Thank you. I think we're live. Okay, hi, everyone. I'm Simeon Gutman, Morgan Stanley's Hard line, Broad line, and Food Retail analyst. It's my pleasure to welcome Wayfair to this conference, and to this event, represented by Niraj Shah, CEO, Co-Chairman, and Co-Founder, and Kate Gulliver, CFO and CAO. I'm gonna say a disclosure that I know partly by memory, a quick intro, and then we'll get into it. As with all of our sessions, if you have questions along the way, feel free, and we'll make sure there's time at the end. Disclosure is, for important disclosures, please see www.morganstanley.com/researchdisclosures. As for Wayfair, first, thank you for being here for the first time at this event. This is one of the most fascinating stories in our coverage of a business that is building a moat in terms of a brand, in terms of being dependable and reliable on home furnishings quickly and in quality. I think the pivots that we've seen over the last, call it two years, have been pretty impressive, and gross margin transformation showing the value of this business to the value chain or the supply chain, as well as the cost discipline, that we're re-engineering a much better, and sustainable EBITDA outcome. So with that, I'm gonna take a seat. Thanks. Thanks for being here. So if we... You weren't here last year, but if we were talking at the beginning of 2023, end of 2022, and you're looking at how the year played out, sort of the good, the bad, we don't have to go the ugly, but surprise to the good, surprise to the bad. So by the late summer of 2022, so we would've seen this at this point, we'd seen that normalcy had returned in terms of supply-demand, in terms of the inventory of goods. So selection was now available again, and inflation had really abated because the ocean freight was the primary driver of inflation in our world. That had come down, and it stayed down for long enough. Suppliers had been pulling it out of the pricing. So the fourth quarter of last year was kind of like the first kind of normal post-COVID quarter in our mind. Now, it felt very recessionary, and it's continued to feel recessionary, but to us, normal, normal decade has a couple recession years and eight normal years, but no COVID years, right? So we finally had normal. So I'd say that by the beginning of this year, we felt like, you know, we were in a recessionary environment. We thought that was gonna last a while. We thought supply chain, you know, we're gonna continue to drive that normalization of the pricing as it kind of beat out all the inflation. That played out through the first half of the year. It was pretty normal by the middle of this year. And then we also knew that we had definitely let our cost structure get bloated during, kind of even the pre-COVID years, but definitely during the COVID years, particularly 2021 into the first half of 2022. We had started an effort in the middle of 2022 to start ripping a lot of that cost out, and, you know, we're not done with that yet, but we've kind of moved along that agenda, which started a year and a half ago, and we knew that was a big topic for this year, driving out a lot of that cost, kind of all through the P&L. That's kind of been the story of this year. We've taken share on the back of the recipe work, and we've been taking share at a pretty fast rate. It has continued to feel very recessionary. Consumers are acting exactly as they do in a recession period in terms of, you know, leaning in on promotions, looking for that value story. We've continued to take a really critical eye at cost and keep ripping it out, and it's a little bit of an iterative process, but you can kind of see in our P&L, we've taken a lot out already. The outcome is the outcome. It feels recessionary. Do you care, or do you think it could be reversionary mixed in with recessionary, and, and does it even matter? What, what, how would you describe what reversionary means in your mind? Very theoretical, but it would be an overconsumption to trend line that occurred in a couple of years, and now we are correcting from that overconsumption. Long-dated product cycles, such that we don't have to replenish in the near anytime. So it takes some time to get back to the line. You know, look, you know, everyone can, you can read into it, I think, but I don't know that we see that, because to us, a recessionary, what you see is, you see a little bit of trading down, you see promotions taking a higher share of the total and the everyday being a lower share. And we saw that this quarter, you know, the C5 period, we saw a nice year-over-year growth there. You know, and so but, but, you know, kind of the pre-period, a little slower, people waiting for the promotion they knew was coming. Yeah. So I wouldn't say that they're not buying and that they don't have needs, interests, and desires, but it's the pattern of it is such that they're going to be a little more sitting on their hands. They're going to look for that value story. Yeah, I mean, that's my take. I think the one overhang could be, you know, moves in housing is slower, and so that is one of the things that bolster the category. So you say, well, hey, what's the time frame where the category is back to 4% growth? You know, that could take a little longer, right? So I think, you know, if people are saying, "Hey, you know, anyone who gets super bullish on interest rates diving quickly and demand taking off quickly," I think that you could, you wanna be careful there. What was my next question? I, I wanted to say, hey... Oh, and I'm sorry, Kate. No, no, no. It's okay. I was gonna- Yeah. The point I was gonna make on, you know, is it a reversionary, and so there is a, is there a pullback versus a recessionary one? You know, either way, we're gonna continue to navigate through it, right? So it doesn't change sort of the recipe, and how we think about it. But if you do think about the category pre-COVID, having grown at, like, 3%-4% a year, and you CAGR that from 2019, I think you'd actually see that the category is down further from what that CAGR would be, which would suggest that there has been a recessionary impact, not just a reversion to, you know, what should it have been if we hadn't had that explosive growth. and so I think that's a way to frame, you know, has this category been in a recession for the last 12-18 months? Probably, right? Beyond any normalization of pull forward and pull back. Yeah. Is that consistent if you look at units? You can't match up unit to unit. Yeah, that's total dollars. It's harder to say unit. Obviously, there's been some unit and AOV trade-off. We've talked a lot about that today with various folks, but you know that in terms of what's happened to us this year on that, so that's harder to say. Right. Okay, so, you know, potentially a macro story, and you mentioned it may take a little time. I guess the category, I was gonna say, hey, when does the category return to growth? Yeah. Dealing with all these factors, but what's your best guess? I mean, if my guess would be that I think the soonest is mid-next year, so the second half of next year, but it could, that could push it a quarter or two, right? And I think this does tie out then with the macro, you know. If you could tell me when the first rate cut is, it'll help me answer your question. Yeah. I think- Right You know, we're highly susceptible. It's a discretionary category that is susceptible to consumer sentiment, and so how does that, quickly does that turn? That depends on how quickly consumer sentiment turns, which probably depends on rates to a large extent. Yeah. Middle of June of next year is the Morgan Stanley forecast for the first rate cut. There you go. Yeah, so a lot of them are sort of then or even maybe a couple months before then. But a lot of the forecasts are in that stretch. That seems very plausible, 'cause I would say that we have a lot of demand data. We get it from our suppliers, we get credit card data from multiple sources. We see a lot of the inbound flows, and, you know, it just feels like the government data is a little slow to show how much things have slowed, and so I think that seems very reasonable. Yep. Inflections in top line. I feel like you've been prescriptive about this year in terms of top line growth. I forget if you got to top line growth sooner, I think, than you promised. And it makes sense, e-commerce growing faster, and you're taking... You seem to be taking share, especially relative to the retail sales data we look at, but you're not in that cohort. And then it's moderated a little bit in the fourth quarter, or at least quarter to date. Well, last we spoke, what are these pivots? Is that recessionary stuff rearing its head? No, I'd say we're continuing to take share at a really nice rate. Yeah. The difference is, as I mentioned, things returned to normal in the fourth quarter of last year. Yep. So it's our first comp over what would be a good period, you know, kind of a normal period. So I think you're gonna continue to see the kind of numbers develop, but, like, in terms of just if you just look at a year-over-year number, you know, it's... You know, I think what you're saying is that you believe it's kind of stepped down. That could, you know, my view is that a lot of the shape you're looking at is actually the shape from last year rather than the shape from this year. Fair enough. Yeah. So it's technically an unfair comparison, and the- We've been encouraging folks to look at things sequentially as well. Yeah. Right. Because if you look at it sequentially, the trend line is much cleaner- Right A nd then you can predict where you're going. If you want to, you can, of course, then turn it into year-over-year, and- Yeah T hat's fine to do, but in terms of... The problem with year-over-year is it works great if last year was a normal year, this year's a normal year. Right. What's happening? I don't know, back to baseline industry getting better a year ago, that is, clearance of excess left the system, the inventory situation favoring Wayfair as a brand and as a channel? It's not so much the inventory favoring us, it's just the widespread availability of inventory for every retailer was then back to good. Yep. The pricing, the inflation, ocean freight inflation, whether or not a supplier had cleared all their inventory, they put the price down because they wanted to be competitive with the folks who had cleared it, and they had now been pricing it on kind of what the normal new price will be. Yep. And so some folks had cleared it, and so they're pricing it and making their margin. Some folks hadn't cleared it, so they're pricing it. They're not making their margin yet, but as soon as they get fresh goods in, they will. Yep. You know, as you can see, ocean freight stayed very stable. It's at a rate very similar to pre-COVID. So there's sort of, like, not a lot of magic as to what the difference, kind of the COVID price- Right V ersus the now price is due to. With the kind of inventory available and that artificial kind of supply chain congestion driving odd outcomes, everyone's now competing kind of on an even playing field. Even though their back half of the year, some of the companies we follow, higher end, it seemed like sales have gone a little bit weaker than planned, such that inventory could be rebuilding a little bit marginally. Does that seem... Is that fair? I mean, I think if, I'm sure we could find some examples where that's happening. Yeah. I think by and large, inventories are pretty healthy. Okay. The difference between some of your premium brands, and non-premium brands, I guess Wayfair versus Perigold, if that's the right way to strike the example, can you juxtapose the trend lines for both? When you look at our total company results, they're obviously, to some degree, a proxy for Wayfair because it's so big and relative to our total. Yeah. Perigold is growing at a very nice rate right now, very fast rate, but, you know, it's just, it's smaller, and so it's in its earlier days. So part of that is I think we have a great proposition, but part of that is it can be, it's easier to grow at a much higher number off a smaller base. So, you know- Yeah T hat's gonna be a piece of it. It's taking share, but it's growing off a small base. I think the last time we talked about it was a few quarters ago, and there, the growth delta was quite a bit different than Wayfair, of course, but you have to put that in the context of the size of Perigold, which is much smaller. As prices normalize, as freight comes in, and maybe some relief, are you seeing incremental volume, or is this not the backdrop where there's elasticity in that regard? Well, I mean, certainly orders have been up while AOV has been down, right? So if that's what you're referring to, we've obviously, we've long spoken about, even before it started happening, that when AOV started to normalize and get back and to pull back out the inflation, that we would see an uptick in orders, and you saw that last quarter, and the quarter before. So that dynamic is continuing to hold. Kate, in the third quarter, was it like orders were up 16- Third- Revenue was up 5? 14%, and, and AOV was down eight, nine. Ryan's telling me nine. I said eight. But AOV was down, orders were up, so you saw, like, a pretty wide divergence in where that was, and US was up 5% on revenue. Yeah. The driver of the lower AOV? Is the inflation coming back out? Exactly. So there's three components to AOV, right? Right. It's unit price, it's mix, and it's items per order. What we're all really talking about when we've been talking about AOV is the unit price coming, and that's really that, as Niraj spoke about, that dynamic where the suppliers were actually already pricing landed goods at what they thought the new product was going to come in at once they took out, in particular, that container freight- Right Ramp up and then quick ramp back down. That's that inflation was spiking up. You saw our AOVs went up, you know, 19%-21% some quarters, and that's come back down starting in Q2 of 2023. We said this quarter would probably be the sort of trough of the year-over-year declines, but we've got to get back to, you know, Q2 of next year to really anniversary it. One more to hopefully put a bow on this. The backdrop being, call it, recessionary, the tempo or rate of change between, call it... I don't know, if everything is discretionary, but some of the more consumable items which, I don't know, I do textiles and- Yeah Items versus some of the bigger-ticket items or furniture. Has that gotten worse throughout the year, or has it been about the same for your business? I mean, we tend to think of our entire business as being heavily discretionary, and so- Yeah We haven't seen that, but I think we're selling grocery. I'm sure, you know, demand is steadier, right? But we sell discretionary. So I think the momentum we've built is off the fact that the reality is even if the market is down some amount, the market is still very large. So then the question is: How can you take share? And you've got, you know, it's a very fragmented market, a lot of competitors, and we've just focused on that core recipe, you know, great availability, great prices, great delivery, you know, great site experience on the site, on the app. You know, and that's driving the share gains. We're seeing nice momentum with our repeat customers. We're seeing a growth in the new customers, and there's still a lot of demand out there. So I think that's the thing to remember. Even though the total aggregate dollars in the market may be down, there's no reason why any given company can't decide to make sure they do a good job and relative to others, and take share. Right. Gonna pivot to international on sales before we go into margin. Just keep in mind, if people have questions, feel free to chime in. International, more of a generic question. It's performed less good than the U.S. business. Talk about your, your market exposure, you know, your, your cost, or your investment in those markets. Yeah, leave it at the top line and the trajectory. Are they behind the U.S.? Are they ahead of the U.S.? Well, I'll start, and then, Kate- Yeah M aybe you want to jump in. What I'd say is, you know, first, the international geographies we're in, Canada is more similar to the U.S., but the European geographies, U.K., Germany, the macro there is definitely more challenged than the U.S. And so, you know, we same kind of phenomena, you know, how are you doing on share? But then it's relative to what the macro is doing, and then that's gonna, you know, give you an outcome. Our biggest market by far is the U.S., so you can kind of see that in the segment, you know, because we disclose the U.S. versus international. International is much smaller than U.S., but I would say the macro's a challenge there. But you, what you've also seen is that we—similar to what we've been doing in the US business, in terms of being very, discerning about what costs have we let build up, what makes sense, what doesn't make sense, we've also, pared a lot of the losses there by being pretty aggressive with the cost structure, which we think is totally the right move. But then, in the near term, that could also impede some growth, you know, if you're comparing it to a year ago when you had some of those costs in. Yep. Maybe we'll... Oh, sure. No, I would only add that I think sometimes, you know, and you're probably gonna get to this as we move to margins, but, as folks think about the cost actions from last year, they... or this year, they were global in nature, right? So as Niraj mentioned, we paired some of the work in Europe with cost actions, but that was up and down the PNL. We saw that everywhere, so op cost savings, but also marketing spend. How do we think about marketing spend, particularly in those markets where it's already been challenged? So that's where you might have seen, you know, potentially some opportunity if you'd, you know, invested in that more heavily. And then obviously on the, you know, the comp expense, we've been focused on that market as well. So these were not just U.S.-specific. It was across the board. Right. To margin, to gross margin. I think this is where the PNL has profoundly changed pre-COVID to now. Can we talk about the buckets first, and then I'll try to probe on, you know, that maybe we're 25, call it, to 30. If I don't know, five points is the right range that you, you know, rule of thumb it, but the buckets to build up to the margin expansion. Yeah, so maybe if I can go back a little bit. In the pre-COVID time period, we talked about, you know, 25-35 walk on gross margin over time, and there were a few different levers within that. So one was, you know, sort of mix shift as our brands and products mixed. As you mix towards things like Perigold, that are higher end, but also even within the categories that we sell, as we mix towards our flagship brands, which maybe have a higher gross margin. So there's one component of that. There's a component that is logistics cost, and how do we continue to get operating efficiency around that piece of the business, and that's obviously been a lot of what you've seen this year, so I'll touch on that in a minute. And there's a component around supplier advertising, and other ancillary services. The one that we've been talking about more recently is supplier advertising and that. And then there's obviously, as you know, we get scale, we continue to get improvement in wholesale economics with our suppliers, right? And so those are sort of key levers in that original 25-35, you know, walk. You obviously saw a step-up, you know, right at the beginning, almost, of the COVID period, so pre-COVID in 2020, as the margin improved to that sort of 27-ish period from the 25. That's as we started to get smarter, and more efficient and thoughtful on some of the pricing models, and how we thought about similar in substitution and demand retention there. And then what you've seen throughout this year has been that logistics piece, that ops cost piece, where we did announce in January that more than $500 million of cost takeout that we were going to be achieving throughout this year. And you know, really operational execution, and improvements on a number of areas in the supply chain that got even sloppier during COVID than I think anyone would have wanted them to. But when the business doubles overnight, you know, that's what happens. And that's driven a lot of the growth this year. We did say we would invest some of that back into the customer experience, and indeed, we actually did do that. You know, particularly in Q3, we mentioned that on the call. We said we still came in a little bit above. Now's where you'll probably say, "But you still beat guidance." We came in a little bit above guidance because of that mix benefit, actually, that we talked about. We achieved a little bit more mix benefit in the third quarter than we expected. As we think about going from, you know, we obviously guided 30%-31% for this quarter. Typically, by the way, the fourth quarter in a normalized period is slightly lower gross margin because of the mix of products, and in that quarter, more giftable. It's also typically a slightly lower AOV sequentially, again, because of the mix of products within that quarter. So but let's just take that guide range of 30%-31%. As we think about getting from there to the mid-thirties, we particularly called out supplier ads as having the largest single impact on that, and that being about 2-3 points, and then logistics costs, and mix, each about 1-2 points. That's helpful. Supplier ad, that is, where is that today in the P&L? Meaning, what kind of contribution? Very small. The last thing that we said was at our Investor Day, it was about 1%, right? So it's a small part of the business today. We think that there's significant upside and opportunity there. A lot of the work on that has been around opening up supply. So how do you expand supply without degrading the customer experience? Particularly in categories like ours, that are differentiated, so unbranded, so it's not, you know, going to, you know, another marketplace and seeing a bunch of the same products, and so a bunch of marketplace guys jumping in and trying to jockey for the first position. You know, we still want to make sure that we serve up to you the end table that you want, and so how do we not, you know, degrade that experience? So one, how do we test and open up supply? And then two, how's the technology performing? Is it easy for a supplier to manage it, to bid in the right way, and are they seeing the ROIs that they want to see on that? And as that's gotten tighter, and we've, you know, invested there, we see real, you know, opportunity there that's somewhat irrespective of the top-line growth, right? You know, top line certainly helps accelerate that, but as you open up supply, we open up opportunity to sell in a way that even on the same top line, we didn't have before. The move from 25 to 30, it shows that you're important to the suppliers, you're important to the customer. Is the walk that you originally built to move from 25 to 35, for example, did it play out? Are these the similar buckets? Are they happening in a different way? I don't know if it, if it matters, but also thinking about the speed at which you can go from then 30 to 35. I can start, but you can feel free to jump in or if you have a thought. Well, it's very similar buckets, right? We talked about logistics, we talked about our private brands, we talked about supplier services, we talked about, you know, suppliers optimizing for profit dollars. These are the same things that, you know, we're pointing to. What I would say, though, is, like, to your point, I think that is the key point, is that there's still a lot of opportunity ahead of us. Like, you know, Kate, for example, just mentioned, you know, when we had the Investor Day in August, we talked about supplier advertising. We said it's 1%, and we talked about the potential for that to get to be a few percent. But that's just one of many things. There's still a lot of logistics efficiency opportunity, and so all these things would add up to a bridge that could get you, you know, quite, quite far, you know, above 35. But of course, some things play out more slowly- Yeah And then you may want to reinvest into the customer experience, which we've found so far a good balance of doing, because then that's driven up our Net Promoter Score, that drives up the repeat. You then monetize that, you know, increased volume through the retail revenue you're getting. So it's a balance, but I think that it is playing out, as we've been discussing. Yeah, the levers are all the same. I think the only things that move around are the timing of it. So obviously, this year we turbocharged the logistics savings, but we think there's ongoing logistics savings opportunities, right? Maybe supplier advertising, you know, we had to, you know, spend more time on the opening up the supply than we would have initially anticipated, and now that is an opportunity for growth, right? So the timing moves around as you dig into these things, but the levers are the same as they have been, and the same that we spoke about in, you know, 2017, 2018. I think it could be just my own misperception and just surprise that a lot of these benefits accrued right when the business... Not right, some of it was pre-COVID, as the business was contracting, post some of the COVID gains- Mm-hmm That really show that, you know, the value of the brand that's been built to be able to, you know, retain some of these outside of the cost takeout from the supply chain from this year. Can we talk about the SG&A cost reduction plans? Dimensionalize them, please, and then talk about the path to getting there, and I think even beyond, because we've talked about beyond. Yeah. So I can start. We, you know, in January, we referred to about $750 million in total SG&A, or total labor cost takeout. Let me actually frame it that way, total comp cost. And so there, we're really focused on not just the expense that runs through that SG&A line, but also the stock-based compensation, which is, you know, meaningful and real expense. And that didn't just hit on SG&A, and also hits a little bit farther up on customer service, a few items that we pulled. So that was the focus that we said we would take out, you know, combining those risks and what we would see really in 2023 for that. What we've also said, even following that, is that we continue to see opportunity in labor efficiency. That meant that, you know, obviously, at the beginning of the year, we guided to that SG&A line actually coming in quarter-over-quarter. That hasn't been exactly linear, but you've seen us deliver that. As Niraj, I think, framed up at the beginning, this has been an iterative process. You know, we've done two large, you know, actions now, and then we've gone, you know, you've seen ongoing sequential improvement. We continue to see opportunity, and we want to be very thoughtful and mindful of labor cost in particular, and, not just how we think about that in, you know, a sort of challenging macro, potentially in 2024, but really, what is the right scale for this business, not just today, but for the future growth, knowing that we've already embedded a lot of the cost of the future growth in the P&L structure as it is. And so how do we maintain the efficiency of that? How do we think about spans and layers, seniority, that kind of thing? The timeframe in which to achieve mid-single-digit EBIT margin, the macro isn't there. Is that achievable? Does it make sense to push the business there or invest back into the value proposition? Well, I think we're balancing the two, but like right now, from where we are, like even if next year was flat to this year, you know, we'd have EBITDA of you know over $450 million. So you know the DNA you know we're our CapEx right now is lower than it was in the past. So you know depending on what you know the period is that you're amortizing, it may take a while for that to come down, but that would just on a... If you're looking at you know EBITDA less CapEx, that would have you very clearly past that. Really, the number we're looking at is like we want EBITDA less CapEx, less stock-based comp. We, you know, we want that number to be positive and then grow at a nice rate. When we turn it back into EBITDA, we talk about getting to 10%+ EBITDA and then, and how that can get, you know, meaningfully higher from there. So we're focused on driving that fairly quickly, and obviously, the macro plays a role because obviously, with revenue growth, it's a lot easier for that to grow much faster, but there's a lot underway that is gonna drive these outcomes, you know, irrespective. Yeah, and if I could touch on that for a minute. You know, obviously, on the last call, we provided a framework for how to think about how all the cost actions in 2023 would, you know, flow through in 2024 when you got the full year of that. And then we also said that we would continue to be very cost disciplined, and that's where you just pencil out flat revenue growth, and take into account what we talked about on that call and ongoing cost discipline. That's where you get to that, you know, north of $450 million. But we want to continue to be mindful, as Niraj said, not just of driving. We often refer to EBITDA a lot because that's what everyone's focused on, is adjusted EBITDA. We're really looking at the adjusted EBITDA, less the SBC, less the CapEx, or in other similar language, you know, getting to net income positive, right? We're very focused on that and driving towards that. Some of the big public companies, they are holding back on promotion, basically sacrificing sales from margin. How do you think about market share, ability to tolerate, you know, market share loss? It doesn't seem to be a challenge for this business, especially in this backdrop. But how do you navigate that, and do you prioritize one over the other? Well, we've been gaining market share without sacrificing gross margin. So I think the way you posit it is, you know, you either would lose market share, and protect gross margin, or you would, you know, lose gross margin and gain market share. But I think the actual results we've had would show you that we're both protecting gross margin and gaining market share. So we, we believe that there's a way to balance these two things. That's what we're doing, and we're getting really good results, where we're, we're seeing the earnings move the way we want, and we're seeing, you know, the revenue market share move the way we want. And so we... That, that is the, the focus we have, and I think that, you know, again, you know, customers are discerning. It's a great opportunity to take market share in an environment like this because they're curious what's out there. They wanna, they wanna get a good deal, they want a great offering, they wanna find that right item. You know, they're not, you know, they're, they're not just kind of spending money left and right. And so if you have that offering, and you're getting in front of them, and they see something interesting they like, they'll buy that. We don't believe that the right move would be for us to lower our margin in order to try to buy that revenue. But we think impressing them with the quality of the offering, and, and that means everything. That is, what is the product? What is the price? What is the delivery? What is the customer service? What... You know, the whole experience, you know, the product experience of finding the item, you know, is the way to do it, and then that's durable. That lets you compound it over time. So then, in other words, as the market turns up, you're gonna see, you know... Well, first, once we anniversary the deflation, you know, order growth becomes revenue growth. Then, as the market turns up, you know, you're taking share over some baseline. If the baseline looks like this, and you're taking share over it, your revenue number is going to look a lot worse than if the baseline looks like that, right? So these are the things that will play out, and that's sort of the history of how, you know, starting in 2002, we would add 0 market share. Pre-COVID, we were at $9 billion in revenue. Today, we're at, you know, around about $12 billion in revenue, but again, doing it while growing profitability and taking market share. This balance, investing in the customer, let's say, total experience versus investing in advertising, for which you've also struck a nice balance. Which one, which one do you push harder on? Where do you get a, I guess, a better return? I think the more durable one you've answered in terms of customer experience, but how do you, how do you think about them? Well, I mean, the way to think about the advertising expense is, you know, you definitely need to be present. Now, if we are a brick-and-mortar retailer, present means have physical stores in locations that people are going, right? If you're online, it means get traffic, and obviously, the best traffic are the loyal customers who are just typing in your name and coming to you or opening up your app. But the truth is, there's a lot more customers out there. They might be early in the journey of getting to know us. They, you know, may not yet be that truly loyal customer. So advertising plays a role there, and as you move them up the loyalty ladder, you find that you don't need to really spend that money on advertising for that cohort of customers. So we do it very, you know-... You know, very mathematically, basically, right? So we're not gonna chase kind of that low-calorie revenue, but at the same time, we understand that being present is a piece of what you do to get the customers in. But you definitely don't want. Advertising cannot make up for not having a good value proposition. So you know, you're not gonna raise price to drive marketing spend, because that's just not gonna get you a great outcome. Yeah. Connected to advertising, repeat versus new customers. Throughout 2023, repeat has been growing sequentially. New has been... I'm sorry, yeah, new has been relatively steady. Can you talk about what's driving that? And if there is, the value proposition, anything in particular that you can point to? Just one comment on the repeat metric, because I, unfortunately, was the person that developed that metric 10 years ago when we went public. It's all-time repeat, so that number should generally be going up. So we look at internally. So it's if you've ever purchased and come back and purchased, even if you haven't been active in a while, you're gonna show up as a repeat customer in that metric. Internally, we look at, you know, a number of different metrics on repeat, including repeat within a certain time period, and, you know, how frequently somebody is repeating. So are you a sort of a 1-time repeater, or are you a 4-time repeater? And trying to understand different engagement levels. We also... You know, in the past, we've certainly spoken about our cohorts of customers, and we look to make sure that those, you know, cohort curves look pretty consistent over time. So we're looking at a lot of different metrics there. I think what you're seeing, though, is it goes back to the basics of that recipe being strong and price availability, and speed being where we want it to be, and seeing the engagement of the customer from that perspective. But that metric itself, it probably gets less and less relevant as we've, you know, tapped more and more of the market. Back to overall market growth. You talked about average industry or annual growth of around 4%. What does e-commerce grow relative to that? Just thinking big picture, and then market share, or a prescriptive way to think about how fast Wayfair should grow within that context. Well, I think as we got to COVID, you know, the market for a while had been growing at 4%, and e-commerce had grown at 12%, or something like that. So that's kind of what it had been. The COVID period, you know, obviously very wonky numbers. You know, I think right now we have a typical recession environment, where you're seeing a negative, you know, negative numbers, but you're seeing e-commerce perform better than offline, so that pattern has resumed. I would think that, you know, this market, you know, you roll forward little ways to kind of post the recession, I would—I think you would expect, like, 4% overall growth, and you'd expect e-commerce to be in the double digits. Mm-hmm. The e-commerce trend line is actually... You know, it spiked and went up and around, but if you look at if you were to straight-line penetration to 2019 to 2023, it would've stayed, you know, we've sort of evened out from those spiky periods. Right. So the COVID boom went way up off the trend line- And then it pulled back. It's reverted almost entirely back to the trend line. Back to the trend line. Yeah. Yeah. There's not been a, you know, a structural change. Right. I'm going to ask about new items. Anybody have any questions? So part of, I guess, the past year, we'd spend time on conference calls talking about new product additions, and that helped expand the TAM and probably generated new growth. Can you talk about, is it part of the market, you're big enough now, where you're an amalgamation, you're selling everything, or are there certain product categories, I don't know if it's white goods, that are growing faster than the house? So across our, you know, across our category, we're seeing kind of good momentum broadly. So it's like our current results are not bolstered by any one or two areas making up for the rest or anything like that. In terms of adding product selection, I'd say we're always open to adding product selection, as long as we think it's additive for the customer. So there, there's, like, a ton of products out there, and we have certain competitor sites that are flooded with products where, you know, it's a lot of the same product over and over again. Some of the quality is not, you know, necessarily described accurately. It makes the shopping experience for the customer very difficult, with a lot of customer disappointment after getting items. So we don't quite take a view as like, "Hey, anyone can post anything super easily, anytime." We don't. We have a tighter view than that because we want the customer experience to be a good one. But at the same time, we don't say, "No, no one can post anything new." No, absolutely, we're open to getting new suppliers. We just wanna make sure the quality is gonna be additive. Okay. Maybe we'll close, if there are no questions, on the balance sheet, the convert. You know, you're controlling your own destiny more by generating EBITDA in the U.S. So can you talk, just frame what the balance sheet looks like, how you think about, I guess, some of the changes over the next few years? Yeah. I mean, I think you actually hit on the biggest thing, which is we are increasingly trying to, of course, drive adjusted EBITDA, but ultimately free cash flow, right? So that we can be in control of what our options are relative to the upcoming maturities and making sure that we're expanding the option set. So as we think about, you know, there's the 2024 maturity, that's just $117 million. We've been very clear we will pay that with cash. Then you get to the 2025 maturity of $750 million remaining on that 2025. It's a late 2025. And the important thing that we're focused on there is optionality. To your point, we gotta get EBITDA and free cash flow, and keep driving that to maintain the optionality, but we wanna make sure that we're looking at a range of options from. You know, certainly we've obviously become, you know, successful tappers of the convert market, but also, what does high yield look like for a player like us, and what could, how could that pan out? And then ultimately, as we continue to drive EBITDA and free cash flow, we generate more free cash flow, and so that becomes part of the option set on how you manage the entirety of the $750 million. Beyond that, you know, the 2026 is at a point where, you know, TBD on what that looks like and how that converts, but the more optionality we create for ourselves, I think the better position we put ourselves in, and so that's what we're focused on. And I think, you know, obviously there's a lot of, you know, This takes you a little off the balance sheet topic, but, you know, a lot of talk about EBITDA. I would say the main financial metric you're going to see us working to optimize is free cash flow per share. You're going to see us keep working on that. And yes, we can report the EBITDA number. We can talk about, you know, the EBITDA less, you know, current CapEx, less current target stock-based comp. But, you know, all of this factors into this kind of concept of free cash flow per share. So really, you know, the problem with the converts are they can be quite dilutive, right? Right. Your share, you know, it can look inexpensive if you just look at the debt piece of it, but it can be a lot of share count. I think if you think about free cash flow per share, that'll be how you see us make decisions. I think a number of folks have asked us, "Hey, you know, the converts are at a really nice and low, attractive rate historically. Even today, obviously, they still are relatively low compared to high yield, and so isn't that appealing?" But when we think about the dilution impact there, that's obviously in our cost of equity, that's very costly to us, right? And so it is very important for us to look at the full cost when we think about these options. Great. Oh, please, one question, if we have the mic on her, please. Hey, thanks. Can I ask, if I were to try to take the long-term growth algo that you guys laid out at the investor day and try to... You guys mapped it as kind of industry. The way you guys mapped it compared to maybe the way some of the KPIs that you guys report from a, reporting perspective. If I wanted to map it to active customers' frequency AOV to get to that low double digit kind of rate that you guys talked about, or a double digit rate, is the right way to think about it, kind of high single digit active customers, low double digit or low single digit frequency, low single digit AOV as a decent framing? Or what would be the right way that you guys think about that? Yeah, I can take a stab. So, I think the right way in terms of those metrics would be on AOV, we've been pretty transparent that in a typical time period, AOV should not be a huge driver of the top line. Right now, again, you'll see the general industry, maybe like for like items, grow roughly 2%. And then obviously, we have some mix benefit as we mix in things like Perigold and the SRBs that come in at a higher, but that's not going to be a huge driver. So therefore, the growth is really coming from active customers growing, to your point, and also the frequency of those customers. We've not disaggregated that, but that's going to be the bulk of that growth. And we've spoken in the past about wanting to take more of a share of wallet of the customers that we have. They're generally purchasing with us two times a year. We know there are markets, some are six to eight, so taking more of that share of wallet, and then, of course, growing the annual active customer number. One quick one, if you don't mind. I, I think you said Cyber Five up nicely year-over-year. Just any other texture you'd add to that comment and how you're thinking about the holiday? Obviously, people, you know, don't give furniture necessarily as gifts and how you think about discounting this year versus prior years. So what... I'll, I'll make a couple of comments, and Kate can jump in. So Cyber Five, yeah, the revenue is positive year-over-year. The point I was trying to make there is that the pattern we've seen for the whole quarter is the same pattern we've been seeing this year, which is promotions are punching bigger and non-promotions are a little more of a lull, and that is a common pattern we've seen in other recessionary periods. That's also been true this quarter. So that was kind of like the, the main point I was trying to make about that. A ll the data we have has us kind of cleanly continuing to take share. To your point about furniture not being giftable, what I would say is, you know, that's where when you look at our fourth quarter pattern, you know, as you get into, like, the week or two right before Christmas, you know, those are not necessarily the big weeks for us. Because, again, a lot of what people would buy from us, they buy kind of earlier, you know, in the quarter because maybe they're planning on hosting or they want to spruce up their space or they're buying something for themselves, or, you know, these are not your last-minute purchases, typically. But that said, there's, you know, the pattern we're seeing in the cadence of how revenue comes in over the quarter, it's not particularly different than what we would expect. It is exactly as the recessionary scenario would expect, and it's not, the recessionary versus non-recessionary is not super different. It's just a shift a little more into the promotions out of the non. But, but to your point on the mix of product, I mean, we said, and I think I said it at the beginning, in a normalized period, the Q4 quarter is a lower AOV quarter, which suggests you're mixing more towards, you know, less of the, maybe the really big items and more towards some of the smaller. And it's a, you know, a tighter gross margin quarter, too. So there is a seasonal impact in the mix, certainly. With that, we are definitely out of time. Thank you. Thanks, everybody. Appreciate it. Congratulations on your pivot in 2023. Good luck in 2024. Thank you. I'm cut off. Yeah-