1stdibs.com, Inc. Q1 FY2026 earnings call

• CEO David Rosenblatt mentioned first quarter delivered on disciplined execution, durable profitability, and steady roadmap progress. Top line reflects sales and marketing reductions, bottom line reflects structural cost work since 2022. Demand environment challenging but long-term opportunity significant. - Funnel trends: traffic declines partially offset by conversion growth and higher average order values. Technology development spending grew 10% as product and engineering is highest ROI investment. AI-assisted development now accounts for over 50% of new code. - Roadmap organized around four pillars: discovery, pricing, shipping, and service. Discovery: launched Tastemakers program and Objects of Desire podcast; invested in content and community; made progress in search with AI-enriched metadata, search success rate improved 4%, null results decreased 25%, and redesign of search bar. Pricing: made progress on price parity, expanding to two additional resale platforms and deepening reach on existing ones, coverage increased 44%. Shipping: integrated USPS, plan to launch ML-powered quoting tool and upgrade shipment tracking capabilities. Service: rolling out improved listing tools leveraging AI, and AI-powered client service chatbot launching in Q2. Annual seller sentiment survey confirmed First Dibs is primary sales channel for sellers.

GMV was $89.7 million, down 5%; revenue was $22.4 million, down 1%. Adjusted EBITDA was $600,000. Traffic declined due to pullback in performance marketing and sales and marketing headcount reductions, but conversion grew for 10th consecutive quarter and average order values increased. Technology development spending grew 10%. GMV breakdown: trade grew year over year with AOV expansion, consumer GMV declined; vintage and antique furniture grew year over year, others declined. Listings grew 2% to nearly 1.9 million. Net revenue $22.4 million, down 1%; transaction revenue ~74% of total, subscriptions remainder; take rates increased ~120 basis points. Gross profit $16.7 million, up 2%, margins ~74%. Total OPEX declined 11%, sales and marketing expenses $6.3 million, down 31%; technology development expenses $6.2 million, up 10%; general administrative expenses $6.8 million, down 2%; provision for transaction losses ~$700,000, 3% of revenue.

• Forecast second quarter GMV between $86 million and $91 million, down 4% to up 1%. Net revenue $21.6 million to $22.6 million, down 2% to up 2%. Adjusted EBITDA margin between negative 2% and positive 2%. - Expect third consecutive year of revenue growth, return to positive year-over-year GMV growth by fourth quarter. Expect gross margins 72 to 74%, up from 71% to 73% in 2025. Expect revenue take rates 25% to 26%, up from 24% to 25% in 2025. Full-year 2026 outlook: positive adjusted EBITDA and positive free cash flow.

Q: Last quarter discussed internal levers to reignite growth, talk about those levers and current progress.

A: Roadmap organized around discovery, pricing, shipping, and service. In Q1, made progress in each. For discovery, AI-driven metadata improvements in search drove 4% higher search success rate and reduced null search results by over 25%, visual search lined up for Q2, natural language search targeted for Q3. For shipping, integrated USPS reducing parcel rates on packages under 20 pounds by 30% to 50%, plan to launch ML-powered quoting tool and upgrade shipment tracking capabilities.

Q: On GMV growth returning by fourth quarter, need change in macro conditions?

A: Confident return not dependent on market recovery. In Q4, will begin lapping over 40% reduction in sales and marketing spend initiated in late 25, and product roadmap's compounding impact. Midpoint of Q2 guidance expects GMV growth rates to improve sequentially, and clear path to return to year-over-year growth by Q4. Product roadmap areas of discovery, price, service, and shipping are high impact, with progress in each and more opportunity ahead.