Good afternoon. Welcome to the Sonos FirstQ quarter 2023 Earnings Call. All participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. To ask a question, you'll need to press star followed by 1 on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. James Baglanis, Senior Director of Investor Relations. Thank you. Please go ahead, sir. Thank you. Good afternoon, and welcome to Sonos First Quarter fiscal 2023 Earnings Conference Call. I am James Baglanis, and with me today are Sonos CEO, Patrick Spence, and CFO and Chief Legal Officer, Eddie Lazarus. For those who joined the call early, today's hold music is a sampling from our Say It Loud station which is curated in collaboration with Black@Sonos in recognition of Black History Month. Before I hand it over to Patrick, I would like to remind everyone that today's discussion will include forward-looking statements regarding future events and our future financial performance. These statements reflect our views as of today only and should not be considered as representing our views of any subsequent date. These statements are also subject to material risks and uncertainties that could cause actual results to differ materially from expectations reflected in the forward-looking statements. A discussion of these risk factors is fully detailed under the caption Risk Factors in our filings with the SEC. During this call, we will refer to certain non-GAAP financial measures. For information regarding our non-GAAP financials and a reconciliation of GAAP to non-GAAP measures, please refer to today's press release regarding our first quarter fiscal 2023 results posted to the investor relations portion of our website. As a reminder, the press release, supplemental earnings presentation, and conference call transcript will be available on our investor relations website, investors.sonos.com. I would like to also note that for convenience, we have separately posted an investor presentation to our investor relations website which contains certain portions of our supplemental earnings presentation. I will now turn the call over to Patrick. Thank you, James, and hello, everyone. Our record first quarter revenue is a testament to the strength of the Sonos brand and our category leadership. It's another performance that proves our flywheel is working. We acquire new customers through disciplined marketing efforts and through our existing customers who tell their friends and family that they should get Sonos. Our existing customers return to make additional purchases, building out their Sonos systems and growing products per household. Our team demonstrated its ability to execute amidst a challenging macroeconomic backdrop as we delivered constant currency revenue growth of 7%, a healthy adjusted EBITDA margin of 18.4%, and $168 million of free cash flow. As we always take a long-term view, the most important thing to note is that these results are where we expected them to be in order to deliver on our fiscal 2023 guidance. In the context of the current market environment, these are especially outstanding numbers. Consumer spending was rather tepid, especially as the pendulum has swung away from goods and towards travel and services as the consumer enjoys some of the activities they were deprived of during the pandemic. The Consumer Electronics space, in particular, continues to experience softness after three years of very strong growth. For this reason, despite our strong start to fiscal 2023, we are standing pat on our annual guidance. The macroeconomic environment remains challenging and consumer spending uncertain. The dollar, while weakening some, continues to erode our top line, gross margins, and adjusted EBITDA. Given everything we see right now, we are maintaining our previously issued guidance range of $1.7 billion-$1.8 billion revenue, 45%-46% gross margins, and $145 million-$180 million in adjusted EBITDA. We believe this is prudent in the face of a lot of unknowns this early in the year. In Q1, we did exceedingly well on a comparative basis. We built upon our already strong share of home theater market and saw significant gains in the U.S., U.K., Germany, and the Nordics, resulting in our highest share in terms of both dollars and units in three years. We performed well amidst the competition in the wireless speaker category as well. There is a reason why The New York Times crossword puzzle selected Sonos as the answer to the clue wireless home audio company, and Michelle Obama named it her most used app recently while on The Late Show with Stephen Colbert. The Sonos brand has never been stronger, and when consumer spending picks up and the balance of goods and services expenditure stabilizes, we will be well-positioned to deliver accelerating top and bottom line growth. On the last earnings call, we discussed how being in stock on our products would enable us to run our typical focused promotions for the first time in three years. As we expected, customers responded in force to these promotions. We saw very strong customer response to our sets offering, resulting in our highest level of sets as a percent of direct-to-consumer orders in years. We are keenly focused on driving multi-product starts because they have proven to have greater lifetime value than single product starts, as well as a higher propensity to repurchase over time. We were pleased with the balance of sales to new households as well as the repurchase activity by our existing household base, which we believe is yet another validation of our flywheel. As a reminder, in any given period, we tend to see existing households account for 40% -4 5% of our registrations, providing us with a sticky, predictable revenue stream from our installed base. Our flywheel is proven and has been remarkably consistent over our history. Even in the midst of the ongoing economic uncertainty, it continues to drive growth. We are still in the early innings of our growth as more than 14... as our more than 14 million households represent just 9% of the 158 million affluent households in our core markets. At the end of fiscal 2022, the average Sonos household had 2.98 products, up from 2.95 the prior year. This figure has steadily increased over the years, underscoring how the lifetime value of our customers continues to grow. There's a lot more room for additional growth. As we noted on our last call, 40% of our households are single product households, whereas our average multi-product household has 4.30 products. In other words, we are starting to get into the range we had previously discussed of four to six products for every mature Sonos household. We estimate that converting our single product households to the average multi-product household install base size represents a $5 billion revenue opportunity. Of course, this will not happen overnight, but it does highlight the long runway we have to further monetize our install base. We are investing in the systems and programs to more aggressively go after this opportunity in fiscal 2023 and beyond. One example I'm proud of is Sonos Voice Control. With Sonos Voice Control, we have created a dedicated, easy-to-use, music-focused voice service for Sonos households. Our hypothesis is that this will result in increased engagement, which will translate into additional products purchased over time, further driving lifetime value. I'm pleased to report that the net promoter score of Sonos Voice Control far exceeds that of the other voice assistants on our platform. SVC, as we call it, caught up to 50% of Alexa total enablements in the U.S. in just seven months and is trending to become the number one voice solution for Sonos in both the U.S. and France, where it only launched in December. Before I turn the call over to Eddie, I want to take a moment to address something that gets asked often: how the pandemic has affected Sonos's performance and what our path forward looks like. There could be no doubt that over the last three years, the pandemic created a stay-at-home tailwinds which drove strong demand for our products. These tailwinds were partially offset by the persistent supply chain disruption that we faced. This quarter was a step in the direction of normalization as these stay-at-home tailwinds subside and we face minimal supply disruption. Importantly, and as our record-setting Q1 revenue attests, the 5 million new homes that we added over the last three years are contributing to our flywheel. From everything we've seen in our data, these customers are behaving similarly to those customers who joined prior to 2020 in that they are, one, adding additional products over time, and two, they've become great advocates for Sonos, helping us attract more new customers. The last three years didn't just yield a temporary spike in sales, nor was it a one-and-done phenomenon. It brought our business to a higher baseline from which we will grow further. As we discussed last quarter, we are making thoughtful and targeted investments to drive our medium and long-term growth while being mindful of the continued importance of delivering profitability. Our investments are focused on driving our flywheel of new household acquisitions and existing customer repurchases. While we are investing in these opportunities, we are simultaneously tightening our belts, reducing discretionary spend, and doing some restructuring to make our teams more efficient. We are laser-focused on what we can control. If we begin to fall short of our targets in fiscal 2023, we won't hesitate to adapt to the environment, prioritize our key initiatives, and protect the profitability of our business. We are on the cusp of launching some exceptional new products. Our product roadmap continues to get more exciting. As I mentioned on the last call, we'll be announcing our entry into a new category this year, one of four that we're working on. We have a proven track record of gaining share when entering a new category, which underpins our conviction that we will continue to gain a larger and larger share of the $96 billion global audio market over time. The future is bright, and we're well-positioned to seize it. I'll turn the call over to Eddie to provide more details on our results and our outlook. Thank you, Patrick, and hello, everyone. At the outset, I'd like to dig a little deeper into the point Patrick was making about our business establishing a new baseline. As our Q1 results show, the pandemic did not create a high watermark for Sonos. Instead, the pandemic strengthened the underlying fundamentals of our business, and we have great confidence that we will be able to continue to grow from the new level that we have attained. I also want to call attention to another phenomena associated with emerging from the pandemic. Our year-over-year comparisons have been and will continue to be a bit wonky. This is due to timing of backlog fulfillment, whether we were in and out of stock on key products, if we ran normal promotions, and many more factors. Although we see the shape of our year normalizing somewhat in fiscal 2023, we will likely have to lap this year in order to get back to some semblance of normalcy in terms of year-over-year comparisons. Against that backdrop, I'll provide what context seems to make the most sense. Let me start with revenue. In Q1, we grew revenues 7% constant currency or 1% reported to a total of $672.6 million. Foreign exchange was a $39 million headwind to revenue and was roughly in line with our expectations for the quarter. We're very encouraged by this revenue achievement, which fit with our ambitious expectations. We're further encouraged that we beat Q1 of FY 2022, which in turn beat Q1 of FY 2021, even though FY 2021 was in the heart of COVID demand and saw fewer supply challenges than FY 2022. Quarterly registrations grew 27% year-over-year, while products sold grew 4%. Quarterly registrations for this last quarter faced a very favorable comparison as Q1 of fiscal 2022 registration growth had declined 24% year-over-year due to product supply constraints, timing of channel fill, and low holiday promotional activity in that period. Looking back a year further to Q1 of fiscal 2021 to smooth comparisons, this quarter's reported revenue was up 4%, whereas registrations and products sold are down 4% and 6% respectively. All told, we saw revenue up from Q1 of fiscal 2021 due to price increases and channel mix, but we were down a touch on units sold compared to the height of Covid demand. On a regional basis, Americas revenues grew 6% year-over-year in reported terms and accounted for 59% of sales. EMEA revenues grew 11% constant currency, but declined 2% reported to account for 36% of sales. As a reminder, the bulk of our FX exposure is to the euro and to a lesser extent, the pound. We are pre-pleased with our constant currency performance in the EMEA region and continue to monitor the economics landscape there closely. APAC revenues declined 15% constant currency or 21% reported to account for 5% of our sales. Gross profit dollars grew 2% on a constant currency basis, declined 10% on a reported basis. Gross margins declined 540 basis points to 42.4%. While our return to a normal holiday promotion drove the bulk of the decline in gross margin, it is also worth noting that FX was a 300 basis point headwind to gross margins. Another point to emphasize here, this quarter's gross margin should be the low point for the year and landed roughly in line with our expectations and does not change our view that we can deliver gross margins in the range of 45%-46% for fiscal 2023. Adjusted EBITDA declined 24% to $123.9 million, representing a margin of 18.4%. The 610 basis point year-over-year decline in adjusted EBITDA margin was driven by our lower gross margin, as well as non-GAAP operating expense growth of 6%. Foreign exchange was an approximately $35 million headwind to adjusted EBITDA. Total non-GAAP operating expenses of $172.3 million grew by $11.9 million, or 7% from fourth quarter fiscal 2022 due to increased headcount, as well as the reset of our bonus accrual from last year's depressed levels. These factors result in uneven year-over-year comparisons beginning in 2Q of this year. I want to emphasize that non-GAAP operating expenses should be roughly stable in absolute dollars from this quarter's level. Free cash flow was $168 million in the quarter, largely driven by $148 million decrease in inventories. Last quarter, we discussed our plans to exit Q1 with a more normal inventory position. That is exactly what we did. At the end of the quarter, our inventory balance was $306 million, down 33% sequentially. Within inventories, finished goods were $261 million, down 36% sequentially. Our component balance of $45 million was down 5% sequentially. We ended the quarter with $432 million of cash. No debt. The increase in our cash balance was largely due to the $148 million decrease in inventory I just outlined, partially offset by the repurchase of $15 million of our stock. Last quarter, I mentioned that we were taking actions to improve our cash conversion. I am pleased with the team's progress in that regard. One additional call-out, changes to the Internal Revenue Code that Congress mandated back in 2017 now require that we capitalize and amortize our R&D spend. This change resulted in a $27 million hit to our net income this quarter, which naturally affects any year-over-year comparisons. We anticipate that this change in law will result in a modest increase to our cash tax rate for the full fiscal year. We're assessing how to mitigate the impact. As Patrick mentioned, we're leaving our fiscal 2023 guidance unchanged. We continue to believe that constant currency revenue growth of 1%-7% for the year is representative of the underlying demand that we see and the range of outcomes that the year could yield. Significant economic uncertainty remains, We do not believe it is prudent to adjust annual expectations based on one quarter of performance. We're aware that the dollar has weakened from the levels we discussed last quarter, As I mentioned earlier, the impact we felt in Q1 was roughly in line with our expectations. I will now briefly recap our fiscal 2023 guidance. We continue to expect constant currency revenue growth in the range of 1%-7%, which bakes in a $79 million FX headwind at the rate assumptions we outlined last quarter. This translates to reported revenue in the range of $1.7 billion-$1.8 billion, down 3% at the low end, up 3% at the high in reported terms. We continue to expect the gross margin to land in the range of 45%-46%, roughly flat year-over-year. Our FX headwind assumption translates to an approximate 240 basis point headwind to gross margin for the year. We continue to guide to adjusted EBITDA of $145 million-$180 million, representing a margin of 8.5%-10%. As previously discussed, a significant portion of the FX headwind flows directly through and reduces adjusted EBITDA. As I also mentioned earlier, we're dealing with uneven year-over-year comparisons, and that's certainly the case in the second quarter of fiscal 2023. While it is not our practice to provide quarterly revenue guidance, we do think, given the unusual puts and takes, that it is important to explain our expectations for the shape of fiscal 2023. In the last five years, we have booked an average of 57% of annual revenue in the first half of the fiscal year. Excluding certain COVID-impacted periods that are not representative of our normal course seasonality, 38%-40% of annual revenue is generated in Q1, with Q2 generally down 55%-60% quarter-on-quarter to be in the 16%-17% of annual revenue range. As our business returns to more normal seasonality, we expect this year to be no different, where Q2 is our smallest revenue quarter of the year. Q2 of fiscal 2022 was a completely anomalous one due to backlog fulfillment as a result of supply constraints and timing of channel fill. The year-over-year comparison of down 25%-30% is not, I repeat, not indicative of underlying trends in the business. As Patrick emphasized, we are pleased to be tracking to a plan that allows us to continue prudent and targeted incremental investments in the business. Our investments in product, in our product roadmap are squarely aimed at re-accelerating top-line growth to our previously achieved levels of low double digits with adjusted EBITDA growth in excess of that. I also wanna echo his caution that should our performance in fiscal 2023 start to fall short of our expectations, we are fully prepared to take remedial actions to prioritize our key initiatives and protect the profitability of our business. I typically give a brief update on our Google litigation, but this quarter didn't see major milestones. We are heads down as we prepare for the May trial in our Northern California case and the summer hearings in the cases Google brought at the ITC. I'd like to turn it over for questions. Thank you. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, please press star one again. Our first question comes from Tom Forte from D.A. Davidson. Please go ahead, your line is open. Great. I have two questions, and then time permitting, I'll get back in the queue for a couple more. Industry-wide, you're seeing a material pullback in container costs and therefore supply chain-related costs. At a high level, assuming that you're also standing to benefit from that, would you let that flow through to margins, or would you potentially reinvest some of that by taking price? First, the first part of the question, I would agree that we're seeing a moderating of supply chain costs. In the first quarter, for example, you know, last year we had to airship a whole bunch of stuff. We didn't have to do that. The logistics overall are smoothing out, and that's a plus for the business. You know, we've laid out our prudent investment path for the year at this point, and we're not gonna modulate, you know, and toggle one way or the other just based on that. You know, we evaluate price all the time. We think we deliver tremendous value to the customer, but we'll make those assessments on a quarter-by-quarter basis. Great. Thank you, Eddie. My second question is, you talked about this, but I was hoping you could expound on it a little. Given that you had a more normalized inventory position in the December quarter, you were hoping that your promotions would enable you to increase both new customers and then your penetration for existing customers. How successful were your promotions and how should we think about future potential promotional activity in the December quarter? Yeah. Thanks, Tom. It's Patrick Spence. I'll take that one. You know, and we use the term normalize or, you know, becoming more normal, because we actually looked back and as well have looked at how the promos performed relative to the pre-pandemic period, and they're in line. We feel like it worked very well, in terms of both attracting new customers, and as well getting existing customers to come back and add another one. I think the other thing that we found, you recall we focus a little more on sets this year, so, you know, an Arc with a couple of ones or Beam with a couple of ones for home theater, even stereo pairs, and that went really, really well. If we learned one thing from that, and we know from our data, you'll probably see us, you know, leading with more sets, particularly in DTC. It makes us feel like, okay, you know, back in a more normal environment where there's inventory, we know what to do and how to execute within the expectations of our gross margin and our brand and our portfolio strength. Coming off of that, I feel like we're, you know, returning to more normal like we were pre-pandemic when it comes to promos. Great. Thank you, Patrick. Thank you, Eddie. Great quarter. Thanks, Tom. Our next question comes from Tom Babcock from Bank of America. Please go ahead, your line is open. Hey. It's actually John Babcock. Yeah, just actually wanted to quickly follow up on that. Overall, it does seem like you're having a promotional period here ahead of the Super Bowl. Is this something you've done in past years, if you can just remind me? Yeah, it is, John. It's Patrick here. This is the biggest time of year for TV sales in the United States, so we tend to do something targeted around our home theater products. That is something we typically do. Tom, I would just say, I think you're gonna see through the course of the year that we're going to do, you know, back to the future. We're going to return to kind of a normal cadence of promotions. The things we've done in the past, I think when consumers are particularly focused on our markets are times when we might dip into that. Generally speaking, we're just not gonna be as promotional a brand as others. Yeah. I'd just say, the one thing I'd layer on is the sets. You'll also see us probably lead more with promos around sets, given the way that helps, new homes get started the right way. Gotcha. Following up at least on the geographic breakdown, I know you provided some commentary on Americas and also EMEA in terms of what went on there. Just in terms of Asia, how much of that decline, 'cause it looked reasonably steep, was driven by kind of the COVID lockdowns in China or if there were any other factors at play? The Australian television market has been weak right now. We think it'll bounce back. It's, as you know, a relatively modest part of our overall revenue. We've got some new geographies that we've been working on in the APAC region, Japan and India. Those are going well. The Australian market had a dip. China's now reopened. That's a big part of the Australian economy. We'll see how that flows through. We don't see any kind of long-term implications here. Okay. Great. I guess just my last question before I get back in the queue, are there any updates on the ongoing litigation with Google? Also, if you can just remind us what the next key deadlines are to be mindful of there, that would be helpful. Nothing from this quarter in terms of big milestones. The next big moment here is gonna be May eighth when we open trial in Northern California in our first trial against Google. Okay. What's going on May 8th exactly? That's. We're actually getting to trial in the Northern California case, and that trial will last something like 10 days. Of course, there's a lot of preliminary skirmishing before you get there, but assuming nothing surprising happens, we'll be presenting our case to the jury. Okay. Thank you. Our next question comes from Erik Woodring from Morgan Stanley. Please go ahead, your line is open. Hey, guys. Good afternoon. Thanks for taking my questions. I just wanna dig into the kind of product registrations versus product sold dynamic because I know there are some kind of wild comps if we look back over the last, you know, like, two-year stack almost. I guess kind of simplistically, you know, as we look at the metrics for the December quarter, did you ship kind of in line with demand? Was there channel restocking? Were you able to work down some channel inventories? Maybe if you could just include in that how customers or how channel partners are thinking about managing inventory into 2023, just because we hear from some of your peers, you know, they're still being relatively tight. Would love to know if that's the same for how they treat your products as well. Then I have a follow-up. Thanks. Inventories dropped very substantially. I mean, we were quite elevated in our finished goods inventory coming out of the last fiscal year. We had hoped and indeed predicted that we would come down to a normalized level, and we did. We dropped, you know, some $150 million or whatever it is. That's, you know, that was exactly as we thought would happen. We exited the quarter with a I would say the channel fill with our partners is in a normal and good spot. Neither heavy nor light. You know, I think as reflective of the share gains we had, our products were moving through these stores. Our main partners are very, very pleased with how the holiday quarter worked out. As long as that continues to be the case, you know, they'll be reordering on a regular basis. Of course, you know, it is an uncertain time. No one wants to be caught with too much in the store, you know, in their warehouses. Yeah, people are careful, but we've had a pretty regular cadence with our partners. Okay. Helpful. Thank you, Eddie. Then, you know, maybe as a follow-up, looking at Asia-Pac, maybe slightly different is, you know, I kinda look at Asia-Pac down year-over-year, I look at the partner revenue down year-over-year, and that to me indicates there might be some weakness within the IKEA partnership, just because I know it falls into both of those segments. Maybe just give us an update on where that partnership stands, how demand for those products is proceeding, especially in light of the December product launch. I know you came out with the floor lamp. Just kinda what's going on there. Yeah. That's it for me. Thanks. Yeah. Erik, it's Patrick. I'll take that. I just talked to our key person over at IKEA the other day. We did get launched with a new product, that's just starting in terms of where we are today. IKEA still is working on some in-store displays and work that they wanna do to try and drive more sales as we go through. It's not where they would've wanted it to be at this point or ourselves. I think it's a matter of, like, them getting refocused on it from an execution perspective in store as opposed to, you know, as opposed to anything else in the mix. We're expecting to see that through the course of fiscal 2023 and continue to work with them on future products. I do think it's been a little bit harder for IKEA coming out of the pandemic to get the footfall back and kinda drive what they would normally see in terms of their business overall, not just with the Sonos products. Got it. Maybe just again, just to double-click on that, no change to how you guys think about that channel as maybe, like, an entry-level channel that you can get younger demographics on and hope to upsell over time. That's still kind of a focus for you guys. Is that a fair statement to make? That is. That's exactly why we do it. Okay. Yeah. All right. Perfect. Thanks, guys. Thank you. Thanks, Erik. Our next question comes from Brent Thill from Jefferies. Please go ahead. Your line is open. Thanks. You know, really impressive top and bottom line beat, but you didn't really flow any of that beat through to the guidance for the full year. Maybe just drill in, you know, kind of what's in your thinking through that. Patrick, you mentioned the new category launch this year. Are you baking anything into the guide for that launch this year or is that still yet to come? I'll take the new category one. We bake everything in, Brent, in terms of what we're expecting for the year. You know, as we go into new categories, we go into them for ever, and we don't expect an explosive start as much as we do, you know, a prudent start and getting it right, it's not like that is the main driver. Our portfolio continues to be our main driver. I'd also just remind everybody, you know, we're committed to at least two new products every year. And we had clearly indicated that Sub Mini, even though that launched in Q1, wasn't counting against those two for this year. You know, that hopefully helps you understand kind of our thinking in the guidance. I would say, just kind of reiterating what Eddie was talking about, is, we're watching what everybody is saying as well. Our retailers have been. I think it's coming out of Q1 in our category gain, our share gains. They've been remarkably supportive, I would say, and are quite excited about the products we're planning on launching together. At the same time, we're just trying to be cautious, having come out, you know, last year of a strong Q1. You know, and making sure that we're being prudent given all the other signals we see, not in our own business, but really across the macroeconomic backdrop, which none of us are, you know, economists, but we're just trying to be thoughtful about the way the year plays out, and not get too far ahead of ourselves. We think it's the right thing to do. At this point, we're not spiking the football, as Eddie likes to say. At this point, we're making sure that we measure this, we get our launches off on the right foot, we continue to execute at retail as we have as we go through this year. Hopefully that gives a little bit more color on kind of the way we're thinking about the year. Yeah. Yeah. Just to jump in- I mean, just as a quick follow-up on that. Are you? No, go ahead. Yeah, no, just as a quick follow-up. Are you leaving a little more wiggle room in the guide given some of the macro concerns in terms of versus historic guide, or is this the kind of similar guidance cadence you've been giving us for years? The range is a little broader and for just that reason. It is a very uncertain time, and we're still very early in the year. The only other thing I would say about this is that we're on our internal plan much more closely, I think, than we are on the external guide. You know, part of the risk, of course, of only giving annual guidance is the shape of the year is a little bit harder to penetrate. We expected to do well being in stock and being able to promote. We did do well. We're very pleased about that. We think given where we are in the year and given the cloudy economic environment, the standing pat on the guidance is the right call. Great. Thank you. Thanks, Brent. As a reminder, if you would like to ask a question, please press star followed by the number 1 on your telephone keypad. Our next question comes from Tom Forte from D.A. Davidson. Please go ahead. Your line is open. Great, last two for me. Patrick, I want to re-ask a question I asked last quarter now that we've had more time. Would appreciate your current thoughts on competition scaling back their hardware efforts and the implications for Sonos. Yeah, it's a good time for that question, Tom Forte, because, you know, we've gone through fiscal Q1, which is the height of the consumer electronics and audio season. You know, we've seen some of the traditional players like go heavy discounting in kind of like a traditional playbook for CE that, you know, we've always fought against and don't really believe in. You know, the big tech players, we just haven't seen them active, and we haven't seen them, you know, doing anything interesting. It's what enabled us, I believe, with our portfolio, our brand strength, our flywheel, and then competitors kind of backing off other than, you know, the traditional legacy players, doing some heavy discounting. We were able to gain share, you know, and really execute on a plan we expected to. You know, we never wanna get overconfident in these things. You know, even seeing what's emerged, you know, recently from Apple, I could not be more excited or confident about the product roadmap we have and our ability to take more and more of that $96 billion. I just. You know, I'm. We're scouring, you know, the Earth as we go through, and we look at things that are happening. I just feel like there's others that are probably questioning their investments in this area, and we are investing in four new categories. We are going to raise the bar in our existing categories. I mean, we've got a lot going on. The team's doing a great job. The team that's executing in the field, is doing a great job and proved that in Q1. I really, really like where we are right now, and I'm not. You know, again, we'll focus on what we can control, but we're always paying attention to competition. It felt like in Q1, it was not much of a factor at all. Excellent. This is also another re-ask. I apologize. Eddie's talking about kind of the persistent strength of the U.S. dollar, and would appreciate your current thoughts on the potential for increasing price for markets outside the U.S., given the persistent strength in the U.S. dollar. We don't have anything to announce at this time. As you know if you follow it, the currency's bouncing all over the place these days. It's something we evaluate. From our perspective, we wanna make sure we're delivering value to the customer, and given the lifetime, you know, how long our products last, the quality they deliver, the experiences we're investing in, that we deliver through our software updates, you know, we think we deliver that value, and we do think we have pricing power at times. That doesn't mean you always wanna use it, because we wanna grow our household base and keep that flywheel spinning. It's always a balance, but we don't have anything to announce at this time. Great. Thanks again for taking my questions. Thanks, Tom. Our last question will come from John Babcock from Bank of America. Please go ahead, your line is open. All right, great. Thanks for letting me back in the queue. Overall, just one last question on guidance here. You know, if you can just clarify, did you say you expected revenues to be down 55%-60% from 1Q to 2Q? Assuming that is right, you know, is there anything in terms of inventories or timing differences that might be impacting that? It just seems like a relatively weak quarter, you know, given what we saw, you know, even back to 2021 and, you know, it's obviously would be the weakest since 2020. There's nothing in particular about it. Timing of new product initiatives is always, you know, a key factor. It's not, it's not a question of inventory overhang. We have thought all along, and we said this when we gave our annual guidance, last call, that this is a muted consumer environment. We haven't changed our expectation with respect to that, even as well as we did in the first quarter. We're not looking at Q2 as weak. We think if you trace back far enough, our first half, and that's really how we're gonna think about it, is gonna be right in line with our historic percentages. We think we have a great second half coming up. It's just the way the wave of the year is working out. Okay, thanks a lot. Thanks, John. We have no further questions. I would like to turn the call back over to Patrick Spence for closing remarks. Thank you, and thanks, everybody, for joining us today. Fiscal 2023 is off to a good start. A lot of uncertainty out there obviously, with the consumer, but at the same time, we're focusing on what we can control. We have an awesome product portfolio today. Our brand has never been stronger. We're taking market share, and we got some exciting products coming up. Thanks, everybody, and we will talk to you soon. Take care.