarters and in years? I don't know if you can talk about that longer term. I guess the second quick question is, I think you mentioned a shift of marketing spend out of the first half into the second. I was wondering if you could just quantify that for us, please. Thanks. Yeah, Bob. Really appreciate you being on the call today. AOV first, you know, we're not guiding AOV specifically. As you can see over the last, you know, year and a half, it kind of slowly climbed a hill to $150 in Q2 of 2020. You know, part of that year-over-year was we did have more masks, which are obviously lower price point. There's some of that in there. We've also been able to really use the data and technology investments that we've made over the years to be smart about things like pricing, to be smart about getting our healthcare professionals to maybe add one more thing to their basket that they need for when they go back on shift, you know, for a midnight shift. We're being smart about it. I think we're building AOV the right way with kind of smart increases to AOV. I think as Trina mentioned earlier, you know, we try to remain really disciplined around taking price just for price sake, right? That's not who we are. We wanna make sure that the value of the products really shine through, again, to our healthcare community. They deserve it. Our products, as you know, very accessible price points, but outstanding value. You know, we look at that. You know, going forward, again, not guiding specifically, I'll go back to one of the things Heather said. You know, we have this layering system that we've innovated around, we continue to add lifestyle products that are just amazing. I think there's opportunity there. We're not guiding it specifically. We're proud of what we've been able to put up so far, and we'll continue to work at it hard. Bob, the second part of your question again was around what? I think you said that you shifted some marketing spend out of the first half into the second half. I just wondered if you could quantify what that was to dollar number? Yeah. That was really just brand marketing. We're not putting a dollar amount to it. You know, we got a lot of good and awesome brand exposure as part of our IPO that we didn't largely have to pay for. We're just really excited about the promotions and the not really promotions, but the brand activity through social and through our community that we have for the back half of the year. We're going to lean into that a little bit in the back half of 2021. You'll see that, you know, likely go up a little bit. Again, for competitive reasons, we obviously can't talk about what that is. Again, we'll work, we'll invest that responsibly, and we feel good about where we're going. Thanks, Jeff. Thanks, Bob. Next question comes from the line of Ed Yruma from KeyBanc. Your line's now open. Hey, guys. Thanks for taking the questions, and congrats on the quarter and on the IPO process. Just a quick one from me. I guess first it relates to marketing. You know, we've heard a lot of buzz about IDFA and maybe how it's changing how people market as it relates to some of these privacy issues. I guess any changes you're seeing in your marketing effectiveness? As a follow-up, it seems like you've had a lot of compelling product introduction during the quarter, noted, like compression socks, you know, some of the underscrubs. I guess, how would you characterize some of these newer products and how they're maybe positively impacting the business? Thanks. Sure. Thanks, Ed. So, you know, first, if you look at the full picture, of, you know, what we're doing in terms of a marketing standpoint, our marketing efficiency is really best in class. You know, I think we are light years ahead of other digitally native direct-to-consumer companies on this front. FIGS' marketing as a percent of sales, you know, that's about 15% for the quarter. You know, and you think back over the past eight years since we started the business, no one thought a 100% digital e-commerce business could have that level of profitability, like ours and spend only 15% on marketing while growing 58% in a quarter. You know, why were we able to do that? I think it's because we have structural advantages built around the word of mouth dynamics, the replenishment dynamics in this business, where we don't have to rely as much on performance marketing to be successful. You know, I think what you've heard around iOS and privacy issues or Facebook algorithms changing, you know, we're not really impacted like other companies on that front. You know, if you think about word of mouth, for instance, healthcare professionals, as I discussed, you know, they work in densely populated healthcare institutions. They're interacting with each other all the time, you know, in the break room, in the coffee shop, in the lobby, in the hallway, in between patient visits. You know, everyone's looking at what they're wearing, and that's essentially free. It's like a walking billboard. No marketing is really necessary for that. On the retention side, it costs far less to retain a customer than to acquire one, and we're a retention business. Over 60% of our business in 2020 was from repeat purchasers. As we scale, we'll see more of our purchases come from repeat purchasers, and that is something that we are excited to see over time. I think, you know, that's, I think, kind of how we think about the marketing side and the marketing effectiveness. To Jeff's point about the brand shift, right? I think where we're focused is on LTV, driving community engagement. What we see from that is that, you know, as our LTV, as we make these investments, our LTV goes up. You might see some investments on the marketing side that are not gonna pay off today, and that's, you know, that's okay, right? You're gonna see that over time, as we shift to really not focusing as much on that immediate gratification or that direct response and really make those LTV-focused investments. On the product introduction front, you know, FIONlite, you saw that. It was our new fabrication, really focused on sustainability, super lightweight material, that we saw an amazing response from that. Colors. You know, we own color in this industry, and you saw a number of color launches that were extraordinarily successful around Nurses Week, too, in particular, with Pop Red and Chalk Pink. You're gonna see, you know, this strategy around we launch new colors, we launch new styles. Our healthcare professionals are waiting to see what we're launching next. It sells out within a matter of hours or days or weeks, and that's a really important part of our business. Thanks so much. Next question comes from the line of Lorraine Hutchinson from Bank of America. Your line is now open. Thanks a lot. Good afternoon. Jeff, I just wanted to follow up on the sourcing question from earlier. It sounds like you're comfortable that you will get the product you need, but is there any way you could just kind of bracket the range of outcomes for the gross margin pressure in the back half? Yeah, it's a great question, and listen, as much as we'd love to do it is just so dynamic and uncertain right now as we look to the back half of this year, as you can imagine, Lorraine. What I do know is that for a very long time, we have been able to produce, you know, gross margins that are fundamentally structurally advantaged, right? The right model for this community, a direct-to-consumer model that has just run really, really well and efficiently. In due in part obviously to the robust and sophisticated supply chain that we built among many facilities in many countries. We'd love to give you a number. We really wanted to give you a number, but it is just so dynamic and shifting that, you know, if we gave you a number, we'd fear that it'd be wrong. And part of this is it also depends on how this does play out over the next 30, 90, 180 days. I think the important part to note here is we're gonna remain nimble. We're gonna continue to lean on our best-in-class manufacturing partners and network that we've built, and that we're confident that yes, we will get the product, as we sit here today. It's really about, at least again, as we sit here today and assess it's really about just getting it into the United States. If we need to make that investment again, to bring in more air, and obviously that would have a downward pressure, for some period of time on gross margin, we will absolutely do that, and we will do that gladly, because we know that the long-term profile of financials, doesn't really change once we get past the other side of this pandemic. Thank you. Thank you so much. Next question comes from the line of Erinn Murphy from Piper Sandler. Your line is now open. Great. Thanks. Good afternoon, and congratulations on a successful IPO. I guess, Trina, I wanted to follow up with you on the color drop performance for the quarter. Could you just share kind of how many you launched this time last year? Do you think it helped to drive repeat customers, or did it just kind of add another purchase for existing customers, or new customers or existing? Jeff, just a clarification on the guidance. The $395 million for the year would imply a low 20% revenue growth in the back half, so below the mid-30% run rate in the long-term model. My question is the 10 percentage point delta there? Is that just related to lapping the third party related sale from last year? If so, like is there one quarter that's more impacted? Is it smoothed across the back half? Help us kinda think about that shift. Thank you. Thank you, Erinn. It's great to speak with you again. From a color drop perspective, we launched a similar amount of colors in Q2 2021 as we launched in Q2 2020. You know, they were extraordinarily successful this year. We're super excited to see the engagement around our color launches. I think, you know, in terms of repeat versus new, it's a really exciting thing that we see. Yes, when we drop a new color our FIGS' customers that are already in our community are super excited. They're the ones that know about it. On those days of launch, we see a significant percent of our net revenue actually be new customers. I think that's where you see that word of mouth dynamic where, you know, you're meeting in the break room, "Oh, FIGS' just launched Shocking Pink and Hydro Green. Did you see that?" "Oh no, I didn't." Head out to our website wearfigs.com and check it out. We're super encouraged by that. It's very much the flywheel effect that you see in our business where not only do these drops bring excitement and newness to our community, but also drive new people to try us out. Hey, Erinn, it's Jeff. On your question on the net revenue guidance for 2021, $395 million net revenues is the number. Again, long term, we have a goal of being a $1 billion+ net revenue brand in 2025. The related party sale that I noted earlier did occur in Q3 of 2020. As you think about potentially how you might want to think about that, hopefully that's helpful. I think also, the guidance that we're giving you, the $395 million, is one we're comfortable with today. It also acknowledges just the challenges generally again in supply chain and generally. Obviously we always have an opportunity to outperform the guidance that we're comfortable giving you with today, and we will, you know, work really hard to try to do all that. $395 million net revenues is a number that we're comfortable with today. That's a 50% increase over 2020. Again, you know us. You know, we're not just about revenue growth, we're about profitable revenue growth. Again, all those things kinda put together gets us real comfortable with that number for today. Yeah. The one thing I would add to just to what Jeff said, I think, you know, if you look at the full picture, we're experiencing very steep growth. We increased our net revenue 58% year-over-year. If you look at the first half of the year, you know, there's always gonna be some bumpiness around quarters, but we really look to look at longer period of times. If you look at the first half of 2020 versus the first half of 2021, we grew net revenues by almost 100%. You know, as we mentioned in the prepared remarks, you know, we see ourselves as having at least $1 billion in net revenue by 2025. You know, we're super encouraged by the future long-term prospects of this business. Thank you both. Next question comes from the line of Brian Nagel from Oppenheimer. Your line is now open. Hi, good morning. Or I'm sorry, good afternoon. I too would like to add my congratulations on a very nice quarter and your successful IPO. I'll also kind of shove a couple questions together. First, Jeff, you talked a lot about the new product launches and the colors. Did the margin profile change with these product launches or is it basically, you know, the same as what we're looking at in aggregate for the company? Second, with respect to the supply chain, I guess, Jeff, this is just more of a point of clarification. You talk about, you know, bringing product in via air, you know, and recognizing that reflects a lot of the challenges happening in the COVID-19. What in normal times, how much air freight do you use? Would this really be an extraordinary move? Yeah, Brian. Thanks. you know, I'll take the second part of that first, just around air freight. We have very well-heeled and sophisticated inventory planning capabilities. In normal times, you know, air freight is something that's more of an exception to the rule, because normally, you're able to plan effectively. You put it on a boat, and with the lack of variability that we've seen, you generally get it in time, and you don't have to worry about it. Obviously, COVID has upended that entire system. You know, going forward, you know, on the other side of the pandemic, again, given our inventory planning capabilities we have today, continued investments that we'll do there, you know, this is largely going to be ocean, you know, in the out years. I will also tell you, though, that if we get incremental demand that we didn't forecast, if we're launching an injection color that we're really excited about, those might be decisions where we at least consider air freighting kind of on the other side of the pandemic. On the product launches and gross margin kind of by product launches, like, you know, the short answer is bigger than a breadbasket. They have similar margin profiles. You gotta remember, our underlying FIONx fabrication makes up the vast majority of both our core and our injection styles. We really get the scaling effects there. That really does kinda bleed through to having a similar margin profile. All right. I appreciate all the color. Congrats again. Thank you. Thanks, Brian. Next question comes from the line of John Kernan from Cowen and Company. Your line is now open. Hi, all. This is John Kernan. Congrats again on a great quarter coming out of the IPO, and thanks for taking my questions. I guess the first question I have is, I guess, how has the competitive environment changed from, I guess, when the pandemic started to now as you've seen kind of rising brand awareness and kind of further established yourselves as a significant player in the market? I'll have a follow-up after that as well. Sure. From a competitive standpoint, the environment is very similar actually to what we've seen since we started. I think, you know, there's really two types of competitors, right? There's the old school players where there's two types actually. There's the people that make products, companies that make product, and they're really licensing a name from another type of company, and then they sell it to companies that sell the product, retailers across the country that then sell it to the end customer. In that outdated model, the companies that are selling their product to the retailer, they don't really understand the customer. They don't have any data on the customer. They don't even know their name. The retailer is then selling it to the consumer. These are stores in strip malls, in the out-of-way locations that close at 5:00 P.M. As a healthcare professional that oftentimes is working 12-hour or 16-hour shifts, you know, you get off shift at 7:00 P.M., it's very difficult to, you know, travel to some out-of-the-way store to get your scrubs. That's the way the industry existed for the last 100 years prior to us disrupting it. I think newer co-companies have come on since we started after us and, you know, have tried to they tried to kind of replicate what we've done. I think what we've seen is that it's really hard to replicate. We've built a level of customer trust with our community that, you know, has taken about a decade to build. Brands are harder and harder to build. I think over the last 10 years, it was hard to build a brand. Over the next 10 years, it's gonna be even harder. Customers are smart. Healthcare professionals are even smarter, and they want that authentic connection with a brand that stands for something that they can stand behind. We're gonna continue to show up for our healthcare professionals and do things differently and be there as they actually are on the front lines of the right now, and our job is to support them in every way we can. Great. Understood. I guess just one quick follow-up. Can you comment kind of on current customer trends, the effectiveness of your marketing efforts, and kind of how that's flowed through to the customer acquisition cost, kind of at the intersection of that? Yeah, I mean, as I discussed, I think we operate differently, right? I think word of mouth, it has driven a lot of our business, and that is something that we don't pay for. We have best in class ROAS metrics. We have best in class CAC, and that you don't see in really any digitally native direct-to-consumer company. It, it is a function of how our community is interacting with each other. It's also a function of how strong the replenishment dynamics and retention dynamics are in our business, that people come to us, and they love our product, and they come back on average every 98 days to replenish their uniform. They're coming back over and over and over again to replenish their uniform. We've seen over 60% of our net revenue is coming from repeat purchasers, and we're gonna see that continue to increase over time. I think that is the what is driving that marketing efficiency that is truly unique to us at FIGS. Great. Thanks again, Heather, Trina, and Jeff, and congrats again. Thank you. Next question comes from the line of Lauren Schenk from Morgan Stanley. Your line is now open. Okay, great. Thanks for taking my question. Just to follow up on sort of the implied back half guidance. Is there anything that you're seeing in July that's causing you to be more cautious, or is this sort of, you know, holistically how you think the back half could play out, just given some of the supply dynamics that you talked about? Then secondly, any color that you can share specifically on the cohort of customers that you acquired in the second quarter last year, sort of the COVID cohort, if you will. How has their retention trended versus previous cohorts, as well as their LTVs? Thanks so much. Sure. I think it's important to be mindful of, you know, the macro challenges affecting everyone, and that's really why we're providing the $395 million guidance. I think our demand is extremely strong. We're structurally advantaged in a number of different ways from our supply chain. With the current COVID-19 environment, getting product out of Asia into the U.S. is a risk, I think, definitely in the short term. We are committed to doing everything we can to solve this and get our products to our healthcare professionals so they can, you know, look good, feel good, and perform at their best. I think it's important to note that we've had such strong growth throughout our history. I mean, we serve healthcare professionals who need uniforms no matter what's happening in the world. They need to replenish those uniforms regularly, and they have careers that are on average 36 years long. I think, you know, no matter what the environment is, you know, we're gonna continue to show up for our community. You know, we feel really confident in the guidance that we've provided. You know, we hope that, you know. I would point you back to the $1 billion number by 2025. That annual number in 2025 is really where we're focused over the long run. In terms of our cohorts, Sorry, the second question, Lauren. In terms of our cohorts, we've seen our, you know, our retention for Q1, sorry, Q2 of 2020 versus Q2 of 2021, we've seen our retention, the cohorts, the retention of those cohorts, be acting in a very similar way. LTVs are trending positively, and that's really something to keep in mind, right? You know, AOV is an important metric, but what we're really focused on is on the annual spend in LTV, because that is where we are focused over the long term health of our business. Our healthcare professionals are coming back, over and over throughout their career. Those are the metrics we're focused on. Great. Thank you. Next question comes from the line of Dana Telsey from Telsey Advisory Group. Your line is now open. Good afternoon, congratulations on the success of the IPO and the solid results today. With the tremendous sales growth that you saw this quarter, how did the category mix shift adjust? Did anything move from that, you know, 82% core scrubs or 13% lifestyle and other? What did you see there? Is there any update on the penetration of men and women in terms of what you saw? Sure. I mean, I think it's generally the same. I think we've seen our business grow, you know, very rapidly over the time period. For the most part our overall scrubs business is growing. Our outerwear business is growing. Our compression sock business is growing. Our underscrubs are growing. That mix shift is around what you saw, you know, previously. That's just, you know, across the board. I think women versus men continue to see a really, you know, it's around what it was that what you've seen in the past. I think we have nothing to note on that as well. Yeah, the one thing I'd add to that, Dana, that Trina mentioned is, you know, lifestyle. You know, approximately $11 million of sales in the quarter, up 60% year-over-year. The percent of sales, you know, up even though, you know, we're selling a lot less masks than we did last year. I think the lifestyle, you know, I think people should not sleep on the lifestyle aspect of this brand. We put a lot of investment in it. We're getting a lot of out of it, and we'll continue to make sure that we invest there. Got it. Just on the marketing side, is there anything in the second half on events or things that will be new this year that weren't there last year that we should note? Yeah, I mean, really for competitive reasons, we really won't speak to specific brand campaigns in the back half. I'm looking across the table at Heather. She's super excited. She'd love to share a lot of this with you, but we won't today. I can tell you that it'll continue to excite the healthcare community. It'll continue to increase, you know, awareness of our wonderful brand. Listen, we know that once we get folks aware of our brand and we get them into our funnel, they become, you know, loyal fans. You remember from our IPO, if you come and you buy from us, 50% of the time, you come back and buy again within 12 months. While that's a phenomenal stat, compared to anybody that we compete with, we also look at that other 50% and use data to figure out how can we get it to 60% or 70%. We're super excited about it. We've got really cool brand things coming your way. We're not gonna let Heather talk to you about it today. Thank you. Congratulations. Thanks, Dana. Next question comes from the line of Michael Binetti from Credit Suisse. Your line is now open. Hey, guys. Thanks for taking all our questions here, and I'll add my congrats on the IPO and the quarter. I do have a couple. Jeff, you know, it's hard for us to find companies with EBITDA margins in the low 20%s or you know, what you guys call 20%+ that have gross margins at 70%+. I know you talked about some of the priorities on the investments, but can you crosswalk us from You've been pretty consistently delivering, you know, in the mid-to-high 20%s range in the last few quarters. Can you crosswalk us to over whatever, you know, next one or two years takes you to the lower end of a 20%+ range from here with the grosses that you described? I guess, you know, as we think about the growth algorithm from here, how much do you think comes from selling to higher, you know, growing numbers of healthcare professionals entering the franchise versus expanding in the closets of the healthcare pros that you have, but more importantly from non-healthcare workers? You pointed to lifestyle, but that's the real TAM expander, is if you start to break into closets of non-healthcare. Maybe any financial metrics you could tell us that are some early indicators that you see in making headway with that customer. Yeah. Thanks, Mike. I'll let Trina chime in here in a second, but as far as, you know, view on TAM, but I'll take the second one first. You know, we think there's multiple ways to expand TAM here. We have a $12 billion total addressable market in healthcare apparel in the U.S. alone. We know it's $79 billion globally. Obviously, that doesn't include other, you know, non-healthcare markets, regardless of what kind of workwear that is. It's clearly an opportunity for us. It's clearly a longer term opportunity. We are really focused on the opportunity right in front of us with, again, only a 3% market share. We also think about TAM expanding, not just in non-healthcare apparel, which again, is longer term for us, not today, but we look at these lifestyle offerings. The underscrubs, the socks, the sports bras, the leggings, you know, we continue to invest behind all that. When we look at TAM expansion, we really view it in both of those way, and neither of those are largely in that $12 billion number. As it relates to the walk kind of from, you know, historical EBITDA margins to, you know, what we're forecasting annually over the next three fiscal years, it's really a couple things. You know, first, you got the cost of being a public company, as I mentioned in my prepared remarks. The second thing, I think as you walk down the P&L, you know, it's human capital. It's building the teams and building the capabilities around marketing and supply chain and data analytics. We have the capital to spend. We know we need to invest there incrementally to achieve, you know, our lofty long-term goals, but we're pretty confident about it. You know, there's all this other stuff that you don't anticipate, particularly to your earlier point, if we do ultimately get up into other categories. That's kind of how the walk works for us. I'll ask Trina if she wants to add anything on, or Heather, on TAM. Yeah, the only thing I would add is that the, you know, the $12 billion TAM for the United States, the $79 billion TAM globally, really doesn't include many of the lifestyle offerings that we have for our healthcare community. The way we think about our TAM expansion and creating TAM every day here, is really about outfitting our healthcare professionals with all of our lifestyle offerings, you know, from head to toe, to work, at work, from work, on shift, off shift. This is really about the healthcare professional's entire uniform, this layering system that we've referred to. You know, that's how we think about that. In terms of, you know, I would just add on the, are we growing the expanding the closet, right? I think that's what our layering system does and the repeat customers that come back over and over again, but also, you know, having more and more of this healthcare community. Once again, we have a 3% market share of that $12 billion, not even including kind of how we think about TAM. We have a 3% market share in the U.S. of that $12 billion number. We have a long runway in front of us. Just to add on to both Trina and Jeff. Our layering system is That's all our healthcare products, right? That's how we see the uniform. It's a new way of thinking about it, and that's what, you know, what FIGS did. We redefined what the uniform is. Our layering system is our full ecosystem of products. It's comprised of really the best products to cover every one of their needs. It's just to reiterate what Trina said, it's on shift and off shift and everything in between, right? In between them going to work. The assortment consists of underscrubs, scrubs, jackets, created specifically for temperatures of hospital environments and all their necessities. They're built to perform together and in any combination, right? They mix and match all these different, you know, styles. They work together and they can be worn in infinite, you know, combinations, right? You can mix and match, and that's the beauty of our business. It's also the lifeblood of our company. Okay. Next question. Next question comes from the line of Brooke Roach from Goldman Sachs. Hi, good afternoon, and thanks so much for taking our question. Trina, the brand continues to show very strong international momentum. Can you talk to the geographies where you're seeing the most success and perhaps your plans for driving that growth over time? For Jeff, we've A lot of commentary so far on the call today on investing to build that growth momentum of the brand for the long term. Could you perhaps help us understand how you're thinking about the cadence of investing into those four big buckets of investment that you talked to? Thank you. Thanks, Brooke. You know, as you mentioned, we know international is a huge opportunity. You know, the market outside the United States is a $67 billion market, and we wanna be a global brand. You know, and serve healthcare professionals everywhere. I think, you know, we can't break out exactly what's coming from what, but as you know, we're in three countries right now. Outside the U.S., we're in Canada, Australia, and the U.K. We're seeing great progress from all markets. Without even adding any new countries, just year-over-year, we've grown our international from 2.9% of net revenues to 7.9% in just the last year. It's really exciting. I think, you know, it's maybe important to understand our strategy on international. You know, many companies, like apparel companies, e-commerce companies, they kind of flip that button and just open 100 countries overnight. That is not our strategy. We really take a very thoughtful and strategic approach to entering new markets. You know, we really love to customize the experience and localize the currency and the language and find people on the ground. We have an incredible ambassador program, as you know, to find ambassadors on the ground so that we can have the You know, really expand our brand in the right way, in a strategic way. International will continue to be a really exciting part of the business, and we're excited to see where we go next. Hey, Brooke, it's Jeff. Thanks for the question on the second one. Yeah, listen, we're super excited and energized by our goal of being a $1 billion+ net revenue brand in 2025. As we think about, you know, the cadence of those investments, you know, I'd first again anchor you to our long-term margin guidance that we gave just earlier today. 70%+ gross margins annually over those next three fiscal years and 20% plus on adjusted EBITDA over that same time period. You know, part of the answer is regardless of any variability or bounce arounds, we still think, you know, and we are very comfortable with those. I'd anchor you there, you know. When we think about the areas of investment, and we've talked a lot about this today, so I won't go too deep into it. You've got product, you've got brand, you've got tech, you've got people. There's probably less variability. Those kind of happen when they happen, and you build them kind of with the rate and pace that makes sense. The one that could be a little bit more of a different cadence could be around supply chain operations, right? As you think about potentially adding additional facilities in the future. You obviously, we just talked about international. That's one that could be maybe a little bit more variable in the future. Again, I think the punchline here is structurally advantaged margins, we think, both we have and will be able to keep those over the next three fiscal years. Again, we're really confident we can get to this $1 billion + net revenue goal. There are no further questions at this time. I will now turn the call over back to Trina for closing remarks. Well, thank you all so much for joining us for our first ever quarter. We really look forward to connecting again in November for our third quarter earnings call. Thank you again. This concludes today's conference call. Thank you for participating. You may now disconnect.