Boxed (BOXDQ) 16 May 222022 Q1 Earnings call transcript

Good afternoon. Thank you for attending today’s Boxed, Inc.

First Quarter 2022 Earnings Call. My name is Hanna and I will be your moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, Chris Manuel [ph], Managing Director of Investor Relations. ahead. go Please

thank XXXX and joining on us Good conference you call. first earnings Boxed’s afternoon for

On today Officer. Officer; and the Chief Mark and call Zimowski, are Chieh Chief Financial Co-Founder Huang, Executive

risks those may cause During in materially events today. of GAAP these based These its the non-GAAP to differ is meaning the uncertainties measures or future assumptions securities that and the measures. federal statements. statements expressed Investor Management’s results operations financial management’s on current and Commission include press forward-looking and could issued results statements materially Boxed These expectations the those of Relations this on Reconciliations could management from non-GAAP are of remarks include for involve course adjusted Boxed and laws. release and webcast website. regarding actual described time-to-time Securities within make to expectations refer call, that and actual from with statements from the be being forward-looking forward-looking differ today company’s release. performance. Please or risks in a earnings it filed implied made an any detailed archive available and of financial will and will made today reports the to the of in financial This available are call discussion Exchange

I’d call Now, to the like to turn Chieh. over

outlook results QX as as will well greater going on up that, going the very from to for our am I in again, am updates hi, business recent what far we After XXXX. detail XXXX and is Chirs questions. Thanks, then call time some Mark the provide convene. in the for open so we momentum to of has our discuss on our everyone. financial proud first and our team last building I accomplished

Boxed. were a others. key If debuted last themes year, you discussed company We as as excited the increased as capital we public infusion about could we few well remember, benefit as how amongst a awareness

recovery keys of We one I more more in customer we cohort business, variability I on how updates am related the these be is trends XX.X% provide year-over-year. one stickier profitable are since X cohorts. and to also today. BXB am of COVID. our discussed happy our would GMV quarter to that seeing years plus after our for grew thrilled the to BXB BXB customer fronts the it of

on and return this deploying we excellent have efforts on where shift to the industry sales dedicated to-date. towards more capitalizing are remain had traction and We marketing by verticals focused work BXB

also year-over-year, GMV We be saw to by XX% growing good exact. growth overall in almost XX.X%

are reacceleration there On revenue well. seeing the front, net we as

period. net year First compared revenue increased quarter to XX.X% prior the

We margin quarter. XX.X% all have the increasing of gross gross for and done to year-over-year profit this, XX.X% while

of Regarding margins, to fortunate you hearing partnerships, cost partnership all a partnership with end only improve dedication to testament customers. the team’s provide a to transportation us convenience, entire will cost cost our commercial incredibly a be announce delivering but service customers. savings feel about and our with expand which also excited will we FedEx. when savings, levels our to At increases value all It’s savings are are not inflation, and to we real and able to is to time

in opportunity how by discussion, we investing excited our Now, said brands. to going we also awareness previous to back to increase our have the were remember, have

a and last have we streaming call begun video new mentioned in more linear channels during of recently content earnings marketing our our brand launched channels. rollout across holistic our across messaging As creative all and March,

first doubled to aided seeing the brand we our of on has awareness XXXX. result of the during were levels throughout a ongoing compared As based quarter results, approximately these XXXX efforts, survey

strategy is This and helping awareness be marketing from starting factor our a on we momentum were this to bolster build expect While will we already customer base, a believe this active year. that working our we low in illustrates throughout this accounts.

stood than XXX,XXX about This the customers. increase the quarter. of We are first active at on positive quarter-over-quarter front seeing trends represents as XX,XXX a end customer of at that accounts more

As revenue we discussed we are previously something noted, XXXX. and is in are we this AOV supporting the subsequent GMV focused behavior. Other quarter-over-quarter trend past repeat items retail throughout important and net have growth on in

of these believe stated be expansion product to improving our we before, will metrics. As important efforts both

improving However, product increasingly as discoverability will assortment, important. become we add

As taxonomy properties, on on our bring growth more will we such, we third-party the revamped fully as sellers. have which support continued

notice to assortment new the pet metric a year the the in have begin hovering for $XXX range, than been AOVs more will organic up is categories, merchandise quarters even versus last XX% prior and expanded general more which You period. standpoint, products. From two

to our Beyond on seeing that, is I’d increase share MaxDelivery. provide feel an with our wallet a across also we our which we means customer like first are bullish about. order update frequencies you active base, trend acquisition, also increasing,

access marketing behind the on-demand X grow in reminder, MaxDelivery to delivery. fresh and York products, delivered we offers in continues as customers dark The acquisition an in environment to from The in hour. frozen New our customer by our acquisition a As spend to base foods, expectations including under business XX,XXX invest hour perform groceries benefited here store has fresh Manhattan. a line expanding and with

during service We to year. with year. integrate locations and of are QX negotiations fully by more forward this we for customers our the QX MaxDelivery several and expanding of to look in operations locations, We and Boxed the end to are track active new to new to of expect we launch this on which

of building business, we the technology on the to the months, underlying and to been services scalability. focused developments platform couple software the broader and last over have to Turning support infrastructure

when feature important we In we on functionality. an Malaysia, first addition, upon it’s with delivery. we have expansion this think We attracting the globe. emerging recently in will across as for to deployed other portion provide customers our markets us prefers other AEON emerging markets, delivery advantage but pay into We where another a believe capability of still large launched competitive the consider payment this population yet

its Stanley X, Secretary Vice a our was driven Revenue Meyer but Black business. Officer key Officer, we provider leadership growing From Strategic Software previously to Revenue has President Merchandising, ESG team it’s the across General President, of Hochberg, President securities Town was Senior and company. Boxed e-commerce of engagement Jung President Merchandising Officer Vega, not prior for previously of Chief fast expanded direct-to-consumer & experience software Dynamo Vice Counsel our already it’s Strategic Counsel, company. been regulation, of of and Assistant delivered online at President Chris of Counsel Chief team through People at Vice previously Officer, and Elizabeth previously Chief our here for Day Growth team. governance, led industry consumables Vice let’s Now, shareholder at at & fin-tech corporate was veterans services reporting, maintain XXXX, in being Decker previously overseeing and Assistant that including People strategy. Anna our right the in results in leadership that. order to so invest world President business, was addition Services positions, a Vice and Chief Sheng, Living a has of me, Technologies. General Chief ensure years people just Growth Choi, have to General software COO we Country at Vice technology and key entire People team. at Veracelle public company that Sezzle, continue Residence, we talk class Officer In sales

collective this of have growing force company. an to honored background, are eclectic We with talent impressive and join our such

up It’s war. stock a everyone to centers. efforts support has been moment working well. part to a stated supply all and suffering because core inventory out of our us behalf do of to relief world’s the X-day through March donated to has multiple out the we Boxed. Ukrainian and I’d of Boxed, in is our meetings our say always of that that take We mission. go are hearts to as of the chain at very of Help helping enable fulfillment and Lastly, our doing technology here like our over important good actively on the storage profits XXX% period Russia-Ukraine at

a differentiated dynamic and can and world. positioned this tell, very is are us. in year changing for As well feel We exciting we XXXX you

save BXC bulk as can rises. in business inflation help customers Our

Our normal. to BXB returns business is world post-COVID ready our customers to as the serve

margin our business Lastly, software high is point of and yet overall our another services differentiation company. for

factors make Boxed to With these of it All Mark. hand let me over unique. that,

Thank much, Chieh. you so

will year-over-year so in quarter. far to are increase software strengthening what million I of financial to compared and our off increase period. primarily combined with was XXXX the we first services retail results or a demand the $X.X was We growth. by customer an in start BXB $XX.X million, for due Net The prior reviewing and have revenue with XX.X% year accomplished pleased

the an increasing customer retail of $X.X the period. we due this marketing was revenue XX.X% largely engagement, sequential million compared to For been increase investments year growth. active have segment, to BXB the making increase increased The for prior demand overall and million, $XX.X net customer is or customer

impact our order year customer our engagement, those as which terms was but as $XX compared the customer, quarter, seeing disclosure share can complementary active was When a the KPIs, we overall we or to strong order XX.X% be blend well two year-over-year metric per frequency, to revenue to through combined growth In together, also RPAC spoke both prior our across In increase dynamics wallet the net which last RPAC, new of retail yielding an are are that increases. added $XXX, you or first values the quarter. of period. average see we our excited we to that

seeing and with RPAC While frequency are increase, order our as the growth in BXC a within BXB customer order we of supporting nice demand lift cohorts is AOV well. also mix some actually customer and

we positive from Turning see a base. mentioned continue to minute, BXB earlier, customer to this Chieh for as momentum

to year-over-year, BXB sustaining of quarters in been team proving capturing in a Year-to-date, the dedicated the a two growth, we expanding XX% and it standpoint, an been quarter leaning last has in actively we demand. catalyst our focused this on be increasing investment of BXB to now, is From highly row range XXXX seeing year. return are BXB first in XX% in ever nice with growth retail. compared up growing has to began quarter first XX.X% BXB momentum GMV the office For to QX also

have compared we the reemergence particularly they stickier average, that customer. quarter, to discussed customer, they BXB on and of customer over BXC spending are As on base, per the are our top a our excited of we profitable more past, about more in Xx are and because

marketing consistently strategy for XXXX. the we Finally, in our growth of on retail, have importance communicated

to us We are and compared channels are enabled our XXXX. maturity. to at levels we supporting which test have quarter spend brand increased and levels new now awareness, increased sustaining into Chieh marketing our seen and increasing the this for noted, investments size throughout budget The believe there as appropriate has doubled

spent million during related During production were million a the do quarter, which fully not though, Otherwise, approximately to at expect as year. we these over And $X.X on marketing continue we advertising, costs, variability of the first throughout quarter-to-quarter. sustain expensed course we to with which result, $XX.X investment content the minor the expect some levels those year, to generally from of QX.

Turning Software in internal or million which and beat million revenue and quarter, generated the in Services segment, to now our $X.X XXX.X% increased the year-over-year net expectations. $X.X we first

versus portfolio, the more we previously future. as are period-to-period recognition revenue Further, increasing such, variable in for mix the remain And to the will from potential within will highly while we more scale. discussed, growth software predictability on quarter-to-quarter we customers of our timing this revenue and opportunity focused quarter-to-quarter as segment support recurring add long-term revenue from we As help near-term results.

have more As provide software able the technology strong customer confident positive there be enhancements pipeline in had Chieh are mentioned, expecting and we in updates some our within coming exciting months. to we our offerings to

XXX this of prior or addition, period environment remains gross resulted from came the in costs. our new customers. inflationary our The year transportation a in Software to nice are end levels and new given point cost between the and we year-over-year $X.X we margin from of macro-driven quarter relatively the that exciting pleased revenue million an in yield increase the there inflationary expected XX.X% of to across within proliferation increase with headwinds X-day XX.X%, flat third-party margin increased in Services and as vendor performance and $X.X margin cost to expect are partnership product structure, In is transportation Further, mix gross QX believe Retail We expansion marketplace the transportation at continued and trends, expansion we positive also not long-term. XX.X% the growth savings, million see first with to supporting only of basis our but better the FedEx XX% profitability seeing service trends higher increase to gross opportunities continue business, year we medium and trade, and advertising segment. our significant versus over by profit revenue the from approximately and margin significant XXXX. this margin BXB net of the increases combating retail

Our first related professional was a investments related period quarter expenses. and advertising, to due compared which loss of million costs. to prior million of primarily growth or in increases insurance non-cash one-time $XX.X a related of loss staff, was million, loss Adjusted $XX.X loss and the EBITDA million in net costs services million of year company prior $XX in related a transaction across public to the This period. $XX.X compared to $XX

On the $XX.X side, first the year XX.X% quarter, merchandise versus year-over-year value quarter-over-quarter and showing both increase was gross period, prior reacceleration million basis. the on a for $X.X of million KPI or an strong

are customer increase with including values, XX.X% $XX optimizations. $XXX, increase year order are quarter order compared first an continued BXB of support expanding the price pleased helping this of assortment There in mix, and an of prior with or increase to we upward ongoing period. Finally, factors our several average trajectory the AOV

help of our the balance investments the we and course million cash have balance restricted Turning marketing, support the now over of million, to $XX.X which our in will technology of software end inclusive first in and cash of sheet. quarter, year. the services At $X.X

coming $XX.X In we million hope had to the continue in which we the balance on a collect form have collecting on addition, on and sheet receivable, of which the throughout over forward the been will year purchase quarters. we

at $XXX a financing provide Finally, further terms the recently X-year equity liquidity draw announcing of seen, to issued which JonesTrading. able will support be may our as flexibility committed will we million expect helping over we facility have we with that needs. our you facility an the to equity facility capital, raise on option, X-K to Subject future time, additional

debt. which $XXX.X of $XX.X principal debt related at total Our is remains million, convertible million to

in discussed call. earnings turning Finally, our full year trajectory we last for detail as that quarterly on our quarter to XXXX, the we the guidance maintaining we provided are outlook as in trends last well

adjusted of We to continue to range expect million, $XXX loss of $XXX $XX net revenue in EBITDA million in the $XX to the an with range million million.

and we million XXXX, In addition, feel $XX we of remain revenue are now results. also to weighted timing providing and of will to guidance partnerships I million stress quarter to to first given recognition of fiscal year the do Overall, half the the enterprise variable revenue that the the about in second segment the of continue the nature in are near-term year. which we negotiating deploying. expect great the for services heavily want in for software we $XX be

We profitability brands, finally liquidity. awareness are seen deliver new margin in and which have improvements increased reaccelerated future some and to of top line savings support cost our partnerships, have exciting growth, customer engagement, announced both expanded expected gross

and for remarks. for for appropriate And to stakeholders. to exciting all are Software year us. Looking massive over making on me With segment, enable many so is our the our BXB continuing all. that, see BXC, deliver momentum XXXX forward, growth we potential our Thank horizon back such for are an turn scale investments of some the avenues focus there value between call you and for the the seeing remains to and final the to on Chieh in Services let we scale us long-term

Mark. Thanks

we as on We are positioned environment. capitalizing are consumer changing this success well for

our growth BXB are investing investments acquisition, expand the enhance in stockholders and growth the we are our where long-term thoughtfully to plan program, BXC loyalty drive We customer and platforms, making of further fuel over sustainable to our strategic for long-term. assortment product

take So questions. with your available we to now Operator? are that,

is with question first Fargo. Please proceed. The Brian the Instructions] of line [Operator Certainly. from Wells Fitzgerald

could the relative remains on awareness recovery aided aided And Couple pre-pandemic of the just doubled, have of sense a how awareness some wondering of in your absolute then maybe kind back the you level larger or existing market. guys. on sense questions, of recapture of the any or mentioned give ramped if peers your in how nice much quarter, Thanks to large many versus brand awareness us volumes with really customers to BXB levels Thanks. of GMV opportunity normalized you customers?

so Hey, much. Brian. Thanks

and at sort everything Certainly, are we combination are BXB then awareness turn with BXB, happening start it quarter-over-quarter of a on will think year-over-year a I over user seeing growth time. will I and the point. of question seeing to I for we Chieh basis. On a So same the

of in seeing on side quarter, returned has we We also kind engagement and actually pre-pandemic basically customer actual we outpaced discussed BXB are as what the last the seeing levels. were

spending customers now we The than returned They as our what have ordering Xx than BXC well a frequently. base. those were more are above AOVs there little are more Xx So, more customer pre-pandemic about or well. seeing actually

are nicely. those really growing So,

it’s look just the hitting underlying year-over-year So, side, of of at us increase. in the once XX% what are growth all and kind that seeing that’s at we when GMV you

Chieh an every so awareness month study do It’s the branded point, internal or on we the awareness aided study. here

survey go out we to So month. each respondents each about X,XXX for

overall, or on are taking So app they sample for the app on time. random at the online exchange online that in taken ad survey, at is rewards mobile using And get currently networks. in network they the the

only. U.S. it’s So,

X% as am number the jumped is internal it a But I happy survey, previously. whole to from number. to it that We this was from say haven’t disclosed what had X% exact

we still whenever said, you when starting it to number comes that are some sell. to But our think much in with I that peers a X% see of KPIs move much a these it of than lower seeing direction. in are the selling doubling of to categories larger do So right awareness, when you comes course, is the

Thanks, Yes. Thanks Mark. Chieh. Got it.

Thank Josey proceed. is you, Ron The Mr. Please the with Fitzgerald. Citi. from next line of question

just wanted see question? I wanted Great. Thanks that compared first the think hadn’t ask, I does this to know up order you I is for details talked lines? I I the partnership? of levels seen about on frequency you to order more pre-COVID, to taking it question. benefits times frequency the can in partnerships, to FedEx the bit you coming along just little is before. and then that shipping impact but more talk heard Thanks, those things increasing the the new FedEx guess a about just of preamble, guys. And on how partnership, I the

so Thanks Certainly. much, Ron.

dynamic an seeing say from standpoint, pre-pandemic we in BXC BXB, are are of basically order that to shifted have frequency what compared I is is over and line. order So relatively right. sort overall has what would frequencies time, we levels, across seen

On off a a there on the that’s during that. seen the saw was the And and of where we happen of big coming have of pandemic BXB amount order recovery in what side, post even follow-up sort periods large we the size. frequency

I pretty frequency Now, from on order up a also left year-over-year nicely will BXC, say is perspective.

that XXXX, we post-pandemic back growth sort at when as are we seeing well. look in that environment very from perspective So, certainly QX nearing of

are also platform. that counteract are which So, think that lower seeing the dynamic news transportation per growth yielding order the I the then the you to very there increases of. things definitely expect can are it to spend What seeing often you we user moving see may good AOV that’s we all And not from see costs question. that is case, always increases that seeing is across with the something on standpoint. we mindful both, the I frequency, are And is positive is is customer you when

we overall, margin well will that some of through as that we exactly are of is gross over quarter, impact course agreement on be. QX year. QX. back kick So, expect I as effects anticipating – to nice growth the the say disclosing would start the into are this the not this going But And the business and to what retail we of margin what that really, in of half

when partnership about there, savings. So, overall, the about we cost think we the transportation really while excited are

that’s side our retail of deliver of the delivery quite other framework ultimately the deploys, business customer, end FedEx are the we that us seven a On day really scale going that to help over enable about, better to excited time. service

will forward are them, go on really, impact really And alliance that have and with we that excited so business that we about commercial basis. the how a

Thank you, Great. Chieh.

Mr. BTIG. from of Instructions] Josey. question you, line [Operator Please Fong proceed. the Marvin The Thank with is next

evening. evening, questions. Thanks my Good taking Good guys. for

So, two me. for

behavioral CAC is range, now expectations? I was have Just Ukraine it’s that question your because are might have that then wondering relative but you if early, still guess in on second one maybe think the quarter, they consumer internal history, to I subsequent you or you Thanks. could the we February to when describe alternatively, changes, CAC, relative noticed, trended is began, changes my how to something any or know in late how noticing. just which $XX And I behavior conflict any trended

Chieh Hey, Marvin, you here. got

So, to detail. provide Mark hand maybe context. fill it I will blanks over I on the to the And in will some

sets within to just of customers behavior, we serve we have really it So, overall, when our remember two if comes segment. that consumer you retail

something So, the plus BXB man posted before pleased XX% quarter, last remember, as we up year-over-year about really that heard like, if you we you are gains.

current quarter that we are more Now, plus you XX% are to that this in reporting. seeing even accelerate

Mark repeat but coming only As increased behavior. size, behavior from before, increased mentioned is basket that not also

said we So, be more on. And capitalize to trend, us back are spending to went important if more would we coming harking first when us. for BXB the public, are that’s and to they you are so back they that

the I to our there business. away. reopen, of pandemic then we which an important largely as key part was starting was as And out part world now the went tailwind a the our business folks of that such think don’t in BXB, realize happened are as So, of that see lot reopens, built

as before, did side, good as way, folks we in they great a a way. mentioned behave the seeing in On are pre-pandemic Mark BXC

behavior repeat And also So, to for What us a are direction buying we in something when this year. that seeing right you quite consumable bit confidence to a that say is continue great cohort sell is individual at before these the when look KPIs repeating, customers, in much the you Mark, are customer, I right hand these of so over I revenue that the things, are mic per direction. books, net the want all active these trend consumables. they AOV, of I believe gives trending to how

I start think going that you the so as theme output go And are quarters gains to really to of see the by.

had capital, of think Mark? we started of And some coming as we So, it. injection see that starting out that. are tailwind to deploying you I

sort medium related Marvin, suggest And been I conflict. at conflict yield has question rates, the around heavily being and impacted acquisition we to we data change as there your across those acquisitions, have customer to anything there, by would that I to very are and seen investment communicated longer costs the think we of your to awareness what itself. that of around major specific periods, conversion a Ukraine, out question of within into investing really really, that term etcetera. gains types QX hearts always sort who marketing result we were have would we the starting customer around the of look are of mindful go has When some QX, in don’t much build our across and everyone as basically across there. you messaging are Yes. And we brand been to of channels, around more any turning its focused brand Obviously, other sort certainly early and previously anticipated which seeing think

certainly tax, compared norms, channels. well manner we But channels the that those near-term, spending is of we when forward. focus to sort re-stabilize maybe our support scale and we there as really that’s are So, start in bottom investing tax back were over And as the you to variability some seeing will been the enable brand very had performance future. behind funnel historical to that in efficient us going investment marketing time when see to investment in as to help move we a in to where are only

Yes, sort I between current I sort describe guess Well, have for maybe apologize. in Maybe maybe energy of – my even the I Ukraine product to more sort a just is and there using conflict inflation, to that I So, didn’t how And like question just I I prices segment as was maybe that change like, spiking some think the missed. anything new noticed I any of was separation don’t the product probably question. BXC shortages. I of help and you question. the that’s are reacting if maybe know and clarify will consumers shortages? you say… point

Chieh thank and it’s Marvin, Yes. that. for you so clarifying

we as of yet. So, overall, didn’t that I wouldn’t say that inflation really any big changes because of conflict, of or because report

inflation, think will private about picks is historically. to point the inflation strong that to seeing a holistically Of of overall, especially brand course, could a up I we I does pretty in people to pick it But up. as very overall, inflation as business, continue speak especially believe that, for flock BXC, and where have terms as the now hot we if world

in they folks to You of see the and to in really to at buying different are going potentially bulk. start money by us, are so potentially course, shift for channels discounters, saving which and going shopping

inflationary So, a business. I could BXC in be inflationary for high environment such environment, think an our actually good quite think I

Mark. great. that and additional for Appreciate Chieh Okay, commentary. Thanks

from of D.A. Forte Please with next Fong. the Mr. you, line question is proceed. Davidson. Tom Thank The

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

how label? label greater a So, private the think private you product. to tremendous your you private And talked consumers Are as a about little you margin inflation there? opportunity of percent have think the we sales are more should opt I seeing generally about label? speaking,

that Thanks one. so Tom. take I Hey, much. will

private basis, we we I penetration, sort to we on campaign, of see quarter-over-quarter where actually think of we dynamic well. at relatively invest of that some back part look started, price sort of in that the compared look largely are there we as stable have sort is ongoing when branded items actually an of today, some brands, when So, we started sort certain to have at of XXXX, as anti-inflationary

penetration we price think the starting support nail will business to we that growth margin And a we penetration and branded the certainly, we that about year. which opportunity go QX, behind basis But the improve invest on brand six in private point to seeing. they try forward that, are that maybe so certain advantage some side to to head, on sort the and the note in are remain inflationary on really And behavior, our continue said to to think piggybacking are trends of items, of the period. private QX trends over to some products. then general. around of we brand consumer cuts other think stable started some during you see that Chieh And last causing this going is what have just hit I is off strategy, the – our compared savings private impact seeing how are the brands earlier, especially to of the we on actually of providing on private where I communication of of around about there, brand marketing we helping relatively of rates see around some think were I When

maintain inflation are. And over so tailwinds of rest nice some we the should year, if of rates they the course sort where expect of the

term have question, build question for your on And I fulfillment longer Great. a out. follow-up center my

the a couple lowering where your adding high what delivered years? are level, centers over could So, of fulfillment At plans standpoint shipping adding fulfillment And to more your miles improve from today? more centers a how for cost consumer? by then the you the next are

wonderful start are And going question. see, time a a again, you It’s and more about. begin thinking lot Chieh make acquisition that’s we I Tom, spend that Hey, especially and in here, the think QX of to to MaxDelivery to sense. more QX,

And of square MaxDelivery so now right remember, foot out facility. sub-XX,XXX is

than had are larger square if we Analyst remember, our as our facilities XX,XXX Day, way you So, feet.

see but smaller you than that are than the as going later see going locations are we as they before, start those we open we larger facilities. been so or As larger said them MaxDelivery, year to to this where have today, combined locations traditionally you for where them additional announced slightly are and to

And so dark takes we MaxDelivery lightweight for out alluded crosstalk smaller, of packed to crosstalk local of those pick, actually to dot costs is large of traveled local to, pack can customers. so that the large, they store and begin we or with or you shift And facilities, items or facilities, getting packed packages, inventory, so the then ship country it actual your we before, can to large, to can what the as those the that customer, our part how miles a can closer deliver in much it end cost structure the as locations. couriers

the more of additional Express in fulfillment more to save, gross costs to closer the comes are to margin. enable so So, it increasing building and we course, relationship, to the centers lower across thereby our – them, we will us Federal our addition when continue transportation country, to

you just what have follow-up then may I one pointed Great. Chieh. to out If

use your fulfillment should the larger the So, at think about level I about fulfillment automation impresses these is that me automation. of centers, thing How smaller when high centers? one think of I

That’s a very point. good

own pieces So, why hopefully together, the when our we about robotics. think build you answers also all to beginning it custom fit

Day was so in environment. conveyors, you we conveyors, you don’t of hosted mezzanine, miles multi dark that storey fulfillment center will see And that last year, our typical the and store huge Analyst see a that miles

floor we at single a custom you fit built And the had, so end would the remember, robotics kind into tour if of you locations. the smaller that we showed then of much which

course, begin once shine. XXXX robotics can feet, square you to of get those square feet. XX,XXX, XX,XXX when really that’s say, wouldn’t X,XXX, But those to fit so XX,XXX, robotics in, And

Thank Great. Mark. you, Thank you, Chieh.

Thank Mr. you,

this Forte. are at questions additional no There waiting time.

I will So, turn Chieh closing over the remarks. to for call Huang

Well, thanks, everybody joining for today. call our

that tell, we on, what felt So, only as capitalized very far, about was not quarter, we what we quarter are there have so but opportunity about in in also created the we and massive that we the XXXX. felt you excited can a

thanks for our So, joining so with call. that, much

We will next see you time.

for call. your participation. today’s conference concludes you That Thank

You lines. may now disconnect your