Good morning, afternoon, evening. My name is Danica and I will be your conference operator today. At this time, I would like to welcome everyone to Revolve's First Quarter 2025 Results Conference Call. [Operator Instructions] At this time, I'd like to turn the conference over to Erik Randerson, Vice President of Investor Relations at Revolve. Thank you. You may begin.

Good afternoon, everyone and thanks for joining us to discuss Revolve's first quarter 2025 results. Before we begin, I'd like to mention that we have posted a presentation containing Q1 2025 financial highlights to our Investor Relations website located at investors.revolve.com. I would also like to remind you that this conference call will include forward-looking statements, including statements related to our future growth, our inventory balance, our key priorities and operating and innovation initiatives, industry trends, the impact of changes in international trade policies and our plant mitigation efforts, our marketing events and the expected impact, our partnerships and strategic acquisitions, our physical retail stores and our outlook for net sales, gross margin, operating expenses and effective tax rate. These statements are subject to various risks, uncertainties and assumptions that could cause our actual results to differ materially from these statements, including the risks mentioned in this afternoon's press release as well as other risks and uncertainties disclosed under the caption Risk Factors and elsewhere in our filings with the Securities and Exchange Commission, including, without limitation, our annual report on Form 10-K for the year ended December 31, 2024 and our subsequent quarterly reports on Form 10-Q, all of which can be found on our website at investors.revolve.com. We undertake no obligation to revise or update any forward-looking statements or information, except as required by law. During our call today, we will also reference certain non-GAAP financial information, including adjusted EBITDA and free cash flow. We use non-GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information presented and prepared in accordance with GAAP and our non-GAAP measures may be different from non-GAAP measures used by other companies. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures as well as the definitions of these measures, their limitations and our rationale for using them can be found in this afternoon's press release and in our SEC filings. Joining me on the call today are our Co-Founders and Co-CEOs, Mike Karanikolas and Michael Mente; as well as Jesse Timmermans, our CFO. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn it over to Mike.

Hello, everyone and thanks for joining us today. Our strong execution within a dynamic environment resulted in outstanding first quarter results, highlighted by double-digit top line growth, 57% growth in operating income year-over-year and $45 million in operating cash flow that further strengthened our balance sheet. What's more? Our adjusted EBITDA margin increased by 160 basis points year-over-year and cash and cash equivalents on the balance sheet exceeded $300 million. It's a great start to the year in an environment that has become progressively more uncertain than when we last spoke at the end of February. We achieved these strong results while continuing to invest in key foundations for long-term success, including advancing our AI technology and personalization capabilities, international expansion, building our brands, capturing a greater share of wallet among existing consumers and developing new owned brands. With that introduction, I will begin by drilling deeper into our Q1 results, then I'll talk about the current environment and global tariff uncertainty before wrapping up with progress on our longer-term objectives. Starting with Q1 results. Our healthy top line performance illustrates that our strategic initiatives are working and that we are gaining market share during an uncertain time when industry peers with weaker foundations have dialed back investment plans. Net sales increased 10% year-over-year, driven by domestic and international net sales increases of 9% and 12% year-over-year, respectively. By segment, REVOLVE net sales increased 11% and FWRD net sales increased 3% year-over-year, our second consecutive quarter of growth within our luxury market that remains challenged. We see considerable opportunity for further gains amidst the disruption in the luxury market as evidenced by the recent bankruptcy and liquidation of Canada's iconic premium department store chain, Hudson's Bay. Now let's unpack the strong bottom line results, highlighted by a 57% increase in…

Thanks, Mike and hello, everyone. I am extremely proud of our impressive first quarter results, particularly in light of the current macro environment. Our strong Q1 results were highlighted by double-digit top line growth and very strong cash flow as well as our outstanding progress on longer-term initiatives. Our success is a direct result of our continued strong execution by our team across the business, including merchandising, site experience, marketing, owned brands, technology and international that collectively have further strengthened our connections with our engaged community of brands, consumers and content creators. With that as an introduction, I will focus my remarks on some of the strategic areas we are investing in and that we are especially excited about. Brand-building investments highlighted by our REVOLVE Festival event, expansion of owned brands and physical retail exploration. First, REVOLVE Festival. As our core consumer gears up for an active lifestyle events in the months ahead, we are making the most of this opportunity to further build our brand heat and expand awareness. On April 12, we hosted our eighth annual REVOLVE Festival in Coachella Valley, bringing together the world of fashion, music and culture and an exclusive and immersive experience. The atmosphere and the desert was electric, elevated by high-octane performances by our incredible lineup featuring Lil Wayne, Tyga, Gelo and special guest Cardi B, who took the stage in custom REVOLVE Atelier look, designed exclusively for her by our owned brands team. The aspirational lifestyle event was very successful in elevating our brands and exciting and delighting our community of VIPs, brands, influencers, partners and fans who are fortunate enough to attend the invite-only activation at WWD called a hot ticket and the biggest celebrity draw of the weekend. The impressive range of A-list actors, musicians, athletes, celebrities and content creators…

Thanks, Michael and hello, everyone. I am very proud of our strong first quarter results on both the top and bottom lines, especially considering the current macroeconomic environment. I'll start by recapping our first quarter results and then I will provide context on our tariff exposure and mitigation strategies before closing with updates on recent trends in the business and guidance for the balance of the year. Starting with the first quarter results. Net sales were $297 million, a year-over-year increase of 10%. REVOLVE segment net sales increased 11% and FWRD segment net sales increased 3% year-over-year in the first quarter. By territory, domestic net sales increased 9% and international net sales increased 12% year-over-year. Active customers, a trailing 12-month measure, increased 6% year-over-year, a slight uptick from the recent trend. With only 2.7 million active customers at quarter end within what is a very large addressable market, we see a great deal of opportunity to further expand our customer base in the years ahead. Total orders placed were $2.3 million, an increase of 4% year-over-year. Average order value was $295, a decrease of 1% year-over-year that was primarily due to lower AOV in the FWRD segment, driven by product mix. Consolidated gross margin was 52%, a decrease of 30 basis points year-over-year that primarily reflects a lower mix of net sales at full price and deeper markdowns year-over-year, partially offset by an increased mix of owned brands year-over-year. As illustrated by the year-over-year AOV decline in the first quarter and with many consumers feeling pressure in the current environment, we are seeing customers begin to move to more accessible price points. Importantly, our operating discipline enabled us to meaningfully outperform our guidance for operating expenses by a much greater amount than the slight miss on gross margin. So now…

[Operator Instructions] your first question comes from the line of Mark Altschwager with Baird.

I appreciate all the detail here. Jesse, maybe if we could drill a little bit more into some of the tariff math and assumptions as we try to unpack that. So if I understand correctly, the low end of your gross margin guidance assumes the tariff costs with little mitigation. Is that right? And then I guess if I look at the gross margin guidance reduction, 240 basis points at the low end on consensus revenue this year, that's about $30 million of gross profit dollars. I guess, is that a rough approximation of the gross costs you're thinking about for the back half of the year? Maybe let's just start there and then I have a follow-up.

Maybe to clarify on the guidance, this assumes -- I think you got the first part right. It assumes the elevated tariff rates that are in place today and our best estimate of our mitigation efforts, so I think that's the key difference from what you said where it's not minimal mitigation efforts, it's our best estimate of mitigation efforts. And then yes, you can do the math on the gross margin impact given the guidance that we gave but it is a meaningful impact on a dollar basis.

And how quickly could you theoretically pivot to a higher percent of the third-party sourced inventory? Or asked another way, maybe help us better understand the inventory commitments or flexibility you have on the owned brand front.

Yes, we can flex pretty quickly. I wouldn't say it's necessarily a shift from owned brand to third party. We're still very optimistic on the owned brand expansion, especially this quarter and see a great opportunity there in the future, especially given the premium margin that owned brand carries. Now if you think about diversification of owned brand sourcing out of China, that is a longer lead time. We can make some progress this year but it's more of a 2026 story there.

And then just finally, on the demand backdrop. Are you seeing the tariff news and weaker sentiment affecting customer traffic and conversion trends at this point? Or maybe what gives you the confidence you can sustain growth, especially in the U.S. as we look at the steeper comparisons in the coming quarters here?

Yes. Yes, I think based on what we said in the prepared remarks, what we're seeing now is just that shift to more accessible price points, so that's impacting AOV. It's certainly having an impact on consumer confidence and that's where we are moderating our expectations as we look ahead through the balance of this year given -- or assuming that the current state of plays in place.

Your next question comes from the line of Oliver Chen with TD Cowen.

This is Katy [ph] on for Oliver. I'd like to kind of go back to the owned brand strategy and just kind of learn more about how you're thinking about launches for owned brands and sort of that product development, specifically around the second half. Are you delaying any innovation there to shift to third party? And then I'll have one follow-up after that.

Yes. We've definitely taken into account and there's been some pushback in some place and some don't. We also have very, very, very exciting things launching in H2. So there's been adjustments but we have to be nimble in this environment and we think we have some awesome product our customers will love coming very, very soon. We're excited to share with you guys.

And then as a follow-up to the selling and distribution expense line item, could you just talk a little bit more about really the savings there and just thinking about what you can leverage to have any incremental savings this year?

Yes. Yes, we did guide up slightly for the second quarter based on what we're seeing in average order values which increases that selling and distribution as a percentage of net sales. Now that's not to take away from everything that the team has been doing. They've been doing a phenomenal job in making that line item, especially more efficient. There's also a significant impact from a lower return rate on that line item. So that's the largest driver of the decreases we've been seeing and then the team has been doing great work there. But we do anticipate some pressure from that lower average order value that we've been seeing for the last month or 2.

Your next question comes from the line of Anna Andreeva with Piper Sandler.

Jesse, thank you for all the color on tariffs. Very helpful. We wanted to ask, you mentioned higher markdowns in 1Q and also the shift to more accessible price points as of late. Are you guys planning to pull the promotional lever more to stimulate demand? Are you starting to see the industry get incrementally more promotional so far in the second quarter? And just curious, there's been some anecdotal evidence of demand pull forward ahead of tariffs, at least in some categories out there. Do you expect to still see that here in early 2Q?

Yes. Maybe on the markdown strategy first. As we mentioned, we are seeing customers shift to more accessible price points, whether that means shifting out of full price into markdown or higher markdowns within that markdown component. But we're not necessarily shifting our markdown strategy in response to that. We typically -- based that on our algorithms, we do what's right for the inventory balance for the customer for the P&L. So no direct response to that or what anybody else is doing out there. We'll do what's right for the business on a whole. Now on the pull forward, based on our customers' buy now, wear now behavior, we didn't see any meaningful indication of a pull forward in our business.

Next question comes from the line of Jay Sole with UBS.

I just want to ask, you mentioned, I think you said you're moderating your internal sales expectations. Can you just give us a little bit more color on that, like the magnitude of that? And does that include any impact from some of the tariff mitigation strategies? In other words, if you're assuming that you have to raise price, do you assume that there's sort of elasticities are such that maybe there's a disproportionate negative impact on unit volumes? Just any color around that would be super helpful.

Yes. Yes, I think the key point there is that we are seeing some softening and we want to -- what we want to communicate is that we are moderating our inventory buys accordingly. So we want to keep everything in check. Now we need to be careful in the case that tariffs are reduced and everything opens up again. So we got to -- have to be very nimble there. And yes, in terms of kind of units versus dollars and how we're planning for inventory and price increases, it is very dynamic and we're taking all of that into consideration with our inventory buys. And then maybe on the elasticity point, I think it's one that you can't look at in isolation. It's not necessarily one percentage of price increase that would impact the consumers' behavior. You really have to factor in kind of everything else that's going on out there, how she's feeling consumer sentiment, et cetera and vary case by case, product by product, price point by price point.

Our next question comes from Lorraine Hutchinson with BofA Securities.

I was wondering for the 78% of inventory purchases from third-party brands, what are you hearing from them on price increase? Is that a strategy they intend to take? And how do you balance that with the customer kind of looking for better value in a tighter spending environment?

Yes. Yes, we are partnering very closely with those third-party brands and we are seeing some price increases, again, very product by product, brand by brand. And also keeping in mind prices comparable across different destinations, across different products. But we are seeing some of that. And then I lost your second part of that question.

Any customer pushback or feedback from that?

Yes. Yes, nothing yet. It's still very early, though and this is all just rolling in kind of as we speak over the last few weeks.

Your next question comes from Dylan Carden with William Blair.

I get that the dollars decrease as your sales projections decrease but keeping marketing spend that kind of 15% level, can you sort of walk through your thinking there? And then we've heard albeit sort of early in the earnings season, some improvement in the efficiency of marketing or other brands sort of pulling back in marketing. Does that help you, particularly if you're -- you had spoken last quarter about some AI and sort of embedded in some of your engagement marketing?

Yes. So I can jump in on the marketing side. So the market projection is just based off the current trends that we're seeing and what we think is going to be the right zone for the business to spend at for the balance of the year. In terms of the softness on the marketing side, you're right that historically, we've seen when there's any kind of economic weakness, often brands pull back on marketing spend and that can open up marketing opportunities. From what we've seen thus far, we haven't seen anything major in that way. And of course, it's -- I think we're still early in the development of what happens with the tariffs and do they stay, do they go away. So that's something that we could see more of. But at this point, we haven't seen any major trends there as far as reduced marketing CPMs or marketing opportunities on that side. That said, I think the team did an incredible job this quarter in terms of delivering marketing efficiencies with better tactics and strategies and then certainly continuing into Q2 with the remarkable execution of REVOLVE Festival by the team. So we feel good about our marketing playbook for the rest of the year. But at this point, from an environment standpoint, it's more similar to what we've seen.

Your next question comes from Michael Binetti with ISI.

Just a couple maybe on the model. So nice to see the improvement on product return percentages again there. Does that start to slow in our models as we look out over the next few quarters as you start to lap some of the real big improvements a year ago? Or do you have some incrementals that you could tell us about that will keep driving it lower year-over-year? And then on -- I'm curious if you're seeing any hesitation or similar shift to accessible price points outside the U.S. as well. And then one last one on the model. I'm curious on the selling and distribution in 2Q. I think it's quite a bit higher than the rate you were talking about for the year. Is there anything unique in 2Q?

I can start with talking about the return rate side of things. So we do have a number of things still in the pipeline that we hope can deliver improvements on the return rate side. But as is the case with any R&D type initiatives or things that are unproven for modeling and forecasting purposes internally, we're not baking any impact of those efforts in. And so we would expect from a modeling perspective internally and externally that the return rate should -- improvements year-over-year should moderate as the year goes on because obviously, we started delivering a lot of that in the back half of the year.

Yes. And maybe to double-click on that one, too. I think if you rewind to last quarter where we said we had factored in a flat return rate year-over-year, not to take away from our optimism, given the significant reduction we had in Q1. We're now modeling in a slight decrease for the full year given our performance in Q1. And then on the hesitation outside of the U.S., nothing significant to call out there on a geo basis. We mentioned some pullback from Canadian customers. That's not necessarily price point but just complete pullback. And then selling and distribution, in Q2, that is generally higher. That's when we see a higher return rate, et cetera. So it typically in Q2 is seasonally higher than other quarters.

All right. Our next question comes from Nathan Feather with Morgan Stanley.

Just a little bit more on the April trend. I guess can you help us understand how you're thinking about what's driving that decel? And any way to kind of frame the micro versus macro in that? And then on the gross margin guidance reduction, is that fully or almost fully attributable to tariffs? Or any other factors to call out there?

Yes. On the April trend, I think we attribute this mostly to macro. The team has been performing exceptionally well. We're driving a lot of significant gains, conversion gains, et cetera. So I think everything we can control is going well. It's just this macro uncertainty and overhang. And then your second part of the question, gross margin fully attributable to tariffs. Yes, I think if you took tariffs out of the equation, we would probably guide slightly lower for gross margin on the full year, just slightly, just given what we saw in Q1 and that shift to the more accessible price points, markdown, et cetera. Now you can't completely take tariffs out of the equation because tariffs did have an impact on consumer sentiment. So it's hard to peel those apart but we did see a shift from full price and then deeper markdowns within that markdown bucket.

Your next question comes from Trevor Young with Barclays.

First, just back to the April trends. Could you clarify just how much of a differential there was between U.S. and international growth? I think you said international is a little bit better. And on the comment around the Canada weakness, in particular, in 1Q, has that subsided in 2Q? Or has that persisted?

Yes. On a month-to-month basis, we don't get into excruciating detail there just because it is only a month other than to say that international did outpace the U.S. So not much more to say there.

Yes. And then with regards to Canada, we are continuing to see an impact in the Canadian markets due to the sentiment shift in Canada and we saw a pretty sharp turn in that market when a lot of the tariff policy and other policies that Canadians subjected to started rolling out.

And then second question, just on the 78% of inventory imported by partners. I think the comment was that, that's a lower ratio than the 72% of where you're the importer of record coming from China. But could you get more specific as to like how much lower that China mix is? And is that kind of the North Star of where you envision your mix of what you import going to over time? Just trying to understand how much lower it is and where your mix could go over time.

Yes. Not any more detail there really other than to say it's meaningfully lower than that 72%. And keep in mind and maybe this will help you triangulate around it, that, that 72% which is of that 22% that is direct. The vast -- call it, vast or significant majority on owned brands is sourced from China and then a much lower percentage on the third-party side of those direct imports. So you can get hopefully a little bit closer using those.

Yes. And then in terms of the long-term North Star, it really depends on how the environment unfolds. Certainly, we expect later this year to have some meaningful reduction in China exposure with regards to owned brand and a much bigger impact in 2026. And then it depends on the tariff situation and other kind of macro issues going forward. But there's certainly a world where China could be very little of our production. But at this point, it's too early to say. It depends on a lot of policy factors and other things that have yet to unfold.

Your next question comes from Matt Koranda with ROTH Capital.

Maybe just spinning back to consumer health and the message here. I guess, could you touch on more directly sort of how the uncertainty and the lower confidence shows up in your customer behavior most prominently? It sounds mostly like lower AOVs. It sounds like at least in the past, we have a precursor of kind of higher return rates a couple of years ago. What else are you seeing in terms of the change in behavior? Are there more percentage of transactions financed via buy now, pay later? What are the other sort of metrics we should be looking for?

Yes. Those are all the main metrics that we've seen thus far. We closely track the consumer sentiment and consumer confidence because we know that historically, that can often have an impact on our consumers' purchasing behavior and very central to the REVOLVE brand is consumers feeling good and feeling great and living their best life. And so certainly, when disruption or macro weakness first hits, it can often affect our consumers' purchase behavior. And then we saw a fairly meaningful shift in price points, as Jesse mentioned, around the same time. So along with a modest decel in the growth rates that we were tracking. So to Jesse's point, it seems pretty clear to us that the macro factors are at play. And macro stuff always works itself out over the long run. We actually feel great about the underlying trends and momentum that we've had through the past couple of quarters and through Q1. And also, we feel great about our mitigation efforts and what our supply chain will look like over the long term. So yes, in the short term, there's a bit of impact but we think all the factors for success are in place. And we'll watch to see how things play out over the next couple of quarters given the macro environment, particularly if it weakens but we think we're well positioned.

Any willingness to just talk about sort of the return rate that you saw quarter-to-date? Has it changed materially since the first quarter? Just maybe puts and takes around what's driving the net sales mid-single-digit growth rate that you highlighted?

Yes. So with regards to the return rate, we're not seeing a meaningful shift in the return rate at this point. Of course, as you know, returns can be a lagging indicator but in the data we have thus far, there aren't any signs of the consumer sentiment impacting return rate just yet. And as you mentioned, it could be something that happens in the future. And again, we saw a modest decel from Q1 and you're always going to have some variance up and down month by month also. But certainly, combined again with the price point shift and those sentiment indicators, it was pretty telling to us that there was some macro sentiment shift. I will say as we exited April, we start to saw some of those indicators reverse a bit but again, it's a very volatile environment. And so at this point, we certainly wouldn't count on the direction of consumer sentiment being reversed or permanently reversed.

Your next question comes from Rick Patel with Raymond James.

Can you talk about the outlook for owned brands? I think typically, during uncertain times, the company has pulled back here and lean more into national brands but you're pushing ahead with accelerating owned brands this year. So just curious what gives you the confidence in doing so this time around and whether we should expect owned brands to continue outperforming the rest of this year.

The team has been doing. There's been many, many years of investment improvement and it's really, really showing from top line metrics that we shared today as well as all of our internal metrics that we think are very, very forward leading. So the team is strong. We're performing well and we'll continue to invest in because we see it as an exciting part of the business, both from a brand building and a margin building perspective.

And then secondly, I think the guidance for G&A expense for the year was only cut by about $1 million. If demand does soften further, what kind of flex do you have in the business to become sharper with spending as we think about the ability to protect margins?

We certainly have the ability to make further G&A reductions but that would not be the plan at all. We're all about positioning the business for long-term success versus delivering short-term results from a profit maximization standpoint. So we -- again, we think we have great underlying trends. We want to continue to build for the long term. And we think we're really well positioned to navigate the period both with the initiatives that we have lot of what we're doing on the tariff mitigation side as well as our really strong cash balance of $300 million. So we certainly don't want to do anything shortsighted and cut expenses on things that could be long-term opportunities.

All right. Our next question comes from Janine Stichter with BTIG.

Just a couple for me on inventory. Nice to see the favorable inventory sales spread there. I was wondering if you could comment on the inventory composition at both brands. I think last quarter, you talked about being a little bit more weighted in the markdowns at REVOLVE. So just wondering if there's still any pockets of excess anywhere. And then maybe just a bit more color on how much you're cutting back inventory for the back half? And then how much flexibility you have in the model if we do need to reaccelerate inventory buys?

Yes. On the first one, I think we called it out in the prepared remarks, too but very encouraging was that inventory to sales growth differential is positive on both FWRD and REVOLVE. So we saw great progress on the REVOLVE segment versus the progress that we saw in FWRD over the last couple of quarters. So we feel good about the inventory composition today on both segments. And the full price markdown ratio is in a zone that feels comfortable as well. And then on inventory purchases, we're very flexible and we want to keep that in mind as we think about moderating our inventory buys but also staying flexible enough so that if and when demand does pick up, if these tariffs are moderated, call it, that we can get back into the inventory and meet the demand.

Our next question comes from Peter McGoldrick with Stifel.

I wanted to understand your philosophy on investing in the near-term opportunities drive share balanced against income statement performance. You mentioned investing while peers are pulling back. Can you help us think about these dynamics?

Yes, 100%. I think there's a couple of really important examples. One of them when we talk about owned brand, right? We think we do have the ability to control that inventory well. Yes, there's going to be increased challenges with the tariff situation but it's really checking and working well and it's a huge area of opportunity for us from both a margin standpoint as well as a growth and customer experience standpoint. So we're going to continue to invest in that. AI technology and technology in general, we've gotten huge gains from that in the preceding quarters. That's going to continue to be an area of active investment for us. And then, of course, it's continuing to invest every aspect of the experience for the customer, continue to invest in optimizing logistics efficiencies and return efficiencies and things of that nature, you're continuing to see that -- those items flow through to the balance sheet in the income statement in the current quarter. So again, we think we have a lot of things that are working, a lot of investments that are going well. And we're always going to judge an investment on the basis of does the ROI on this investment look good rather than how does this investment affect the P&L statement for this current quarter.

And then I was curious on the active customer base. It keeps expanding sequentially. Can you talk about newly acquired customers? Obviously, you have international outperformance embedded in that. But I'm curious how you're meeting new customers and if there are any behavioral differences in these newer cohorts.

Yes. So we continue to invest on the marketing side. We're finding great opportunities, obviously, both from retention standpoint but continuing to acquire large amounts of new customers. And there's a huge untapped market and opportunity for us on the new customer side, obviously, continuing to invest in all of our existing channels. But one thing we haven't talked about much on this earnings call, obviously, with the tariff focus but is the exciting opportunity of the physical retail expansion. And one of the really neat stats on the physical retail side is that we find significant amounts of the purchases, close to half at our Grove store came from new customers. And that's in essentially our hometown, our home market of Los Angeles. So there's huge upside for us long term to continue to acquire those new customers on top of that category expansion, continuing to invest and expand internationally. So we feel great about the trajectory.

I apologize. We have time for one more question. We'll go to the line of Lucas Cohen with BMO.

This is Lucas Cohen on for Simeon Siegel. I see second straight quarter, no repurchases but obviously, a new dynamic here with CapEx investment in new stores as you build that out. That being said, it would still be great to get some context on what the future plans are for repurchases going forward.

Yes. Thanks, Lucas. Yes, to your point, we haven't been active in the last 2 quarters. Now that said, we were active in Q2 of this year. So we still have a plan in place. We still see that as a great return of capital to shareholders. And we have a strong cash balance such that we can invest in both the stock repurchases and our initiatives on the core business.

All right. That's all the time we have for questions today. I will turn the call back to management for closing remarks.

Guys, thanks for joining us for this earnings release. We're really proud of all the work that we've invested and put into the organization and we're seeing a lot of progress across the board. We really think that these macro challenges really provide a lot of opportunities and we're excited and focused for the challenges and opportunities ahead.

All right. This concludes today's conference call. You may now disconnect.