FIGS, Inc. (NYSE:FIGS) Q4 2023 Earnings Conference Call February 28, 2024 5:00 PM ET

Company Participants

Jean Fontana – Senior Vice President-Investor Relations

Trina Spear – Co-Founder and Chief Executive Officer

Daniella Turenshine – Chief Financial Officer

Kevin Fosty – Corporate Controller

Conference Call Participants

Brian Nagel – Oppenheimer

Edward Yruma – Piper Sandler

Brooke Roach – Goldman Sachs

Dana Telsey – Telsey Advisory Group

John Kernan – TD Cowen

Josh Reiss – Raymond James

Matt Koranda – Roth MKM

Angus Kelleher – Barclays

Bob Drbul – Guggenheim Partners

Operator

Good afternoon. Thank you for attending today's FIGS Fourth Quarter and Fiscal 2023 Year Earnings Conference Call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions]

I'd now like to turn the conference over to our host, Jean Fontana. Please go ahead.

Jean Fontana

Thank you. Good afternoon, and thank you for joining today's call to discuss FIGS fourth quarter and full year 2020 results, which we released this afternoon and can be found in our earnings press release and in the stockholder presentation posted to our Investor Relations website at ir.wearfigs.com. Presenting on today's call are Trina Spear, our Co-Founder and Chief Executive Officer; and Daniella Turenshine, our Chief Financial Officer. As a reminder, remarks on this call that do not concern past events are forward-looking statements. These may include predictions, expectations or estimates, including about future financial performance, market opportunity or business plans. Forward-looking statements involve risks and uncertainties, and actual results could differ materially.

These and other risks are discussed in our SEC filings, including the 10-K we filed today, which we encourage you to review. Do not place undue reliance on forward-looking statements, which speak only as of today and which we undertake no obligation to update. Finally, we will discuss certain non-GAAP metrics and key performance indicators, which we believe are useful supplemental measures for understanding our business. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP measures are included in the stockholder presentation we issued today.

Now I would like to turn the call over to Trina Spear.

Trina Spear

Thank you, Jean. Looking back at 2023, we outperformed our expectations with net revenue growth of 8% and adjusted EBITDA margin of 15.8%. We reduced inventory by 33% and generated strong free cash flow of $85 million. Looking across the business, we grew our active customer base 13% versus last year. Additionally, we achieved 18% net revenue growth in non-scrubs, 42% growth in our international business and nearly 50% growth in our teams business. We also opened our first permanent retail location, our community hub in Los Angeles with strong early reads in traffic and conversion. Importantly, we continue to lay the groundwork to scale our business with investments in infrastructure and technology.