So we're gonna get started. Good morning. My name is Chris Horvers. I'm the Broadlines and Hardlines retail analyst here at JP Morgan. Welcome to JP Morgan's 50th annual TMC conference. It's my great pleasure to introduce to my right, Co-Chairman, CEO, and Co-Founder, Niraj Shah of Wayfair, and to his right, CFO and CAO, Kate Gulliver. Morning. So we, this is a 35-minute session. There'll be time for audience questions. So please, if you have any questions, I'll open it up in a bit, and happy to answer any of your questions. So maybe, kick it off, starting at a very high level. Over the past two years, there's been a significant amount of change at Wayfair. You know, bulls call it healthy maturation, cynics sort of say, like, you had to, like every other internet company coming out of COVID. I'd love to set the table here for investors and ask you to speak about what drove that significant amount of change, and what goals do you have going forward? Yeah, sure. Well, first, Chris, thanks, thanks for having us here. We're really happy to be here, and thanks, everyone, thanks, everyone, for coming. And I think we still have a few seats scattered about if anyone wants a seat who's in the back. But yeah, thanks for your question. So I guess the way to think about it is, right before COVID, we had come to the conclusion that we thought we had overhired and that our team had gotten too large, and we had lost some efficiency. So we actually did a layoff of about 500 folks in February of 2020, right before COVID. And we had a plan and a trajectory to get us back to being, you know, basically very focused, lean, execution-oriented, but yet well-resourced against our key initiatives. And that's sort of the way we had grown the business. 'Cause, you know, just in the quick history is that we bootstrapped the business for the first 10 years, so that was sort of we grew with no outside capital for 10 years. We got it to $500 million in sales before we first took in outside capital, just to give some context. But then what happened is with the onset of COVID, we had a huge boom in demand. That was followed then by a period where we were trying to hire to keep up to the demand, but that was the Great Resignation period, if you sort of remember back to 2020. We entered 2021 with the old plan not only out the window but with a series of events that had happened that had kinda, in hindsight, you know, being 20/20, thrown us off balance. What had happened is, by summer of 2022, what had become clear to us, 'cause by then, kind of the COVID boom had turned into the COVID bust, and, you know, today, we're about $12 billion odd in revenue. Pre-COVID, we were $9 billion, but that boom went up, and then it settled down in the $12 billion and change period, and that's kinda like where we've been for a little while. What we had realized is, hey, so our cost structure had not only not been corrected and execution not been corrected as we initially planned, but it had gotten worse. Like, we'd not only hired more during COVID, that had created a problem, but frankly, just our levels and spans had gotten out of whack. You know, it was hard to ramp up more junior folks during COVID, working remotely. We'd on average hired more senior folks. And so the org model had gotten kinda messed up a few ways. So what we did, starting in the summer of 2022, is we decided to get very aggressive about sort of getting back to the kind of lean, focused, execution-oriented, yet very ambitious, driven, kind of culture company that we have always been. And that's kind of what we did over 18 months. Very quickly, within six months, by the end of 2022, we were back to taking market share at a fast pace, outgrowing the category by a significant margin, and that's continued for six quarters now. So I think now what folks notice is in a year, they're like: Oh, wow, you know, tremendous amount has changed, and jeez, we didn't really know if that was possible, and why'd it change, and how was that possible, and how did it end up in that situation? And it's that confluence of events that I described that sort of... or the kind of framework. But, you know, where we are now is very much the same culture. That's how we built it over the last 20 years. Excellent. So maybe talk about it. This is such a unique economic cycle. You had the COVID pull forward, and then you had the, you know, past two years, the normalization of, of wallet. You had inflation, then we've had deflation, and, and we have a consumer that is just a, it's a little... It's not great, but it's not bad. So there's a lot of different vectors that are working around you, and then you have the e-commerce penetration vector. So can you, can you talk about all that? How do you see, where do you see the category growing? Where do you see your growth relative to the category? Yeah. So I'll share some thoughts, then, Kate, I don't know, maybe share some thoughts you have, too. What I will say is our category has definitely been in a, you know, full-blown traditional recession for 2 years now. And while there was a COVID pull forward, I think, we've not only gone through that demand level, but then some. If you look at demand today, it's below 2019 levels in nominal terms, and if you look at it in real terms, they'll be, you know, meaningfully below 2019 levels. Why did that happen? Well, the initial piece, that pull forward, initial sort of recession, sort of onset, would've been sort of the boom-bust cycle. Goods had a boom, then it had a bust as services, particularly leisure, entertainment, travel, you know, all of that, had a huge boom, which has continued. But the bust in this category sort of persisted because there is some correlation to housing. And if you just think about interest rates and how that's hit the housing market, anything related to housing, it's sort of really stifled sort of the general flow of people moving to new houses, selling their house, investing in their house, thinking about doing something with their house. Their neighbor moves, and then they, the new neighbor does something, they think about maybe doing something with their own yard or whatever. And so that's kind of the current environment, and then obviously, the overall economy slowing. Traditionally, travel and furniture and big discretionary goods are the categories that first get hit.... you know, we're obviously, have a significant, penetration there. So the category, you know, I know you look a lot at the, the U.S. government data. If you look at the government data, you see the category continuing to be down, whether it's negative, mid-single digits, high single digits. You see it down in that kind of range persistently for that period. and, you know, I think that's the reality. We've been significantly outpacing that. We've been outpacing that by taking market share. The reason we take market share is the same reason that we went from being, you know, zero in revenue, you know, 20-odd years ago to where we are today, which is just the incredible selection, the great delivery experiences, the high-quality merchandising, and, you know, the good in-stock availability, and sort of the fact that we're built for home. And these big, bulky, fragile items, these items that require consideration, these items that are very decorative and style-oriented in nature, where you want to find the perfect item, it's just a different shopping experience, and that's what we're tailor-built for. So that's, that's why we've had sort of a different outcome than the category, but the category has been kind of negative. And now what you see folks talking about is how these are cycles, and these cycles end. I think, you know, whether you're talking about the building materials and the renovation side of, like, a home improvement retailer, or whether you're talking about the furnishing side, you know, which is, you know, a different cohort of companies, we kind of straddle the two. You see the same sentiment that, you know, we're probably near the end of that negative cycle. Yeah, I mean, I think you touched on all of it. I guess just a few pieces to add. You know, we've talked about the category being down now for 10 quarters, and from the data that we look at, so credit card data from a variety of sources, you know, double-digit, high single-digit, double-digit decline for seven quarters, that's a significant contraction in the category. You mentioned, Chris, e-commerce penetration as part of that, and, you know, certainly, e-commerce penetration ramped in the beginning part of COVID and then pulled back. We do think e-com penetration has gone back to its normalized curve. So if you look at sort of 2019 and were to draw it out, that would be fairly standard, and it's really the category overall that has, has fallen back, and our ability to gain share has kept us, you know, significantly outperforming the category. If you look last quarter, we were down a little bit, the category down double digits. That's that price availability, speed combo allowing us to gain share. And so maybe, maybe talk about there, there's different sort of y ou have some retailers seeing green shoots in some of the short cycle home furnishings category. Got Home Depot, on the other hand, talking about, you know, anything that's financed is just dead right now because given where rates are. So can you elaborate a little bit more about where like, how, how close do you think we are to the bottom, and what's the complexion that you see within your business across different categories? Yeah. So I think there's sort of, kind of two separate ways to talk about the bottom. The one is, like, when do you see the market no longer falling, just being firmer? And then the second is, when do you see an upturn? And they're really different questions if you think about it, because the context right now is you've had, like, a significant negative number on top of a significant negative number. So when I say, you know, there's a lot of sentiment that that's ending, what I think people really believe is ending is a significant negative number on top of a significant negative number, and people really believe it's firming up. Now, how it turns out, I think there's a lot of data saying there's a lot of pent-up enthusiasm for the category, but I do think some of that gets unlocked as interest rates crest and the housing market starts moving forward, and then housing is more top of mind for people. And I think, you know, there's a lot of different macro factors that may be weighing on folks that would cause consumer sentiment to get better over time. I think the stronger upturn, I think, could be a little bit ways away. I think the kind of firming up that we're near the bottom, I think that's what we're very close to. I think that's the way we would think about it. Got it. And then, you know, there's a certain internet retailer that starts with an A. We won't say the full name here, but, you know, it's always been the, the bear case. Like, how can Wayfair grow sales and grow profitably in the shade of this big tree? And it's, you know, it's a sort of common, sort of default bear case on, on your business and on your stock. What don't people understand about your business in terms of how you're differentiated and, and, and that drives your ability to grow in the shade of this big tree? Yeah. So I think, I think the key thing to keep in mind is that not all physical goods are identical to each other in terms of how consumers pick what, what they want nor how they shop. Most categories of physical goods are either pure commodity items, where the brand doesn't matter, and they're just looking to buy, you know, good price value, easy combination. So think about buying a 3-pack of iPhone cables there. You don't particularly care about the brand, you just care about the review rating, the price, the length, and you buy it, and it's a relatively low consideration purchase because, you know, you don't necessarily expect those three cables to last a very long time. You know, you're paying, you know, $10-$12 for this pack and, you know, as they break, it's fine. You know, you probably don't remember the name of the last brand of cables you bought, in any case. The other side is where they're branded goods, and there's a few brands. They're selling largely similar items, but think paper towels, you know, Bounty, Brawny, you know, Seventh Generation. You know, they're not super different. And so there's these generalist platforms that are great for all these use cases, you know, and whether it's Amazon or Walmart or Target, you know, you can go to any of them. You'll have a selection of goods. They'll be quickly delivered. They just have the same items as each other, and you have your loyalty to whichever one for whatever reasons, and you go to whichever one for whatever reasons. It's why they all get into grocery. What's interesting is certain categories are just very different. One is, just think about if you're shopping for fashion, and I'm not talking about commodity fashion, where it's like, you know, white tube socks for your son. You know, I'm talking about, you know, you want to pick out a shirt for yourself, you know, or a sports jacket.... you don't necessarily think of the same platforms I just talked about, which are sort of ubiquitous in their selection, as a place where you're gonna be able to navigate and find what you want. And there's very few categories like that. Fashion is a big one, and home is the other big one. Because if you're thinking about buying a bed, or an outdoor patio set, or a rug, or a table lamp, or a swing set for the backyard, you're not looking to just kind of pick off the seven, eight, 10 items that are on the top of page one. You have some desires around the quality you wanna get, the features you wanna get. You wanna get educated in the process. There could be a significant aesthetic element to what you're buying. You wanna know the durability over a longer period of time will be good. You wanna know that the price value hits the right spot. These are hard things to do on these generalist platforms. They're not optimized for that. They're optimized for what is a very large market, but of items that fit the characteristics I just described. And that's even before you then get into the logistics of delivering these items, setting them up in people's homes, handling any questions they have, either pre, pre the purchase or post the purchase. And so there's a lot of aspects that make this category difficult. It's why basically, the three large physical goods categories that are not set up well on the generalist platforms are fashion, home, and automobiles. And the reason is, they're very good-sized categories, which is why they can have their own players, who then have specialized logistics and do a very good job with them. But it's also, you know, those are only three specific categories, and these platforms, it behooves them to worry about all the rest of the market, which is a very big piece of the market. That's why they then worry about things like grocery or building materials as ways to drive tonnage. So it's just a nuanced aspect of the category that's very obvious if you think about it from a consumer lens and the types of goods. You know, but in a spreadsheet, if you think all goods are the same, then, you know, it wouldn't, it wouldn't jump off. Yeah. Going back to the category and focusing a little bit on the near term, it sounds like your description of where we are, it's like a less worsening. Like, sort of we were running categories down low double digits, now we're running down mid to high single digits and, you know, you're gonna come through the bottom, and then at some point, we'll have the release in the right rate environment. On the call a few weeks ago, you talked about, you know, trends flattish ex Way Day, and you guided the flat to slightly positive sales growth for the quarter. So can a two-part question. One is, how within that guidance, how are you thinking about U.S. versus the international business? Right. And can you share any observations in terms of, perhaps how Way Day played out relative to your expectations? Let me say one thing, then I'm gonna let Kate answer the question, the two-part question. The one thing I just mentioned, one thing, just also, when you think about the comparisons, what you're referring to when you talk about the category being down double digits, is now down mid to high single digits, I believe is exactly what you just said. One thing to keep in context, you're comparing to the year before, and one thing we'll comment on is the shape of the curve last year, is that the market significantly weakened both in the summer and again in the early fall. So this year, as long as the market does not significantly weaken as those points in time, the comparisons get a lot easier. And so the year-over-year number can flatten out without the market really getting better, simply because the problem with year-over-year comparisons, you typically assume last year was a normal year. But in this case, last year had a lot of weakening in the back half. And so, you know, could this year weaken in the back half? Sure, anything's possible, but we're at quite a low point. So unless that happens again, you're gonna just see that year-over-year number kind of compress. But Kate, do you wanna field the guide- Yeah. So first of all, sort of, U.S. versus international. As a reminder, the international segment is Canada, the U.K., Germany, a very small business in Ireland. And we've spoken on prior calls about the macro in those markets being more under pressure than the U.S. market, and you've seen some of that in, you know, how those comps have played out in terms of what they're reported. The U.S. is, you just look at the numbers, you know, the vast majority of the business. So generally, you know, the direction of the US informs what the global comp is. If you sort of think about, you know, how we thought about the guidance going into this quarter, all I would say is, you know, Way Day was a little bit later this year than it typically is, so we guided ahead of Way Day. We've certainly seen, you know, promotions outperforming every day. That's something that we've been speaking about for some time, and that makes the promotional cadence, you know, generally quite important. And, you know, it sort of was in our minds as we thought about the, flattish, performance quarter to date. Got it. Understood. Before I pivot to some margin questions, any audience questions? Check the panel. Question. Go ahead. Your thoughts on, like, immersive shopping and really using that to educate your customers on, educate your customers on products, so on and so forth? Yeah. So the question was that, you know, what do w hen we think about immersive shopping and, kind of ways to educate our customers, you know, as they're shopping. So I think in reference to kind of how I was describing the category, a lot of the goods we sell, you know, there's some that are simple, like, accent pillows, but there's quite a few categories which are complicated categories, and if you haven't purchased even something as simple as a, you know, a queen-size bed in a long time, you really don't understand what's out there, the materials, the types of items, and then there's a lot of categories that are even far more complicated than that. What we found, the way, you know, the way customers learn about items is, there's quite a few different ways they learn about items, and they're not necessarily super interested in, like, a detailed educational approach. But there's a combination of how images, videos, comparison tools, you know, there's a lot of merchandising detail we store to help folks navigate by features that are particularly interesting to them. We have a large customer service organization who can work with folks, and then, frankly, with the kind of dawn and rapid growth of generative AI, there's a lot of ways on a conversational basis to try to take the wealth of content we have... and surface it for customers in an easy way, where we can take their queries and just get back to them. So, the way we look at it is, it's a pretty comprehensive sort of approach you take, and it's not any one thing that does it. Because customers shop in different ways, and then they actually have different questions as they go through the consideration process and sort of down the funnel. And so when they're first kind of approaching a category, you may need to give them kind of the context of what are the first few key questions they should think about that'll help them sort of narrow their range. As they get more detailed into an item, they often are looking for things that give them confidence that they've picked the right item relative to their goals. And so there's a lot of different aspects there, in terms of how you help folks navigate. Other questions? In the back. I know that you have an initiative to have brick-and-mortar stores. How do they fit into your vision? Yep, sure. So today, what we have open as far as specialty retail brands, AllModern, Birch Lane, and Joss & Main, we have eight stores open. And they range from sort of 10,000-14,000 sq ft, I believe, or so. So, you can think of them as very similar to other lifestyle home furnishings retailers stores that you visited, where you get a real feel for the brand, you see a breadth of product. It's. There's a broader assortment of product available, but, you know, it's a pretty cohesive offering. It's relatively easy to get a feel for whether it's your style or not. It spans all the furnishings categories, and you can work with associates, and it's also been a great way for us to start to build an expertise of how to operate stores. Because if you think about brick-and-mortar stores, we have a lot of the key sort of aspects of what a successful brick-and-mortar retailer needs. You know, you need to have a brand, you need to have an assortment, you need to have a supply chain with the inventory in it, you need to have a delivery and fulfillment capability, you need to have a customer list or brand, a way to market to customers. We have kind of everything I just described, and then, of course, you need to have brick-and-mortar stores, which is what we didn't have. But we had sort of all the other operating pieces, but, designing stores, opening stores, operating stores, is the piece that would be new to us. The complexity for a lot of retailers, once someone orders it, how do you deliver it to them? How do you make sure you have it in stock? How do you do that economically? Ironically, that's something we actually are quite excellent at already and have done for years. So the way to think about what we're doing is we're building a craft of getting good at the store piece of it. For the Wayfair brand, the first store actually opens later this week, on Thursday, and that store's been three years in the coming. And the reason it's so long is that's a large format store. It's a 150,000 sq ft store. It's located in Wilmette, Illinois, just north of Chicago, sort of a dense suburban area. And that, the reason the store is large is it's meant to bring the Wayfair brand to life. So if you think about the breadth of categories that we're in, that sort of creates that square footage, sort of plan that we have, and we also believe it can be quite a destination. And so there's some home furnishings retailers, very few, but who've successfully become destinations, and so they get quite a large draw of customers. The reason we're pursuing stores is that if you think about some categories that are more mature online, like consumer electronics or office supplies, what you see in their early days is the online penetration grew really fast, but then they both asymptoted out, you know, around about 50/50, you know, online, offline. And the reason is, there's a lot of use cases online can be handy, and there's a lot of use cases where offline can be handy. And each one, I think one is 40/60, the other 60/40, but, you know, they found the right balance that worked for consumers. Well, in our category, you could say, "Hey," you know, some people would still believe, "Hey, no one will ever buy a sofa online." But, you know, well, we have an upholstery business over $1 billion, so I would argue that that's technically not true. But the reality is, there's some people who may want to touch and feel an item, sit in an item, they may want to work with a designer. They may want to finance their purchase, and might find that easier to do in person. They may just be browsing. They may want to browse with a few friends and get their friends' feedback on ideas. There's all these different use cases that you can do in a brick-and-mortar store. And then there's, of course, the categories that are more impulse-driven, that you may just shop... You know, this is a fun category. You shop stores for fun, and whether you pick up some pillows or some candles or what have you, a lot of that's done just on an impulse basis. So stores offer a very powerful use case for us. Online, obviously, with the expanded selection and all the benefits that we bring to bear and have built up over the last couple of decades are significant. So the way we think about it is, this lets us complement the two and unlock a much larger share of wallet than we could if we only focused on either one alone. And we're in the early days, we'll iterate, and we'll figure it out, and then we think it's quite a large opportunity ahead of us. And the inventory is owned by? So the question was the inventory- who owns the inventory? The inventory in our business is always owned by suppliers. So, regardless of the sales channel and the method, the inventory is owned by suppliers, and then we work with them to create joint logistics that optimize the logistics, cost, speed, and availability, using their infrastructure and our infrastructure blended in whatever way is best for that type of item and their supply chain. When you look into the future of living spaces, and which is really what you're, the business I think you're in, what one or two, three trends that you're starting to see coming, emerge on the future that you just have to get better at or have to think more about in your business in terms of supplier base or other aspects of the business? Yeah. I think there's certain tenets that we've focused on for 20-odd years, which matter a lot, which is this comprehensive selection of goods from this broad supplier base. So we're reflecting everything that's available in the market from all these different types of providers, and helping a customer find the right item for them. Versus us saying, "Hey, you know, here's the narrow set of items we've decided you should have the right to choose from." So we need to stay excellent at doing that, while backing it with great delivery, and logistics, and price value, and customer service, and all of those things. I think there's an ongoing opportunity to continue to make the shopping experience both more and more sort of efficient and easy, while making it more enjoyable and fun at the same time. And so efficient and easy doesn't always mean that it has to be short. It could be short for the person who wants to get right to something, and it can be just more productive in terms of seeing things you're super interested and excited about, for someone who wants to spend time and explore. But they wanna explore things that they find interesting or curious about. So I think there's an opportunity for us to kinda continue to advance that. And then I think there's a very large opportunity for us through the benefits of what we're doing from the standpoint of both having scale, having proprietary logistics, and having a very large technology organization, to basically continue to become more and more efficient at how we operate, which lets us both have great margins while offering the customer great value. I think we can keep doing a lot in that regard. I would just add, I think that there is an increasing opportunity to help the customer identify online that price-value equation. And so, as the online channel, you know, has continued to be sort of congested, how do you help her identify the- Mm-hmm. her perception of value of that, and how do you bring that to life for her? And that's something that we actually spoke about a bit in our last call and something that we're experimenting a bit with. Great. Any other questions? There's one all the way in the back. Hey, there. Dennis Ma here with Artisan. I'm kind of curious about what you believe is the AI opportunity for your business. How are you thinking about that? It's gonna be a transformational change. We're hearing that increasingly from other e-commerce players. How are you thinking about this today? Yeah, sure. So the question was what the AI opportunity is for Wayfair. So a few thoughts. So one, when you talk about AI, sort of the concepts of machine learning, I mean, we've been using those principles for over a decade, how we price such a large catalog so efficiently, and these are topics we've been tackling for a long time. I think you're probably also getting at what's the generative AI opportunity. I think if you zoom in on that aspect of it, I would say that, you know, I would kinda break it into sort of two buckets. The first bucket is at how do you use this technology to help make us more efficient at the things we do? And we have a whole series of pilots running, a number of which are already proving very productive around, you know, how do you continue to drive up efficiency and productivity for your customer service and sales agents who are interacting with customers? To how do you generate merchandising information and marketing copy for items on a lower cost, higher quality basis? I mentioned we have a large technology organization. How do you improve the speed and efficacy of creating the custom software that we're creating, you know, using you know various software development tools that exist out there that kind of enable software developers to move much quicker? So there's a whole series of things, and some of them are esoteric. Like, every retailer has an obligation to scrutinize customer feedback, to look for any quality errors, to both remedy them, but then also to report them to the CPSC. Okay. Well, how do you do that if you have, you know, huge number of items and a huge number of inbound customer service feedback mechanisms? So this is a great example where you can summarize, you know, millions of inbound items and find nuggets that you can then use better to improve your merchandising, improve descriptions, and as well as meet various requirements you have. I picked that just 'cause that's a very narrow, specific one that is super uninteresting, but you'd be like, "Oh, that's a cost in any business." And then folks who do it better are gonna be way better off than those who don't. Well, that's an example where we've always used technology, now we can use even better technology. So I think part of having proprietary technology has allowed us to move much faster on this first bucket of things that you can unlock value from very quickly. So we're doing that in a lot of different places. The second bucket is more, how could the customer experience change over time? This would get more at, like, how do customers shop? How do they explore the catalog? What ways would they wanna interact with us? You know, do they wanna... Would it be asking questions? It's a very visual category. How do you integrate the modalities of sort of, you know, video and imagery in with text and voice? And so there's a set of things we're doing there. That, I would call more R&D, although we have a number of pilots there, but we think of those as R&D pilots, not necessarily things that will unlock huge value overnight, but will lead to breakthroughs. And we have, over time, created really interesting experiences as we've learned about different pieces of what can work well for customers. Yeah, I would just add, it's also a place where scale benefits, right? So having a lot of, you know, 1P data there helps you to develop these models much faster, and that allows us to do things like this R&D, Decorify being an example of that, that's out there that, you know, customers can play around with. It's, you know, not right now, you know, anything major. It's meant to sort of learn and experience, and we can put those things out there, test them, and then iterate. Mm-hmm. I think we'd be remiss not to talk about what's a great margin story that's forming here at Wayfair. So maybe a little bit of an open mic in terms of where you are now and the path to long-term margins. Yeah, well, thank you, Chris, for teeing that up. Appreciate the notice. So, you know, we spoke actually originally, I think, several years ago, about when we were operating at sort of about 24, 25-ish% gross margins, moving that up to the mid-30s, and, you know, making progress sort of along that path. Obviously, accordingly, then the EBITDA margin would improve as well. And the story over the last, you know, 18 months has really been driving improvement on that gross margin line, and also really generating that fixed OpEx expense leverage there to get to that, you know, positive Adjusted EBITDA, and then onwards, you know, of course, to 10%+. On the gross margin line, we said there were a few drivers. One was obviously the cost efficiencies that we could drive in the network, and you've seen that play out over the last year. And that's really gotten us to this, you know, sort of 30%-31% that we keep guiding to on the gross margin range. The other pieces there, of course, being supplier services, so things like ad sales. We're still early days on that, but that can come in and help drive some incremental growth there. Ongoing logistics leverage. We've said that our network is, you know, fairly well built out at this point, and so as you put more volume through that, you get some leverage. And then, of course, you know, sort of our ongoing efficiency with our suppliers and our wholesale costs and the mix of products, and that would move us up to that sort of mid-thirties place on gross margin. We've then talked about, you know, being able to, for some time, hold that SOTG&A line and continue to get leverage there, and that's where you're seeing that flow through from, you know, the 30-31% on gross margins, roughly 4% on that customer service and merchant fees. That's come in a little bit as we've continued to get tight on that line as well. You know, the 11.5%-12.5 that we guide on that advertising, that's where you get that mid-teens flow through, and that's obviously as we get the leverage on the fixed OpEx, helping to drive that significant improvement in the Adjusted EBITDA margin. Just to clarify, now, the mid-teens flow through, that's down to the operating margin line. Is that... Like, how, how is the gross margin? Yeah. So I would think about it as the unit economics, right? So if you start with where we are today on that gross margin line, I'll just use our guidance range because that's easiest. You know, 30%-31%, then about 4% on customer service and merchant fees, and then, you know, sort of 11.5, 12-ish on that, 12.5 on that, ACNR line. If you assume that you then keep the fixed OpEx, you know, constant for some time, that's where you get that mid-teens flow through. That's even- Okay ... you know, without ongoing, you know, of course, we've said over time, ongoing gross margin upside. We've talked about that path to 10%+ Adjusted EBITDA over time. And that's, you know, you get from the sort of 30, 31. We've talked about a few more points to get up to that mid-30s, and, you know, some leverage then again on ACNR and on OpEx, but again, over time. Got it. Just to cover the balance sheet a little bit, you do carry a fair amount of convertible debt, and you have some maturities coming up. So can you talk about what your plans are around refinancing, paying off, and so forth? Yeah. So I'd start with, you know, we had two large goals, you know, as we started doing these cost initiatives over the last 18 months, as it relates to the capital structure. One is we wanted to open up the aperture around what we could do from a financing perspective. You noted today, all we have are convertible notes. You know, we'd love to mature beyond that market, and we think we've, you know, very successfully gotten to a place where we have other avenues available for refinancing beyond, you know, convertible debt. The second piece has been, over time, we would like to delever, right? And so both of those things are predicated on improving, you know, our margins and ultimately growing free cash flow, both of which we've been doing quite nicely, and you've seen that very steady progress. So specifically to talk about the upcoming maturities, you know, the 2024, which is $117 million left, we've been very transparent, that'll be paid in cash. You know, our cash flow profile is such that we're building significant cash throughout the rest of this year. We've spoken to that. You know, leaving us optionality around that 2025 to, you know, pay some or all in cash as we continue to go forward. So as we look at it over the next few quarters, we intend to be thoughtful around what's the best mix of, you know, cash refinancing as we look at the 2025s and the 2026s, making sure we're preserving optionality and, you know, managing accordingly our goal over time of delevering. Great. Any final question? Awesome. So we'll leave it at that. Thank you so much for joining us today. Thank you for having us. Thank you, Chris.