Slide 1: Q2 2020 Results
THE ANALYST DAY PRESENTATION 2018 Q2 2020 RESULTS August 12, 2020
Slide 2: Note on Forward-Looking Statements
PAGE 2 Note on Forward-Looking Statements Information in this presentation contains forward-looking statements as defined within the meaning of U.S. federal securities laws, including, but not limited to, statements regarding our expectations around the continued impact of the COVID-19 pandemic on o
Slide 3: Summary: Solid Quarter on Key Priorities in Current Environment
PAGE SUMMARY: SOLID QUARTER ON KEY PRIORITIES IN CURRENT ENVIRONMENT (YoY comparisons skewed by COVID-19 impact in Q2 2020) 3 IMPROVED INVENTORY FREE CASH FLOW FURTHER TOP-LINE TREND TURNS HIGHER STRENGTHENED BALANCE SHEET YoY Growth (Decline) YoY Growth (Decline) Net Cash Position ($MM) in Net Sale
Slide 4: Income Statement Highlights
PAGE INCOME STATEMENT HIGHLIGHTS (YoY comparisons skewed by COVID-19 impact in Q2 2020) 4 NET SALES ($MM) GROSS MARGIN NET INCOME ($MM) ADJUSTED EBITDA(1) ($MM) % ADJ. EBITDA MARGIN (12%) YoY $161.9 +10% YoY $142.8 (530 BPs) YoY $20.9 +12% YoY $19.0 55.8% $14.2 50.5% $12.7 14.6% 11.7% Q2 2019 Q2 202
Slide 5: Operating Metrics Highlights
OPERATING METRICS HIGHLIGHTS PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 5 ACTIVE CUSTOMERS(1) (000s) TOTAL ORDERS PLACED(1) (000s) AVERAGE ORDER VALUE(1) (TRAILING 12 MONTHS) +13% YoY 1,533 (26%) YoY (10%) YoY 1,359 $275 1,294 1,163 $204 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 20
Slide 6: Category Performance Is Key Driver of AOV YoY Decrease
CATEGORY PERFORMANCE IS KEY DRIVER OF AOV YOY DECREASE PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 6 HIGHEST YOY NET SALES YOY DECLINE IN NET SALES GROWTH RATES IN Q2 2020 IN Q2 DUE TO “STAY AT HOME” Beauty Intimates and Dresses Skirts Accessories Loungewear (#1 category) Dresses as
Slide 7: Net Sales by Geography
NET SALES BY GEOGRAPHY PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 7 YoY GROWTH (DECLINE) INTERNATIONAL MIX OF TOTAL NET SALES IN NET SALES IN Q2 2020 Q2 2019 Q2 2020 + 3% 16% 19% (15%) U.S. International INTERNATIONAL NET SALES U.S. NET SALES
Slide 8: Segment Net Sales
SEGMENT NET SALES PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 8 REVOLVE SEGMENT NET SALES ($MM) FORWARD SEGMENT NET SALES ($MM) (12%) YoY $143.9 $126.9 $116.1 $90.4 (12%) YoY $17.5 $18.0 $15.7 $15.9 Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2017 Q2 2018 Q2 2019 Q2 2020
Slide 9: Segment Gross Profit
SEGMENT GROSS PROFIT PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 9 REVOLVE SEGMENT GROSS PROFIT ($MM) FORWARD SEGMENT GROSS PROFIT ($MM) (20%) YoY $82.8 $66.5 $66.2 $48.0 (23%) YoY $6.9 $7.6 $6.6 $5.8 Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2017 Q2 2018 Q2 2019 Q2 2020
Slide 10: GAAP Cost Structure
GAAP COST STRUCTURE PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 10 Q2 COSTS YoY OBSERVATIONS: AS A % OF NET SALES CHANGE Cost of Sales: Cost of sales deleverage in Q2 2020 consistent with (ROUNDED) commentary on the REVOLVE Q1 2020 investor call. REVOLVE’s inventory dynamics and indu
Slide 11: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 11 THE EPS MATH (000s, except per share figures) Q2 2020 Q2 2019 Net income $14,236 $12,741 DILUTED EPS (1) Less repurchase of Class B common stock upon corporate + 11% YoY conversion (at the time of the IPO in Ju
Slide 12: Cash Flow Highlights
CASH FLOW HIGHLIGHTS PAGE (YoY comparisons skewed by COVID-19 impact in Q2 2020) 12 NET CASH PROVIDED BY INVENTORY OPERATING ACTIVITIES CAPITAL EXPENDITURES FREE CASH FLOW (1) ($MM) ($MM) ($MM) ($MM) $102.5 $53.8 $53.0 $64.5 $4.8 $6.8 $2.0 $0.8 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019
Slide 13: Build Up of Free Cash Flow in Q2 2020
PAGE BUILD UP OF FREE CASH FLOW IN Q2 2020 ($MM) 13 + $2.7 $53.0 + $36.9 ($0.8) $14.2 Net Income Reduced Inventory Other W/C and Other CapEx Free Cash Flow
Slide 14: Balance Sheet Highlights
PAGE BALANCE SHEET HIGHLIGHTS 14 CASH ON THE BALANCE SHEET ($MM) BALANCE ON CREDIT LINE ($MM) (1) $150.8 + $53M in free cash flow in Q2 - $6M repayment on credit line $103.6 $65.4 ($6M) QoQ $51.1 $44.8 $30.0 $27.2 $24.0 $16.4 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q1 2020 Q2 2020 No
Slide 15: 1H 2020 Highlights
1H 2020 HIGHLIGHTS PAGE (YoY comparisons skewed by COVID-19 impact in 1H 2020) 15 NET SALES EBITDA MARGIN NET INCOME $289 M 9.2% $18 M (3%) YoY Flat YoY +4% YoY INVENTORY FREE CASH FLOW NET CASH (37%) YoY $61 M $127 M ` $38M Decrease YoY More than All of 2019 +183% YoY
Slide 16: Metrics Definitions
PAGE METRICS DEFINITIONS 16 Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income before other expense, net, taxes, depreciation and amortization, adjusted to exclude the effects of equity-based compensation expense, and certain non-routine expen
Slide 17: GAAP to Non-GAAP Reconciliation
PAGE GAAP TO NON-GAAP RECONCILIATION (YoY comparisons skewed by COVID-19 impact in Q2 2020) 17 - ADJ. EBITDA ($MM) Q2 2020 Q2 2019 NET INCOME $14.2 $12.7 (+) OTHER EXPENSE, NET 0.2 0.4 (+) PROVISION FOR INCOME TAXES 4.4 4.5 (+) DEPRECIATION AND AMORTIZATION 1.2 0.9 (+) EQUITY-BASED COMPENSATION 0.9