The following is a summary of the 1stdibs.Com, Inc. (DIBS) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 2024 GMV was $84.6 million, down 5% due to lower average order values (AOV)

• Net revenue for the quarter was $21.2 million, up 3% year-over-year

• Adjusted EBITDA loss was $3 million, reflecting margin compression due to seasonally lower revenue and constant operating expenses

• Take rates improved modestly despite GMV contraction, thanks to a higher proportion of orders below $25,000 and a revised commission rate structure.

Business Progress:

• Discontinued the Auctions feature to reallocate resources more effectively to high-return projects, aiming to improve market-based pricing and conversion through machine learning

• Ended the Essential Seller Program, shifting focus to more engaged, fee-paying sellers to boost quality engagement and contributions to the marketplace

• Active buyers and new buyer conversion have shown improvement, underpinning future revenue potential

• Continued prioritization of cost-efficient strategies and resource allocation to position the company for sustainable growth.

Opportunities:

• Plans to generate operating leverage from mid-single-digit revenue growth in 2025, focusing on conversion enhancement and efficient marketing

• A rerouting of resource allocation from low-return projects to higher-value initiatives, such as machine learning pricing models, could strengthen competitive positioning and improve financial metrics.

Risks:

• Continuation of soft demand in luxury housing and high-end discretionary markets, which impacts GMV and revenue growth

• Reliance on the recovery of the luxury market segment, whose timeline remains uncertain.

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