Brilliant Earth Group, Inc. Q2 FY2025 earnings call

• Strong quarter with positive year-over-year net sales growth and exceeded net sales and profitability guidance. - Disciplined strategy working, with fine jewelry bookings growing 38% year-over-year in Q2. - Showrooms expanding, with increased walk-in traction and orders from retail customers without appointments up 81% year-over-year in Q2. - Digital front saw marketing spend decrease 4% year-over-year with 180 basis points of leverage. - Brand partnerships with Beyonce, Madison Keys, Selena Gomez, reinforcing position as premium brand. - Q3 to date showing acceleration, and annual net sales guidance raised.

Brilliant Earth reported second-quarter 2025 net sales of $108.9 million, a 3.3% year-over-year increase, exceeding the top end of the guidance range. Adjusted EBITDA for the quarter was $3.2 million, far surpassing guidance. Gross margin was 58.3%, within the medium-term target range. Net cash increased 5% year-over-year to $99 million as of the end of Q2. Total orders grew 18% year-over-year, and repeat orders grew 11% year-over-year. Average order value was $2,074, a smaller year-over-year decline than Q1 due to assortment diversification and stabilization in engagement ring ASP.

• Raised annual net sales guidance. - Q3 expected net sales growth of 8%-10% year-over-year. - Adjusted EBITDA for Q3 expected to be between $3 million and $4.5 million. - Annual net sales guidance revised to a 2.5%-4% year-over-year growth. - Monitoring the impact of new tariffs on India but confident in navigating the environment.

• Yesterday's announcement of new tariffs on India, with the financial impact not yet fully determined. This is an industry-wide impact, but Brilliant Earth leverages geographic supply chain diversity, nimble operating model, and dynamic pricing to navigate.

Q: Touch on the bridge in higher fine growth relative to margins, consumer purchase habits and pricing compared to 3 months ago.

A: Beth Gerstein said consumers are discerning, fine jewelry is growing, it's a strategic investment, and there's no huge difference in pricing/AOV compared to the past several months.

Q: Strength above and below $1,000 price point, consumer health, showroom uplift and maturation.

A: Beth Gerstein said seeing a healthy consumer, high single-digit unit growth in engagement rings and wedding bands, pleased with showroom performance, fine jewelry growth in showrooms, and walk-in traffic and retail customer orders are up.