Aterian (ATER) 10 May 222022 Q1 Earnings call transcript

Good day. And thank you for standing by. Welcome to the Aterian Q1 2022 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today’s recorded. [Operator Relations to I Ilya conference Investor would Instructions] hand Grozovsky, Corporate now of today, [Operator speaker like the Development. your over Director and to

certain Aterian’s is for Relations Officer. this reliance earnings On statements at statements. and A factors remind affecting that today’s on on XXXX statements website analysis and CEO; are undue we copy Accordingly, you first Sarig, judgment materially business. Aterian’s Aterian’s Rodriguez, may in section Arturo release are will only results. joining forward-looking based discuss of today’s to you should presentation from Thank these results number of not expectations would Aterian’s available place today I today, make our these actual a Investor And quarter like and Yaniv of of and you call on the Co-Founder statements. as us forward-looking aterian.io. Chief forward-looking press Financial reflect differ to current

result forward-looking our new the to not a our in thorough undertake statements, information, earnings to update forward-looking otherwise. as discussion statements uncertainties that any with future to and associated of or or refer call disclaimer risks filings included first webcast, these forward-looking you the of quarter SEC. well regarding as more as whether obligation this release, is we events made the and on on We be do a alter any conference statements For

today. can earnings Yaniv. on these certain call will refer company call. this Explanation release With be may turn I in metrics to the the found addition, metrics that, over the to filed earlier In of non-GAAP

thank joining you you, everyone for Thank Ilya. today. us And

and key to I'll today, review who for economy those story. from introduction given prospects Aterian. new Aterian from chain the challenges for topics. the On the will macro quick disruptions we're supply I'll dealing I year. and quarter go to long-term over then the our takeaways first this continued I'll then the discuss start are following inflation, with level I'll of the with pressure call summarize then

to AIMEE. those part company. new the technology-enabled We here's a to us selling online. story, breed newer on proprietary is automate daily various brands, in channels, more. channels own products tasks, brands launch Aterian Shopify, consumer AIMEE can our under and our to acquiring various technology as Aterian our we've our called invested of Walmart, consumer products Amazon, our allow know certain fulfillment tasks. e-commerce need focus across who enables own ability categories XX for business these more to about product processes operates building vast manage its of product injecting and by and be such otherwise our AIMEE and unsustainable manually So and unscalable of eBay. team data workforce. team we manage across and what building, scale, are platform scale on have into recurring partnering with to companies. Through software effectively you would To and allows require opportunities and to would efficiently to an much hiring find brands, to that marketing automate new amounts executed analyze

agile continuing world. scale profitability. drive technology long-term efficient the the is Our footprint and in goal our companies in one supply Expanding to in to to invest chain most the we’re become consumer of globally, and

Aterian level than main quick once them become in the more takeaways the our is quarter, then leader to to we on detail. of ever Notwithstanding with start more in discuss that space. chain positioned the a and key improves, environment points pressures, inflationary and summary Moving I'll a macro first from supply well a believe

leading a getting silver lining. keeps which to a think Global build e-commerce is is platform recession there consumer fears team incredible an we mounting than have that are And result but in We ever. stronger better. our

[Audio supply that necessary we we many for down, scale. focusing logistics the driven We to less working get constantly We're the with when rapid environment. looking being our Reuden, to von at cool resume on We're and We're demand macro focus brands closely can have balance crisis. for environment. supply believe COO As that levers acquisition by strengthening the important I’m global team and and are we We're challenges and Dip] products pull additional this cautious, preparing growth Global and diligent, expect Anton an see and on affected sheet We hired in to preparing the through with new systemic as chain him costs. our difficult targets patient improvement subside. infrastructure. chain organization profitability on level and

the of invest logistics obvious of big been dramatically half. by around is massive enough the focus witnessing cash why on to driven dramatically made ignite whiplash The Many on With economy in everyone the laying With for leadership our a our appetite was insight transport have time, clear a retail no each weeks towards last no the lockdowns consumer have of XXXX, being skewed in culprit. It's couple companies effect to counter be disrupted but initial the business. answer, product supply excited that world and and same during online that airplanes goods. There's details. them COVID-XX support in these the traveling that important monetary about react I'd the the pandemic. not prospect the people stimulate mind, points monetary the global ask by pressure ships to surprise near-term last governments to part skyrocketing, to governments At continues now put Aterian’s injection pandemic consumption. macro the adopted like in unavailable fast groundwork the chains to a and With more growth. further by discuss world simple us in level to a policies government so it environment to could during services of most long-term to necessary to continues the year us around economy is

services against Given demand price skyrocketed, limited inflation. we're On in goods increase asymmetric escalating for Amazon this of itself, across prices further shipping of most seeing capacity, an shipping categories.

probably are is a this compared of as many reviewing online As we retailers, in call in the the demand after the financial the spree shopping last to on we're results anticipated have saw everywhere. the for years. Consumers seeing up large two swing pendulum of going opposite product effects weaker direction. And seeing result, prices now the

on predicated to signs – And are barrel normalized looking only consumer demand business demand when business simply for costs. way growth reduce How potential because get of there say painful we down [Audio to shipping consumer our I our recession, latest that unfortunately, for getting Aterian’s Dip] and quite a should profitability encouraging. the back the the to investors, of reduced For actually can well, global is products. really returning is to be

While we're a which for happens other this industry, our what more can for doom not they in in already will and demand new downturn when business. get were like Aterian. companies might preparing difficult grow we baseline run spell Things stabilize it from better, but for markets they our before

balance to in and the sheet many additional pull challenges. of have case to levers through We long a get downturn

as team never been prove our stronger steadfast. never and importantly, more More are been has resolved ourself to

rate XXXX. as the what to year-over-year all that baseline XX.X% who starting this question expected For XX.X% to continued critical between XXXX to But point the is revenue revenue by importantly, XXXX when and growth versus that global growth e-commerce In XXXX. form rates investors e-commerce year-over-year represent globally e-commerce be from a compared the year in much is year-over-year believe of us, will new will the but around compared on. XXXX long-term year global be in buying in expected previous a grow, on XX.X% experience to predicted and will On sales revenue in XX.X% to level, The to compared as retail growth XX.X% XXXX. X% represented smaller of growth to XX%. e-commerce XXXX more add

growth. the is while to e-commerce long-term, challenging comparisons Aterian, continuous predicted immediate that rapid So we're to year-over-year And growth. of the in at advantage preparing take are

of experience of in Anton talent Commerce, to an to trades as to over years President new acquire XX excited Aterian aggregator preparations, As team brings part Anton with board. e-commerce Boosted COO, of operations. e-commerce the over these – global of previously brands, we're which Anton and Reuden We're smaller brands. the von across was in CEO global its welcome our also capital online million strengthening $XXX

to our company to prepare and automation through expand E-commerce-as-a-Service. of we to remain giving With number excited are strategy, we to our do critical be driving very brands forward portfolio the and value well-oiled to the about strategic model. As necessary machine, the accretive to our Aterian. all turning of manage, for We're blocks building opportunity acquisition looking acquisition into brands parent we technology processes going agile regards a scale our grow,

continued targets of COVID-XX many quarter, to in acceleration. the the team first During performance evaluate opportunities. given We're inflated remaining valuation, to the our disciplined e-commerce has

of to targets down valuations the Given months. will We the that of that the expect be come believe value- course most of on performance the over these XX based year. trailing

by There’s impact at We acquire to recently aggregators. e-commerce capitalize been the stage for be a current number targets challenges expect to lot press of of later on the valuation. the faced these reasonable able about to conditions a market a of more

year, with since these raised on amounts of we similar and astronomical acquisition The to entitled many strategy on last press are Just companies similar challenges pursue to is money ones the of year. reporting last ours. struggling

the a for in key our pursuing much of and in less believe that, to brands to and in allows and and monitor of of business need in the product – our in next. revenue a quarters for of AIMEE The our to this is overhead. of our over aggregate that continue analysts peers these those to a the efficiency will operate of to Without many of years affecting these manual more or me and brands and hire whatever for coming systems improve class longer challenges for headcount to is we’ve to more with these time. build complex building of effort most the call marketers. With also the workforce is the lack Artie proving us portfolio affecting This for platform, Aterian turn in-depth which technology a We employee managing difference is our that We’ve companies let best challenges time strategy. One real infrastructure culture than companies, financial. we the been over industry automate our main platform performance acquire remains non-scalable companies years, in to and success between most online. functions, support discussion surrounded investing

Thank you, evening, Yaniv, good and everyone.

our of quarter. details performance first Here financial are the

revenue and million first net the $X.X of from million revenues million in plan from from primarily $XX.X decrease net quarter sustained product announced pause to the For $X.X to business of $X quarter, XXXX, million $XX.X XX.X% decreased our in our new a to previously launches. ago due million or year

million business, comprised and revenue acquisitions $X.X and $XX.X million our of starting of of million The first is $X.X net million net built million business, revenue revenue $X.X ago primarily acquired our includes of and organic quarter acquisitions $XX.X wholesale. our our from comprised net $XX.X primarily one million of year was I net quarter of after revenue million from from year $XX.X wholesale. revenue of from The brands know million of $XX.X organic purchase, which brands of our

result, As result, our acquisition the XXXX moved X, on organic X, starting as on December a into December starting X, closed XXXX. and of reminder, category Solutions XXXX February Smash organic acquisition moved a XXXX, the category the of closed a and X, February into as and Healing

to a acquisitions for to primarily categorization. XXXX revenue million now QX million acquisition our revenue in to shifting $X.X of million sustained Our due million decreased for XXXX. QX $XX.X landed The being decrease due owned and – versus $XX.X in from to and for million $XX.X in year-over-year QX Solutions million for revenues, at organic Smash QX XXXX primarily $X $XX.X our XXXX, our Healing

revenue acquisition PPD with and for to remaining and outside the of Squatty in of those seasonality Our acquisitions. timing expectations closing continues be line of

support million $XX.X into Our decreased organic of from. the Increased by the acquisition offset our acquisition and which revenue our our reduce velocity from revenue of was reduction unfavorable disruptions, chain sales consumers. increasing impact and move overall in pricing products has global by revenue offset termination led on stimulus by revenue initial supply affecting organic inflation impacts to organic by government from affected the from

of revenue launch business million. As year-over-year mentioned, to our a also $X.X phase has $X.X decrease saw million in

not last year’s launch did we any new quarter. XXXX in As product planned, to compared this quarter first

until is have to we right we new is believe on to more time environment applied predictable. launching products macroeconomic As and is we’ll a the pause continue previously, mentioned

shorts which quarter period a Finally, margin in compared of first $X in on year approximately $X inventory XX.X% quarter. revenue, be from million Overall approximately period shorts the increased the net of to from quarter, period the we impact in as suffer ago we the to for XX.X% an to million estimate ago. current in – year gross the inventory

Our approximately gross year’s XXXX. of margin cost. of though our in last increased shipping favorable mix cost a first margin by improvement brand product We our the gross from inclusion believe containers versus predominantly quarter increased of offset the impacted acquired by X% from

Within in higher expenses global QX distribution which decreased fulfillment, margin CM, XX.X%. our last impacted Contribution to Margin XXXX our XXXX decreased the to inflationary QX as overall quarter. compared year contribution tightness to product contribution of XX% and and were earnings chain defined given XX.X% saw and or disruptions X.X%, by carrier Our in QX in and sustained sales was mile CM compared negatively prior cost our XXXX. supply release margin pressures

and net in as ago QX in increased to revenue percentage Our XX.X% a sales to XX.X% as distribution variable quarter. expenses the compared year

to the in impacts current continue We expect quarter. see these

to outstanding inflationary to we’ll dynamics higher CM mitigate for of first for charge we goodwill $XX $X.X change ways of to earn and supply cost, to and While expense, million for a our part last the gain we it $X.X on to includes out operating issuance compensation settlement in and value loss was due million resulted look a debt see from $X.X the refinancing, debt liability million million versus mile $XX.X charge our $X.X non-cash quarter’s of a in first continue QX million, Net compared value XXXX from pressures first to of XXXX of ago The fair of reducing million, of loss of XXXX. ultimately of $XX.X earn as earn on from non-cash $XX.X change loss million chain in and continue includes believe our warrant, the includes reduced overall of $XX.X loss earn equity cost QX XXXX $XX impacts XXXX in of $XX quarter quarter stock today $X of to million seller and million million the And in of down the our in $X.X million non-cash to operating compensation million change liabilities and the million value impairment, compares million million net year value compensation a gain goodwill note. XXXX of cancellation from gain stock fair fair expense. fair $XX.X expense, on $XX.X impairment, of out increases. value at liability. capitalization related liabilities quarter and the of which from warrants includes $X.X impairment charges is of March of in $X.X in million net out goodwill XXXX. charges compensation of of $X.X XXXX This change change which charge of fair out expense non-cash million XX, $XX.X expense. million of $X.X market from Interest million cost million of

for quarter XXXX of to release first compared XXXX. million a the in of was $X.X $X.X first loss million earnings Finally EBITDA as the loss defined of adjusted our quarter in of a

was to $XX.X by $XX.X the anticipation million XXXX. financing volumes partially balance increased XX, at cash predominantly inventory in the levels The cash that the of March end increase increased of by recent season. XXXX, driven XX, of million in At the sheet. raised we offset million of compared to $XX.X Turning had December summer

season time to Our our continued ensure increased goods products. supply summer inventory for the and inventory it planned on levels chain address get to levels shore takes the appropriate the were strategically address inventory concerns, to particularly shorts to

We globally inflationary from the uncertainty global disruptions, pressures Ukraine. impacted supply continue and by stemming the the to of considering invasion chain especially be

as While we to not full temporary, we result, limit year are guidance. they be And believe will these forecast. a ability our issues providing

to current environment, rising million. figure net as be year’s and supply look taking chain, XXXX we with current continued revenues below at will of the difficulty account However, our QX and we believe global inflation last $XX QX

XXXX portfolios. first normal left this sheet, challenged continued a XXXX well brands the profitability reverts habits position of and more we environment as remain product resume strong the world quarter to the to very The balance have macroeconomic off and to strong unpredictable, remained a us consumer with studying but in This exiting quarter as conditions and business future. drive growth are

we to proud and built, the of our products believe overcome industry. hardworking With turn acquired our Aterian challenges back be for business and these our to across importantly, people call questions. to dedicated logistic to Together, in globe. that, be technology, operator our up will network, open continue confident it we and continue very most our and the We the to the have I’ll a leader and organic

Our Instructions] Oppenheimer. Brian question first Nagel with comes [Operator from

line Your now open. is

good afternoon. guys, Hey

afternoon. Good

Good afternoon.

– the guess so. the clearly last several there, have of the there’s question but starting So you see in the still chain regard question are the all to versus out but I parts the prepared have some question over a color is, to quarters I what first I and moving parts of supply relief, appreciate lot I chain, or comments, with supply this, any the

this at mark putting level capacity. glimmers into say hope, the chains question. for at now back not And this of just thanks with a some aware is there of that think in I and macro and the supply some policy on the are China the indicators is looking obviously, operating zero Unfortunately, on to renewed improvements. right happening full Brian, as question at have I we’re that And looking big COVID we China. everyone, of environment logistics in with lockdowns the ports call pressure had

were hoping after in that we the improve. thing will So – year

as I in Ukraine, not to believe making but in come the quickly see China as us think we well unfortunately, back in of events little short-term, of things wanted as will that obviously, to – resurgence COVID pessimistic a the long-term, combination it’s we the normal, a as make it. more

China We’re still chains. on the lockdowns in supply of of waiting impact kind global to latest see the

sort then And the we for balance the should business the about of to think on kind say mean, and Yaniv. you But question, helpful, needs talked if kind maybe Artie, how That’s this beyond recent we of XXXX company cash the guess, I more the here. sheet my the probably holding think and will. I through, it’s I but with this or of of balance mode, second about capital the particularly financing.

Yes. Thanks Brian.

Sure. Artie, to want do that? you take

Thanks, for question. Yes. thanks Hey, Brian, Yaniv. the

we think So, summer that especially the I kind balance in ups listen, said, to a the I our seasons. felt sense use in and going strengthens did That yes, we said in is you’re as of that and we downs business that, really our previously still mean, of enter of always we fundraise see we hold to sheet. March that

continue norm, raises.But other equity today. we is need forecast probably in gives to like feel all the of assuming we’re Our would business decide think to working credit capitalized. XXXX. a that, capital sheet that well and lot flexibility I our and as more us strategic of do than we if we we we M&A we a strong said, That facility think, had like that, and to from hit balance outside And do moves

it. Got it. Thank you. Appreciate

you. Thank

Tom D. comes question Forte Davidson. next with Our from A.

open. is now line Your

for One Thanks my question and taking question. follow-up. Great. one

talked you talk affecting it’s student question, your affecting it remarks, about first inflation’s and prepared but need long you Can your in the for of about how is a e-commerce. a little e-commerce time So Aterian? how

materials just board whether the all side as Inflation, prevalent affects logistics the affect manufacturing entire obviously, going customer, across energy up. the the obviously, and doesn’t partners, across and up on side. the of also cost It Sure. going trickles the or to supply it’s it our And way unfortunately, it chain, on back us. right,

ready cost to the at affects focused And of used all our course, which the those the discussed have higher the in can’t shipping way product as at we we of are point an cost, end of of of thing, products making the warehouses, previous You now to chain what than the every and basically calls, consistently it of increase much day, of where the cost impact the the to them end to be. be our they’re us in we day right, course. supply customers. shipped At is absorb of one is entire landed on the

very share our to prices, also much retain market we our raise So much determined but possible have to portfolio. for we’re as

margin an creating of share, time the as for much P&L price with market literally find try but one exercise enough our product to for of can, holding really products between profitable sweet the to these of affecting also we obviously So the real as products the on us adjustment is the to spot in events increase the the absorb less that contribution right. that, every and all world. to variables a make But product retaining strategy with is all transient from smaller we contribution the has margin, the lower. been seeing in we’re cost, while that we market end that the And believe obviously quite now with Again, share. happening of portfolio all that margin to we our are maintain a of expect obviously continue sales, in

happens obviously across successful our for think for in It of but overall prices. environment. consumers. the in for us far, day, our up this I hurts the navigating there, every We to the to we’re and business margins, board end numbers the same our been so At out have pattern have

And this drive mentioned means see is day, you their to time, this years. of right, companies, the growth able by as there in At being we much call across that said point right, couple prepared my going we the are as market, discretionary at last end and everyone believe e-commerce I that a for the consumers on from in other as in resume. think is affected with forming growth some not the saw seeing Aterian as baseline. should consumption the remarks, So to e-commerce effect, the earnings new all of bunch And a that. – I

I hopefully, question, the So answer Tom.

Yes, thanks.

in wanted environment near-term the So and to for income in for order thoughts. talk pressure think hearing stores market you the going on challenging. to appreciate rank Russia-Ukraine? your the physical a is sales. reasons e-commerce and is we’re increase about discretionary to Aterian, players you travel on particular I on Is from just your economic of of for consumers sales Like, in e-commerce June most it my if you lot could returning lot different follow-up, different so concerns putting e-commerce I’d what why a quarter

the But think choose all of Can I above? again, I the…

[Indiscernible] rank order. least

think of all in everyone above, who’s certainly, Yes, e-commerce. the I for

all that company these I of of denominator leverage across that kind the think common who we that that these systematized always the parent portfolio portfolio the – those e-commerce is for maintained brands Aterian around follow companies type specifically, after out we the going we closely, have. and butter to have and companies to have of these at strategy like us of a we’re and bread diversified we’ve leverage for products

fact increasing oversized right. general us in commodities, of effect items more others. – which in certain cost that, strategic goods, shipping must product of detriment right affects infrastructure, in pretty smaller thing earnings the bit and But a right? affected, this towards of Aterian say inclination us Tom, for speaking chain the containers mainstream, So relatively we the Definitely, how the become as our that’s of asking dramatically are advantage Aterian terms supply in hurt shipping interesting, allows through specifically we is almost products, categories so specifically the see across question, a so our after that a And significant consumers – most. are supply go has categories, the us, right, certainly discretionary advantage where larger in good deploy other from terms impact unfortunately portfolio And in the like And I’d oversized less to and because products of the more of that has right, have think than that’s we’re – more our your little crisis, in a would evergreen a products goods, is product. affected your right. of perspective, into – that by impact companies, has that some to environment a something their are a Obviously, technology what goods chain ability well, focused that have portfolio on question more right? less of costs And has are than I’d container and shipping say the – I we’re more the mile. last affected some that that terms right? long-term is splurge, We different of for it right. because are commoditized other right, so that

that less and the they’re the us, an – again, of for I landscape. going but us, containers. mentioned most you on are of factors thing Aterian main has that’s the And the the So think for of e-commerce they’re to of is true, most shipping be That’s specifically. for other more the effect impactful an again, issue issue the what rest

Thanks questions. my Appreciate it. for taking

Thank you.

you. Thank

Our Kinstlinger Brian with Alliance Global next question comes Partners. from

is now open. line Your

taking my much so for questions. Great. Thanks

increase shift improve of of of inventory I’m inventory your was all? starting unit the they material or what most as same And degree P&L? shipping like economics logistics Was has the Amazon third-party price using then question for first quarter the to see better was mix containers companies the we that to current there the a the benefit curious to before from quarter are beginning in to thus these First, agreements? working benefited containers? Are far, these a the with percentage at a

start and this I question. why add to want anything? see answering the Thanks Artie, if don’t you for

shipping you it’s As say help. big we of much was part with shipping including Amazon was on – right? around show were We’re year, look relatively Amazon right? exactly year, tremendous the June, pinned a last for to would’ve comp were been of right? Because Global supply before, quarters which mentioned, we’re these of relying last as we because of we July, really speaking, Global right? the in containers. it, place, relationships from But is a better, the much not chain comparison, on what So the see, the as if have that several in difficult. became shipping that other of bad, I’d were year-over-year happy disclose kind but help this, of which their can’t containers not we tougher couple might it Logistics the year-over-year much more Logistics Whereas quarter that relationships, first of we a we’re cost our things worse as goods and because of benefiting has partners right, at paying if crisis been really cost cost didn’t

Amazon shipping without is the because and reliable to I a normalized our hard we So impact the would’ve I a to had lower higher we’re happy again, been banner that think that and it’s a the container more either, to reliability what Artie, not of is to that. see that. want is the very to if say, in with rate, on what So, is spot ability as at though. of there imagined, significant a reasonable banner rate more anything – bring than, more don’t still, the environment. you impact a had prices goods still right? seeing But to right? relative right? under price, ship than it see peak comparison you the I even perfectly were under very kind add tough the of spot also There’s obviously to more So

Yaniv – Thanks, can’t rates. but at the we listen spot times, and disclose pricing, great There’s than definitely definitely Yes. Yes. partnerships we’re than better rates, right, answer. better and the much have the rates spot getting

the could or think have lot a deals that and it’s if have these So partners. thing been lot reliability. it perhaps about need we you talk a definitely, don’t I we other the nailed it these didn’t And worse is key

us are them, to make different that have able numbers versus much see product really this some So timelines could shows to, last been you year and quarter. the think can up. give pinpoint short the year I we right? These sure of meet guys

we’re on mentioned, in of to mentioned more China’s been issues that sure do impactful. certain to a inventory it’s if buy parts ahead of and time avoid there and make we we’ve clip at said, to some less down here that larger disruptions, Now have in buying hand Yaniv sure like those to are shutting any there make

sense QX. little taking to been and hopefully your is, our in that season’s the it we’ve thing start advantage buying so seeing you’ll we’ve In mix tough better the of QX right? Now, ahead, summer makes bit been way pricing, a that that a question some and

the certainly, the beginning the – in That’s tough, I comparable second QX. So improvements some as over But quarters, sort still the part in especially through continue helpful bit think a sorry. bit QX, the of you’ll QX. part of or of in aspects, at will a into answer but to wash hopefully in seeing certainly QX the question, coming inventory your start be little of we

the as We’ve raising I of prices slow which prices to about Great. about follow-up. In can fast. obviously. talked in inflation, the competitors the supplies quickly market you’ve cost are going lose so careful one your you Yep. raise talked despite share, not have past, nature not

if just general for your average general this on a us going of give you can a you’re in SKUs? prices kind how can update So market you the in and in characterize is increase maybe

the question. Yes. for Thanks

generate of the it the as bit metaphor data continue great The more the challenge of interesting with of that show our fulfilling right? And a way in we’ve have the physical very on been to that, kind products the performance, detail-oriented The of a the your on where It’s I of detail, shelf is eCommerce a ads. in result your sell. will able self at we visibility will it to see always will So be in if and up retail it performance, searches, an mentioned day, this for to your retail to sells, traditional consistent is up end digital a really to like to online customers, terms and is again, traditional in prophecy, a launching idea right? shelf more more in sales. show more it’s product this almost

not the lose and right? always, mentioned all the really market me with yes, advantage especially price, dilemma, but the is the also their of you have throwing share other really like, is towel, they’re if and that as it’s and take again, I reducing they’re do, then cost much, as market ways of remember The of come share. people the And the or challenges. too because because down, or we if going because getting that well, same earlier are that companies to the they’re, that, interesting reduced take to who that, this can by competitors this is people towel And product everything we your having the other them answer With might dealing take well, potentially squeezed, margins dealing up, mean sustainable is throwing part liquidating in lot up same at cost ask prices are our a up but share I even going to with really in problems market we for performance them, right? are situation regain how hard

imagine to on it well, on a for in they’re yourself, through us, this, ask Now and a by push of are literally me right? of challenges getting And starting temporarily do those is time out that trying sales Amy those someone decisions decisions. could a monitoring They competitor taking way, without or be real lot the without take semi-automatically analytics. what automatically is When a the to sitting right? market, always in business. this to either performance managing products of the product’s we’re the give can we And again, they’re do like, to that the because technology again, it about, about manually you the these systems, or without someone market within for And right the critical team in is where, real that right have visibility that team in our we and how right? make so SKU rid And is right difficult from this You basis. is to the investments get data investments need it’s would SKU make try into and abilities our looking to our kind Or time. inventory the of at, share? this

far, here with as able we’ve all environment. it been those overall, market through overall question? I share, we’ve think that we so so. things in Does little resonate we’ll to and again, I’m to we’ve market could do believe continue with retain as So as how far well lost the a And But other challenges gain done there, shares considered, and managed we’ve your places. I so happy with that bit

Understood. Thank you.

problem. No

[Operator Our Koranda ROTH you. question Instructions] comes Thank Matt with next Capital. from

Your now line open. is

Hey guys, it’s on from Mike Matt. Zabran

Just a strategy couple M&A going questions on forward.

well whether debt or you distressed we’re we just we’re kind just at. improvement looking just just equity? more looking of growth, businesses? color types or of some thinking what give how seeing about lastly, some If need could for are and we help companies talk we’re about this that overall And us for what aggregators looking through run terms on multiples funding understand of Are in operational

question. That’s great a

go he answer add see I’ll to and wants anything. Artie me Let it if to

absolutely to the we’re marketplace multiple the of brand the the – consumer that So, in prepared winners scale, as many overall, I the managing super excited think M&A. there a said channels. across about industry future, portfolio long-term, And is platform remarks, this also this at landscape We be massive. are in building going

much starting winners said, want the room online to dominate marketplaces space. multiple retail good we at be there’s about Amazon, just are very managing speaking, Globally are pretty every and on to I marketplaces. not As there those it’s for And right? brands continent that

As amount remarks, level see again, go brands roll there is tech, starting smaller like some a significant the very realize the environment macro of to we’re challenging the starting in landscape, manage right? those do, the I mentioned companies to and have right hard to up very thing aggregator that money pressure, is that without out e-commerce raised it’s situations also to of They’re especially today. and a in infrastructure to the businesses, that challenging this in some really

we in to so believe going consolidation. we’re space, that see aggregator the And

environment to measured is see We’ve time. acceleration of when a two aware we’re of right, it very at we potentially the happened to are take in to of XX-month companies And it baseline the little they overpaying. to is, continued maybe that careful right. wait including is the now that to prepared make going opportunity And I obviously not We’re business Does what on things bit, good think let the and results, be there, we in will the seen. Yes, in the I e-commerce trailing and look out we it has we Aterian come as there very look it about about call and at last but that years. more more targets have couple from stabilize, maybe be they’re and all careful here, sense a at remarks, right. targets mentioned to look the remains us, it of am see for

valuation, a to right. opposed execute at As higher

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want [indiscernible]. wait to I And you I Artie, for here. that probably be to times stabilize. don’t execute opportunity anything think we need add incredible to things there’s maybe again, if during well continue this. know to think got just capital about I those the and execute on we’re We’ve to as more for positioned careful

including Yaniv. interesting will good a some to equity financing we’re us of and facility, of or shares sellers. or some the is ones, and certain if credit flexibility we think especially We balance think, I us to combination Yes. doing doing disruptions material is position M&A, in type earlier, the of navigate we current that’s gives the these our the more said we’re midcap obviously said reiterate, and becoming working going to capital. both, And Thanks what strengthens probably we in at yes, if volume provides some I equity do to look certainly it which debt flexibility puts raise sheet, previously, seller,

So if I on is were think doing would those combinations we where news some financing see M&A. you

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and think XX other will transit which I I sitting say roughly is or guess, about difference, is I be considered would on the is hand. XX million So XX, like roughly, in

That’s helpful. Thanks guys.

you. Thank

Ilya Thank you. to our session. turn would This back to over Grozovsky. concludes I question-and-answer like now conference the

Thanks.

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continue it investment strategic on past, the the So recurring talked related to make in about we publisher everything to while that’s business. we in driven DealMojo side,

of XX% looking for outside And in publishers. by are this when or recommendation, products they’re reminder, traffic, the solution of problem oftentimes this to for marketplaces a search searches a As a customers United right? States captured

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with is was, that question what popular Aterian’s international was going sales on Next efforts?

Sure.

as are disruption even as is U.S. supply preparations we infrastructure of happening other we’re that meantime, So opportunity as we’re it’s there’s be we that up push all lot Yes. things important chain. our the calls, of Aterian pending [ph] we we’ve made the Europe one not making And moving than experienced are now. large main we’re back on previous to especially these chain, going of on as a In of is PS mainly in for all a growth. on So rollout, critical and things believe very again, some sales, progress but logistics kind right? setting where focusing more we’re to doing the wanted, robust normalization mentioned obviously fast because on more disruptions that international I supply And and of Europe

a all also things acquisitions the if lot well more internationally can. But as those well again when, then we start just – the there. kind normalization we And as the day, we’ll to we’ve to to potentially the discussed guess an see starting into at we’ll acquisition And expand not bringing infrastructure coming versus is at. of that in look that timing both to which end but which is we’re products as been of those We’re see of do of will given that again, pushing last us, products months is we right. a get I of as But not Europe all pending this potential over timing from to specifically to next few invest going now, to disruptions. right environment, the as want in. think I we see that stabilize growth And necessarily the markets, as

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Yes. received questions about We that.

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This portion Thank Q&A of the concludes you. the call.

speaking This to Investor June the Annual our now Conference forward Annual X, be and Consumer Xth of and look future on management the XX XXnd Oppenheimer We Growth Conference in Annual you Conference disconnect. calls. Thank Emerging on Oppenheimer calendar, call, you with on terms you. the ends XX. will upcoming XX, and In Institutional and may participating XXth May E-Commerce the on June Aterian Craig-Hallum

Thank conference This participating. concludes for today’s you call.

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