WEBVTT - A Blue Owl-Linked Structured Note Is Now Worth Just 47 Cents 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.920 --> 0:00:13.240 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.240 --> 0:00:17.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.880 --> 0:00:22.760 and trends shaping today's complex economy. Plus global business finance 0:00:22.800 --> 0:00:26.520 and tech news as it happens. The Bloomberg Business Weekdaily 0:00:26.640 --> 0:00:31.720 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.200 --> 0:00:35.599 We are watching shares a Figma. They're up nearly eight 0:00:35.640 --> 0:00:38.560 percent inter day high today. They were up even higher 0:00:38.640 --> 0:00:41.479 last night in the aftermarket. This is after the company 0:00:41.479 --> 0:00:44.120 came out with its latest quarterly update. So the stock 0:00:44.200 --> 0:00:46.760 rallying after the design and product development platform. It's a 0:00:46.800 --> 0:00:49.479 creative software maker. They do a lot of interesting stuff. 0:00:49.800 --> 0:00:53.280 They gave an annual revenue outlook that topped estimates, so 0:00:53.479 --> 0:00:56.120 kind of ease some of the Wall Street anxiety that's 0:00:56.120 --> 0:00:57.960 been out there that the business is threatened by the 0:00:58.000 --> 0:01:02.560 emergence of rival artificial intelligence products. And if you're not familiar, 0:01:02.680 --> 0:01:04.320 I mean they do some really interesting stuff. 0:01:04.400 --> 0:01:06.800 Yeah, they got a cloud based design prototyping tool. It's 0:01:06.880 --> 0:01:10.360 largely used for creating UI and user experience for websites 0:01:10.360 --> 0:01:12.920 and mobile apps. The stock so far this year, down 0:01:12.959 --> 0:01:15.960 about thirty four percent. Eight percent of the float is 0:01:16.160 --> 0:01:20.000 shorted Golden Morgan, Stanley, Carrol, RBC, stfel, JP, Morgan, Wells, 0:01:20.000 --> 0:01:22.279 Fargos just a few, though they've lowered their price targets 0:01:22.319 --> 0:01:24.440 on the stock. Today the stock down about eighty percent 0:01:24.480 --> 0:01:26.360 from its IPO that was last July. 0:01:26.600 --> 0:01:29.039 Investors don't care, though we see the stock definitely ralling 0:01:29.080 --> 0:01:32.280 in today's session. All right, let's get to it with 0:01:32.360 --> 0:01:34.240 more in the quarter of the outlook. The company joining 0:01:34.360 --> 0:01:37.360 us from San Francisco's Dylan Field. He's co founder, CEO 0:01:37.360 --> 0:01:40.080 and president of FIGMA. Hey, Dylan, so good to. 0:01:40.040 --> 0:01:40.560 Have you here. 0:01:40.640 --> 0:01:43.800 With Tim and myself, we do have to address though, 0:01:43.880 --> 0:01:46.960 I mean, investors have been nervous about you guys. The 0:01:47.000 --> 0:01:50.520 stocks down about eighty percent from the post IPO highs, 0:01:51.080 --> 0:01:54.720 and we've seen the software space in particular investors kind 0:01:54.760 --> 0:01:58.360 of trying to figure out the AI impact on lots 0:01:58.360 --> 0:02:01.800 of different sectors, including yours. So grappling with the defense 0:02:01.800 --> 0:02:05.720 ability of FIGS mode against AI native players and competitors, 0:02:06.280 --> 0:02:09.400 or the potential for general AI efficiencies to kind of 0:02:09.400 --> 0:02:12.760 weigh on seats. So walk us through should investors be 0:02:12.840 --> 0:02:16.440 worried what impact is AI disruption really having on your company? 0:02:17.600 --> 0:02:19.480 Yeah, well, first of all, thank you for having me 0:02:19.960 --> 0:02:22.560 and really appreciate the chance to be on the show 0:02:22.560 --> 0:02:29.079 with you. Yeah, I think it's I can offer always 0:02:29.080 --> 0:02:30.880 a point of view, but I can't tell investors what 0:02:30.919 --> 0:02:33.480 to think or not think. They're going to do that 0:02:33.520 --> 0:02:37.080 on their own. But for us, twenty twenty five we 0:02:37.160 --> 0:02:40.240 look back on as a massive year for Figma and 0:02:40.320 --> 0:02:43.560 our fourth quarter was our best quarter yet. We saw 0:02:43.600 --> 0:02:47.480 growth acceleration. We delivered three hundred and four million in 0:02:47.600 --> 0:02:51.600 revenue last quarter and this is that represented an accelerated 0:02:51.840 --> 0:02:55.560 year over year growth rate for the quarter of forty percent. 0:02:56.400 --> 0:03:01.280 And for us, we look at the business and go okay, 0:03:01.400 --> 0:03:04.120 as AI gets better, Figma gets better, And I think 0:03:04.160 --> 0:03:07.720 everyone should be thinking that way. As AI gets better, 0:03:07.800 --> 0:03:10.880 does your company and your products do they also get better? 0:03:11.760 --> 0:03:14.640 We're also shipping fast than ever. Last year in twenty 0:03:14.680 --> 0:03:18.640 twenty five, we went from four to eight products, and 0:03:18.680 --> 0:03:21.240 we also launched over two hundred features. And that growth 0:03:21.520 --> 0:03:26.320 and that momentum has not slowed down. The velocity continues, 0:03:26.400 --> 0:03:30.000 and actually this week we just launched a integration with 0:03:30.080 --> 0:03:33.480 cloud code where cloud Code can now go to Figma design, 0:03:33.960 --> 0:03:36.240 so you can take the code you're working on and 0:03:36.280 --> 0:03:39.760 then take that state of the application and then move 0:03:39.800 --> 0:03:42.480 it into Figma Design. We can talk more about the 0:03:42.480 --> 0:03:44.960 benefits and why we do that later, but we're really 0:03:45.000 --> 0:03:50.640 excited because right now we are seeing people start in 0:03:50.680 --> 0:03:53.840 so many different places, whether it be a terminal prompt 0:03:53.960 --> 0:03:57.080 or user interface design to like Figma. We want to 0:03:57.120 --> 0:04:00.320 make sure that Figma is the place where all can 0:04:00.320 --> 0:04:03.080 come together, and that's the platform that we're building. And 0:04:03.120 --> 0:04:06.160 if we can do that, I think that we are 0:04:07.680 --> 0:04:10.800 in a place where we can capture a massive opportunity. 0:04:11.200 --> 0:04:13.520 So we're very focused on building that platform to make 0:04:13.600 --> 0:04:14.440 that feature possible. 0:04:14.920 --> 0:04:17.840 Still, I wonder about the message to investors who may 0:04:17.880 --> 0:04:24.000 be concerned about LMS or just AI actually affecting your 0:04:24.040 --> 0:04:28.159 core business or your core features. As the stock of 0:04:28.160 --> 0:04:30.040 the company gets lumped in with sort of like all 0:04:30.080 --> 0:04:32.640 of the SaaS play and this idea of a SaaS 0:04:32.680 --> 0:04:35.360 pocalypt what would you say to investors out there who 0:04:35.360 --> 0:04:38.279 are a little gun shy when it comes to software stocks. 0:04:38.320 --> 0:04:44.720 Right now, I think that the best thing to do 0:04:44.880 --> 0:04:50.800 is to actually understand companies from first principles and again, 0:04:51.680 --> 0:04:55.239 to me, the first and most obvious test is okay, 0:04:56.160 --> 0:04:59.200 if AI and models are getting better, which I think 0:04:59.360 --> 0:05:01.760 is our everyone's base case right now, that we're going 0:05:01.800 --> 0:05:08.440 to continue to see really significant increase in capabilities, then 0:05:09.040 --> 0:05:12.159 does the company get better too? And for Figma, we 0:05:12.240 --> 0:05:16.640 passed that test. We are a year ago, we didn't 0:05:16.680 --> 0:05:20.120 have any notion of A credits in the platform. Now 0:05:20.240 --> 0:05:23.400 we see more than seventy five percent of our paid 0:05:23.400 --> 0:05:31.799 customers who are over ten k in ARR they're consuming 0:05:31.920 --> 0:05:35.359 A credits every week in Q four as of Q 0:05:35.440 --> 0:05:38.600 four and that I think speaks to some of the 0:05:38.720 --> 0:05:44.679 traction that we're seen with our AI offerings. And also 0:05:44.839 --> 0:05:47.760 over half of our large customers they're building with our 0:05:47.800 --> 0:05:50.680 product Figma Make, which is a way to go from 0:05:51.120 --> 0:05:56.400 prompting and Figma design to working application. Over half those 0:05:56.440 --> 0:05:59.800 large customers are building in Figma Make on a weekly basis, 0:06:01.440 --> 0:06:03.480 and so that's and that's up by the way, from 0:06:03.520 --> 0:06:07.279 thirty percent in Q three, so significant increase to fifty percent. 0:06:08.920 --> 0:06:14.719 And I think overall the platform is just very ole positioned. 0:06:14.720 --> 0:06:18.400 If you think about the product development life cycle. Not 0:06:18.839 --> 0:06:21.600 everyone is thinking in code. A lot of people want 0:06:21.640 --> 0:06:24.800 to think visually and if you can go create that 0:06:24.880 --> 0:06:28.880 map of what the software can be, and if you're 0:06:28.880 --> 0:06:33.760 not just urgently driving towards a solution, but rather you 0:06:33.839 --> 0:06:36.599 share our point of view, which is in a world 0:06:36.680 --> 0:06:40.520 of ever increasing competition software, you don't just need to 0:06:40.560 --> 0:06:42.560 make a product. You need to make the best product. 0:06:43.000 --> 0:06:45.560 You need to lean in and actually have design as 0:06:45.560 --> 0:06:49.360 a differentiator. Craft is a differentiator. You need a point 0:06:49.360 --> 0:06:52.720 of view. Then you need to select from this infinite 0:06:52.760 --> 0:06:56.599 option space out there possibilities and curate the ones that 0:06:56.680 --> 0:06:59.320 are actually the best options for you to go build. 0:07:00.080 --> 0:07:03.520 And that's not work that is done in code. Code 0:07:03.560 --> 0:07:06.560 is linear, it's a linear process. You need to go 0:07:07.200 --> 0:07:10.520 and actually consider the full option space to go build 0:07:10.520 --> 0:07:12.640 the best thing. And that's what we're trying to enable 0:07:12.680 --> 0:07:13.360 for our customers. 0:07:13.720 --> 0:07:15.320 So how do you think the world? 0:07:15.440 --> 0:07:17.840 I mean, Dylan, this is great because I think we're 0:07:17.840 --> 0:07:21.040 trying to understand, especially when we see these sectors impacted 0:07:21.080 --> 0:07:24.920 by this AI scare of just trying to understand how 0:07:24.960 --> 0:07:27.520 this is unfolding. And yet kind of would you agree 0:07:27.560 --> 0:07:31.880 that the AI disruption that we're seeing unfold and maybe 0:07:31.920 --> 0:07:34.520 impact certain sectors is kind of happening a little bit 0:07:34.560 --> 0:07:37.800 faster than we expected. At the same time, everybody seems 0:07:37.840 --> 0:07:40.320 to come on and say, we're really early in. 0:07:41.680 --> 0:07:43.960 You know, when it comes to this process. 0:07:44.000 --> 0:07:47.080 So even if you are kind of somewhat upbeat, would 0:07:47.080 --> 0:07:50.520 you can see that we're not quite sure exactly how 0:07:50.560 --> 0:07:53.920 this might shape your company or you know, how this 0:07:54.000 --> 0:07:56.160 all impacts how we work going forward. 0:07:56.240 --> 0:07:58.320 I mean, there's still a lot to be figured out. Right. 0:07:59.680 --> 0:08:02.240 Well, I think again there's framework so you can use 0:08:02.240 --> 0:08:06.360 that are good tools here, So for example, I think 0:08:06.440 --> 0:08:10.600 that you can we we can broadly bucket verifiable versus 0:08:10.640 --> 0:08:14.000 non verifiable, and a perhaps it's a spectrum not a binary, 0:08:14.120 --> 0:08:19.760 but math, for example, as verifiable as it gets. You 0:08:19.800 --> 0:08:24.440 can understand if something that is a math theorem that 0:08:24.480 --> 0:08:30.600 AI generates, you know, is provably correct based on you know, 0:08:30.720 --> 0:08:34.520 formal verification systems. And because of that, we're going to 0:08:34.520 --> 0:08:38.200 see incredible progress in mathematics. I mean, it is just 0:08:38.840 --> 0:08:42.200 amazing what we're going to see in math. Code is 0:08:42.280 --> 0:08:47.280 closer to math in terms of its verifiability. Design totally 0:08:47.320 --> 0:08:51.360 not verifiable. You could have five designers in a room 0:08:51.760 --> 0:08:54.640 debating what is the best design, and you can get 0:08:54.679 --> 0:08:58.600 like ten or twenty or thirty opinions from those five designers. 0:08:59.559 --> 0:09:03.880 It is something that is, you know, very subjective, and 0:09:03.960 --> 0:09:06.040 yet if you get it right and you can lean 0:09:06.040 --> 0:09:08.400 into craft and you can lean to design as a differentiator, 0:09:08.920 --> 0:09:12.079 that is how you're going to win in software. And 0:09:12.600 --> 0:09:16.600 also it's not just that SaaS companies are software businesses 0:09:16.640 --> 0:09:20.200 and that's it. Every company's a software business today, and 0:09:20.280 --> 0:09:23.600 so I think that every company really needs to figure 0:09:23.640 --> 0:09:26.120 this out. And if they can lean into design and 0:09:26.160 --> 0:09:29.600 really treat it with the reverence and deserves, then I 0:09:29.640 --> 0:09:32.560 think they will have a path to winning. But I 0:09:32.559 --> 0:09:34.160 think the ones that don't are going to have a 0:09:34.160 --> 0:09:34.640 hard time. 0:09:35.720 --> 0:09:37.840 Well, part of that path includes spending big when it 0:09:37.880 --> 0:09:41.360 comes to AI and working to improve those features and 0:09:41.400 --> 0:09:44.160 bring those features to your customers. How much are you 0:09:44.200 --> 0:09:47.400 spending on AI tokens? How much are you spending on 0:09:47.480 --> 0:09:48.080 the models? 0:09:50.120 --> 0:09:53.640 Yeah, you know, we're not trying to be a frontier 0:09:53.720 --> 0:09:56.680 lab first of all, just to cp super clear about that. 0:09:57.840 --> 0:09:59.960 You know, there's that's a game that we're not playing, 0:10:01.400 --> 0:10:04.360 you know, in kidos. To those that do, they are 0:10:04.360 --> 0:10:06.320 our partners and we're very lucky to partner with them. 0:10:06.360 --> 0:10:10.400 And also there are customers and it is I think 0:10:10.520 --> 0:10:13.400 very exciting to see how they're using Figma to help 0:10:13.440 --> 0:10:18.520 shape these surfaces. But yeah, you can see the spend 0:10:19.240 --> 0:10:24.840 around inference show up in our gross margin, and I 0:10:24.880 --> 0:10:28.520 think that we did well to hold that flat, and 0:10:30.200 --> 0:10:34.800 definitely we're always looking at ways to be more optimization focused. 0:10:35.880 --> 0:10:41.400 But also you can see it as as a proxy 0:10:41.480 --> 0:10:45.439 through how Make weekly active users, which we disclosed as well, 0:10:46.440 --> 0:10:51.120 grew seventy percent quarter over quarter, and I think that 0:10:51.240 --> 0:10:59.160 the way that the overall activities growing the platform as 0:10:59.160 --> 0:11:01.680 it relates to not just that, but also the way 0:11:01.679 --> 0:11:04.760 that people are using some of our AI image generation 0:11:04.880 --> 0:11:11.560 capabilities and other AI features in Figma. It's really just 0:11:11.559 --> 0:11:16.160 the start. Like we believe that Make in Figma Design 0:11:16.840 --> 0:11:20.080 and Figma Design is our our five ship design tool, 0:11:20.440 --> 0:11:23.400 whereas Make is about going from prompt to working app. 0:11:23.480 --> 0:11:28.120 With Figma, we can try to bring those surfaces close together. 0:11:28.160 --> 0:11:32.800 Because so many of our users that are using Make 0:11:32.920 --> 0:11:37.360 on active basis are also using Figma Design. It is 0:11:37.400 --> 0:11:39.920 the majority case by far, and so if we can 0:11:39.920 --> 0:11:42.400 bring those close together and have them live as one 0:11:42.440 --> 0:11:47.880 experience and help people really think, divergently, explore options spaces, 0:11:47.880 --> 0:11:51.160 but also use their hands get into it. You don't 0:11:51.200 --> 0:11:54.280 want to prompt and say, you know, change it to 0:11:54.360 --> 0:11:57.800 twelve pixels spacing like and then takes two minutes to 0:11:57.840 --> 0:11:59.560 go see if you're right or not. Like, you want 0:11:59.559 --> 0:12:03.960 to go have that directnpulation flow state and actually see 0:12:04.240 --> 0:12:07.679 what it is that you want. And I think there's 0:12:07.760 --> 0:12:09.280 things that are going to do and prompt and things 0:12:09.280 --> 0:12:12.400 that are going to do with direct manipulation with design 0:12:12.480 --> 0:12:13.920 tools like we've done for a while. 0:12:14.559 --> 0:12:18.920 A really interesting conversation, especially Dylan, against what we've been 0:12:18.920 --> 0:12:20.960 seeing playing out in the market as we've tried to 0:12:20.960 --> 0:12:24.040 figure out what AI is going to do to different industries. 0:12:24.679 --> 0:12:28.080 Love it, Thank you so much, Really appreciate it, Dylan Field. 0:12:28.160 --> 0:12:31.360 He is co founder, CEO, and president of Figma. Figma shares. 0:12:31.360 --> 0:12:33.080 By the way, folks, they are still up more than 0:12:33.120 --> 0:12:34.360 eight percent in today's session. 0:12:34.480 --> 0:12:36.120 Hey, let's get to one of our most read stories 0:12:36.120 --> 0:12:37.960 on the Bloomberg. It's another gut check perhaps in the 0:12:37.960 --> 0:12:41.720 world of private credit again, this one involving yes Blue 0:12:41.760 --> 0:12:45.440 Owl Capital. She's stumbling after the decision to restrict withdrawals 0:12:45.440 --> 0:12:47.840 from one of its private credit funds raised fresh concerns 0:12:47.880 --> 0:12:50.240 over the risks bubbling under the surface of the one 0:12:50.280 --> 0:12:53.920 point eight trillion dollar market. We've got Bloomberg News Leverage 0:12:53.960 --> 0:12:57.160 finance reporter Olivia Fischlow joining us from New York City. 0:12:57.400 --> 0:13:00.280 Restricting withdraws from a private credit fund never a good 0:13:00.320 --> 0:13:07.160 sign investors reacting, Hi. 0:13:07.040 --> 0:13:12.000 Guys, Yeah, So basically what we've seen here is that 0:13:12.280 --> 0:13:15.160 this is one of Bluell's funds, a non traded BDC 0:13:15.520 --> 0:13:22.280 that they decided yesterday to ultimately restrict redemptions from. But 0:13:22.360 --> 0:13:25.319 what they did instead was they've sold loans from the 0:13:25.360 --> 0:13:29.160 portfolio in order to start paying investors back and winding 0:13:29.200 --> 0:13:30.040 down this vehicle. 0:13:31.160 --> 0:13:34.120 So help us understand And I think, you know, we've 0:13:34.120 --> 0:13:36.240 only got about a minute or so here, but it's 0:13:36.280 --> 0:13:38.679 just what do investors need to understand this? Because we've 0:13:38.720 --> 0:13:41.240 been following Blue Oul for a while, go back to 0:13:41.320 --> 0:13:44.560 Jamie Diamond's comments when it comes to private credit and 0:13:45.120 --> 0:13:48.240 you know, never just one cockroach. And then Blue Oul 0:13:48.240 --> 0:13:52.440 Capital's CEO co CEO Mark Libscheltz came back and defended it, 0:13:52.600 --> 0:13:53.400 and I'm just. 0:13:54.960 --> 0:13:57.079 Is everything okay? Or do we need to be is 0:13:57.120 --> 0:13:58.719 this is this kind of. 0:14:00.640 --> 0:14:03.640 Cost for concern here? And are what should we be 0:14:03.720 --> 0:14:06.880 watching to see? Because Aria's Management's down five percent, Apollo 0:14:06.960 --> 0:14:09.360 Management's down six and a half percent, Blackstone is down 0:14:09.400 --> 0:14:11.240 six percent. Just got about forty seconds here. 0:14:11.280 --> 0:14:15.120 Olivia definitely, Yeah, it's a fair question, and I think 0:14:15.160 --> 0:14:18.200 what investors need to be thinking about is these are 0:14:18.320 --> 0:14:22.720 retail vehicles, but they house illiquid private credit loans, right, 0:14:22.800 --> 0:14:25.800 And in this situation, bluell was able to sell some 0:14:25.840 --> 0:14:28.640 pieces of these loans in order to make up liquidity 0:14:28.720 --> 0:14:31.920 and start to pay investors back. But as of now 0:14:32.120 --> 0:14:35.160 they've sold around thirty four percent of the portfolio, so 0:14:35.640 --> 0:14:37.520 they still have a ways to go of loans to 0:14:37.600 --> 0:14:40.520 sell to make investors whole. So I think the concern 0:14:40.560 --> 0:14:42.920 that investors are starting to see is, well, when I 0:14:42.920 --> 0:14:46.680 invest in these vehicles that promise the ability to receive 0:14:46.720 --> 0:14:49.400 cash back, will I actually be able to get that 0:14:49.480 --> 0:14:50.080 money back? 0:14:50.160 --> 0:14:52.040 Right? We talk about this especially as there has been 0:14:52.080 --> 0:14:54.920 a push to open this up to more individual investors. 0:14:54.920 --> 0:14:57.280 For one case, it's not as liquid as a lot 0:14:57.280 --> 0:15:01.640 of other investments. Olivia fishloughl News Leverage Finance reporter, really 0:15:01.640 --> 0:15:02.240 appreciate it. 0:15:03.640 --> 0:15:07.480 This is the Bloomberg Business Week Daily podcast. Listen live 0:15:07.600 --> 0:15:10.320 each weekday starting a two pm Eastern up on Apple 0:15:10.360 --> 0:15:13.400 Car playing and the Android Auto with the Bloomberg Business app. 0:15:13.480 --> 0:15:16.240 You can also listen live on Amazon Alexa from our 0:15:16.280 --> 0:15:20.720 flagship New York station Just Say Alexa played Bloomberg eleven thirty. 0:15:22.520 --> 0:15:23.520 Well share as a Wayfair. 0:15:23.520 --> 0:15:25.480 We're keeping a watch on that one, dropping a lot 0:15:25.520 --> 0:15:28.640 down about sixteen percent at their lows on earnings, a 0:15:28.800 --> 0:15:32.160 four month low intra day as active customers during the 0:15:32.200 --> 0:15:35.400 fourth quarter came in slightly below street expectations. Now the 0:15:35.400 --> 0:15:38.440 Street weighing in on the results, William Blair saying that 0:15:39.000 --> 0:15:41.080 the six point nine percent growth and net revenue likely 0:15:41.120 --> 0:15:44.800 fell short of buyside expectations. But you had some peers 0:15:45.000 --> 0:15:48.480 rh our House and also Williams Sonoma under some pressure 0:15:48.560 --> 0:15:50.960 in the trade, so investors looking at the group overall. 0:15:51.280 --> 0:15:53.160 Let's get a little bit more on the outlet. We 0:15:53.200 --> 0:15:54.160 want to head to Boston. 0:15:54.200 --> 0:15:57.520 We got Kate Deliver back with us CFO of Wayfair. Kate, 0:15:57.600 --> 0:15:59.520 good to have you on the program. Tell us a 0:15:59.520 --> 0:16:03.240 little bit about quarter because interestingly enough, jeffries Uh says, 0:16:03.280 --> 0:16:06.240 this is attributable to colder weather to start the year. 0:16:06.720 --> 0:16:11.400 Anything about the guidance regarding is is it about colder weather? 0:16:12.360 --> 0:16:12.600 Yeah? 0:16:12.600 --> 0:16:15.040 Well, maybe let's step back and sort of speak to 0:16:15.200 --> 0:16:17.200 the quarter we just reported, and then I'm happy to 0:16:17.280 --> 0:16:20.560 shift to guidance. You know, we feel really great about 0:16:20.560 --> 0:16:23.440 the quarter we just reported. I think it highlighted and 0:16:23.480 --> 0:16:26.600 capped off a year of incredible momentum for us. We 0:16:26.680 --> 0:16:28.920 opened up the year flat, we you know, exit of 0:16:28.920 --> 0:16:31.600 the year at seven percent, revenue growth eight percent, you know, 0:16:31.680 --> 0:16:34.760 managing for the exit of Germany, and we flowed through 0:16:34.840 --> 0:16:38.760 to improved EBITA. EBITDA grew year over year about sixty percent, right, 0:16:38.880 --> 0:16:42.840 so we're seeing both ongoing market share gains and improved 0:16:42.840 --> 0:16:46.720 profitability and that story continues with our guide into Q one. 0:16:47.560 --> 0:16:49.520 We feel really good about the guide, the you know, 0:16:49.600 --> 0:16:53.240 mid single digits revenue growth and improved adjusted EBATA throughout 0:16:53.240 --> 0:16:55.360 the quarter. So you know, when we look at it, 0:16:55.440 --> 0:16:57.280 we feel that we produced pretty strong results. 0:16:57.840 --> 0:16:59.680 Yeah, I mean, you look at the quarter, I mean 0:16:59.720 --> 0:17:02.960 it just cps better than what the street was expecting. 0:17:03.480 --> 0:17:07.159 Just to even, as you said, coming in stronger, net 0:17:07.320 --> 0:17:11.720 revenue up about seven percent year over year, gross margin, 0:17:12.400 --> 0:17:15.119 coming in better than the street estimate, there were a 0:17:15.160 --> 0:17:17.840 lot to do. So maybe we talk a little bit 0:17:17.960 --> 0:17:20.680 about you know, I am curious you know, you guys 0:17:20.720 --> 0:17:22.280 have dealt with the call and so on and so forth. 0:17:22.320 --> 0:17:24.360 What are you hearing from the investment community that they're 0:17:24.359 --> 0:17:25.640 not just so comfortable with Kate? 0:17:26.880 --> 0:17:29.480 Yeah, you know, actually, you know, as we talked to investors, 0:17:29.520 --> 0:17:31.800 I think again they're they're pleased with the momentum that 0:17:31.840 --> 0:17:35.640 we see here. You know, obviously we're in a category 0:17:35.680 --> 0:17:38.600 that has been under pressure, right, So the category itself, 0:17:39.200 --> 0:17:42.080 we think was down low single digits in the fourth quarter, 0:17:42.160 --> 0:17:44.160 you know, to your earlier questions sort of around whether 0:17:44.240 --> 0:17:46.639 in the first quarter, we do think the category has 0:17:46.680 --> 0:17:49.240 been impacted in the first quarter of this year, you know, 0:17:49.440 --> 0:17:52.240 likely you know, downlow single digits again, maybe slightly worse 0:17:52.280 --> 0:17:55.560 even than Q four. So there's certainly some complexity in 0:17:55.600 --> 0:17:58.639 the overall category here. You know, what can we focus on? 0:17:58.720 --> 0:18:00.400 We can focus on what we can control, and our 0:18:00.440 --> 0:18:03.240 share game continues to be a real source of strength. 0:18:03.240 --> 0:18:06.240 You see us outstripping a category by several points, right, 0:18:06.560 --> 0:18:09.399 and that's continued, you know, Q three, Q four and 0:18:09.480 --> 0:18:11.000 then again into the guide in Q one. 0:18:11.200 --> 0:18:13.040 And we should point out that investors have been really 0:18:13.080 --> 0:18:15.080 keen on your stock, I mean, nearly doubling over the 0:18:15.119 --> 0:18:15.640 past year. 0:18:15.880 --> 0:18:18.000 Kate, let me just go to what you said. I mean, 0:18:18.200 --> 0:18:18.720 maybe it. 0:18:18.640 --> 0:18:23.200 Is those concerns about some softer active customer trends kind 0:18:23.200 --> 0:18:26.160 of early on in the first quarter. Do you give 0:18:26.240 --> 0:18:28.680 us an idea of what you're seeing in any idea 0:18:28.800 --> 0:18:30.480 or can you tell us if it continues. 0:18:31.119 --> 0:18:33.720 It's a great question. So active customers is one of 0:18:33.720 --> 0:18:37.800 our reported KPIs. It's actually a lagging indicator. Okay, that 0:18:38.080 --> 0:18:41.159 metric is LTM active customers, So anyone who's sort of 0:18:41.160 --> 0:18:44.280 placed an order within the last twelve months and as 0:18:45.000 --> 0:18:48.040 orders grow, and you do see that order volume grew 0:18:48.200 --> 0:18:50.800 in Q three and in the quarter we just reported 0:18:50.880 --> 0:18:54.760 Q four, that sort of precedes active customer growth. The 0:18:54.840 --> 0:18:56.280 other thing I do just want to point out there 0:18:56.320 --> 0:18:58.480 is we did exit in January of last year or 0:18:58.560 --> 0:19:01.040 German Business, So that took a large chunk of customers 0:19:01.240 --> 0:19:03.040 or not a large chunk, but a chunk of customers 0:19:03.080 --> 0:19:05.359 out of that number. And so as you're looking at 0:19:05.359 --> 0:19:07.840 that active customer number, you know obviously that came out, 0:19:07.880 --> 0:19:10.320 so we'll clear that comp you know, we exited that 0:19:10.359 --> 0:19:12.240 in January of this past year. 0:19:12.560 --> 0:19:14.879 You did say the sector has been under pressure, and 0:19:14.920 --> 0:19:17.840 Carol mentioned some of the peers, But what about the 0:19:17.880 --> 0:19:21.760 Wayfair consumer. When they're buying something on the platform right now, 0:19:21.760 --> 0:19:24.959 are they buying it because they need to replace something 0:19:25.080 --> 0:19:27.040 in their home. Are they buying it because they have 0:19:27.280 --> 0:19:30.760 extra money to upgrade something. What's the profile of the 0:19:30.800 --> 0:19:33.200 consumer and in other words, how is the consumer doing. 0:19:33.800 --> 0:19:35.840 It's a great question. We're seeing a few trends. So 0:19:36.160 --> 0:19:39.000 you mentioned some of the sort of luxury peers. Obviously, 0:19:39.040 --> 0:19:41.280 we have high end brands that do compete with those players, 0:19:41.320 --> 0:19:45.480 like a Paragold or specialty retail brand. The Wayfair brand itself, 0:19:45.680 --> 0:19:47.720 you know, plays all the way from opening price point 0:19:47.760 --> 0:19:51.080 to you know, upper end mass, so really spans the 0:19:51.119 --> 0:19:54.520 full range. And we have seen, you know, a divergence 0:19:54.520 --> 0:19:57.160 some of that ke shaped economy I'm sure we've all 0:19:57.160 --> 0:20:00.480 been talking about now for a bit. Certainly are Paragold 0:20:00.480 --> 0:20:04.320 brand or specialty retail brands are growing, you know, really 0:20:04.359 --> 0:20:06.680 north of twenty percent we said in twenty twenty five, 0:20:06.720 --> 0:20:09.439 so you can see that accelerating beyond you know, the 0:20:09.480 --> 0:20:12.159 overall core business. And I think that speaks to the 0:20:12.160 --> 0:20:15.520 strength and that you know, higher net worth consumer. We 0:20:15.640 --> 0:20:17.320 also do see a bit of a divergence in the 0:20:17.359 --> 0:20:20.640 types of things that people are buying. When I talk 0:20:20.680 --> 0:20:23.679 about the category being down low single digits, that's a 0:20:23.720 --> 0:20:27.880 category overall. We actually think furniture or bigger ticket items 0:20:27.920 --> 0:20:30.840 are down more. That tends to actually be where we 0:20:31.000 --> 0:20:33.240 you know, are more focused and have a bigger part 0:20:33.240 --> 0:20:35.840 of the business. But you know, we also of course 0:20:35.880 --> 0:20:39.199 sell decorative accent, seasonal decor. That part of the business 0:20:39.200 --> 0:20:41.920 seems to have done a bit better from a category 0:20:41.960 --> 0:20:46.000 perspective overall, So those would be lower ticket items you know, 0:20:46.040 --> 0:20:48.680 that may feel more comfortable for folks to purchase right now. 0:20:48.840 --> 0:20:50.639 Well, and the other thing I want to ask you 0:20:50.680 --> 0:20:53.680 and listen, Kate, we're obsessed with this the buy now, 0:20:53.760 --> 0:20:56.600 pay later and you can do that on Wayfair too. 0:20:56.680 --> 0:20:58.119 Are you seeing an uptick in that. 0:20:59.560 --> 0:21:02.040 Yeah, we have a number of options you know, for 0:21:02.200 --> 0:21:04.640 various financings and buy now, pay later as we work 0:21:04.680 --> 0:21:07.159 with a wide range of partners. I do think it's 0:21:07.160 --> 0:21:09.720 an important offering for the consumer, so you know, to 0:21:10.040 --> 0:21:12.480 you know, sort of sort of ensure good underwriting for 0:21:12.560 --> 0:21:14.760 folks and provide them with a lot of optionality. I 0:21:14.760 --> 0:21:18.200 would say our penetration there has been lower than other 0:21:18.400 --> 0:21:21.800 more traditional brick and brick and mortar furniture retailers. So 0:21:22.160 --> 0:21:24.439 you know, as we grow, we're really trying to get to, 0:21:24.720 --> 0:21:26.800 you know, sort of a more natural place there for 0:21:27.000 --> 0:21:28.360 the furniture industry overall. 0:21:28.520 --> 0:21:32.080 We're speaking with Kate Goliver, CFO of Wayfair, joining us 0:21:32.160 --> 0:21:32.800 from Boston. 0:21:33.840 --> 0:21:35.320 You know, Kate, one of the other things that we've 0:21:35.320 --> 0:21:37.840 talked with you about is the physical stores, and you 0:21:37.920 --> 0:21:42.400 have noticed some encouraging early performance from the physical stores 0:21:42.480 --> 0:21:43.120 when it comes to. 0:21:43.080 --> 0:21:45.160 Brand engagement and cross channel lift. 0:21:45.520 --> 0:21:47.760