Thanks, everyone. So we'll get started with our next session. Happy to have the team from Rover here. We have Aaron Easterly, CEO, Charlie Wickers, CFO. Aaron, maybe we'll start with you. You know, for those who don't know the company as well, obviously, you've been on this journey of building the company and the platform and driving sort of the product initiative you have in the last couple of years. Why don't you set the table with the evolution you've been on, what you've seen both through and out of COVID, and where we are now, and then we'll dive a little deeper into all those topics. Sure. Well, first, thank you very much for having us, Eric. We've appreciated your support and analysis and the opportunity to tell the Rover story. So, for those less familiar with Rover, Rover is an online marketplace for pet services. We were founded, or we found the company really focused on overnight care. We looked at the business and said, "Wow, people really hate using kennels. They hate taking their dogs to boarding facilities, but there are, like, no shortage of dog lovers in America. Like, what happens if we could tap into that and provide a better solution?" And so for the first couple of years, we focused on building the overnight care market, house sitting and boarding. And it turned out that the opportunity was a lot bigger than we thought. It wasn't until after we launched the business that we realized that the market opportunity was 10 times bigger than we thought because so many people relied on friends, family, and neighbors. And so the commercial part of the portion of the industry is a tiny portion. Some number of years later, we expanded our services to include daytime services, dog walking, daycare, drop-ins. Through our content offering, we also provide advisory and advice services, as well as pet-related content on products and offerings. We have a training offering now as well. So it's grown into a multi-service approach for pet care, and we've also expanded into another nine markets, so 10 markets total. Got it. Okay. So let's, let's dive a little deeper into all of that. Just starting with the addressable market, 'cause I think that's something we've talked about before, and I think as always, doesn't get enough attention. You know, how the view of what the addressable market is and even the concept of the shadow market and how you got educated about that, and how you think about what you're sort of building towards in terms of the addressable market opportunity. Sure. Like, again, a deceptively large opportunity. One of our co-founders had the opinion, like, "Hey, we can really go take a lot of market share from boarding facilities," and he was talking about his experience there. I was like: I can't relate to any of that. Like, you know, I'm, I'm absolutely owned at the time by my four-pound Pomeranian, Caramel, and I've never taken her to a kennel, and I don't think I'm alone. And so, we did the math, and we're like, oh, my God, like, 90% of the time that pet owners travel away from home, they rely on friends, family, neighbors. They don't use commercial facilities. Those transactions with their friends, family, neighbors, like they're, they're transactions, meaning that there's a currency that people pay with, oftentimes in a bottle of wine or take you out for dinner or I'll reciprocate the favor somehow or watch your kids. But there is a value exchange that takes place. Yeah. But the weird thing about the friends, family, neighbors segment is, a lot of times people are doing it, because of the social capital and, sense of obligation, not because they love animals. And you can't... When someone's kind of doing you a favor, you can't really ask for, like, really high-quality care because they're like, "Hey, I'm doing you a favor." And so the bet was that we could actually take a portion of that or a large portion of it and make it addressable. And you do the math on that, and you get to something like a $70 billion opportunity, just in the U.S. Yep. And maybe twice of that globally. And put that in perspective, that's, in the U.S., that's almost as big as the rest of the pet care industry combined: food, vet, treats, toys, adoption, everything. So we don't think all that's addressable, but a lot of, what we've been up to is proving that a big portion of it is. And basically, from our beta test on, we found out that about 60% to two-thirds of our customers are coming from the shadow market. Yeah. We were taking share from boarding facilities, kennels, physical premises daycare, but the vast majority of our business was people that said, "You know what? I'm tired of asking my mother-in-law. I'm tired of having to repay the favor with childcare. I want someone that actually wants to be with my dog," and that's been the growth driver for our business. Okay. Obviously very clear in your answer there that one element of competition is with disrupting the old way of doing things, but investors always want to know what, what's a wider definition of what you see as the competitive landscape? Who, who else could offer these services? What are you watchful for of how competition could evolve and change going forward? How do you define the competitive landscape of what you're trying to both disrupt, but where there could be elements of rising competition looking forward? So number one, friends, family, neighbors, that's the bulk of the market, and there is a value exchange that takes place. Number two, the traditional facilities, boarding facilities, doggy daycares, professional dog walkers. Number three, other digital players. Sometimes that's a digital transactional player, sometimes that's lead gen websites, sometimes that's online directories. And then number four, people's personal income in the sense that there is a fraction of people that will pay to take their dog with them everywhere. Take their dog with them on a plane, get a private jet, drive their dog. And so there, to some degree, the alternative to not have to think about this problem is a competitor as well. Interesting. Okay. I have noticed the rise of service animals on occasion on planes, wondering how many are actually service animals. We've talked a lot on earnings calls over the last year about the broader macro environment, because there's certain elements of consumer behavior that are sort of first and second derivative orders that drive demand on your marketplace. So for those that are a little less aware of that, obviously, we've even talked about travel dynamics and how that feeds into the marketplace demand. Talk a little bit about what you see as the macro dynamics in connecting some of the dots of the variables of how consumer behavior can lead to periods of stronger or weaker demand on your marketplace. Sure. So, about 75% of our business is focused on the overnight care use case. Dog Walking, Doggy Daycare, Drop-in Visits make up the bulk, but that means most of our business is tied to the travel sector, somewhat. COVID was really hard because, you know, the two biggest use cases is what to do with your pet when you travel and what to do with your pet when you're going to work. No one was doing either. Right. The pandemic dynamics is obviously one factor that affects the willingness to use Rover. Travel demand is another factor, but for us, we're more levered to leisure travel. If you have a five-person household and only one person goes on a business trip, you probably don't seek Rover. But if you're single and going on a business trip, you probably do seek Rover. Some other dynamics that are more relevant and normal is the economic backdrop. The pet services industry tends to grow much faster than the economy in general. Pet services grows a lot faster than physical product in pet, but like the rate of growth, how much above and below that long-term trend is a function of the economy. And there are some also more subtle dynamics. There are life events that happen that make someone more open to using Rover for the first time. So if your go-to neighbor moves away, that's one. If you have a falling out with your father-in-law, that gives us a good opportunity. But related to that is actual moving as well. So when you move to a new community, you're less likely to have people that you can rely on for those cares. So we're more likely to see faster development of our markets in places with high transitory populations. So Washington, D.C., which isn't a tech hub in the same way that we would say, you know, San Francisco or Seattle or even New York is, was one of our earliest markets to grow really rapidly because you have so, such a large portion of the population come in and out with the administrations, that Rover was a important critical service early in, D.C. as well. So those dynamics play a role as well as pet adoption. COVID was interesting because it kind of slowed down our growth, and then we had a really rapid spring back. But in terms of pet adoption, did the opposite, where it kind of pull forward pet adoption, a nd now, you know, it's a little bit slower now than it was a year or two ago. And so, in the recovery or coming out of COVID, you know, travel was the only factor people looked at. Right. TSA numbers. But as we start to get to more travel areas, all of a sudden, the macro backdrop is more complicated. Okay, understood. You talked a little bit about how the service initiatives have sort of continued to evolve on the platform, where you started, where you are now. Can you talk a little bit about mix of product on the platform and what's driving portions of growth versus above or below maybe trend line to some degree from a product standpoint? Sure. You know, we were all overnight to begin with. Late 2015, we rolled out the daytime services, and those quickly became about a third of our business. Yeah. COVID hit, and people weren't traveling, they weren't going to work, with the exception of critical workers, so hospital staff, nurses, doctors. So we actually saw that the daytime services held up better initially when COVID hit. But then coming out of COVID, people started traveling again, but not a lot of people, at least on the West Coast, went back to work. And so we saw that the daytime services went from, you know, maybe two-thirds of the mix to closer to three-quarters. In the last year, all the services, daytime versus overnight, have been growing roughly equally, but daytime has never kind of regained the lost mix that it had due to COVID. Additionally, we see, going a little bit deeper, we see particularly good growth in drop-ins and house sitting. I think with drop-ins, it's because we support cats in a more robust way a couple of years ago. And so, Rover, although it's a name or brand associated with dogs, cats has been one of our fastest growing segments for a number of years now. So if you're traveling, someone can come in, check on your cat, feed your cat, change the litter box, which is a great segment for us. And house sitting is another interesting one. And the research we've done is that, in some ways, a house sitter is more convenient for people than to take their dog to someone else's home, because they don't have to worry about the transportation to the dog to someone else's home. The dog is familiar with the environment. But with... It also has a higher trust hurdle to get over. Mm-hmm. So as Rover's reputation continues to build and becomes the most common way people use pet care, we're seeing house sitting do really well, too, because of the brand reputation. Got it. When you think about where your product set's going and how some of this landscape continues to evolve, what do you see as some of the key growth investments you're trying to make around product that can lead to growth when you think about the landscape evolving in the next sort of 1-2 years? In the 1-2-year time frame, it's pretty simple. We want to have a forever investment in making matches better on the platform. Mm-hmm. Rewarding good behavior, doing a better job with data science to find you the perfect person. If you want to find someone who allows the dog to sleep in the bed, maybe even under the covers, we want to match with that person. Friction is number two. It turns out that there's a lot of work to remain in terms of making Rover simple, easy, efficient to use, because it's a considered choice. It's kind of the opposite of Uber, opposite of DoorDash. You don't really care who the driver is, as long as you're safe, your food isn't turned upside down, you don't get in an accident. But with Rover, people care a lot about who the person is that's watching their pet. And so there's a decent amount of friction that's required to get people the information and the comfort that they need to. For us, it's a multi-year investment on figuring out which of that friction is constructive and which just needs to be eliminated. But we've seen some really nice conversion rate gains and improvements to our drivers of unit economics, continuing to improve there. And then the third investment is making the platform value of Rover really strong, so that our long-term stickiness continues to improve. If you look at the history of Rover, we're kind of unique in the consumer space in the sense that our cohorts just go up and up and up every year. And that's largely due to continuing to improve the value proposition to keep transactions on Rover, and using data science to create a stickier experience. And so for the next couple of years, that's 90% of what we're focused on. Well, maybe just reversing course and going back to some of the drivers you talked about before. Not to, you know, rile people up by bringing up return to office, but if, if there is a return to office, and we do see some momentum around that, this has been a broader topic at the conference over the last two days, how do you think about what that might mean for your daytime services going forward, if there was that element of three, four, five, whatever number of days it is, becomes back to normative trend? Just another reason for further upside in the business is kind of our view. You know, as people return to work, particularly in urban areas, where people don't have yards and are less likely to have people at home during the day, we expect that to increase demand for in-home daycare and, and dog walking. We, we think it's unlikely at this point that it would catch up to the mix it had pre-pandemic. But that's not a statement on the growth potential. It's just that we've grown so much in suburbs and rural areas. 97% of the population in the U.S. is now within a short drive of a Rover sitter. Those types of daytime services, like dog walking, just aren't as used as much in places where everyone has yards and people have other people at home during the day. But it should accelerate the daytime services. Okay. Wanted to talk a little bit about the international opportunity. Obviously, you've called it out as an area for growth, but there's a couple different ways we could come at the international question. What you have today, what it might turn into over the longer term, and to some degree, how you think about organic versus inorganic elements of trying to grow the international business. I know there's a lot in there, probably about five or six questions I'm asking you at the same time. But, broadly, just let's go down the road of talking about international, both as a focus for growth today and how it might evolve going forward. International is one of our most exciting areas of the business, and there are a lot. Canada is very similar to the U.S. in terms of market share, market position, maturity, the drivers of unit economics. Of the digital transactional players, we have 90+% share in the U.S., and the overnight segment, probably something like 98% share. And Canada, we think is comparable to the U.S. In Europe, it's nascent. We actually launched Europe right before the pandemic hit, so it's kind of like the worst timing possible. So we kind of treaded water there, reduced our fixed costs while we were improving the system to be ready for the growth period, and it's come out of the pandemic booming. And sustained that high level of growth has sustained even longer than we thought it would. It wasn't just a bounce back. We're really in a sweet period there. The great thing about our business is, as the engine gets smarter, as we do a better job with matching, as we do a better job of having long-term retention, the drivers of unit economics improve. And if you convert prospects, then you can drive a lot higher revenue growth than actually demand growth on the platform. If you have better LTV, same thing. Europe is a lot of the markets in Europe are at the sweet spot where you're seeing material jumps in all those rates. So you're getting outsized growth, but really cost-effective because it's not driven by marketing spend. So Europe is, call it, a mid-ish single digits. International overall is a little bit below 10%. But we think, Europe overall is about half the size, the opportunity is half the size of the U.S., and just the markets we're currently in, in Europe, is maybe a third of the size. So there's a long way to go between mid-single digits and 33% of the U.S. number. Okay. So we've talked about the demand side of the equation and the product side of the equation. We've talked a little bit about international. Can we talk about growing the side of the caregiver dynamic? And, you know, we obviously were in a very different position with the labor market a year ago, and that's starting to loosen up to some degree. But talk a little bit about supply of caregivers and also how pricing factors into the equations of the potential for supply, retention, supply growth on the caregiver side. One of the things that I guess isn't a total surprise for us, but it's pleasant news nonetheless, is from the get-go, the supply side of the business was virtually free. It turns out there's no shortage of animal lovers in the U.S., and the idea of making money to play with a dog is something that a lot of people get excited about. But unlike a lot of companies that are grouped in the gig economy, it's not primary income for the vast majority of our participants. The vast majority of our participants have full-time jobs and just like having a dog in their house in the same way that most dog owners have full-time jobs and like having a dog in their house. What that means is our caregivers, the income that they earn from Rover, is not at the expense of other earning opportunities. It's incremental income. They can do it in conjunction with having a full-time job, with being a stay-at-home parent, with being retired. Our caregivers aren't really optimizing on dollars per hour versus DoorDash or Uber. It's just not even in the competitive set. When some other technology platforms were struggling with supply dynamics, we just didn't see that at all. Yeah. I think, Charlie would want me to note that it's not just that virtually free. We charge for background checks on the supply side or entrance fees to the marketplace, and so it's actually profitable, it's like, almost like a negative CAC, on the supply side. And the reason we do that is not to make money off of it. It becomes a really good tool to manage supply-demand balance- Yeah. so that we can gate supply entrance into the marketplace and make some money while doing it. Understood. So taking those comments on the supply side to bring it back to take rate, I think when anybody ever looks at a marketplace model, they always are intrigued when they see movement in take rate on either the demand or the supply side. You've done both in the more recent past. Talk a little bit about your philosophical approach to take rate unit economics on the platform, and how should we think about that evolving in the years ahead? Do you want to take this one? Yeah, yeah, happy to. Take rates aren't something that you just go change. Right. They're things that you, you think about over a long period of time. Philosophical approach for us is to really just test, watch, wait, and then potentially implement. For those that are new to the story, just so you're aware, marketplace participants that join to be a pet care provider on the platform, we keep a 20% owner side fee in the... or, 20% take rate in the U.S. For owners that join the platform, we charge an 11% transaction fee on top. Hypothetical example, if there's a $100 transaction between a pet care provider and a pet parent, we're actually charging $111 to that pet parent and keeping $31 of that $111. That's the take rate dynamic that takes place there. What we recently did was we adjusted all of our legacy pet parent users in the U.S. to the 11% owner side fee after a long duration test, seeing if we could increase their rates from those legacy rates that they had prior. Previously, as people have been watching the business, they've been seeing this drift up in the take rate that has been taking place over the years as newer cohorts matured. What we were able to do with this most recent test is accelerate a little bit of that transition. All users in the U.S. are now at that 11% owner side fee. Do we have the right fee right now, right take rate structure right now? Probably not. There's always room for us to test and understand more. I don't think there's much room to go up, but there might be different monetization methods that we can look at for different services. So, for dog walking, for example, there might be a reason to think about the take rate structure a little bit differently for the higher recurring use case versus the episodic. So we think about these things deeply, think about them over a long period of time, and we just don't jump to making changes quickly. Yeah, you sort of jumped ahead to what was occurring to me to be a follow-up question, which would be elements of could we see very different segmented approaches that result in a skew of take rates? And how do you think more broadly about elasticity around take rate and the potential for it to be a stimulant of demand? Yeah, I know you think about this all the time, so I'll let you take that one. Yeah, we can tend to be surprised. Every time we run a test, like, it doesn't feel like... We run these tests, as Charlie mentioned, six months a year, and really look at the repeat effect. We have yet to see a case where we can't charge more. So it's relatively inelastic, although we're reticent to be too bold there too early, because we're still developing the category. You know, we are a great share in the U.S., growing at a good pace, profitable, good operating margins. But you know, there's this 90% of the market that's in the shadow market, which we've captured a chunk- Yeah ... but still a long ways to go. We want to make sure that we're making decisions that align with category development, not just short-term financials. Understood. One other element of the unit economics and the transactions on the platform that we've talked about in recent earnings quarters is cancellation rates, which have gotten better, but still remain below the levels I believe you saw in a pre-pandemic period. Can you talk a little bit about what you continue to see with cancellation rates, and how to think about that evolving as you get further removed from the pandemic? Yeah, happy to. At least I can talk through Q2. So prior to the pandemic, we had a cancellation rate trend that was about 9%-10%. It was like clockwork. We could look at it every single year, year-over-year, and see that based on the seasonality, our cancellation rate was gonna be between 9% and 10%. When the pandemic hit, everything shut down, our cancellation rate spiked dramatically, and it has moderated a bit since, or moderated quite a bit since, but we're still elevated relative to historical norms. I think in Q2, we were 12.6%-12.7% cancellation rate, so about 200-300 basis points elevated. We don't think there's anything structural within the environment that suggests that cancellation rates can't trend back to the historical norm. If anything, we continue to see the dynamics that accelerated cancellation rates in the first place continue to drive it. So we monitor COVID wastewater data, and one of the things that we can see is a correlation between levels of illness across the country and our cancellation rates climbing, ebbing, and flowing with those trends. Through Q2, we saw a decline in level of illness within the wastewater data. We also saw a decline in our cancellation rate. Right now, we're watching that wastewater data tick up, and it feels like there's an anecdote that everybody has, knowing somebody with COVID or flu-like symptoms, et cetera. So we'll see how it continues to progress, but that correlation has remained, and it's something that we'll continue to watch. Structurally, within the business, we don't have a reason to believe that we can't get back to the 9%-10% range. Okay, interesting. You've talked about longer-term margin targets for the business. I wanna talk a little bit about what you see as the puts and takes or the variables about balancing investments in growth against hitting those longer-term margin targets, and how we should be thinking about striking the right balance there, that you plan on striking as a management team going forward. Yeah. So our long-term targets are 20%-25% revenue growth and greater than 30% EBITDA margins. With regards to how we think about the puts and takes, the primary driver for this is the recognition that a lot of our business is fixed. Our product and technology investment is fixed, our G&A is fixed. They'll grow modestly year-over-year, but nowhere near the pace of revenue. And so there's a lot of leverage available within those line items in front of us. In addition to that, we have a framework around marketing that is different than a lot of companies. Some companies will go to a marketing team, and they'll say: "Hey, you get 20% of revenue, go spend it." That is the exact opposite of what we do. We hold our teams accountable from a marginal customer acquisition framework, and we say, "Go get as many customers as you can within the efficiency of our marginal unit economics." And that's what they go and do. And so as a result, we have pretty high confidence that we're able to stay within our target range of 18%-25% for marketing, because that becomes an output rather than an input where you're just guessing. And so from a puts and takes perspective, there's gonna be times where volume is ebbing and flowing from a category perspective, and so our marketing spend will adjust up and down as a result. But if our marketing team came to me and said: "Sure thing, I can spend $30 million in the next six months and drive customers within the unit economic framework," we would definitely consider doing that. That would make sense. But in addition to that, there might be some periods of time where we're interested in expanding the business, maybe expanding into a different adjacency or opportunity, at least getting a test out there. In those periods, we'll consider taking on some incremental cost within our structure and but consider it within our long-term margin trajectory. The last thing that I'll say on this is, one of the questions that we consistently get is, how do you get there? And, the last couple of quarters, we've been demonstrating incremental flow-through, so the incremental margin associated with revenue growth in excess of 30%, sometimes closer to 40%. And so, we continue to believe that what we are doing right now is the right way in order to get to those long-term targets, and we believe that the last couple of quarters are a clear demonstration of that. Got it. Maybe just sticking on that theme of marketing, and I feel like I ask you, you and the team this question twice a year maybe. But you, you always say such interesting things about the way in which you're sort of experimenting around new marketing channels or thinking about driving different marketing ROIs and outcomes for the business. What's the latest thinking on how your marketing spend continues to evolve and where you're seeing high pockets of ROI in terms of what can be deployed, out from the business into being an active, component of driving growth? We went public for the sole reason of having a balance sheet that would allow us to invest in the opportunities as we saw in the years coming out of the pandemic. But that doesn't mean we are rash about what we do. We have 90% of the opportunity in people that, because they use friends, family, and neighbors, they're not out there searching for commercial solutions. You don't find them on Yelp, you don't find them on Google. You know, organic customer acquisition is about half of our customer acquisition, which is great. We have a lot of free customer acquisition, and that grows nicely as the business grows, 'cause there's more people that have used Rover and have great experiences. But we sure would like to accelerate the shadow market conversion to commercial market. And so we've been endeavoring to move a little bit up funnel, mid-funnel, top of funnel, which is not to say that we consider brand spend. It may be video, it may be streaming, but we still hold it accountable to relatively direct response metrics, at least hard ROI targets. And we test our way into it. So if we can make a new channel work, whether it's YouTube, Nextdoor, we say: Great, now let's figure out how much we can push on that channel and increase the spend while gaining the same efficiencies. And so that's how we've been doing it, and we continue to have a mix of brand-new tests, scaling stuff that's working- Yep. considering additional ways that we can accelerate the free piece. ... It is a great business with a really unique unit economics that have improved the bigger we get. So we want to leverage that, but we would love to figure out how to have even more of that TAM come into reality. Understood. You talked about the balance sheet a little bit there. Can you refresh investors for your current view on how to think about the rank priorities of allocating capital, both into the business and outside the business as well? We have a balance sheet of, you know, just shy of $300 million, Two seventy. We have healthy cash flows in the business, and we've had a step function increase in our operating margins. And so, there isn't a lot of need for capital on the balance sheet to operate the business right now. But in general, our philosophy is, number one, let's invest to continue to grow our core offerings. Let's invest in making things more efficient. Let's invest in product to improve the drivers of unit economics, conversion rates, all things else. We'd love to do that all day. We're also open to ways to expand our service offerings, either organically or inorganically through M&A. I think, we built out a small corp dev team focused on M&A. I'd say we haven't been super excited about a lot of things we've evaluated so far, and I would say, the private company view on valuations have probably not come in line with the public market view on valuations yet. You may or may not have been in the VC panel earlier today that we hosted. That's. They made a similar point. Oh, did they? That there continues to be. The VC panel talked about elements of M&A as an exit strategy for private investments and talked about how the bid-ask spread is as wide as they've ever seen. Yeah. So it sounds like you're echoing that. Yeah, and so we're hardcore data people, very analytical, get excited about the business, but don't make decisions based on that excitement. We make decisions based on our expected returns. And so we just haven't seen a lot of opportunities that we're excited about betting on yet, but we wanna keep cash on the balance sheet for that purpose. And then, all other things equal, we're happy to return to shareholders, too, whether it's in the form of a buyback or maybe in someday a dividend. We think that, given the valuation suppression of a lot of the companies that went public about the time we did, we saw a very unique opportunity to retire shares at a very attractive price. And we were happy to do so with that, felt like a great shareholder value. We're about halfway through our allocated buyback. Yep. Assuming we complete that, we'll take a look at what to do next on that front. Okay. Minute to go. If we're sitting here a year from now, and we reflect back on what your key priorities are for the business over the next 12 months, what's top of mind for you in terms of investing in the business and executing against the opportunity set? I think from a milestone perspective, you know, hopefully, in the not-too-distant future, we'll cross the $1 billion of trailing twelve-month sales in aggregate on the platform, $100 million in international sales, which would be pretty neat for us. We think that we'll be at a materially different market share position in our European markets, in the coming year. But ultimately, it's pretty simple for us. We have a business that's growing at a good clip, with good operating margins, that's improving its leverage, and we just want to execute the hell out of the business. Understood. Well, thanks so much for the update. Really appreciate you being part of the conference. Please join me in thanking the team from Rover for being here this year.