Revolve Group, Inc. · NYSE:RVLV
Revolve — Q3 2020 Earnings Presentation
17 slides from Revolve's earnings presentation, Nov 11, 2020
Slide 1: Q3 2020 Results
THE ANALYST DAY PRESENTATION 2018 Q3 2020 RESULTS November 11, 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 Q3 2020) 3 IMPROVED HIGHER FREE CASH FLOW FURTHER TOP-LINE TREND INVENTORY TURNS STRENGTHENED BALANCE SHEET YoY Growth (Decline) YoY Growth (Decline) Net Cash Position ($MM) in Net Sale
Slide 4: Income Statement Highlights
PAGE INCOME STATEMENT HIGHLIGHTS (YoY comparisons skewed by COVID-19 impact in Q3 2020) 4 NET SALES ($MM) GROSS MARGIN NET INCOME ($MM) ADJUSTED EBITDA(1) ($MM) % ADJ. EBITDA MARGIN (2%) YoY $154.2 $151.0 +66% YoY +103% YoY $24.0 +164 BPs YoY $19.4 Quarterly Record Quarterly 55.3% Record 53.6% $14.4
Slide 5: Operating Metrics Highlights
OPERATING METRICS HIGHLIGHTS PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 5 ACTIVE CUSTOMERS(1) (000s) TOTAL ORDERS PLACED(1) (000s) AVERAGE ORDER VALUE (AOV)(1) (TRAILING 12 MONTHS) (4%) YoY (16%) YoY +5% YoY 1,504 1,194 $275 1,438 1,141 $232 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q
Slide 6: Category Performance Is Key Driver of YoY Decrease in AOV
CATEGORY PERFORMANCE IS KEY DRIVER OF YOY DECREASE IN AOV PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 6 HIGHER YOY NET SALES YOY DECLINE IN NET SALES GROWTH RATES IN Q3 2020 IN Q3 2020 DUE TO “STAY AT HOME” Intimates Knits & Beauty Swim Accessories Dresses Skirts Loungewear Sweaters
Slide 7: Net Sales by Geography
NET SALES BY GEOGRAPHY PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 7 YOY GROWTH (DECLINE) INTERNATIONAL MIX OF TOTAL NET SALES IN NET SALES IN Q3 2020 Q3 2019 Q3 2020 + 18% 17% 20% (6%) U.S. International INTERNATIONAL NET SALES U.S. NET SALES
Slide 8: Segment Net Sales
SEGMENT NET SALES PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 8 REVOLVE SEGMENT NET SALES ($MM) FORWARD SEGMENT NET SALES ($MM) (4%) YoY $135.4 $130.6 $109.5 $82.2 +9% YoY $18.8 $20.5 $17.3 $16.4 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2017 Q3 2018 Q3 2019 Q3 2020
Slide 9: Segment Gross Profit
SEGMENT GROSS PROFIT PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 9 REVOLVE SEGMENT GROSS PROFIT ($MM) FORWARD SEGMENT GROSS PROFIT ($MM) ∼ Flat YoY $75.0 $74.7 $61.2 $41.7 +14% YoY $8.8 $7.7 $5.9 $5.1 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2017 Q3 2018 Q3 2019 Q3 2020
Slide 10: GAAP Cost Structure
GAAP COST STRUCTURE PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 10 OBSERVATIONS: Q3 COSTS YoY Cost of Sales: Cost of sales leverage in Q3 2020 primarily reflects a higher AS A % OF NET SALES CHANGE percentage of net sales at full price YoY and reduced markdowns on marked down product
Slide 11: Diluted Earnings Per Share
DILUTED EARNINGS PER SHARE PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 11 DILUTED EPS THE EPS MATH (000s, except per share figures) Q3 2020 Q3 2019 YoY % + 108% YoY Income before income taxes $21,542 12,840 68% $0.27 Provision for income taxes 2,104 3,281 (36%) Net income (GAAP) $19,
Slide 12: Cash Flow Highlights
CASH FLOW HIGHLIGHTS PAGE (YoY comparisons skewed by COVID-19 impact in Q3 2020) 7 for a reconciliation to Net Cash Provided by Operating Activities, its corresponding GAAP financial measure. 12 NET CASH PROVIDED BY OPERATING ACTIVITIES CAPITAL EXPENDITURES FREE CASH FLOW (1) ($MM) ($MM) ($MM) $76.2
Slide 13: Build Up of Free Cash Flow in Q3 2020
PAGE BUILD UP OF FREE CASH FLOW IN Q3 2020 ($MM) 13 + $4.1 $19.4 $13.9 ($9.1) ($0.5) Net Income Other Working Capital Increase in Inventory CapEx Free Cash Flow
Slide 14: Balance Sheet Highlights
PAGE BALANCE SHEET HIGHLIGHTS 14 CASH ON THE BALANCE SHEET ($MM) BALANCE ON CREDIT LINE (1) ($MM) + $14M in free cash flow in Q3 + $3M from stock option exercises ‒ $9M repayment on credit line $158.7 $150.8 $103.6 $65.4 ($9M) QoQ $51.1 $44.8 $27.2 $30.0 $24.0 $16.4 $15.0 Q4 2018 Q1 2019 Q2 2019 Q3
Slide 15: YTD 2020 Highlights
9 MONTH YTD 2020 HIGHLIGHTS PAGE (YoY comparisons skewed by COVID-19 impact in 9 MONTHS YTD 2020) 15 NET SALES EBITDA MARGIN NET INCOME $440 M 11.5% $38 M (3%) YoY +223 BPs YoY +39% YoY INVENTORY FREE CASH FLOW NET CASH (29%) YoY $74 M $144 M $30M Decrease YoY More than 2X All of 2019 +181% YoY
Slide 16: Metrics Definitions
PAGE METRICS DEFINITIONS 16 Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income before other expense (income), net, taxes, depreciation and amortization, adjusted to exclude the effects of equity-based compensation expense, and certain non-rout
Slide 17: GAAP to Non-GAAP Reconciliation
PAGE GAAP TO NON-GAAP RECONCILIATION (YoY comparisons skewed by COVID-19 impact in Q3 2020) 17 ADJ. EBITDA ($MM) (1) Q3 2020 Q3 2019 NET INCOME $19.4 $9.6 (+) OTHER EXPENSE, NET 0.3 --- (+) PROVISION FOR INCOME TAXES 2.1 3.3 (+) DEPRECIATION AND AMORTIZATION 1.3 1.1 (+) EQUITY-BASED COMPENSATION 1.0