Good afternoon, and thank you for standing by. Welcome to the fourth quarter and full year fiscal 2023 Stitch Fix earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, you will be invited to participate in a question-and-answer session. To ask a question during the session, please press star one one on your telephone. You will then hear an automated message indicating your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the call over to Hayden Blair. Good afternoon, and thank you for joining us today for the Stitch Fix fourth quarter and full year 2023 earnings call. With me on the call are Matt Baer, Chief Executive Officer, and David Aufderhaar, Chief Financial Officer. We have posted complete fourth quarter and full year 2023 financial results in a press release on the quarterly results section of our website, investors.stitchfix.com. A link to the webcast of today's conference call can also be found on our site. We would like to remind everyone that we will be making forward-looking statements on this call, which involve risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered as an indication of future performance. Please review our filings with the SEC for a discussion of the factors that could cause the results to differ. In particular, our press release issued and filed today, as well as the Risk Factors sections of our quarterly report on Form 10-Q for our third quarter, previously filed with the SEC, and the annual report on Form 10-K for our fiscal year 2023, which we expect to be filed later this week. Also, note that the forward-looking statements on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward-looking statements except as required by law. During this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the press release on our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call in its entirety is being webcast on our investor relations website, and a replay of this call will be available on the website shortly. Now, let me turn the call over to our CEO, Matt Baer. Thanks, Hayden, and good afternoon. I want to thank everyone at Stitch Fix for such a warm welcome and for your passion and commitment to helping our clients discover and express their style. I also want to thank Katrina and the board of directors for entrusting me to lead the company and for sharing their perspective with me. I've spent the last 90 days getting to know our business and our brand, working closely with our executive leadership team to understand the issues and opportunities, and meeting our corporate, stylist, customer experience, and warehouse teams to learn about how we serve clients today. I've also met with a number of clients, attended several client research sessions, and read a lot of client feedback to help me understand our opportunities from their vantage point. Consistent, personalized client service is at the core of what we do. It was important to me to become grounded in what we're doing well, how we can do better, and where we can do more. These first few months have reaffirmed my conviction about the bright future ahead for Stitch Fix, and at the same time, I fully appreciate the focus, time, and resources required to realize our ambitions for the brand and the business. Today, I'll say a few words about why I joined Stitch Fix, share my initial observations about where we are today, and how that will inform our future strategy. Then David will take you through our Q4 and FY 2023 results. When I first became aware of Stitch Fix, I recognized right away that it was a unique business model, and as a digital leader, I was impressed. Stitch Fix presented a compelling, differentiated, and innovative experience powered by advanced technology, offering personalization, convenience, and service at scale. When the opportunity to join Stitch Fix presented itself, it appealed to me because I saw a powerful idea that hadn't yet realized its full potential. I believed that my background, experience, and drive could get that done. I've always had a passion for retail and an appreciation for the importance of customer service. My first job was at my family's furniture business, which taught me the fundamentals of retail. I took those early lessons to a few retail startups, where I learned the value of a compelling, curated assortment strategy, and then ran digital businesses in some of the most complex and competitive marketplaces for the world's largest retailer and the country's largest department store. What has excited me the most throughout my career is identifying opportunities to provide better experiences for customers, the kinds of experiences that solve their problems, fulfill their desire for value, and exceed their expectations.... I've always been drawn to digital and tech-forward businesses because I believe customers want and deserve a better way to shop. With more options available than ever before, at a time when people feel more time-constrained than ever before, I think customers need that better way to shop more than ever before. In most instances, shopping offline is cumbersome, and shopping online can be overwhelming. The brick-and-mortar apparel shopping experience is time-consuming and, at times, frustrating. Although the online experience has gotten better, it is still too focused on session-level conversion and lacks the inspiration and personalization that make great style, great fit, and great value attainable. Part of the magic of Stitch Fix is that we can deliver all of that in a way that is truly convenient, not only in terms of ease of shopping, but also in terms of anticipating our clients' needs. Of course, we believe the richness of our data also makes it possible for us to leverage our assortment to deliver fresh and compelling style and drive better margins. Stitch Fix is a brand that really means something to people who rely on us to help them find their style and experience a better way to shop. We exist to make getting dressed easier, and our model has always combined the power of data science with the personalization of a human connection. As I've spent time with our stylists and customer service teams, I've heard them talk about the interactions they have with our clients, and it's clear that these connections are powerful. One of our stylists shared a message from a client that really speaks to the role Stitch Fix can play in our clients' lives. She wrote, "Brought to tears by how special this Fix made me feel. I have two babies and started working as a teacher last week. I pour from my cup all day, and all I could think was that I deserve this." To me, that note reinforces how important and integral the Stitch Fix stylist-client relationship is to who we are and what we represent. I read another client note that reinforces the value of making shopping for clothes easier and more convenient. Selection is tailored to my taste, and it is very easy to find new items that I like. Saves time from going to a store and searching through so much stock that isn't my style." Now, those are just two of many examples of terrific client experiences, and of course, there are also examples of experiences where we missed the mark. Within both sets are key learnings that will guide us. As a longtime student and operator in the retail space, I am both energized by the challenges and motivated by the opportunities I see for Stitch Fix. As I begin to shape our long-term vision and define our future corporate strategy, some of my early observations inform my thinking. First, personalization algorithms, artificial intelligence, machine learning, and data science are fundamental elements of our model. It is clear that these capabilities are changing the way companies create and deepen relationships with customers. And while they have certainly become popular buzzwords among retailers who are investing heavily to catch up, they have been part of the DNA of Stitch Fix since its inception, and something we will build upon going forward. Second, the relationships between our clients and their stylists are amazing, unlike anything I've seen before. These connections are built on service and trust. They foster loyalty to the brand and represent long-term value to the business, and I believe these relationships are especially relevant as staffing levels in so many retail stores continue to decline. I expect us to deepen and enrich these relationships in the future. Third, I think the assortment and service we offer today creates a better experience because it solves for many of the frustrations we know people feel about both physical and digital shopping. Because of this, I believe we can and will introduce more people to the Stitch Fix way, and I believe we can drive market share gains. You'll hear much more from me about our long-term strategy in the near future. In the meantime, we are focused on enhancing the client experience to deliver personalization, strengthening profitability, and investing carefully to drive growth. Looking ahead, I am confident that being data-led, customer-centric, and technology-driven will continue to be key contributors to ensuring that every client engagement, interaction, and solution is personalized. Stitch Fix has already created a model based on a combination of data science and human connection. As we continue to evolve the application of both AI and human touch, we plan to further advance this key point of differentiation. This will help us constantly look at things through the lens of our clients and think about the experience we provide to someone trying Stitch Fix for the first time or returning for the tenth. Doing this will ensure we are consistently investing in new capabilities to bring stylists and clients closer together, creating new ways of interacting with clients, and continuing to advance our operational capabilities to be optimized for scale. The leadership team and I are aligned and focused on delivering long-term, profitable growth. With that, I will turn the call over to David, who will take you through our Q4 and full year financial results, as well as our future outlook. Thanks, Matt. This is a pivotal time for Stitch Fix, and we're fortunate to have someone with Matt's retail, digital, and operational expertise leading us into the future. He's asking a lot of great questions and has a fresh perspective that's challenging our thinking in a really positive way. Let me begin with setting some context around FY 2023. We made the decision to focus on the core Fix experience, which meant changing our inventory, product, and marketing strategies. To allow time for those strategies to take hold, we focused on near-term profitability and cash flow. This meant restructuring our organization, consolidating our warehouse footprint, and making the decision to exit the U.K. market. Decisions like this are never easy, but we believe these actions were the right ones. Throughout the course of the year, we improved our inventory position, realized over $150 million of annualized cost savings, and achieved our goal of returning to positive adjusted EBITDA and free cash flow. FY 2023 net revenue was $1.64 billion, a decline of 21% year-over-year. We ended the year with approximately 3.3 million active clients, a decrease of 13% year-over-year. Despite the revenue decline, we believe we effectively unlocked the leverage potential for our business moving forward. We made great progress through cost savings and restructuring initiatives and ended the year with adjusted EBITDA of approximately $17 million, an improvement of more than $35 million versus the prior year. We also generated nearly $39 million of free cash flow. For Q4, our performance was better than we expected and reflects the work we have done to improve gross margin and rightsize our cost structure. We also made progress on a number of key initiatives in the quarter. After careful review of our operations in the U.K., we made the decision to wind down that business. We notified the affected employees in August, and we expect the full closure of our U.K. operations to be completed this calendar year. Additionally, the plan to consolidate from five U.S. warehouse locations to three is on track to be completed this fiscal year. We believe the consolidation will have immediate cost savings, and having inventory in fewer warehouses will make it easier for stylists to build more relevant assortments for clients, and we will realize inventory efficiencies as we scale. We continue to expect the combined annualized cost savings related to the closure of the U.K. operation and the U.S. warehouse consolidation to be approximately $50 million. Q4 net revenue was $376 million, down 22% year-over-year, but above the high end of our prior guidance due to higher order volume. Revenue per active client declined 9% year-over-year in Q4 to $497. Q4 gross margin expanded 330 basis points year-over-year to 43.3%, thanks to the really hard work our merchandising teams did to improve the composition of our inventory over the last year. We ended Q4 with net inventory down 30% year-over-year and down 10% quarter-over-quarter to $137 million as we continue our efforts to align our inventory position with demand and increase the assortment composition of our successful private brands. Advertising was 7% of net revenue in Q4, down slightly over Q3 and down more than 350 basis points year-over-year as we rightsized our marketing spend based on specific payback methodologies. Q4 adjusted EBITDA was $10.4 million, above our range due to better-than-expected revenues and the gross margin and operating leverage I mentioned earlier. We generated $18 million of free cash flow in Q4 and ended the quarter with $258 million in cash, cash equivalents and investments, and no bank debt. Turning to our outlook. We remain focused on improving the client experience, retaining and attracting clients, maximizing the effectiveness of our marketing, increasing leverage in our cost structure, and driving positive free cash flow. Before we get into the numbers, there are two key call-outs in our guidance. First, I want to remind everyone that FY 2024 is a 53-week fiscal year. We will also be providing this guidance in the context of U.S.-only operations, as we anticipate reporting our U.K. results as discontinued operations beginning in Q1. Our guidance provided in the press release details the reconciliation between FY 2023 and FY 2024 for both of these items. For the full year, we expect total U.S. revenue to be between $1.3 billion and $1.37 billion. We expect total U.S. adjusted EBITDA to be between $5 million and $30 million, primarily reflecting an improved gross margin and ongoing cost savings initiatives. This guidance also assumes we will be free cash flow positive for the full year, though we may see some variability between quarters due to the timing of working capital requirements related to our inventory purchases. Moving on to Q1, we expect total U.S. revenue to be between $355 million and $365 million, and we expect Q1 U.S. adjusted EBITDA will be between $2 million and $7 million. We also expect revenues from the U.K., which we anticipate will be reported as discontinued operations in Q1, to contribute approximately an additional $7 million in Q1. We expect both Q1 and full year gross margin to be approximately 43%-44%, as we continue to drive improvement in our inventory position with a higher mix of private brands and continued efficiencies in transportation costs. We also expect advertising to be approximately 7%-8% of revenue, but will continue to be opportunistic if we see the right return on our investment. We do expect inventory balances to rise in Q1 due to the timing of receipts ahead of fall/winter, but expect our inventory turns to improve as the year progresses. We began FY 2024 with an eye to rebuilding, leveraging the cost savings work already accomplished in FY 2023. Our unit economics remain strong, and we will continue to identify opportunities to improve both fixed and variable costs in order to increase our contribution margin and fixed leverage potential. We expect this continued focus on leverage and profitability, along with the acquisition and engagement of high lifetime value clients, will help us maintain profitability today and provide a solid foundation for our future growth strategy. Now, let me turn the call back to Matt. Thanks, David. As I said at the top of the call, my first 90 days as CEO have reaffirmed my conviction about the bright future of Stitch Fix. The insight and vision on which this company was founded are just as powerful and just as relevant today. We are evaluating and assessing every aspect of our brand, our business, and our operating model. We are carefully examining what we do and how we do it, optimizing where we can right now, while also looking ahead to the longer-term opportunities. Stitch Fix was founded on a belief that a technology meets humanity model could create an individually tailored shopping experience that would make it easy and enjoyable for people to find their style and buy clothing. The company's commitment and investment in that belief has never wavered. While we have a lot of hard work to do, our clients deserve the best from us, and I am confident in our ability to deliver that. I am determined to unlock every opportunity for us to realize the full potential of Stitch Fix and drive long-term, profitable growth. Thank you for your interest in our company. Now, operator, we'll take the first question. Thank you. As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. We ask that you limit yourself to one question and one follow-up question, and to refrain from multi-part questions until all participants have had a chance to ask a question. If time allows, we will then come back to answer any remaining questions. Our first question comes from the line of Youssef Squali of Truist. Please go ahead, Youssef. Oh, can you hear me? Yes, we can hear you. Oh, excellent. Thank you guys for taking the questions. I have two. So first, Matt, you talked a little bit about how you've been on the job now for 90 days. You've had a chance to talk to a lot of people internally, externally, et cetera. Maybe can you just summarize for us some of the key learnings that you had during this period? What are kind of the two or three key challenges that are kind of top of mind for you based on those learnings? And then, Dave, for the fiscal 2024 guide, can you talk about the assumptions you're making in terms of active client count and maybe just how you see pricing, you know, kind of progressing throughout the year? Thank you. ... All right. Thank you, Youssef. Appreciate the question. So yeah, so 12 weeks in, and definitely have spent a considerable amount of time onboarding, learning everything that I can, talking to all, to all of our internal stakeholders, as well as external advisors, and also trying to get as close to our clients as, as we possibly can to truly understand the business from their standpoint as well. And in addition to what I shared in the earnings transcript preceding this, one of the things that I learned was just how strong of a bond our most loyal clients have with our service. And that, to me, is something that really creates a tremendous opportunity for us as we continue to drive growth in our business into the future. It is quite rare to have a e-commerce business or any retail business where you're able to get such high levels of engagement from your clients. In the last quarter, as we shared, with our business down 22% and our marketing spend down nearly 50%, it's pretty rare to be able to see those kind of proportions, and that speaks to the testament of how we engage our clients in an organic manner, and how they continue to come back to us time after time, despite any challenges we might see in the macro environment. Another learning that I think, you know, is really important to us is the strength of our private brand business. One of the things that becomes really important for us as we go forward is to have assortment that's not only exclusive, but has a strong desirability from our clients. If we look at our total brand portfolio, of our top 25 brands, they deliver about 50% of our total revenue, and over half of those brands are private brands. Those private brands are also delivering approximately 5%-10% higher IMU than the national brands, and our clients absolutely love them, with materially higher keep rates than our national brands. In terms of challenges, I really see those as opportunities going forward. As we continue to listen to our clients, we'll continue to see where we need to tweak our experience, improve our business model, where we need to find operational efficiencies to lock further savings, to further improve our bottom line and profitability going forward. As I continue to onboard further, I look forward to pulling all of that, all those, all of those learnings together and sharing our long-range plan and strategy at a future date. Then, Youssef, on the FY 2024 guide, a couple call-outs. First, on active clients. We aren't sharing any specifics on full-year active clients, but it definitely remains a primary focus for the teams to drive towards growth. We do expect Q1 active clients to be negative. You saw for Q4 FY 2023, we were down about 5% quarter-over-quarter, and we expect Q1 to be slightly better than that quarter-over-quarter. On the revenue side, a couple call-outs. You know, the active client loss in FY 2023 and the Q1 loss I just described are definitely a big contributor to the revenue headwind in FY 2024. We also expect the headwind that we've recently seen in existing client order frequency to remain in FY 2024, you know, with clients still being cautious, you know, in the macro environment that we're in. You touched on pricing. Pricing, we expect it to continue to remain stable with what we've seen in the past few quarters. Great. Thank you both. Thanks, Youssef. Thank you. Please stand by for our next question. Our next question comes from the line of Simeon Siegel of BMO Capital Markets. Thanks. Hey, everyone. Good afternoon. Welcome, Matt. So, nice, nice progress on the gross margins. Could you just maybe quantify the moving pieces a little bit more, just given there are some, there's nuance out there, and maybe how you're thinking about those moving pieces into the Q1 full year guide you gave? And then, did you guys say what you are expecting the 53rd week to represent for revenue to back? Thank you. Yeah, thanks, Simeon. I I appreciate the question. It's Matt here. I'll speak to the gross margin at a high level. David can share some additional color, as well as answer your question regarding the 53rd week. A lot of recognition to our merchants, and many others within our organization for all the hard work that they've put in over the last year to ensure that we have a healthy inventory composition. It's a strong perspective of mine that, more inventory is not better, but better inventory is better. And the merchant organization has truly taken that to heart, and, you know, that's evidenced by what we just previously shared with inventory down 30% year-over-year. That also allows us to mix into higher margin products. As part of that, it's our reinforcement and our continuing investment within our private brands, and as I just shared, the IMU there is about 5%-10% higher overall. So, I believe that while we still have additional work that we can do in order to improve our overall inventory health, really encouraged by the early signs of success that we're having already. And then Simeon, on gross margin, and just to give you a little bit more color on that, for FY 2024, we are showing between 100 and 200 basis point improvement, and that really ties back to what Matt was describing, that focus on improving our inventory health, as well as sort of the transportation efficiencies that we continue to drive. A couple other call-outs, just as you go further down the P&L. There's also an annualized impact of the cost savings initiatives that we had in FY 2023. And then there's also a good portion of the $50 million of annualized savings with the U.K. and the warehouse closures that we would realize in FY 2024 as well. And then on the 53rd week, we do have specifics in the press release as well. So you can, you can see the impact there as well as the impact of the U.K., but it's, it's about a point to 1.5 points. Great. Thanks a lot, guys. Best of luck for the year ahead. Thank you. Thank you. Thank you. Our next question comes from the line of Trevor Young of Barclays. Great, thanks. Just back to the full year guide for kind of core U.S. What are you baking in, in terms of underlying assumptions, in terms of, like, the macro environment, impact from student loan repayments starting back up and, you know, continued competitive pressure, given, you know, higher levels of discounting at peers or at retail? Just any color on kind of what your kind of broader macro outlook is. And then just, more of a housekeeping one, appreciate the color on, you know, U.K. revs, being able to back that out. But any directional commentary on what, you know, average revenue was for those customers, so we can kind of contemplate that in our models as well? Hi, hi, Trevor. Appreciate the questions. This is Matt. I'll speak at a high level to how we're thinking about the macro environment and our competitive positioning around discounting. David can share additional perspective on that as well as try to answer your question around the U.K. So in terms of the macro environment, I think that there's ample reason to take a cautious view of the U.S. consumer. They remain under pressure. Energy prices are rising, interest rates are at the highest levels in recent years. Student loan payments resume next month, and there's a continued drawdown in consumer savings, and you already know all of that. And also, all of those factors are outside of our control. So for myself and the team, what we're focused on are the factors that are within our control. So do we have the right assortment? Are we priced intelligently? Are we acquiring high lifetime value potential clients? Is our brand resonating with the target market? And are we fostering deep, enduring relationships with our clients? And I think also, with our service, we have that privilege of being delivered in the customer's homes when the macro environment is both a headwind and a tailwind. So during tough times when discretionary spend is constrained or when a customer is reducing trips to the mall or resisting opening that addictive shopping app on their phone, we're still being delivered to our loyal clients' homes, and our focus remains on that experience. Our focus is on winning that wallet share upfront. And we also have that awesome advantage of owning a direct relationship with every single client. So if a client's budget is stretched, they can share that with their stylist, and then we can adjust the assortment we send to ensure that we meet their current needs. So, you know, as I think about it, you know, no matter what the macro environment is, we remain focused on serving our clients, each of them individually. In terms of discounting, I think we also have a competitive advantage when it comes to discounting. As we continue to mix more and more into our private Brands, and we see great adoption of those brands with our clients, you know, we don't have to worry about any price pressures in terms of price checking from consumers. And also, we have the luxury of already having that product into a customer's home. As they're thinking about the assortment, whether they keep it or not, we have that added advantage of where they're not, you know, actively price checking that assortment as well. It gives us a unique advantage to be much more of a full-price retailer. Now, of course, at times, we don't meet the sell-through targets that we want to on the inventory that we've acquired, and we're also really investing in and getting smarter about our pricing intelligence to ensure that we have the right markdown cadence in order to drive the right sell-through and the right keep rates as our inventory ages, as well as continuing to test and learn and become better at using our Freestyle channel in order to move inventory that isn't hitting our sell-through targets. I do feel really good, overall about our ability to compete in a tough macro environment, as well as our ability to compete against retailers that might be more heavily discounting than we are. And then, Trevor, on your specific question around the U.K., yeah, there, there's definitely a reconciliation in the press release as well to give you the top line, as well as, gross profit and SG&A, to help you sort of back those numbers out of the models. From an active client standpoint, the U.K. represented about approximately 180,000 clients, and so you can back into our RPAC with that to be able to back that out of the models. Okay, great. Thanks, Matt. Thanks, David. Thank you. Thanks. Thank you. Please stand by for our next question. Our next question comes from the line of Blake Anderson of Jefferies. Hi, guys. Thanks for taking my question. Wanted to first ask on just if you could provide any more color on the trajectory of the year in terms of sales and margins. It seems like Q2 through Q4 EBITDA seems like it's around breakeven after Q1. So just wondering kind of the puts and takes on profitability for the back half of the year, last three quarters versus the first quarter. And then second question, was just curious if you could talk at all about kind of your return rates, how many of your customers on the Fix business are keeping boxes? How many items are they keeping? Wondering if you could share any color on how those KPIs are trending. Thank you. ... Yeah, Blake, on the first part of your question, I think you're talking about EBITDA throughout the year, and, you know, the guide for Q1 was between $2 million and $7 million. And then the guide for the full year was between $5 million and $30 million. And so you can see from that that we actually do expect to be profitable in the back half of the year as well. Because that's, you know, going back to what we've talked about in prior calls, like our focus on profitability has been something, you know, we have been really digging into, and we're certainly proud of the work that we've seen there. And so we expect to be EBITDA positive for the year. We also expect to be free cash flow positive for the year as well. On the second question, I can jump in there, and David, feel free as well. But in terms of the key metrics that we track from AUR, AOV, and keep rate, overall, we're seeing relatively stable metrics across the board. And then going forward, we'll be working, you know, to put processes in place and strategy in place to improve those metrics over time. Got it. That answers it. Thank you. Thank you. Our next question comes from the line of Tom Nikic of Wedbush Securities. Hey, everybody. Thanks for taking my question, and, you know, Matt, welcome aboard. I just want to ask, so, you know, obviously, you had a big revenue decline last year. You know, you're calling for another, you know, double-digit revenue decline this year. So kind of, you know, in aggregate, it's, you know, a pretty significant decline versus where you were a couple of years ago. Just kinda conceptually, is sort of, you know, the idea that, you know, you're kind of resetting the revenue base to, I guess, kind of a sort of healthy, sustainable base, and then you find opportunities to grow from there? I guess when you do kinda think about, like, how to kind of inflect the top line from, you know, negative to, you know, hopefully positive again, like, you know, how, like, how is it? Is it inflecting customer growth? Is it share of wallet? Like, how do we think about that? Thanks. Hey, Tom, I appreciate the question. It's Matt. I'll answer that question, and then David, if there's anything you'd like to add, please feel free. So in terms of where we see the business going forward and where our focus remains, we're working really hard to ensure that we have a healthy foundation for our business, that we have a healthy inventory position for our business, that we have a healthy client franchise for our business, and that we have a healthy financial, and P&L, ultimately, for our business. We also have strong perspective that as we continue to invest in and deliver experiences that resonate best with our clients, and as we continue also to ensure that as we really judiciously rationalize our marketing spend, we're gonna be able, over time, to both improve the experience and do a better job acquiring high lifetime value customers, that will ultimately lead to future revenue growth, and we'll be able to do that on a profitable basis. What I can also tell you confidently is that the service that we provide is a phenomenal one. The ability to get product delivered to your home, that matches your style preferences, that aligns with your value orientation, that actually fits, is a surprisingly rare experience, and it's one that we have an exceptional experience, and we excel in competitively. I believe that that service resonates with an incredibly wide audience and untapped future markets, which over time will be able to expand our target market audiences and deliver growth. Right now, we're focused on the healthy foundations for our business, and in the future, we'll be focused on driving that long-term profitable growth. Understood. Thank you very much. Thank you. Our next question comes from the line of Dylan Carden of William Blair. Thank you. I'm just curious, maybe even follow to that last answer. How are you thinking about the relationship now between marketing and sales? You're, you're kind of keeping the ratio relatively stable next year. You know, is that driven by the sales outlook, or is that driving the sales outlook? And kinda what's the strategy as it relates to retention and sort of new customer engagement? Thanks. Hey, Dylan, appreciate the question. It's Matt. I'll, I'll answer your question, and then David, if you'd like to provide additional color, feel free. What we're focused on right now in marketing is exactly as you called out, that we need to ensure that when we go to market, we have a judicious marketing spend that rationalizes every dollar, to ensure we're doing our best job to acquire high lifetime value customers into our portfolio. And I've been... You know, based on my experience, I've seen where at times, if you're just chasing client growth from a vanity metrics perspective, you can get yourself into some really difficult situations that become then ultimately very difficult to unwind. More important for me and the guidance to the team is that we need to focus on the health of our client franchise. So are we acquiring the right customers? Are we acquiring customers that display all of the signals that would indicate a high likelihood of high lifetime value? And how the marketing team is focused, and what gives me a lot of encouragement, is that there's a few different things that guide their work. The first is that they go to market with a really clear audience focus. They know who it is that they're speaking to and who it is that they're working to acquire.... Two, they're doing a really good job of telling our story. What's the uniqueness of our brand? What's the uniqueness of our business model, and what is that value proposition for a prospective client? Three, they're doing a good job balancing the budget between higher funnel brand and awareness campaigns, and then lower funnel programmatic acquisition tactics. To your point, we also have to be very mindful in terms of our retention and reactivation campaigns. The marketing team is really dialed in here as well. Recently, we've had a lot of success in terms of re-engagement. Then going forward, we look to continue those efforts, not just to continue to harvest reactivation, but also to improve retention and fend off dormancy in the first place. So we feel confident that if we focus on these right things, we get the client experience right, we're really acquiring, engaging with high lifetime value customers, we'll create a better trajectory for our total client health over time. If I could just sort of follow up on that, I mean, I don't know if you're going to answer this per se, but, you know, as you think about sort of the active customers you're left with now at the end of this year, and to your point about kind of unwinding past marketing spend or unwinding past growth, do you feel, you kind of mentioned the stability of some of those key metrics. Do you feel like this three-some million is a more engaged core group, or are you still kind of weeding out, some less efficient customer base in the model? Yeah, Dylan, I'll touch on that. You know, I think to Matt's point, sort of this holistic approach to marketing touches on a couple areas. First, is in gross adds, and I think that was a lot of what Matt was describing as well. But I think what you're alluding to is on the dormancy side, we've talked about this in the past, where we are still cycling through some of the Freestyle first clients that we've talked about in the past, although it's definitely less of an impact than it's been in the past. And we're also still seeing some of that elevated first Fix dormancy that we've talked about in prior calls, but we're also seeing improvements in some of that first Fix engagement as well. And so it's still a big area of focus for us. Got it. Thank you. Please stand by for our next question. Our next question comes from the line of Mark Altschwager of Baird. Please go ahead, Mark. Mark Altschwager, your line is open. We're going to go to our next question. Our next question comes from the line of Edward Yruma of Piper Sandler. Hey, guys. Thanks for taking the question. Matt, thanks for all the forthrightness. I guess just, you know, stepping back and maybe as a follow-up to the last question, when you look at churn, obviously, maybe introduce some customers that were, you know, lower value or just not as focused on the service. But if you kind of talk to your customer base and look at some of these longer-term customers that have churned or gone dormant, I guess, what are the top two or three things that cause them to churn or go dormant, and how do you expect to address that long term? Thank you. Hey, Ed, I appreciate the question. Matt here. We'll provide an answer, and then David can follow up with additional context, if you'd like. So I've spent a lot of time, as noted, with our clients. I've been a participant in multiple client focus groups. I'll be participating in two more tomorrow. And one of the reasons or one of the things that really piques my interest is both why they're excited about the service that we offer, and then also, to answer your question, for those that have decided to leave us, what were those drivers and what we-- what could we do in order to improve our service, such that we mitigate the dormancy that we see from some of our clients? And the top couple of reasons are probably no surprise and actually give me a lot of optimism in terms of the value of our service overall. Number one, it's just that there's a life-changing event that they've had that interrupts their need for our service, and it's something where, you know, it's beyond our control, and something that, you know, is why we're also seeing, I think, a lot of success with the more recent re-engagement campaigns that we have. There's times in people's lives where our service is one that's of incredible value to them, and they might want to receive a fix every 30 days. And then something else changes in their life circumstance that then they might go for a while, you know, where the service is less valuable for them. But then we have a really great opportunity to re-engage them in the future when their life circumstance changes again. The second, and that, really proud of the work the team is doing, is around- Thank you. The second is around what we're really doing to continue to improve the assortment quality and what we send to our customers. Overall, our customers give us really high marks in terms of the quality of our assortment and our keep rates and our success growing the business demonstrate that. Our merchants are definitely focused on making sure that our assortment is holistically focused on our core customer segments that we serve today. So the experience then is at its best when we have the assortment, breadth and depth to meet the needs of the entire closet for our customers, and that continues to be a focus for us. ... Thank you. Our next question comes from the line of Kunal Madhukar of UBS. Please go ahead, Kunal. And please make sure your line is unmuted, and if you know, speakerphone, lift your handset. Again, to ask a question, please press star one one on your telephone. Again, that's star one one on your telephone to ask a question. Please stand by. Our next question comes from the line of Mark Altschwager of Baird. Please go ahead. Mark, please make sure your line is unmuted, and if you know speakerphone, lift your handset. We'll go to the next question. The next question comes from Kunal Madhukar of UBS. Hi, thank you for taking the question. A quick numbers one, and then a follow-up. So on the numbers one, you mentioned that U.K. had about 180 active clients, 180,000. So when I take that out from the 1Q numbers, that implies that on a quarter-over-quarter basis, that would be a -5.5% in 1Q, which is worse than the -5.1% in 4Q. Which kind of tells me, and since you said that the expectation would be that in 1Q, there would be an improvement, that would suggest that at least as far as the U.S. is concerned, you expect to add active clients. Is that right? No, I don't think that's, that's right, Kunal. You know, we definitely expect... Another way to look at this is, you know, quarter-over-quarter, we definitely expect active clients, from an absolute number, to get better from a loss standpoint than what you saw in Q4. So in Q4, you lost 179,000 clients. Now, if, if 180,000 clients are going to go out of the system in 1 Q because U.K. would be a discontinued arc- Yes. Then I- And so the down 3%, the down 3% that we were quoting included, it was a U.S.-only number. The down 3%. Okay. Yeah. When I was talking about the quarter-over-quarter sequential decline in Q1- Okay. It was a U.S. only. It was a U.S.-only comp. Okay. Okay. Okay. Okay, great. And then- Yeah. I think this has been asked before, so I apologize. It takes me a bit to kind of understand stuff. But the -15% to -20% guide, revenue guide for the full year, how should we kind of think about it in terms of, you know, where you'll probably end up with active clients versus where you will end up with NPM revenue per active client? Yeah, Kunal, we, I think we touched on this earlier, that we aren't giving specifics around active client, clients from a full year guide standpoint. You know, the guidance that we've given assumes pretty stable pricing throughout the year as well. The stable pricing. Okay. Thank you. Yep. Thank you. As there are no further questions in queue, this does conclude today's conference call. Thank you for participating. You may now disconnect.