So going from Q1 to Q2, there’s a couple of things that are reflected as you look at our guidance. There is a – we always see Q2 being seasonally slightly smaller than Q1, and you’ll see that reflected in our volumes. So our GMV shows that small sort of seasonal reduction that tends to happen in Q2. On the EBITDA side, we are looking at a couple of things that put some pressure on us. Most notably, these are not unique to us, like we have – we have salary increases like most other companies. We do that every year at this time. So that puts a little bit of pressure on Q2 versus Q1. More importantly, and I think this was discussed in the past, we have some operational investments that, we are planning on investing in. These are things that will drive efficiencies in our operations and help us expand margin in the longer term.
So some of that is reflected in our Q2 guidance as well.
Ike Boruchow: Thanks so much.
Operator: Thank you. Please stand by for our next question. And our next question comes from Ashley Owens, KeyBanc Capital Markets. Go ahead, Ashley.
Chandana Madaka: Hi. This is Chandana on for Ashley today. So my first question is just any update. I know it’s early. I think the capability just launched this quarter, but maybe just looking at the opportunity for like drop ship consignment as a side business there and maybe from expanding supply as well from that perspective as well?
Rati Levesque: Yes. Thanks Chandana, I can take that question. Yes, we’re always looking at new channels for supply. So I think that’s the important part here, drop shipping an example of that. Continuing to bring trust to our consumers and focus there, whether that’s drop ship or watches, whether it’s international, part looking at other partnerships as well. I’d say we’re super early days with drop-ship. We’re happy with the launch, but – and we’re continuing to be optimistic on where we’re going. We’re really thinking about this as a new channel strategy. So for watches, for example, and how do we expand that market into men’s watches. So again, super early stages. I don’t want to share too much on what – how that’s been performing, but we’ll definitely keep you posted. But again, really the focus is new channels, new supply channels in general, as we get back to growth here.
Chandana Madaka: Awesome. Thank you. And I might have just missed this also, but could you kind of talk us through where the oxide came in for this quarter with an EBITDA. And just to refresh on anything that we should be considering there? I know in the past, you’ve mentioned like shipping margins, other efficiencies potentially with an inventory or transport. So just kind of a refresh on all of that?
Caitlin Howe: The question is on operational efficiencies and where we’re investing. Was that the question?
Chandana Madaka: Yes. And also kind of just what happened with EBITDA this quarter to kind of bring it in a little bit higher than expected?
Ajay Gopal: I can talk to that, Chandana. This is Ajay here. So when you look at our reported results in Q1 and compared to where our guidance was, there’s a couple of things I would draw your attention to. First off, volume, we had a really strong start to the year. And you can see that reflected in the fact that our GMV came in higher than our sort of anticipated range on guidance. So that was a source of strength for us. We had strong supply coming into the year, and we had – and we saw that supply sell through very nicely through the quarter. The other thing that led to upside for us is our gross margin. As I pointed out earlier, we came in at a record high gross margin percentage, and that was driven by the mix of direct versus consigned, which was also another source of strength for us in the quarter.
The last – the last thing I would point to – is there’s great operating discipline around how we manage our operating expenses. I’m new here, and I see the team is doing a phenomenal job, and sort of being very thoughtful about where we invest and what returns we’re getting for those investments. So the cumulative effect of those sort of – that operating rigor really came through in our Q1 results as well.
Chandana Madaka: Awesome. Thank you.
Operator: Please stand by for our next question. And our next question will be Anna with Needham. Please go ahead, Anna.
Anna Andreeva: Great. Thanks so much, and congrats. Nice results. Two quick ones from us. First, you’re guiding for GMV acceleration at the high end for the second quarter. So can you talk about what’s driving that compare is easier, so that’s probably a part of that. But what are you seeing in the business quarter-to-date as well? And secondly, in the past, you mentioned a mid-value was pressured a bit. How did that perform in the first quarter? And how do you think about that as we go through the year? Thanks so much.
Rati Levesque: Yes. Hi, Anna. This is Rati. So your first question on GMV acceleration in Q2, just how we’re thinking about demand in general. As you know, it’s all about supply, and supply is quite healthy right now, and I just talked a little bit about that, really targeting the sellers that matter that have the right mix, that have the right value and bringing them into our ecosystem, and then keeping them via retention strategies. So, we feel really good about kind of the input that came in or the supply that came in Q1, and that helps us kind of lead into Q2 like it takes a couple of weeks, to get that items process, get it on the site. And so, we have some indicators there of what Q2 will look like. And then on the mid value supply, yes, you heard us talk about mid-value.
And back in the day, when we made all those commission changes. We had – to really kind of make sure that we tweak the commission changes based on mid value, because in the past, we have seen that dropping. I will say that, that’s in a much better position. We continue to kind of optimize and personalize our promotional strategy, to go after that mid-value supply. So yes, overall, I mean, at the end of the day, it’s kind of a three-legged stool between retail marketing and sales. And we kind of have to get all of these things firing at the same time, and the tactics kind of in line to focus on quality and again, the right seller to bring in the right mix of product, which we’re seeing in Q1.
Anna Andreeva: All right, terrific. Thanks so much.
Operator: Thank you for your questions. Please stand by for our next question. And our next question comes from Mark with Baird. Go ahead, Mark.
